A fugitive landlord is at large. Where does that leave dozens of his Ontario tenants?

CBC

5 hours ago

Tenants of buildings owned by a wanted fugitive could be safe from eviction if the bank or a new landlord take over, a legal expert says.
Gareth West, 45, is wanted by U.S. authorities for allegedly running a grandparent scam call centre in Montreal, defrauding American seniors out of more than $21 million US. He's been at large since an arrest warrant was issued for him in February.
CBC News has previously reported that Gareth owns two apartment buildings — one in St. Thomas and the other in London. West bought another building, at 232 Elm Street in St. Thomas, in March 2022 but the three-storey walk-up was ordered shut by the fire department last November for severe fire code violations, resulting from botched renovations. It was foreclosed that same month before the bank took over in January, according to property records.
"When the bank takes over, it's actually a good thing because if the landlord wasn't paying the utilities then the bank takes on the responsibility and things get restored," said Elena Dempsey, a lawyer at Elgin-Oxford Legal Clinic in St. Thomas.
Tenants living at West's rentals at 14 Holland Street in St. Thomas and 308 Egerton Street in London say they've been left to deal with uncollected garbage piling up, power interruptions and no hot water. They've expressed concerns about what comes next in the absence of their landlord.
Both cities said services are restored at the apartments and they're working with the respective mortgage lenders.
What happens next?
The next step would involve the mortgage lender, which could be the bank, seizing the properties and taking ownership until its sold to another buyer. However, tenants would have protections against evictions under the Residential Tenancies Act.
"The only way the bank would seize the property is if the landlord goes into default on the mortgage," Dempsey said.
"We have in the past had times where the landlord can't pay utilities, or the landlord is unable to maintain the payments on the property and the bank takes over, which is more frequent."
With West on the run, the lender can get an order from Superior Court allowing it to take ownership, but that process could take several months.
Residents will then have to prove they are legitimate tenants, after which they'd receive something called a Notice of Attornment and their rent would be paid directly to the bank from the date of the notice.
Having the bank as their landlord can be a boon for those living at the buildings because it can guarantee stability in services, said Dempsey. If another person or company purchases the building, they become the new landlord and cannot evict tenants without valid cause, she added.
"Only under the act can you evict, you cannot just say 'Get out people, I'm the new owner,'" Dempsey said. "If the new person takes over and one of the tenants do something that give rise to eviction, potentially yes, they could be evicted, just like they can be evicted anywhere else."
The landlord could apply to demolish the building or convert it for other use but they're required to provide at least 120 days notice and tenants can contest that at the Landlord and Tenant Board — another lengthy process.
Municipalities limited in authority
Municipalities are limited in their jurisdiction over private properties, said St. Thomas Mayor Joe Preston. However, his city and London have issued bylaw notices which gives them authority to address violations such as garbage collection, and issues with water and electricity.
"Not having trash picked up is not likely enough of a property standards but when we get water and electricity shut off, then we can step in after a disconnect has happened to get it turned back on. We cover those bills and put them on the landlord's [property] taxes," said Preston.
"The landlord has certain obligations, even if he is an absentee landlord, and it appears right now things are back on and tenants are being well served but we will make sure we get involved where we need to."
With West at large, the property tax expenses become a lien on the buildings and would prevent future sales until that's paid, said Preston, adding: "It gives us some power to be able to collect from anybody who might purchase the building in the future."
St. Thomas officials managed to find new housing for all tenants at West's Elm Street rental, said Preston. Both cities said they will work to help relocate tenants in the event of an eviction, but that remains up to the mortgage lender or new owner.
Keep rent money aside, lawyer tells tenants
Some tenants CBC News spoke to said they won't be paying rent until the situation is resolved, with some saying efforts to make their payments have been unsuccessful and deposits weren't accepted, though others said the money was withdrawn from their accounts.
Dempsey's advice is to put money aside until there's a resolution. Tenants could pursue the new landlord for violations of tenant protections such as loss of services, interference with reasonable enjoyment, emotional distress and other issues.
"It's not a good idea to withhold your rent. Any court does not look favourably upon self-help remedies," she said. "Let's say the tenants pooled all their money together and paid the hydro bill, that might be a good argument as to why they shouldn't pay their rent but I'm not hearing that that's what they've done."