In a recent decision that made headlines, a tenant who had rented 12 Ontario homes under false pretences was found in contempt of court and ordered to pay the landlords a total of $36,000 or face jail time.

Tenant Rents 12 Properties Under False Pretences

The owners of 12 residential single family homes (together “the landlords”) located in Richmond Hill, Markham and Thornhill entered into lease agreements of their homes with the tenant. The lease agreements between the landlords and the tenant set out that he would reside in the homes with his family.

However, the tenant had no intention of living in the homes, instead renting them out to others as rooming houses. At one point, the tenant admitted that he had in excess of 90 people occupying the residences as roomers.

In September 2020, the landlords sought an injunction that would effectively evict all those living in the homes, including the tenant, from the residences. The court refused the landlords’ request, finding that it did not have jurisdiction to issue such an order. However, the court did order the tenant and all occupants of the residences to restore them to their former status as a single family residence in order to comply with the provisions of the local zoning bylaws which prohibit rooming houses.

Subsequently, the court further ordered the tenant to comply with the September order by October 13, 2020, failing which the landlords could re-enter the residences and take whatever steps were required to ensure compliance with all zoning bylaws.

As a result of further non-compliance on the tenant’s part, the landlords applied to court to obtain a writ of possession and a finding that the tenant was in contempt of court.

Court Finds Tenant in Contempt of Court

At a November 3, 2020 hearing, the court found the tenant in contempt and granted the landlords exclusive possession of their residences.

The court found that while the tenant had taken limited steps towards complying with the court order, as of November 3, 2020, there remained approximately 73 individuals living in the residences, which the court deemed “a complete lack of good faith on the part of [the tenant] with respect to substantial compliance with the [order].” In addition, the tenant continued to accept rent from many of the roomers still occupying the residences.

The tenant testified that he had received an average of $500 a month for each room he rented, which resulted in approximately $40,000 a month for the properties. Additionally, his bank account statements showed total monthly deposits ranging from roughly $30,000 to $208,000 during the months he was leasing the homes. The court stated:

“The fact that [the tenant] continued to accept rent is a further reflection of his real intentions. [The tenant] had no intention of complying with this court’s order to restore the residences to their former status as a single family residences unless he was absolutely forced to do so.

[The tenant]’s complete lack of bona fides was further demonstrated during the course of his evidence, when he freely admitted that when he entered into the various lease agreements he did so fraudulently misrepresenting to each of the [landlords] his true intentions. Where the [landlords] believed that [the tenant] was going to occupy the residences with his wife, two children and one of his in-laws, the true intent was never revealed, specifically his intention to convert the various residences into rooming houses and maximize his income potential, while at the same time not even complying with his rental obligations to the various landlords.”

In determining the penalty for the tenant’s civil contempt, the court set out the relevant principles as follows:

  1. The sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender;
  2. The sentence must be increased or decreased as the case may be, to account for aggravating or mitigating factors surrounding the contempt or the contemnor;
  3. A sentence should be similar to sentences imposed on similar contemnors, for similar contempt committed in similar circumstances;
  4. Sentences should be fashioned in such a way as to denounce the unlawful conduct of the contemnor; promote a sense of responsibility in the contemnor and, perhaps of even greater significance, deter the contemnor and others from defying lawful court orders; and
  5. In imposing sentence, the court must consider a sanction that does not involve jail.

Ultimately, the court ordered the tenant to make restitution to the landlords in the sum of $36,000. As a result, the owners of each of the 12 residences would receive $3,000 each. Additionally, the court stated that, if the tenant failed to make the payments within 10 days, an arrest warrant would be issued against the tenant and he would face jail time of 120 days.

The CBC has also reported that the tenant faces17 fraud-related criminal charges for allegedly using fake identification documents in his applications to rent the houses.

Get Help 

Whether you are buying your first home, purchasing a cottage or investment property, or selling your home to downsize to a condo, the real estate lawyers at Campbells LLP can guide you through every step of your residential real estate transaction. We will explain your options, review all relevant paperwork and contracts, negotiate on your behalf, and defend your interests in any potential disputes that may arise.

At Campbells LLP, we understand that the majority of real estate transactions occur in the evenings or on weekends. One of our lawyers would be happy to meet with you, by appointment, at a time and date that works best with your schedule. To learn more about how we can make the buying and selling process less stressful, contact us online or at (905) 828-2247. We look forward to speaking with you.