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This is an example of a sale of a Power of Sale property asking for vacant possession with a lease in place

The Tenant Protection Act takes precedence in this case

A mortgagor went into default and power of sale proceedings were initiated. Prior to the mortgagee becoming the mortgagee in possession, the mortgagor leased the property to a tenant for one year from April 1, 2001 to March 31, 2002. On June 28, the mortgagee sold the property to a buyer with ''vacant possession'' to close on October 3, 2001 .

The tenant was given a notice of termination pursuant to the Mortgages Act but refused to move out prior to the end of the lease.

The mortgagee made application to the Ontario Rental Housing Tribunal to enforce the termination. The ORHT dismissed the landlord's application (landlord was the mortgagee in possession) to terminate the tenancy on a date prior to the end of a fixed term tenancy and the tenant stayed to the end of the lease.

After the tenant had vacated, the landlord appealed the decision and the court agreed to hear the appeal because of the great importance of the issue.

This case determined whether a mortgagee in possession can terminate a residential tenant's lease by giving notice on behalf of a buyer who is purchasing the property under power of sale.

There is a conflict between the Mortgages Act and the Tenant Protection Act in this regard. The Mortgages Act states a landlord in possession may give a notice ineffective at least 60 day! After it is given regardless of any fixed term of tenancies.

The Tenant Protection Act states "the date for termination specified in the notice shall be at least 60 days after the notice is given and shall be the day a period of a tenancy ends, or where the tenancy is for a fixed term, the end of the tenancy"

However, the court also noted that Mortgages Act states; ''In the event of a conflict between this Part and any other provision of this Act or any other Act, this part prevails unless the provision or the Act states that it is to prevail over this Part''.

The court also noted that the Tenant protectionist states ''if any provision of the Tenant Protection Act is in conflict with a provision of another Act, the provision of the Tenant Protection Act shall a I apply" The court also noted that to allow the mortgagee to terminate the fixed term tenancy would place the mortgagee in a better position than any ordinary owner of a property and in a better position than the buyer of a property who has completed the purchase of a property in a power of sale situation.

All of such similarly situated people could only recover possession at the end of a fixed term tenancy.

Therefore the court decided the provision of the Tenant Protection Act prevails and a mortgagee in Possession can not obtain the early termination of a fixed term tenancy. The appeal was dismissed.

So, what is your plan with this information and what is your next step in the real estate process?

Mississauga Real Estate Market Professional

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So, if you are thinking of selling and buying a homes this year, should you buy or sell first?  I've had many clients purchase before they sell.  I just want you to have all the information so you can make the best decision for yourself and your family.  You may read more about buying or selling first here

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I wish you much success, good health and happiness today and always! 

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