Poor Tenant Screening Leads to Government Seizure of Two Rental Properties

by Chris on February 28, 2011

Relying on previous decisions from Ontario, the Supreme Court in British Columbia has ordered that a Vancouver landlord must forfeit two of his rental properties, worth about $997,000, after police found marijuana grow operations there. 

This is the first trial of its kind in British Columbia.

The court agreed that the landlord did not know about the drug operations at three of his rental properties, and that he did not directly receive any proceeds from the illegal activities except for the $24,000 he collected in rent.  However, the court held that forfeiture was warranted because the landlord did not conduct tenant background checks, obtain rental applications, or inspect the properties while the tenants were present, which would have revealed material alterations to the furnace vents and electrical wiring to support the grow operations.

In the opinion of the justice overseeing the trial, the landlord had no knowledge of the grow-ops on the three  properties he owned in Vancouver.  It was also clear that the landlord, who worked as both a longshoreman and a builder, had purchased the adjacent properties for investment, and was planning to redevelop the area at a later time.  In the meanwhile, he rented out the three properties to tenants with whom he had no contact.  Instead, he appointed a woman he barely knew to manage the collection of rent.  This woman speaks at least three languages, and served as an interpreter for the tenants. 

The landlord was not questioned by police once the grow-ops were discovered in all three of these rental buildings.  He was never a suspect nor charged with any complicity for the illegal activities.

Despite the finding that the landlord did not have knowledge of the operations, which is a defence to the forfeiture law, the justice found it too incredible to believe that the landlord had made no effort at tenant screening and maintained no contact whatsoever with the tenants.  Applying a rule usually reserved for criminal cases, the justice found this behaviour to be “wilful blindness” – the refusal to become aware of a situation, and concluded that wilful blindness is the equivalent to knowledge.

At the same time, the justice felt the government had not met its burden of proving all the allegations it had originally charged against the landlord.  For instance, there was no evidence that the landlord had received other cash proceeds from the illegal activities, or that any of his other rental properties were, in fact, grow ups. 

The court also found the landlord to be a “decent, and very hard working family man.”  The justice noted that since illegal activities were discovered on his properties, the landlord “changed his practices in terms of screening tenants, having appropriate paperwork, and arranging for inspections.”

Applying these equities, the justice ordered two of the three subject properties to be forfeited, while allowing the landlord to keep the third property. 

 

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 6 comments… read them below or add one }

Vince A March 1, 2011 at 6:46 am

This is ridiculous! What is the government going to do with the property they stole form the LL?

Ted Lee March 1, 2011 at 6:54 am

This is what can happen in Canada since we are not a “Free” country.

In Canada we do not have the right to own any property. It was never added to the Charters of Rights and Freedom in 1982.

There was a debate about it, the PM said not to worry about it because of the Notwithstanding claus. But then that clause was never use and our Chartier never amended.
So remember your rights when the next election comes (maybe this spring).

HLL March 1, 2011 at 9:30 am

Ok, let’s see: Police and government refuse to investigate landlords allegations of criminal behaviour in rental properties because they feel it’s not worth their time. However, should they happen to stumble upon a grow-op, they have the right to strip you of your assets?

No wonder no-one wants to become a landlord anymore. Unbelievable.

Concerned Citizen March 1, 2011 at 1:46 pm

Guilty even when proven innocent. The government (so-called justice system) stole $1,000,000 from one of its own citizens. Something needs to be done. This guy worked too long and too hard to have his retirement income stolen from him by the government.

It is a normal process to hire someone else to manage your properties. If anything, this woman he hired should lose HER house.

Donna Wanless March 2, 2011 at 3:24 pm

I agree that it is no wonder very few people will take the chance of becoming a landlord. Even when doing all the paper work before renting to a tenant it is impossible to tell if they are going to start a grow-op. The justice would be surprised to know how many are out there. You cannot disturb a renter by demanding to check on him at your convenience. Maybe the landlord tried and they would not let him in. This has happened many times and unless you go through the courts and get an eviction notice which is not easy to do you are not alloweds to enter the property unless the tenant agrees. If there had been a fire the landlord’s insurance would not have been worth anything either. It was not up to the justice to play God. D.W.

Rose March 4, 2011 at 2:12 pm

Courts have no business taking away anyone’s hard earned property regardless of how damaged it is by another party. Did he fail as a Landlord? yes he did! Did he know or care what was going on there? maybe not. Did he pay for that property? Yes he did. So it is his, including the cost for cleaning up the mess, that is what the judge should be able to impose, no nonsense, clean up fees or we’ll clean it up for you!
But take away his property, NO! Not now, not ever! Once we say it is alright for them to do it to him, they will do it to you and me!
Maybe eventually Canadians will wake up and stand up for ourselves and our rights as human beings. Low lifes destroy our property, our country and everything else in their wake including our children if they are given the chance.
50 years ago good people would have banded together to stop the corruption, the control, and they would never have dared set up shop in your neighbourhood, now everyone is too busy, don’t want to get involved, pretend not to notice, until one day you wake up and it is your property, or your neighbours property, or your child corrupted or abducted or your rights trampled in to the ground.
Start screaming CANADA . We can’t afford to take it anymore!

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