N12 for purchaser — what does \"good faith\" actually require after the closing?

Good faith under section 48 (own use) and 49 (purchaser own use) requires three things post-eviction:

1. **Actual occupancy** by the purchaser, their spouse, child, parent, or caregiver — for at least 12 months. Renting the unit out within 12 months of eviction is the single biggest red flag.
2. **The compensation paid** — for N12, that's one month's rent BEFORE the termination date (recently increased from optional to mandatory in many cases — check current RTA).
3. **Truthful intent at the time of N12 service** — the purchaser must genuinely intend to occupy at the time you serve the notice.

Exposure if the purchaser changes their mind:

- The evicted tenant can file a **T5 application** within 1 year of the eviction.
- Damages are punishing: up to 12 months' rent in compensation, plus moving costs, plus the rent differential between the old unit and the tenant's new unit for up to 12 months.
- The LTB has been aggressive on bad-faith N12s in 2025-2026 — orders of $30-50k against landlords are not uncommon.

Your protection: get the purchaser's intent in writing in the APS (Agreement of Purchase and Sale). Include a clause that the purchaser indemnifies you for any T5 damages if they don't actually occupy. Insist on the compensation being paid by the purchaser, not you.

VirtualPM Legal Shield includes N12 strategy + T5 defense at the $199/month tier. Book a free 15-minute consult.