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This question is looking for some ideas and some underwater rocks that haven't been though of yet.

The context:

Jurisdiction: Nova Scotia, Canada

A buyer and a seller has entered into an sale agreement. The seller agreed to deliver the premises vacant on closing date.

Midway to the closing date, the seller is having issues with the tenants who are refusing to leave until well after the closing date.

  1. The tenants have the legal right to remain in the property well after the stated closing date.
  2. The new owners will not be occupying the property.
  3. The seller has no written lease.
  4. Although the seller had a handshake agreement with the tenants that they will vacate the property before the closing date, the tenants have turned around requesting a sum of money.

The buyers are at the point right before incurring majority of the closing costs. They have just a few days to play with, before they have to continue with the expenses.

The questions:

  1. Can the seller enter a formal agreement with the tenants in which the seller pays a sum of money and in return the tenants vacate the premises before the closing date, and would such agreement hold over the tenants legal right to remain on premises past the closing date?

  2. What happens if the sale goes though under the assumption that the tenants have left, and in fact the tenants are still occupying the premises?

  3. What guarantees and proofs can the buyer demand as to the vacant status of the property?

  4. What other questions should the buyer be asking?

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    You said, "The tenants have the legal right to remain in the property well after the stated closing date." What gives the tenants that right? (e.g. they have a lease that extends past that date; they've paid rent for a period past that date; they were not properly notified; etc.)
    – Makyen
    Commented Nov 24, 2019 at 16:53
  • The law in Nova Scotia is that the only circumstance in which the tenants can be served a notice to leave the premises is if the new purchaser or their family is moving into the house. Otherwise, the purchaser must take on the tenants as their own.
    – Anton
    Commented Nov 24, 2019 at 23:02
  • Just interested: So, the only way a landlord can end a tenant's right to possession (assuming the tenant pays the rent agreed upon when they began renting), is to sell the property and have the new owners occupy the property? In other words, the landlord has no right to end the tenancy for any other reason? (I assume they can end the tenancy if rent isn't paid.) In addition, I assume the landlord can't raise the rent, or at least not more than X% in Y period. The type of law you describe is usually in place to prevent landlords from getting around rent controls by transferring the property.
    – Makyen
    Commented Nov 24, 2019 at 23:34
  • Depending on the type of rent agreement: fixed vs periodic. In case of periodic, the tenant must be doing something against the law or lease, otherwise yes, the only way is to sell to new owners who will occupy the premises. However, as far as I know, the following quote is accurate: "There are no restrictions on how much a landlord can raise the rent in Nova Scotia. As long as the landlord only raises the rent once every 12 months they can raise it as much as they want. They must give you four months notice before raising the rent."
    – Anton
    Commented Nov 25, 2019 at 1:33
  • Thanks for the information. So, effectively, you can arbitrarily end the tenancy in 4 months (or 12 months, if you've just raised the rent) by raising the rent to $1B/mo, or some other unrealistically high number. Unfortunately, that doesn't help getting the tenants out by the time the property closes, but at least allows for a way to get them out in the long run.
    – Makyen
    Commented Nov 25, 2019 at 1:57

2 Answers 2

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  1. Can the seller enter a formal agreement with the tenants in which the seller pays a sum of money and in return the tenants vacate the premises before the closing date, and would such agreement hold over the tenants legal right to remain on premises past the closing date?

Maybe. It depends on tenancy law in Nova Scotia.

Notwithstanding, given that the tenants are “difficult”, what are your plans if they take the cash and don’t move out?

  1. What happens if the sale goes though under the assumption that the tenants have left, and in fact the tenants are still occupying the premises?

Why would the buyer settle under an “assumption”?

At the time of settlement either the tenants have left (so settlement happens) or the haven’t (so the vendor is in breach, settlement doesn’t happen and the buyer decides whether to rescind the contract and claim damages or affirm the contract and claim damages).

  1. What guarantees and proofs can the buyer demand as to the vacant status of the property?

They take the keys and walk into it.

  1. What other questions should the buyer be asking?

They should be asking: “Will you be in a position to fulfil your obligations under the contract?”

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I assume (perhaps incorrectly) that you read this especially the "New owner to occupy premises" part and did all of that, having given them Form DR-2. Then presumably you delivered the notice at least 2 months in advance of the planned closing. It is unclear why you think the tenants have the right to remain longer – perhaps you mean that you made an error in giving notice such as not observing the 2 month advance notice requirement.

You could offer them money to move out early (in the form of a contract), but do consider the probability that the tenants will change their mind. Here is a suggestion for an early termination offer in Nova Scotia. An alternative is to negotiate with the buyer for a delay in closing (probably at some cost to you). The unresolved existence of a tenant could seriously mess up your plan to close, since the landlord obligations survive the transfer of ownership, and the new owners may find themselves with unexpected tenants.

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    The new owners will not be occupying the premises. What then?
    – Anton
    Commented Nov 24, 2019 at 1:28
  • 2
    If the tenants are a deal-breaker for the buyer and you can't buy the tenants out, that pretty much exhausts your options. The buyer might just take over the tenant for the remainder of the tenancy: the buyer would therefore want to know that they might get stuck with a tenant until the lease runs out.
    – user6726
    Commented Nov 24, 2019 at 2:30

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