‘Cash-for-keys’ offers fueling renoviction fears in London complex

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Worried and stressed, some residents of a west London rental complex say they’re feeling pressured by a new owner to leave their affordable units and fear they’ll become the city’s latest renoviction victims.

But the new owner of the properties at 145 Base Line Rd. W., a complex made up of five triplexes, insists that’s not the case and that all tenants will be allowed to return and be given the first right of refusal on their unit.

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Still, he’s been offering thousands of dollars for tenants to voluntarily end their long-term tenancies, a practice known as “cash for keys” that housing advocates say is used by landlords to more easily gain possession of their properties before renting them out at higher prices.

Lindy Fleming, who lives at one of the 15 units with her partner and his children, said her nightmare began in late June when she was informed the property where she’s lived for the past four years had been sold.

“At the beginning, they told me that nothing was going to change,” said the 35-year-old. “The buildings weren’t going to change, we weren’t going to have to move or anything. And then, about a week later, they come by with a letter telling us that they want us all to leave.”

In the letter, tenants were told the new owner — a numbered company whose principal is listed as Carlos Afanador — plans substantial renovations to the property and that “the rental unit will no longer continue to exist to its current extent.” The units will be uninhabitable during the work, said the letter, that also offered “a discontinuance of tenancy package to facilitate your successful transition to your new home.”

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The letter also said the landlord has the right under law to vacate the units during the work, with 120 days’ advance notice to tenants, and that tenants are entitled to three months’ compensation.

Fleming said she and her partner haven’t received an offer yet. But some tenants have accepted offers of up to $9,000, according to a legal clinic supporting some of the residents.

Given how high rents are in London, however, Fleming said even that much money makes no sense for her. She pays $1,050 monthly for a three-bedroom unit with an unfinished basement her family uses for storage and as a laundry room.

“To rent a room is the same price as what we’re paying here,” she said. “If we get anything with more than one bedroom, it’s twice as much as what we’re paying here.”

Courtney Crossen, who’s lived in her two-bedroom unit for 10 years and pays $920 plus utilities, agrees.

“It’s a huge space for what I pay,” she said. “After COVID, and seeing how rents basically tripled, it really made me feel like I had found one of the last little gems left in the city.”

Crossen said she’s set on not accepting any offers and plans to stay in her unit. But she’s worried about the future of some of her neighbours, who include elderly people and others on disability support.

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“Where are they going to find a place to rent?” she said. “I can only imagine the sleepless nights that some of my neighbours are having because of all of this.”

Crossen said she’s concerned the landlord is “trying to bait people and prey on their vulnerability and hope that they can dangle some money in front of their faces, and they’ll take it.”

But Afanador, who describes himself on social media as a real estate investor, defended the project, saying in a social media exchange with The London Free Press that he’s “committed to ensuring a smooth transition for all affected tenants, in compliance with all legislative requirements.”

Under Ontario law, tenants can legally be evicted from their units to make way for major building repairs or upgrades but they’re entitled to first right of refusal to return once the work is done at the same rent they paid. Landlords in rent-controlled buildings, however, can apply for higher increases to offset those costs.

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So-called “renovictions” occur when bad-faith owners, trying to cash in on hot housing markets, evict tenants for upgrades, hoping they’ll move on. Once their units are declared vacant, they often then jack up the rent to higher rates the market will bear.

None of the tenants The Free Press spoke with said they’d received a formal eviction notice.

The Free Press called, texted and wrote on Instagram to Afanador, who confined his replies to Instagram.

He said his plan is to create additional units by renovating building basements, which he said are being mainly used as storage space. He also reiterated that tenants will be given the option to return to their modified units while acknowledging some have been offered “financial incentives” to end their tenancies.

“As part of the renovation, the landlord will add additional rental units, contributing to the city’s housing availability,” Afanador said in his exchange. “This project aims to enhance the quality of the current units and increase the housing supply, which is critically needed in the city.”

Cash-for-keys deals aren’t uncommon and are legal in Ontario. Through them, both tenants and landlords agree upon a sum of money in exchange for the tenant to leave the property voluntarily.

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But in many cases, such deals are used by landlords who want to take possession of a property but avoid the legal hurdles of going through the Landlord and Tenant Board that settles disputes between landlords and tenants, said Kristina Pagniello, executive director at Neighbourhood Legal Services (London and Middlesex).

Her clinic estimates landlords in London offer between $3,500 and $5,000 in compensation to tenants in such deals, which is less than they’d receive if they were illegally forced out and successfully fought that under provincial rules.

Pagniello also said cash-for-keys agreements could become even more appealing to landlords, given a proposed London bylaw to crack down on renovictions.

“Part of what’s behind the proposed renoviction bylaw is to give the city the tools to help protect the affordable rental housing stock in the city,” she said.

“Landlords who ultimately want permanent, vacant possession to be able to do whatever they want with their properties — they have an interest in getting this done fast, before the city is involved in terms of a licensing process.”

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Last week, a city council committee voted unanimously to ask staff to add more protection for tenants as part of the proposed bylaw, including possible clauses that would require landlords to guarantee alternative housing or financial help to tenants forced out by renovations.

Fleming said she plans to stay put and see what happens, but that the wait is taking a toll.

“I moved around a lot as a kid. This is the only place that I’ve lived in for more than a year,” she said. My partner has “raised his kids here. This is their childhood home. I don’t want to move. I can’t afford to move. I don’t think it’s fair.”

jjuha@postmedia.com

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