Sale of Rental
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SALE OF RENTAL (REN)
(A) VACANT POSSESSION | |
|---|---|
| REN - 01 | Vacant Possession - Total Property on Completion |
(B) ASSUME TENANCIES | |
| REN - 02 | Assume Single Tenant/No Lease |
| REN - 03 | Assume Single Tenant/With Lease |
| REN - 04 | Assumption of Existing Tenancies (Multiple) |
(C) WARRANTIES | |
| REN - 05 | Rent - General Warranty by Seller |
| REN - 06 | Seller Warranty Regarding Disputes |
| REN - 07 | Rent - Seller Warranty Regarding Rents Charged and Permission for Rent Registry Statement |
| REN - 08 | Rent - No Warranty About Legal Rents (Including Disclaimers) |
(D) RENT REVIEW APPLICATIONS | |
| REN - 09 | Rent Review Application - Seller to Provide Financial Information and Documentation Necessary for Rent Review Application |
| REN - 10 | Rent Review Application (Pending) - Buyer to Pay/Buyer to Control |
| REN - 11 | Rent Review Application (Pending) - Seller to Pay/Buyer to Control |
(E) MISCELLANEOUS | |
| REN - 12 | Confidentiality of Disclosed Information |
| REN - 13 | Notice to Tenants of New Owner |
| REN - 14 | Rent Increase with Notices Prior to Completion of Sale |
| REN - 15 | No Rent Increases |
| REN - 16 | Seller Shall Not Renegotiate Leases Prior to Completion without Buyer Instruction |
| REN - 17 | Seller to Renegotiate Leases |
| REN - 18 | Adjustment of Purchase Price Due to Shortfall in Rental Income |
(A) VACANT POSSESSION
REN - 01 Vacant Possession - Total Property on Completion
The Buyer hereby authorizes and directs the Seller, when this Agreement becomes unconditional, to give to the tenant(s) the requisite notices under the Tenant Protection Act, requiring vacant possession of the property for use by the Buyer or his immediate family, effective as of the ____________ day of _______________, 20___.
NOTE: Due to the current state of Landlord and Tenant Law, the Seller will not be able to "guarantee" vacant possession on completion if a tenant refuses to vacate.
(B) ASSUME TENANCIES
REN - 02 Assume Single Tenant/No Lease
The Seller represents and warrants that the ___________________________________ [property, basement, or ________ floor apartment] is occupied by _______________________________ as a monthly tenant at the rate of ______________________________ ($________________) per month ___________________________________________, payable on the ____ day of each month. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to those circumstances at completion of this transaction.
REN - 03 Assume Single Tenant/With Lease
The ___________________________ [property, basement, or ________ floor apartment] is occupied by __________________________________ pursuant to a lease expiring on the ________ day of _______________, 20___. The Seller represents and warrants that the copy of the said lease attached hereto as Appendix _____ is a true and complete copy of the said lease. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to those circumstances existing at completion of this transaction.
REN - 04 Assumption of Existing Tenancies (Multiple)
Buyer agrees to assume the existing tenancies, as set out in the attached Schedule "_____", which the Seller warrants are the only tenancies affecting the property.
NOTE: Schedule should itemize categories such as: Apartment #, Tenant Name, Tenancy, Expiry Date, Rent Due Date, Prepaid Rent, and Tenancy Particulars (Items included in Rent).
NOTE: The actual lease documents should be attached as a Schedule to the Agreement. If too many documents, consider making Offer conditional upon inspection of tenancy agreement.
(C) WARRANTIES
REN - 05 Rent - General Warranty by Seller
The Seller represents and warrants, to the best of the Seller's knowledge and belief that, during the period of the Seller's ownership, the property has been rented in accordance with Landlord and Tenant legislation and that any rent increase has been effected in accordance with relevant rent review legislation. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to those circumstances existing at completion of this transaction.
REN - 06 Seller Warranty Regarding Disputes
The Seller represents and warrants, to the best of the Seller's knowledge and belief, that there are no disputes between the Seller as landlord and any tenant as to the state of repair of the leased premises, the payment of rents, contravention of applicable rent review legislation for residential tenancies, or other material items concerning the tenants' lease agreements other than as specifically set out in this Agreement of Purchase and Sale. The Parties agree that these representations and warranties shall survive and not merge on completion of this transaction, but apply only to those circumstances existing at completion of this transaction.
REN – 07 Rent - Seller Warranty Regarding Rents Charged and Permission for Rent Registry Statement
The Seller represents and warrants, to the best of the Seller's knowledge and belief, that the current actual rents are:
| Unit | Current Rent | Max Legal Rent | Last Increase(Date/Amount) | Tenancy Particulars |
| ____ | _______ | ________ | ______________ | ______________ |
| ____ | _______ | ________ | ______________ | ______________ |
The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to those circumstances existing at completion of this transaction. The Parties further agree that if the rents have been registered, the Buyer may request a Rent Registry Statement in respect of all units on behalf of the landlord.
NOTE: If Seller cannot or will not warrant, make Offer conditional upon the Buyer investigating Rent Registry.
