Selling Your Income Property during COVID-19: What You Need to Know

August 13, 2020

COVID-19 has shaken up a lot of areas of the real estate industry. As a landlord of a tenanted income property, you may be wondering if you can still sell your home during the pandemic. The answer is yes, you can.

At the start of the pandemic, provinces across Canada put a general moratorium on evictions in an effort to keep people where they are and to help slow the spread of COVID-19. A prohibition on evictions was also meant to help tenants who couldn’t afford to pay rent due to job loss as a result of the pandemic. Measures were taken to aid landlords who had tenants that defaulted on rent payments through various payment support programs and even mortgage deferral programs put in place by lenders across the country.

At the time of writing, the moratorium on evictions has expired in Ontario and Alberta and is scheduled to expire on September 30, 2020 in Manitoba1.

While the moratorium hasn’t change the process in cases where buyers intend to continue the existing tenancy agreement, it did limit the pool of buyers since buyers who intended to evict the tenants and use the property for different purposes wouldn’t be able to do so unless there is mutual agreement to end tenancy. Now that the moratorium has ended or is soon to end in these provinces, sellers can return to selling their income properties as they normally would with the following key measures to keep in mind.

Please note, these are general guidelines relevant at the time of writing. It is important to review the regulations of the tenancy board in your province for specific guidelines related to your rights and responsibilities as a landlord and the rights and responsibilities of your tenants. Due to the rapidly changing nature of the pandemic, please reference your government’s resources for the most current information.

The First Step

Communication and mutual understanding are always important when selling a tenanted property, but particularly during COVID-19.

If you've decided to sell your income property, start the process by scheduling a call or video call with your tenant to discuss your plans. Ask your tenant if they have any initial concerns they'd like to share with you. For the safety of your tenant, ask them if they are immunocompromised and if they have any hesitations about in-person showings. Having this initial conversation helps establish mutual respect and understanding at the start of the selling process and might help make the selling process easier for you both. End the conversation by letting your tenant know there is an open line of communication and that you’re committed to their safety during the sale.  

Showings Schedule  

When you’re ready to put your income property on the market, have another conversation with your tenant about showings. In many provinces, it is mandatory for the landlord to give the tenant a minimum of 24 hours notice for each showing. While there is no legal need to confirm the 24-hour rule with your tenant, there is no harm in confirming both of your expectations with each other; for example, some sellers are choosing to give tenants 48 or 72 hours notice due to COVID-19. Alternatively, since you’ve already established trust and understanding with your tenant, you could come to an agreement with your tenant on a showings schedule that works for you both. If you do agree to establish a schedule, be sure to have the days and times in writing in case any issues arise later.

Keep in mind that legally tenants are not required to leave the house during a showing. As the landlord, you’re expected to allow a reasonable number of showings or your tenant can submit a complaint to your provincial landlord and tenant board. For example, it might be considered unreasonable by your tenant for you to accept showings all day, every weekend until the home sells.

Showing the Property

When it comes to showing the property, you’ll already know if your tenant is immunocompromised and how they feel about in-person showings from your initial conversation. If your tenant is considered to be at risk, limit showings to virtual showings wherever possible. If an in-person showing is necessary, talk to your tenant again and suggest that you arrange for the unit to be professionally cleaned after each in-person showing. If they’re still not comfortable with in-person showings due to health reasons, ask whether they have a relative they can stay with for a couple of days and offer them a discount on their rent, or offer to put them up in a hotel for the night. If you feel your tenant is unreasonably denying showings, you can take your concerns to your provincial landlord and tenant board.

Health measures to keep in mind during showings
While in-person showings aren’t restricted, there are health measures in place to help ensure the safety of the tenants, potential buyers and REALTORS®. Make sure that your tenant is equipped with all the necessary tools like a printed list of guidelines for showings they can display, hand sanitizer, gloves and masks. For those provinces that recently entered Stage 3 of reopening, you can expect the process of selling your home in terms of health measures to remain largely unchanged compared to Stage 2. Let your tenant know that they can share any feedback or concerns at any point.

If Your Buyer Intends to End the Tenancy

You’ll need to honour your tenancy agreement and plan for your closing date accordingly, unless you and your tenant come to an understanding that will allow you to end the tenancy sooner than is stated in the tenancy agreement. If so, be sure to have this change in writing. If your buyer is planning to use the tenanted property for a purpose other than renting, you will need to give your tenant proper notice for the end of tenancy. The timeframes and forms vary by province and the information will be available from your provincial landlord and tenancy board. For example, in Ontario, the landlord needs to give the tenant at least 60 days written notice and the landlord may apply to the Landlord and Tenant Board for an eviction order after serving notice to their tenant2.

It’s more important than ever to have a REALTOR® on your side to guide you through the market. If you’re ready to sell or buy a home, a Purplebricks REALTOR® can help you do so safely.

Purplebricks is here to support Canadians by providing them with a full-service real estate experience while saving them thousands in commission when selling their home. As for homebuyers, we share the commission by giving buyers $2,000 in cash back* when they buy a home with us. Call 1-855-999-9740 for more information.

On December 1, 2021, Purplebricks rebranded to FairSquare Group Realty. Blog articles published before this date were created under the Purplebricks brand but remain the property of FairSquare Group Realty.

In January 2019, ComFree Commonsense Network Brokerage rebranded to Purplebricks.