Buying a Tenanted Home in Etobicoke: What Changes on September 21 and What Does Not

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If you are buying a house or a condo in Etobicoke with a tenant living in it, the rule changes taking effect on September 21, 2026 almost certainly do not apply to you. That is the short answer, and it catches out most of the people who ask us. Ontario is loosening one specific rule for a landlord who wants a unit for their own use, which is section 48 of the Residential Tenancies Act. A buyer who wants the unit runs through section 49 instead. Section 49 was left exactly as it was. You still need 60 days of notice, the seller still owes the tenant one month's rent, and none of the new flexibility is yours.

Thinking about a tenanted semi, duplex or condo in the west end? Browse current Etobicoke listings and we will tell you which ones come with a tenancy attached before you get attached to the house.

What actually changes on September 21

Two amendments from Bill 60 come into force that day. The first adds a new subsection 48.1(2). A landlord who serves an N12 for their own use, and who sets the termination date at least 120 days out rather than the usual 60, no longer has to pay the tenant one month's rent in compensation. Longer notice buys you out of the payment.

The second is a new subsection 57(6.1). If the person named on that N12 does not move in within a period set by regulation, the Landlord and Tenant Board will presume the notice was given in bad faith. The landlord can rebut it, but the burden flips, which is a meaningful change in a hearing room.

Both of those amendments are written to apply to notices given under section 48. Neither one touches section 49.

Why your purchase runs on a different section

Section 48 is for someone who already owns the place. Section 49 is for a sale. It lets the landlord of a residential complex with no more than three residential units, or the owner of a condo unit, serve a termination notice on behalf of a purchaser who in good faith requires the unit to live in. That distinction matters in three practical ways.

You cannot serve the notice yourself. The seller has to do it, on your behalf, while they still own the property. If the agreement of purchase and sale goes firm on a Friday and the seller does not get the N12 out until three weeks later, you have lost three weeks and there is nothing in the Act that lets you fix it.

The one month's compensation is still required, and it is still the seller's bill. Subsection 49.1(2) says so in as many words: the obligation stays with the landlord who gave the notice and does not become the purchaser's. Sellers sometimes try to push it into the price. That is a negotiation, not a legal obligation, and it is worth knowing which one you are having.

The minimum notice is 60 days, and the termination date has to land on the last day of a rental period or the end of a fixed term. A month to month tenancy that runs to the last day of each month means a notice served on October 2 cannot end the tenancy on December 1. It ends it on December 31. That single detail moves more closings than anything else on this list.

Who is allowed to require the unit

The list under section 49 is short and it is closed. The purchaser, the purchaser's spouse, a child or parent of either of them, or a caregiver for one of those people who will live in the same building. That is it. A sibling does not qualify. A niece does not qualify. Neither does a corporation, and neither does "we might move in eventually." The requirement is good faith occupation, and the Board reads it the way it is written.

The timeline, from firm offer to keys

Source: Residential Tenancies Act, 2006, ss. 49, 49.1 and 57, as they read on September 19, 2026. This is general information, not legal advice.

Notice what is not in that table: a closing date. The Act does not care when your lawyer registers the transfer. If the tenant is still there on closing day, you own a house with a tenant in it and the seller owns an LTB file. Build the notice timeline backwards from the termination date, then set the closing date after it, not the other way around.

The other path: keep the tenant and run the numbers

Plenty of Etobicoke buyers are not looking for vacant possession at all. They want the rent. If that is you, the question stops being procedural and becomes an underwriting question, meaning you are pricing what the income stream is actually worth rather than what the listing says it is.

The thing to understand is that you are not buying the market rent. You are buying the sitting rent, and in Ontario the sitting rent only moves by the annual guideline for any unit first occupied on or before November 15, 2018. The guideline is 2.1% for 2026 and 1.9% for 2027. Units first occupied after that 2018 date sit outside the guideline, which is why the year a building came online matters more than most buyers expect.

Here is the gap, drawn to scale. The top bar is an illustrative sitting rent for a two bedroom, not a published figure. The three below it are published.

Sources: TRREB Q1 2026 Rental Market Report, GTA condo apartment averages, one bedroom $2,246 and two bedroom $2,939. Rentals.ca and Urbanation July 2026 rent report released August 7, 2026, Toronto apartment and condo average asking rent $2,577. The $1,900 bar is an example, not a market statistic. Figures as of September 19, 2026.

Run that example forward. A tenant paying $1,900 against a two bedroom average of $2,939 leaves a gap of $1,039 a month, or $12,468 a year of income you are not collecting. At the 2026 guideline of 2.1%, holding the market figure flat, it takes about 21 years of annual increases for the sitting rent to catch up. That is not a criticism of the tenancy. It is the arithmetic of a regulated rent, and it belongs in the price you pay.

If you are weighing a tenanted purchase, these three are worth reading alongside this one:

• Ontario's rental rules change again on September 21: what landlords and tenants should do now
• Buying an Etobicoke home with a legal second suite: the rules and the math
• What a real estate lawyer actually does, and when to call one

The two paths, side by side

Rent figures per the TRREB Q1 2026 Rental Market Report. The $1,900 sitting rent is illustrative. Guideline of 2.1% per the Ontario 2026 rent increase guideline.

What it costs if the move in does not happen

This is the part buyers skip, and it is the expensive part. Under section 57 of the Act, a former tenant has one year from the date they vacated to apply to the Board. If the Board finds the notice was given in bad faith and nobody on the section 49 list moved in within a reasonable time, it can order the landlord to pay the tenant's increased rent for a full year, plus general compensation of up to 12 months of the last rent charged, plus an administrative fine of up to the greater of $10,000 and the Small Claims Court limit, which has been $50,000 since October 1, 2025. Moving and storage costs are available on top of all of that.

Take that example tenancy at $1,900. Twelve months of general compensation alone is $22,800 before anything else is added. Plans change, jobs move, relationships end. If yours changes after the tenant is out, get advice before you list the place or hand the keys to someone who is not on that list.

What would change this read

Three things. The regulation under the new subsection 57(6.1) is what sets the occupancy window, and while the reporting has pointed to 60 days, the regulation governs and it is worth confirming the number with your lawyer before you rely on it. Second, nothing stops the province from extending the section 48 approach to section 49 later. Bill 60 came into force in pieces and the pieces are still arriving. Third, the rent arithmetic above assumes a flat market. GTA condo rents have been falling, with one bedrooms down 4.1% and two bedrooms down 3.2% year over year in TRREB's Q1 2026 report, so a sitting rent that looks deeply below market today may be closer to market than it appears by the time you actually own the place. That cuts against paying a premium for vacant possession.

There is also a reasonable argument that a tenanted property is simply cheaper to buy, and for an investor that discount is the whole point. Fewer buyers will touch a property with a tenancy attached, which thins the bidding and shows up in the price. If you are not in a hurry and the numbers work at the sitting rent, that thin market is working for you rather than against you.

Every tenanted property answers this differently, and the answer turns on the lease, the rental period and the year the unit was first occupied, not on a rule of thumb. Book a call and we will read the actual lease, map the notice dates against a workable closing, and tell you what the income is worth at the sitting rent. Sometimes the answer is that the place is priced as though vacant possession is a formality, and we will say so.

Dave Dubbin
Etobicoke Real Estate Expert
Dave Dubbin & Associates
Real Estate Broker for Etobicoke and Toronto
Sotheby's International Realty, Canada