What is “Tenancy – At – Will”? The situation where a buyer receives possession of the property prior to payment of the full purchase price to the seller.

Sometimes, for a number of different reasons, the buyer may not be able to pay the purchase price to the seller on the possession date. One example is where the buyer’s mortgage lender is late sending the mortgage funds to the buyer’s lawyer which results in the buyer’s lawyer not having the money to pay the seller the purchase price. Another example, is where the seller has not provided the buyer with a document required to close and therefore the buyer’s lawyer wants to delay the payment of the purchase price so as to protect the buyer.

The seller may still allow the buyer to move into the property on the possession date if (there may be other requirements):

  1. the buyer’s lawyer has the downpayment in trust;
  2. the buyer’s lawyer has submitted the transfer of land to the buyer for registration;
  3. the buyer has signed all their mortgage and purchase documents;
  4. the buyer has property insurance in place; and
  5. the buyer has signed a tenancy at will agreement which generally says that the buyer is a tenant only, must vacate the property on very short notice, the buyer can’t make any changes to the property; and the buyer must pay interest to the seller up until they pay the purchase price.

The seller is under no obligation to allow the buyer to move in prior to the buyer paying the full purchase price and the buyer completing all it’s obligations under the purchase agreement (unless the purchase agreement says otherwise).

If you have any questions about Tenancies at Will,  I would be happy to answer them.
Rosellina

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