ImmoMulti — a direct buyer of multi-unit properties on the North Shore — tells every seller the same thing: selling a plex with active leases erases no lease. In Quebec, leases follow the building, not the owner. On closing day, the buyer inherits your tenants, your rents, your pending notices and any lingering disputes. Your obligations as a seller therefore go well beyond signing the deed: you must hand over a complete rental file, properly prorate prepaid rent, settle the deposit question and disclose every pending notice. This guide walks through each of these seller-side obligations, with the right sources.
Does the sale end the leases on my plex?
No. Under article 1937 of the Civil Code of Quebec, selling the building does not end the lease. The new owner becomes the landlord by operation of law and remains bound by the existing leases, on the same terms. Leases follow the building, not the person of the seller.
This is the starting point for any sale of an occupied income property. The Civil Code of Quebec is explicit: the voluntary or forced alienation of the leased property does not, of itself, terminate the lease. In other words, a tenant in place cannot be removed simply because you are selling. The buyer picks up the lease exactly where you leave it: same rent, same clauses, same term.
The direct consequence for you: you cannot guarantee the buyer "vacant on possession" units simply because a sale is approaching. Delivering a vacant unit requires a genuine voluntary departure, a repossession or an eviction validated before the sale — otherwise you expose yourself to remedies. Many owners therefore choose to sell the building occupied, with clear leases. On this point, your mix of tenants and rents weighs directly on the price: we explain it in our article on how your tenants change the value of your plex at sale.
Source: Civil Code of Quebec, art. 1937 (LégisQuébec); Administrative Housing Tribunal (TAL).
What documents must I hand over to the buyer?
The seller must hand over a complete rental file: each signed lease and its schedules, the TAT schedule showing the lowest rent in the last 12 months, the history of increases and notices, the rent-account status (arrears, agreements), tenant contact details and any pending notice or TAT file. The offer to purchase usually provides for this hand-over before closing.
Since the buyer becomes the landlord, they need everything that governs the relationship with each tenant. A well-assembled file is not just a courtesy: it drives the price, reduces the buyer's conditions and prevents last-minute stalls. Here is what a seller should gather early:
- The signed leases for each unit, with all schedules and the building rules if any.
- The TAT lease schedule showing the lowest rent paid over the previous 12 months (required at renewal, useful to the buyer).
- The history of rent increases and notices sent, to demonstrate compliance with the TAT.
- The rent-account status: rents up to date, arrears, payment agreements, cheques or transfers.
- Tenant contact details and recent proof of payment.
- Any pending notice (repossession, non-renewal, major work) and any open TAT file.
Why a complete file protects you
- It justifies your declared income — a plex's value rests on it.
- It limits price-reduction requests and conditional clauses.
- It shields you from a claim of misrepresentation after the sale.
Who keeps the rent for the month the building is sold?
The current month's rent is prorated to the closing date on the statement of adjustments prepared by the notary. The seller keeps the portion before the sale; the buyer is credited the portion covering the days from the sale date onward, since they will be the landlord for that period.
In Quebec, rent is payable in advance: the tenant generally pays on the first day of the term (often the 1st of the month). Closing day therefore almost always falls in the middle of a month already collected. The notary splits it: the fraction of days you owned the building is yours, the fraction the buyer owns it is credited to them. This is one of the standard lines of the costs and adjustments at closing, alongside taxes and fuel in the tank.
| Situation | Treatment at closing | Effect for the seller |
|---|---|---|
| Month's rent already collected | Prorated to the sale date | Buyer is credited for the days after closing |
| Unpaid rent for the month | To clarify: seller's account, adjustment possible | Document it to avoid a post-sale dispute |
| First term prepaid (new lease) | Tracked and transferred by the period covered | Prorated like prepaid rent |
Do I have to transfer tenant deposits to the buyer?
Normally, no: in Quebec, a landlord may only require the first rental term. Security deposits, key deposits and last-month deposits are prohibited. There is therefore usually no deposit to transfer to the buyer, unlike in other provinces.
This is a major difference from elsewhere in Canada, where security deposits are common. In Quebec, the law prohibits a landlord from requiring any sum other than the first rent payment. If, despite this, you hold a sum a tenant paid you as a "deposit", it is not a transferable asset: it should be returned or regularized before the sale, never presented to the buyer as an amount to take over. We detail this framework in our article on security deposits and rent advances banned in Quebec.
Absolutely avoid
Do not "transfer" an illegal deposit to the buyer by presenting it as a file asset: you would be passing on both an irregular sum and the risk attached to it. Regularize the situation before closing.
Do I have to notify tenants and pass on pending notices?
You do not need the tenants' permission to sell. However, the tenant is entitled to know the identity and address of the new landlord in order to know whom to pay, and you must disclose to the buyer any pending notice (repossession, non-renewal, work) and any TAT dispute, since they follow the building.
Selling an occupied building does not require the tenants' consent. But two practical obligations remain. First, the tenant must know whom to pay rent to after the sale: information on the new landlord is passed on, usually at closing or shortly after. Second, while the building is listed, you must respect the tenant's rights regarding visits of the unit, framed by the Civil Code (reasonable notice, suitable hours).
Beware of notices already given. Notices strictly tied to the lease (increase, non-renewal for a lease-based ground, work) follow the building. But repossession of a dwelling is a personal right: a repossession notice you gave for your own benefit generally cannot serve the buyer. Every pending notice must be disclosed, because it changes what the buyer is purchasing. For the required deadlines and forms, see our guide on mandatory tenant notices and legal deadlines in Quebec.
Sell your occupied plex, hassle-freeDirect offer within 48 hours, leases in place accepted, no broker or commission. →What are the common seller mistakes?
Most disputes after the sale of an occupied plex come from obligations neglected upstream. The most common:
- Promising vacant units without a legal basis, forgetting that leases follow the building.
- Handing over an incomplete lease file or undocumented rents, which drives the price down or multiplies conditions.
- Hiding a TAT dispute or a pending notice from the buyer — a misrepresentation with heavy consequences.
- Believing you must "return" a security deposit to the buyer, when such deposits are illegal in Quebec.
- Ignoring the tenants' right to visits while the building is listed, a source of tension and complaints.
A rigorous rental file and honest disclosure are your best allies. They speed up closing, secure your price and protect you after the sale.
