Assuming Tenancy Clauses in Ontario: Single and Multiple Units

Last updated 11 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · For Ontario registrants · 9 min read

The buyer who thought the tenant was leaving

A first-time buyer purchases a semi with a basement unit. They intend to live upstairs and rent the basement to cover part of the payment. Somewhere in the offer is a clause recording that they assume the existing tenancy, and nobody walked them through what that meant. On closing they discover the basement tenant is a long-standing tenant paying well under market, with no intention of leaving, and their own plan for the house no longer works arithmetically.

Nobody lied. The clause said what it said. But the buyer heard “the tenant is month to month” and translated it into “the tenant can be removed,” and the agent did not correct them. An assumption clause is the opposite of a vacant possession clause. It documents that the tenancy continues and that your buyer is stepping into the landlord’s shoes. That is the whole point of it.

TEN-1, TEN-2 and TEN-3 side by side

These three clauses look similar and do different work. Pull the current wording from your own OREA member copy before you use them, because the blanks are where the value sits.

Two features run through all three. They are representations and warranties, not conditions — there is no investigation window and no exit built into them. And they are expressed to survive closing, which means they give your buyer a claim afterwards rather than knowledge beforehand. If what your buyer needs is knowledge beforehand, you need a condition on reviewing the tenancy documents, not a warranty about them.

The schedule is the clause

On a multi-unit file, TEN-3 is only as strong as the schedule attached to it. A schedule that says “three units, rents as per rent roll” is not a schedule, it is a promise to have an argument later. What a usable schedule itemises, unit by unit: the unit identifier, the tenant’s name, the nature of the tenancy, the expiry date where there is one, the day rent is due, any prepaid rent, and the particulars of what the rent includes — heat, hydro, water, parking, a locker, appliances, snow clearing.

That last column is the one agents skip and the one that generates post-closing disputes. A buyer who assumed rent was net of utilities and discovers the rent has always included hydro has bought a different building than the one in their spreadsheet.

The actual lease documents belong with the agreement as well. Where there are too many to attach sensibly, the practical alternative is to make the offer conditional on the buyer’s review of the tenancy agreements, with a real window — and that is a condition you draft deliberately rather than a warranty you rely on. I cover the mechanics of that kind of condition in my post on documentation review conditions.

The money that moves at closing

Tenancies come with balances, and those balances have to be identified before closing or they get argued about after it.

• Last month’s rent deposits. Every unit’s deposit has to be identified and dealt with between the parties. How deposits and any interest on them are treated is governed by the residential tenancies regime, so the schedule identifies them and the lawyers handle the adjustment.
• Prepaid rent. A tenant who paid ahead has paid the seller for a period your buyer will own. Put it in the schedule.
• Arrears. Whether the seller keeps the right to pursue arrears, and how a partial payment after closing is applied, is a question the lawyers settle. Your job is to surface that arrears exist before the offer is firm.
• Keys, fobs, parking and lockers. Cheap to list and expensive to sort out on a Friday afternoon when a tenant has no working fob and no landlord they recognise.
• Appliances that belong to the tenant. They are not chattels the seller can sell, and a washer disappearing on moving day is a genuinely common complaint.

None of these are exotic. They are the routine contents of a tenanted file, and the reason agents miss them is that residential practice rarely trains anyone to think like a landlord’s representative.

Vacant possession is a different file, and not yours to promise

This is where I see the most dangerous conduct in the category. A buyer wants the unit empty. The listing agent says the seller “can deliver it vacant.” Somebody writes vacant possession into the agreement. And the mechanism for actually ending a residential tenancy — what notice is available, on what grounds, with what compensation, on what timetable, and what happens if the tenant does not leave — is governed by the residential tenancies regime and administered by a tribunal. It is not within the seller’s gift and it is certainly not within yours.

Whether a tenancy can lawfully be ended in a given situation is a question for a lawyer or a licensed paralegal, and it should be answered before anyone signs anything, not after. I have watched a closing collapse because a seller gave notice in good faith on advice they got from an agent, the tenant did not leave, and the seller could not deliver what the agreement required. That seller had an agent-shaped problem.

There is an advertising dimension as well. Under RECO’s advertising guidance, a misleading statement is one that causes someone to have a wrong idea or impression, and it does not matter that not everyone would be misled. “Vacant possession available” on a tenanted property, where nothing has been determined and no process has run, is precisely that kind of statement.

Showings, access and the tenant you are asking for cooperation

A tenanted listing runs on the tenant’s cooperation, and the notice a landlord must give a tenant before entry is set by the residential tenancies regime rather than by your lockbox schedule. Build that into the listing conversation, into your showing instructions, and into any access term in the agreement.

