Termination Notice with One Month’s Rent (Ontario)

Termination Notice with One Month’s Rent (Ontario)

Question:

What is the situation with the one month’s rent, where the Seller gives notice for the Buyer to occupy the premises personally. The deal will be closed, but the Seller will have given the required notice.

Answer:

The OREA Forms have not yet been amended. The Seller pays the one month to the Tenant, assuming that the “notice provision” is in the APS. There is no adjustment. This is undertaken at the Seller’s expense. If the APS ran over the changes to the RTA (April announcement), then the risk of this change befalls the Seller.

If the APS was silent on the point, or the Buyer simply asked afterwards, and the Seller agreed to the Buyer’s request after the deal was struck, then, the Buyer will pay this amount later to the Tenant following closing as the new Landlord. This is not an adjustment. If the Seller pays “in advance”, in this scenario, then it would be an adjustment.