Rental signs are seen in Toronto, Ont., on April 20, 2023.Christopher Katsarov/The Globe and Mail
A rental property investor is being called Ontario’s most prolific “renovictor” as the federal government prepares new Renters Bill of Rights legislation that promises to take action against evictions for renovation.
Michael Klein appears as a director of companies that own at least 21 properties across Ontario where tenants have been sent remarkably similar so-called renoviction letters in recent years according to research conducted by Acorn, an organization with 177,000 members across six provinces representing low and moderate-income families. Among the buildings are 13 where the Acorn is organizing tenants to fight back against what they call bad faith evictions.
“This has been like tenant terrorism. I have never lived with anything like this in my life,” said Sharon Hodgson, a tenant and Acorn member who has rented at 1270 Webster St. in London, Ont. for the past five years. In April, 2023, she received a provincial N13 eviction form and a letter that said her lease would be terminated before the summer was over and claimed her unit would be under renovation for 10 months because of a “health and safety matter.”
According to property records the letter came shortly after a company that lists Mr. Klein as director paid $20.3-million to acquire the building in March, 2023. Mr. Klein did not respond to attempts to reach him for comment.
“It looks very legal and very threatening and very intimidating,” Ms. Hodgson said, but according to her the real threats began when she didn’t agree to move out and sought a hearing at the provincial Landlord and Tenant Board over the eviction application. “A lot of stuff started happening: They shut down elevator, they shut down the pool … hydro, heat and water were sometimes shut off, sometimes for eight or nine hours at a time,” she said.
In May, 2023, CBC obtained footage of an incident where property management staff shoved tenants and called in police on an Acorn protest against the Webster renoviction letters.
“Of course I condemn that,” said Tony Irwin, president of the rental industry association Federation of Rental-Housing Providers of Ontario that represents some of the largest landlords in the province. He noted Mr. Klein and his companies are not members of his organization. “When it comes to renovictions that’s something our members don’t engage in by and large. Those that do, do it within the rules that apply,” he said.
But for Acorn and other tenant advocates, the reality is the laws that are intended to regulate tenants and landlords create powerful financial incentives for landlords to evict by any means – good or bad faith – especially in an environment of rapidly rising rents.
“If we’re going to be honest, he [Mr. Klein] took advantage of the bad laws of Ontario, that’s it,” Alejandra Ruiz-Vargas president of Acorn Canada said. “Acorn believes Michael Klein is Ontario’s biggest renovictor. What he found out is he can make a business renovicting people, because we don’t have vacancy control.”
While the majority of Ontario apartments are rent-controlled – including most units built before 2018 – and limited to an annual increase set by provincial guidelines, whenever a renter leaves a unit landlords can reset the rent for the next tenant at whatever price they please. Acorn has been calling for vacancy control, to extend existing rental rates to incoming tenants, to remove the incentive to pursue so-called no-fault evictions for renovation or landlord’s own-use.
In September, the federal Liberal government published a “Blueprint” for it’s long-promised Renter’s Bill of Rights that called for an end to “unfair rental practices, like renovictions.” But rather than calling for a ban on the practice or proposing vacancy control (as Acorn does) the government is calling for “proportionality” regarding evictions and rent increases that consider “timing and fairness.”
Already, Ontario’s LTB has the power to rule that a renoviction is in bad faith, though many critics say the fines aren’t high enough to deter the practice and the burden is on the tenant to prove their case. There are also questions about whether federal renter legislation can have any legal impact in the provinces.
“Residential tenancies are within the jurisdiction of provinces and territories, but what the federal government is trying to do is start a conversation about what basic rights renters should have,” said Douglas Kwan, director of advocacy and legal services for the Advocacy Centre for Tenants Ontario, which provides free tenant counselling services. At its heart, the debate over tenant rights is a debate over a right to housing, according to Mr. Kwan. “Housing is an essential element of prospering in this country; It’s as close to a right as a right to air or water. These are essential elements of basic living … it’s not a ‘nice to have’ in anyone’s mind.”
Whether renoviction is a central feature of Mr. Klein’s business is debatable, but what is clear is he has been on a buying spree: A look at transaction records for buildings where Acorn is battling with Mr. Klein over recent renoviction demands showed companies linked to him have paid more than $68-million to acquire six new rental properties mostly outside of Toronto just in 2023 and 2024.
While Mr. Klein adds to his empire, some of his tenants are finally about to get a hearing at the backlogged LTB tribunal, more than a year after they were told to leave. Many fear that if Mr. Klein is able to evict them, he will not respect legal requirements to offer them a place to return to once renovations are done.
“If I’m told that I have to leave here, and if that owner re-rents my unit, the LTB isn’t going to evict that tenant,” said Ms, Hodgson who has a hearing coming up in December. She’s referring to a precedent set in 2019 where even though the LTB found a series of renovictions by 795 College Inc. were in bad faith and showed “blatant disregard” for the Residential Tenancies Act, the tribunal still had no power to revoke the tenancy of the new tenants. That enforcement loophole allows renovicting landlords to ignore Ontario law that requires them to offer tenants a chance to return to their updated apartments.
With recently vacated units in her building renting for $900 more than she is paying, Ms. Hodgson fears what will happen to her should she get renovicted by Mr. Klein. “I don’t have an option: I am looking at a tent. N13′s are a gateway to homelessness, that is the bottom line,” she said.