The Best of Rob Di Lisi: Cash for Keys, Occupants & Buying Tenanted Property

About this compilation

This is a special “best of” episode — a compilation of highlights from three earlier Ontario Landlord Series episodes with paralegal Robert Di Lisi of Stonegate Legal Services. For the full conversations, see the original episodes:

• What Is Cash for Keys? How the Strategy Works for Ontario Landlords
• Tenants, Occupants, and Guests: Who’s Allowed to Live in an Ontario Rental
• Buying a Tenanted Property in Ontario: Pros, Cons & What to Know

Cash for Keys Explained

Landlords often say cash for keys is extortion — that they have no rights or control of their own property, and that paying a tenant to leave rewards bad behaviour. But cash for keys is a settlement, and settlements happen everywhere: if you get a traffic ticket and go to court, you try to work out a deal before facing a judge or adjudicator. Cash for keys is the same thing — a process where a landlord offers a financial incentive to the tenants or occupants in exchange for vacating the property voluntarily and returning the keys.

The arrangement is used when landlords want to avoid the time, expense, and potential legal implications of going through the LTB. The amount varies with the local rental market, the condition of the property, and the negotiation between the parties. The ultimate goal is to get an N11 signed — a mutual agreement to end the tenancy — so the process of getting the tenants out is quicker.

Why Would Landlords Pay Tenants to Leave?

It can be a lot of money. The word “extortion” gets used, and Rob has heard numbers requested upwards of $50,000, with landlords paying large sums to get their property back.

When Cash for Keys Becomes Necessary

Most of the time cash for keys isn’t a necessity — but sometimes it is. The clearest example is selling a tenanted property when the tenant doesn’t want to move out. Under the law the landlord has the right to sell, but the tenant controls the showings and must consent to pictures and video. On top of that, clause two of the agreement of purchase and sale says the seller shall guarantee vacant possession — and you can’t guarantee vacant possession on a tenanted property.

Once the property is sold firm, the landlord can serve an N12 (minimum 60 days’ notice, one month’s rent compensation). But on the N12’s second page, fourth paragraph, it tells the tenant they don’t have to move out and can wait for an adjudication. Even with the LTB improving, that’s roughly six to eight months to get to the board, another 30 to 60 days for the order, and then three to six weeks for the sheriff — a 10-to-12-month timeline that few buyers will wait through. Worse, if you guaranteed vacant possession and can’t close, you’re in breach of contract and the buyer’s lawyer can sue for damages. You can’t sue the tenant for staying, because staying is their right.

The alternative is to approach the tenant before selling: offer a fair, reasonable cash incentive to be out in the next 30 to 60 days. Once they’re gone you don’t have to worry about showings, pictures, or video — and, most importantly, you can guarantee vacant possession and will usually command a higher price on a vacant, well-presented property.

Guests, Occupants, and Tenants Defined

To a landlord it doesn’t much matter whether someone is an occupant, roommate, or guest, because they aren’t tenants. The person who signs the lease is the tenant. The Ontario standard lease has a section for occupants — everyone else living in the unit, such as a spouse or children under the age of majority. Tenants can have guests, occupants, and roommates for any length of time without the landlord’s permission.

The one thing a landlord must never do is accept rent from anyone other than the named tenant, because that person could later claim to be a tenant themselves. Tenants remain responsible for damage caused by their guests, occupants, or roommates, and may face consequences if a guest commits illegal acts; a landlord can serve a trespass notice on a guest who substantially interferes with other tenants or the landlord. And no — if a couple renting a three-bedroom home want to bring people in, they don’t have to notify the landlord.

Landlord Responsibilities and Rights

The tenant stays responsible for everyone they live with. A landlord can’t stop a tenant from adding occupants, but it’s reasonable to want to know who lives in the property — for knowledge, and in case of an emergency like a fire.

ID Requirements Clarification

Occupants don’t have to give the landlord ID. If a tenant says their boyfriend Jim moved in, that’s the level of detail you’re entitled to.

Existing Leases and New Owners

Any lease in existence continues automatically with the new buyer — the question is only whether it’s a fixed term or month-to-month. Rent can be raised only once per year: on a fixed term you wait until the end of the term and give proper notice; on month-to-month you still follow the process (an N1/N2, minimum 90 days’ notice) and can raise only to the guideline unless the unit isn’t rent-controlled. This ties to security of tenure — the tenant is entitled to stay after the initial term — and to what agents call covenants running with the land: prior agreements carry to the next owner.

Can New Owners Change Rental Terms?

A buyer who takes over must follow through with the existing lease. There are only three ways to terminate a tenancy: the tenant decides to leave (N9), the landlord and tenant mutually agree (N11), or there’s an order through the Landlord and Tenant Board. You can’t end a tenancy at will — the mutual-agreement route brings you back to cash for keys.

The N12 “Moving In” Notice Reality

For genuine personal use, a buyer can serve an N12 to have the tenant vacate. It’s for an individual moving in — not a corporation — with a minimum 60 days’ notice, one month’s rent compensation, and the requirement that the arm’s-length person (immediate family) actually move in for one year. But the N12’s second page, fourth paragraph, tells the tenant they don’t have to move out and can wait for a hearing: six to eight months to get there, then 30 to 60 days for the order, then a one-year occupancy. All told you’re looking at nearly two years before you could re-rent or sell — because in Ontario the tenant has the right to wait for a hearing.

Disclaimer

While we are professionals, this podcast is for informational and entertainment purposes only. The advice shared may not apply to your unique situation. Always seek personalized advice from a qualified professional before making any decisions.