A small group of landlords who own hundreds of rental properties across the province have run out of money, owe over $144 million in unpaid loans and face dozens of lawsuits from creditors, according to documents filed with the Ontario Superior Court of Justice.
Dylan Suitor, Ryan Molony and Aruba Butt are behind 11 now-insolvent corporations that face a “liquidity crisis” with only $100,000 in the bank, the documents say.
The landlords and their corporations are based in the Hamilton area, but specialize in buying, renovating and in some cases relisting “distressed residential real estate in undervalued markets,” said a court factum.
Those markets are in Timmins, Sault Ste. Marie and Sudbury, as well as smaller communities, including Kirkland Lake, Temiskaming Shores and Val Caron.
Why not ban corporate ownership of any residential real estate that is in legally-habitable condition?
Because that’s becoming a massive problem when corps come in and buy up entire neighbourhood, only to jack up rents to the maximum the market will bear.
Better yet, make any personal ownership of homes beyond a certain amount - say, 5 rental units, not just homes - be classified as “landlording as a business”, and therefore ineligible for residential home ownership of anything other than their primary residence.
People who upgraded from a home and held on to it, or are renting out a “mortgage helper” suite in their basement aren’t the problem here… tens of thousands of these people competing against each other is what will make a marketplace competitive.
The problem occurs when someone with deep pockets runs out and buys 5, 50 or even 500 “investment rentals” and then parasitizes off the backs of working-class Canadians. These capture the market, limit/reduce competition by dramatically reducing players, and hold it ransom to the highest bidder, severely hurting working-class people.
I would be in favour of limiting how many properties/parcels one corp can own (as long as there’s a limit to how many corps one person can own). But outright bans would probably be detrimental.
Lots of areas need to be bought up by corps in order to densify areas, like buying up 10 detached houses in a downtown area in order to merge it and build a large apartment building which can house 200 instead of 20.
It becomes a problem when one person owns ten corps each of which have a house each to rent out, or when one corp owns 300 properties.