As landlords look to sell properties in Canada's active real estate market, it is forcing some renters to have to move into, often, more expensive rental.Rich Pedroncelli/The Associated Press
Elysha Krische and her family have lived in the same apartment, a comfortable two-bedroom in an old row house in Hamilton, for close to six years. So when their landlord told them he was looking to sell and asked if they would be interested in buying the place, it was a bit distressing.
When the Krisches told the landlord that, with two small children in tow, they wouldn’t be able to purchase the home, it went on the market for $1.1-million. Now they face the prospect of moving out should new owners decide they want to move in, which will mean higher rent someplace else, says Ms. Krische, a midwifery student at McMaster University.
“We have parking, we have a yard. To move elsewhere, it would be more than double what we pay.” Mrs. Krische said. “Which is a scary situation to be in.”
It’s impossible to know exactly how many renters in Ontario are finding themselves in this situation but tenant advocates say it’s been on the rise for years and has picked up during the COVID-19 pandemic. Legal aid clinics that help tenants say they have seen a marked increase in landlords seeking agreements from tenants to move out as they prepare to sell.
“I don’t know if it’s connected to a booming market but it’s happening at the same time,” said Lee Webb, a former staff lawyer for Community Legal Clinic of York Region.
When a landlord wants to sell a property and the buyer wants to move in, the buyer can ask the landlord to arrange with the tenants to move out – and sometimes they will strike a deal where the tenant will be paid a month’s worth of rent, or more. In such cases, the two parties will usually sign an N11 form, an agreement under the Residential Tenancies Act to have the tenant leave the unit by a certain date.
Mr. Webb said he’s seeing an increase in calls from people whose landlords ask them to sign N11 forms before receiving a notice saying there is a purchaser for the property.
If the tenant refuses to move out, the landlord or the new buyer can go to the province’s Landlord and Tenant Board and get an N12, a formal eviction notice used by landlords when they are either selling the property to someone else or planning to move into the unit themselves. If the tenant again declines to move out, the matter goes to the LTB for a hearing.
An eviction ban put in place in early April by the Ontario government means no one is currently being forced out, but the LTB is still scheduling and conducting eviction hearings and issuing orders that could be enforced when the ban comes off.
“I think that the sheriff pausing its work is changing the behaviour of landlords,” Mr. Webb said, noting he has seen the largest increase of N11s and N12s in 2021.
Data provided to the Globe and Mail by the Ministry of the Attorney General show the number of N11 and N12 agreements was roughly the same in the 13-month period ended March 31, 2021, compared to the same period a year earlier. But Geordie Dent, executive director for the Federation of Metro Tenants’ Associations in Toronto, said N12 forms had been the top reason tenants have called the association throughout the pandemic.
“I can’t tell you how strange that is. The big thing you’d expect to be seeing during the pandemic is an explosion of [calls from] people that can’t pay the rent,” Mr. Dent said. “That’s been higher, but still higher than that has been a proliferation of N12s. If you talk to folks on our hotline, those are still coming through.”
Mr. Dent said he’s specifically seen more landlord-driven eviction forms in the Davenport Road area, Parkdale and the Yonge and Eglinton neighbourhoods of Toronto.
“Where you see the highest rental spikes you’re also seeing the highest property value turnover and you’re seeing the highest incentive for a landlord to push people out,” Mr. Dent said, adding that rental prices have also been rising in other places across Ontario since more Torontonians are having to find cheaper housing prices elsewhere.
In his work for Parkdale Community Legal Services, legal worker and outreach lead Cole Webber said buyouts have become increasingly common over the past few years and throughout the pandemic, with some tenants saying they were forced to sign the agreements.
“We’ve seen lots of cases where tenants have felt like they’ve been forced to sign an N11 form under duress. The landlord will just come in and say, ‘Look, you’re being evicted, sign here.’ Once a tenant signs that form, it’s kind of game over. … If you put your signature on that page, it’s a very uphill battle to try to fight it,” Mr. Webber said.
Another family in the Greater Toronto Area has also had issues with a landlord asking them to sign an N11 form before closing a sale.
Alvin Allen Sr. was asked to sign an N11 form last September when his landlord decided to sell the home he had been renting in Mississauga for close to 15 years. His daughter, Avia, and her partner, Evan Hookong-Taylor, had moved into the home four months earlier to take care of the place.
“He was supposed to go to Jamaica and retire there and live a beautiful island life,” Ms. Allen said.
The N11 form showed that Mr. Allen agreed to move out by the end of last December that same year. Ms. Allen said she felt like her father had no choice but to sign the form because when he first moved in, there was no lease jointly signed by the landlord and Mr. Allen. “I feel like they used the N11 form to evict my father,” Ms. Allen said.
The home sold in mid-December when Mr. Allen, Avia and Mr. Hookong-Taylor were still living on the property, but the family moved out by Dec. 30.
In some cases, though, tenants can find themselves in the driver’s seat, says Steven J. Smith, owner of Handsmith Advocate & Paralegal Services, who mostly works with property owners. Mr. Smith said one of his clients agreed to take responsibility to move a tenant out when they sold their house. Since the purchaser would not change the closing and the client couldn’t get a hearing in time, the client wound up paying $27,000.
“It’s tragic. I really feel their [the client’s] pain,” he said.
Looking ahead to the future, Ms. Krische said she and her family hope to stay in Hamilton. And if they end up having to move to a more expensive place, Ms. Krische hopes to know sooner rather than later so she and her husband can alter their budget. So far, they’ve not been given either an N11 or an N12 form.
“I’d love if something happened quickly because [being in] the limbo of that is just awful. Especially with kids, you want to know if you need to make a Plan B,” Ms. Krische said. “My daughter’s starting school this fall. I want to know where we’re going to be living so that she can be registered.”
Editor’s note: This story has been updated to remove from the text the implication that prospective buyers deal directly with tenants on eviction requests.
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