The tenant has the right of first refusal

If, prior to the sale of an apartment building that is being converted into condominiums, a landlord fails to inform the tenant of their statutory right of first refusal—in violation of their legal obligation—the tenant may claim damages.

The Federal Court of Justice recently dealt with such a case. One of the tenants was not initially informed of the sale. She only learned of it when the new owner later offered her the apartment at a significantly higher sale price.

Legal Requirements for Landlords

The law requires the landlord of a multi-unit building who later converts the rental property into condominiums to inform the tenant, in the event of a sale, both of the terms of a concluded sale of the apartment and of the existence of a right of first refusal. The Supreme Court justices deemed the defendant landlord’s conduct to be in breach of duty. Since she failed to inform the tenant, she owes the plaintiff damages. According to the reasoning in the judgment, it is irrelevant whether the tenant actually exercises her right of first refusal after becoming aware of it.

Amount of Damages

The judges awarded the tenant damages in the amount of the difference between the portion of the sale price attributable to the apartment and the market value of the apartment.