REN - 08 Rent - No Warranty About Legal Rents (Including Disclaimers)
The Seller represents and warrants, to the best of the Seller's knowledge and belief, that the current actual rents are:
Unit Current Rent Last Increase (Date/Amount) Unit Current Rent Last Increase (Date/Amount)
| Unit | Current Rent | Last Increase(Date/Amount) |
| ____ | _______ | _______________ |
| ____ | _______ | _______________ |
The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to those circumstances existing at completion of this transaction. The Parties also agree that the warranty given is as to actual rents only, and does not extend to the legality of the rents.
NOTE: Additional categories may be used to expand tenancy information: Apartment #, Tenant Name, Type of Tenancy, Expiry Date, Rent Due Date, Prepaid Rent, and Tenancy Particulars (Items included in Rent).
NOTE: The actual lease documents should be attached as a Schedule to the Agreement. If too many documents, consider making Offer conditional upon inspection of tenancy agreement.
(D) RENT REVIEW APPLICATIONS
REN – 09 Rent Review Application - Seller to Provide Financial Information and Documentation Necessary for Rent Review Application
The Seller shall provide the Buyer with any and all financial information and/or documents in the Seller's possession and control, which the Buyer requires to effect or defend any rent review application or appeal.
NOTE: See confidentiality clause REN-12
REN - 10 Rent Review Application (Pending) - Buyer to Pay/Buyer to Control
The Parties agree that the Seller will allow the pending rent review application, and any appeal thereof, to be continued in the Seller's name, in the control of the Buyer and at the expense of the Buyer including the payment of any liability for costs in the Divisional Court or a higher court. Provided further, that if an appeal is brought to, or defended in, the Divisional Court or a higher court the Buyer shall provide the Seller's Solicitor with the amount of ________________________ ($_______________), at each level of court to which the appeal is taken, to a maximum amount of ____________________________________________________________, ($______________), to be held in trust as security for the Seller's liability for costs.
NOTE: Buyers using this clause should seek legal advice as to potential amounts involved.
REN - 11 Rent Review Application (Pending) - Seller to Pay/Buyer to Control
The Parties agree that the Seller will co-operate with the Buyer in completing all pending rent review applications and appeals thereof which shall be at the expense of the Seller up to a maximum of _____________________ ($________________), until the completion of any appeal whether to the Ontario Rental Housing Tribunal or to the Divisional Court, provided further that such application and appeals shall be in the control of the Buyer throughout.
NOTE: Buyers and Sellers using this clause should seek legal advice as to potential amounts involved.
(E) MISCELLANEOUS
REN - 12 Confidentiality of Disclosed Information
The Buyer will hold in strict confidence any knowledge about the rent review situations of the property, financial documents, leases, and such other records of the property which the Buyer obtains from this Agreement or any other source, subject only to the use of such information in order to obtain professional advice and in the application or appeal process concerning rent review.
REN - 13 Notice to Tenants of New Owner
Upon completion, the Seller shall provide the Buyer with a notice to all tenants advising them of the new owner and requiring all future rents to be paid as the Buyer directs. The Seller will pay to the Buyer any rent paid to the Seller in error or in violation of the direction for a period of _____ months following completion, after which period the Seller may refuse to accept rent from tenants or return it to them.
NOTE: Lawyers for parties will treat rent deposits and interest thereon as part of the adjustment process.
REN - 14 Rent Increase with Notices Prior to Completion of Sale
The Seller shall, at the earliest legally permitted time to completion, give notices of rent increases, at the statutory rate or as otherwise agreed between the Buyer and the Seller, and provide the Buyer with proof of proper service thereof.
REN - 15 No Rent Increases
Pending completion, the Seller shall not give any notices of rent increases.
REN – 16 Seller Shall Not Renegotiate Leases
Prior to Completion without Buyer Instruction Unless otherwise agreed between the Buyer and the Seller, the Seller shall not renegotiate any leases after this Agreement becomes unconditional.
REN - 17 Seller to Renegotiate Leases
The Seller shall make reasonable attempts to renegotiate leases with current tenants [for terms not to exceed ______ years] as agreed between the Buyer and Seller.
REN - 18 Adjustment of Purchase Price Due to Shortfall in Rental Income
The Parties agree that if the actual rent, including any planned increases as declared in this Agreement, is less than the rent warranted, including any planned increases by the Seller, then the Parties agree that the Seller shall pay the Buyer as liquidated damages, the amount of the difference times a factor of _______, as either an adjustment on the purchase price of the property or as a separate payment at the sole discretion of the Buyer.
NOTE: The factor is negotiable between the Parties, but is often based on the ratio between the overall purchase price and gross rent (gross rental multiplier).
NOTE: For the purpose of these clauses "Lessee" and "Lessor" have been used.
Lessee = Tenant and Lessor = Landlord. Either term may be used.
NOTE: In all cases please refer to the Tenant Protection Act.
NOTE: It is not lawful for a Landlord to "demand" post dated cheques for rent as a requirement when leasing residential premises.