Where a buyer needs pre-closing access — an appraisal, an insurance inspection, a contractor quote — negotiate it properly. ACC-9 (Access to Property) is the clause that specifies purpose, notice period, number of visits and hours, and it is the right tool precisely because a seller with tenants cannot promise access on demand. I set that out in my post on access clauses. Treat the tenant as a person whose cooperation you need rather than an obstacle, because on a tenanted file they hold more practical power than anyone in the transaction.

Your exposure as the registrant who drafted it

Start with the knowledge qualifier. TEN-1, TEN-2 and TEN-3 are warranties, and a warranty is only as good as what the seller knows and what it is read to cover. In Coppendale v. Mills, 2025 ONSC 5192, as reported, a best-of-the-seller’s-knowledge warranty was read as speaking to knowledge at signing rather than at closing; the buyers who had waived inspection lost a $20,000 deposit and faced damages of $206,703.56. On a tenanted file the parallel is direct: a warranty about circumstances at completion is not a warranty that nothing changes in between, and not a substitute for reviewing documents.

Then the four things that put the drafting registrant on the hook. Writing an assumption clause for a buyer who wanted the unit empty. Filling in the rent figure yourself because the seller was not sure. Telling a client what notice the residential tenancies regime allows, which is legal advice about a regulated process. And marketing vacant possession that has not been achieved.

Disclosure sits underneath all of it. Patent defects are caveat emptor, actively concealing one removes that protection, and latent defects rendering a property unfit or dangerous must be disclosed — duties that come from case law rather than from the regulations under TRESA. Whether something about a tenancy or an unlawful unit meets that threshold is a legal characterisation for the lawyer, but a tribunal application in progress, a unit the municipality has questioned, or a tenancy nobody put on the schedule are all things you cannot discover and then not think about.

And if the seller is self-represented — which happens on small investment properties more than anywhere else — confirm they intend to proceed without representation, deliver and explain the RECO Information Guide and the Information and Disclosure to Self-Represented Party form, state plainly that you act for your client and not for them, and make reasonable efforts to obtain written acknowledgement of that form. You must not advise them on price, terms or clauses, and telling an unrepresented landlord how to end a tenancy so the deal can close is well past that line.

How I run a tenanted file

1. Ask the buyer, in plain words, whether they are buying the income or buying the house. Write the answer down.
2. On the listing side, collect the documents before the property goes live: leases and amendments, the rent roll, deposit records, payment history, any notices given or tribunal applications outstanding, and what each rent includes.
3. Build the schedule properly — unit, tenant, tenancy type, expiry, rent due date, prepaid rent, and what is included in rent.
4. Attach the leases. Where there are too many, use a condition on reviewing the tenancy documents with a window that reflects how long it takes to get them.
5. Send everything to the buyer’s lawyer at the start of the condition period, not at the end.
6. Route every question about ending a tenancy to a lawyer or licensed paralegal, and record that you did.
7. Set showing and access arrangements around the notice the tenant is entitled to, and put pre-closing access in the agreement rather than in an email.
8. If a condition fails, give notice in the form the agreement requires and start the written direction for the deposit the same day — the agreement ending does not move the money.

A tenanted property is a business with people living in it. Treat the paperwork the way you would treat a small commercial file and most of what goes wrong in this category never starts.

Questions agents actually ask

Related reading

• Access Clauses in an Ontario APS: Right-of-Way, Road Access and Water Access
• Changing the Completion Date in Ontario: The Clause, the Consent and the Deadline Risk
• Environmental Clauses in Ontario: Oil Tanks, Flood Plains, Site Assessments and Endangered Species
• Residential Lease Clauses in Ontario: What You Can Add, What the RTA Overrides
• Self-Represented Parties and Mere Postings: The Remuneration Clause Under TRESA
• Every clause and condition guide in one place

This is professional commentary from a Broker of Record on Ontario drafting practice for tenancy assumption clauses, not legal advice. Ending a residential tenancy, dealing with deposits and arrears, and the lawfulness of a second unit are questions for the client’s lawyer or a licensed paralegal. This is general professional commentary from a Broker of Record on drafting practice. It is not legal advice, it is not a substitute for your own brokerage’s policies, and it does not create any professional relationship. Clause codes refer to OREA’s Guidelines for Residential and Commercial Clauses, an OREA member resource — the clause wording itself is OREA’s and is not reproduced here. Always work from your brokerage’s approved forms, and send your client to a lawyer for anything turning on interpretation, enforceability or remedy. Legislation, regulator guidance and case law all change; verify anything you are relying on.