Rental Income Squared

"In the beginning, nothing seemed amiss. Gubb's rent cheques cleared. Over email he struck all the right notes: polite, responsible, diligent."
"But within a few months we would learn Gubb didn't live in our house. Instead, he had converted our four-bedroom semi into an illegal rooming house and was sub-letting to as many as sixteen people"
Sonia Verma, Toronto property owner

Wilf Dinnick and Sonia Verma moved to Qatar in 2014 and rented their west-end home to people who seemed like ideal tenants. (Images: House by Dave Gillespie; Gubb, Dinnick and Verma via Facebook)

A young and presumably reasonably affluent couple whose profession, news journalism, appears to be one that has market appeal on the international circuit, became accustomed to moving and living at foreign destinations, making their temporary homes wherever they landed, and enjoying as was their privilege, a cosmopolitan lifestyle. When they did move back to Canada, the Toronto housing market was cooling down in the heat of a temporary recession.

They committed themselves to becoming Toronto property owners. They became owners of a red-brick Victorian semi-detached building located on Lakeview Avenue in the city. And then their peripatetic lifestyle kicked in again, with husband Wilf Dinnick taking a new position in Doha, Qatar. What to do with the newly-acquired house -- rent, sell? Concerned that when they eventually returned to Canada to take up permanent residence booming house prices would put a replacement out of their reach, they decided to keep the gem they had, and rent it out in their absence.

Makes good financial sense, there are plenty of people who do the same, people in the same situation this young couple found themselves in, as well as those who buy properties as rental investments. The house was advertised at $4,000 monthly and before long a prospective tenant appeared, a man working in sales who drove a Range Rover and seemed to have reasonable financial security.

On the rental application he filled out, a solid income appeared, and a high credit rating. He had written that he, his girlfriend, his brother and his father would occupy the house. The lease was signed to everyone's satisfaction and the couple left the country to begin a new phase in their lives.
All seemed well until an email written by a Toronto friend involved in journalism alerted them to the fact that their house had been altered physically and was being used as a rooming house.

The rooms were divided with the installation of new walls, and each bedroom was rented out for $550 monthly per person. Toronto is well known in Canada as being second only to Vancouver for high home sale and rental prices. Apartments can be hard to come by. University students in particular look for affordable accommodation while they acquire degrees. The couple was advised to hire a trouble-shooter.

A 47-year-old woman who had distinguished herself locally as a paralegal who got things done "People say I'm a mix of a bloodhound, a cop and Erin Brockovich", quipped over the telephone with the home owner, who hired her with the conviction that if anyone could help, surely this person could.The paralegal informed the renters, all young women, that they were being exploited, and the person representing himself as the home owner was a scam artist.

The paralegal contacted Toronto Fire Services informing them that the scam artist was operating an illegal rooming house. Inspection found nine violations, and tagged the owners with $50,000 in fines; charges later dropped when the situation became evident. The renter threatened the owners with a law suit. When, however, he attempted to have the people whom he rented to give false witness, the conversation, recorded, was sent to the Toronto Landlord & Tenant Board.

Municipal regulations won the day. Everyone left the house. The owners set to work to restore their property to its original condition. And a month later found new, reliable tenants, a family who would live in their home in their absence enabling them to eventually return to a house that was still a home.