Selling with a Difficult Tenant

Question:

I have a Seller Client who wants to list a Townhome with a (currently) disagreeable Tenant. Tenant is paying far under market rent, and apparently said, “I’m not going anywhere” during the last showing with previous Listing. How much detrimental value would you ascribe to the situation – that is, Sellers are losing financially by trying to show under current situation, rather than having Tenant gone?

Answer:

This can easily run in the range of $50,000 to $100,000 as a discount. So, give that discount to the new Buyer, or provide half that amount by way of “cash for keys” to the Tenant.

It’s not a good situation. Nothing really helpful in the Act, from the Landlord’s perspective. That means, don’t invest in residential tenancies in Ontario. Also, be aware of the new “Confiscation Tax”, that might encourage you to invest outside of Canada.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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