Poor Tenant Screening Leads to Government Seizure of Two Rental Properties

by | Feb 28, 2011 | Tenant Screening

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.

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