What Happens to a Tenancy When a Rental Property Is Sold

The tenancy generally survives the sale

A common and understandable worry among tenants is that their landlord selling the building means they'll have to move out. Under Ontario's Residential Tenancies Act, 2006 (RTA), that's generally not how it works: a sale of the property generally does not, by itself, end an existing tenancy. The tenancy generally continues on exactly the same terms it had before the sale — same rent, same lease terms, same rights and obligations — with the new owner simply taking over as the landlord going forward. A tenant generally cannot be required to leave, and a lease generally cannot be unilaterally cancelled, purely because the building has changed hands.

This principle reflects a broader feature of Ontario tenancy law: a tenancy is generally tied to the unit and the tenant's occupancy of it, not to the identity of whoever happens to own the building at a given moment. Buying a tenanted property generally means buying it subject to the existing tenancy, much like buying a property subject to an existing mortgage or easement.

The new owner generally steps into the landlord's shoes

Once a sale closes, the new owner generally assumes the landlord's role under the existing tenancy, including its rights and its obligations. This generally means the new owner is bound by the existing lease terms, any outstanding repair obligations, and the rules around rent increases, notice, and entry exactly as the previous landlord was. A new owner generally cannot impose new lease terms unilaterally, demand a new lease be signed as a condition of continuing to live in the unit, or treat the existing tenancy as a blank slate simply because ownership changed. Our overview of landlord rights in Ontario describes the obligations that generally transfer along with ownership.

Rent and deposits after a sale

A tenant generally continues paying the same rent, on the same schedule, simply redirecting payments to whoever the new owner designates (typically communicated in writing as part of the transition). Any rent deposit held by the previous landlord generally needs to be transferred to the new owner as part of the sale, and the new owner generally remains responsible for that deposit and any interest owing on it under the usual rules described in our guide on how rent deposits actually work. A tenant generally isn't required to pay a new deposit simply because ownership changed, and a new owner generally cannot ask for one on top of the deposit already transferred.

Notice and communication during the sale process

During the sale process itself, a tenant generally retains the usual protections around entry and privacy — a landlord or their real estate agent generally still needs proper notice before entering to show the unit to prospective buyers, following the same rules described in our piece on landlord entry and tenant privacy. A tenant generally should also expect to be notified in writing once a sale closes, identifying the new owner and where rent should be directed going forward, though the specific mechanics of that notification can vary.

Can a sale be used as a reason to evict?

A sale on its own is generally not a valid reason to end a tenancy. However, Ontario law does recognize one specific, narrower situation connected to a sale: where a purchaser (not the current landlord) genuinely intends to move into the unit themselves or have an immediate family member move in, a notice of termination may generally be used for that specific purpose, subject to its own strict requirements. This is a meaningfully different situation from a sale generally, and it's worth understanding the distinction clearly, since it's often the source of confusion and, occasionally, misuse.

The purchaser's own-use notice specifically

Where a purchaser intends to occupy the unit personally, a notice of termination for that purpose generally needs to meet specific requirements, including genuine intention to occupy, proper notice timing, and in many cases compensation to the tenant. This is generally the same category of notice used for landlord's own use more broadly, just applied to an incoming purchaser rather than the existing owner. A tenant who receives this kind of notice in connection with a sale generally has the right to dispute it at an LTB hearing, and our guide on bad-faith evictions explains how adjudicators generally assess whether a stated intention was genuine, which is often a central issue in these disputes.

Fixed-term leases vs. month-to-month tenancies after sale

Whether the existing tenancy is in a fixed term or already month-to-month generally doesn't change the basic rule that the sale itself doesn't end the tenancy — both types of tenancies generally continue under the new owner on the same terms. Where a fixed term is still running at the time of sale, the new owner generally cannot shorten it or treat the sale as an opportunity to reset the term; the existing term generally continues to run exactly as before, and after it ends, the usual rules about automatic month-to-month continuation described in our piece on the RTA vs. your lease generally apply the same way they would for any other tenancy.

Practical steps for tenants and landlords

For tenants facing a sale, the most useful practical steps generally include keeping records of the existing lease and deposit, confirming in writing where rent should be paid once a sale closes, and understanding that any notice connected to the sale still needs to meet the usual RTA requirements. For a new owner, the most useful step is generally reviewing the existing lease, deposit records, and any outstanding repair issues before closing, since all of these obligations generally transfer along with ownership. Both sides are generally better served by clear, written communication through the transition rather than assuming the sale itself resolves or resets anything about the tenancy.

A related situation worth understanding is what happens when a property is transferred within a family, such as from a parent to an adult child, or placed into a trust or corporation for estate-planning purposes, rather than sold to an unrelated third party. Generally, the same basic principle applies regardless of who the new owner is or how closely they're related to the previous one: the existing tenancy generally continues to bind whoever holds title to the property, and a tenant generally cannot be required to leave simply because the property has moved between family members or into a different legal structure.

It's also worth noting that a tenant generally isn't entitled to block or delay a sale itself — the landlord's right to sell the property is generally separate from the tenant's right to remain in the unit under the existing tenancy. A tenant can decline to make the unit available for extensive staging or renovations beyond what reasonable showing access requires, but generally cannot prevent the sale from proceeding, provided the landlord continues to respect the usual entry and notice rules throughout the process.

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Reviewed by Ryan J. Manilla, BA, JD

Legal Reviewer · Landlord Tenant Ontario