MetCap Living Management, which has more than 10,000 rental units in the city concentrated in Parkdale and Scarborough, and Suite Collections operate out of the same Richmond St. E. office. Suite’s president, Brent Merrill, who also sits on MetCap’s corporate board, says everyone must give 60 days’ notice to vacate an apartment, even if they’re being evicted.
“It is MetCap’s position that residents who breach their lease or give improper notice are required to pay the rent for the unit until it is re-rented or until the date that would have been the last day of the tenancy had proper notice been given,” wrote Merrill in an email to the Star. “We believe that we are following the law in the Province of Ontario.”
The Ontario Ministry of Municipal Affairs and Housing said the practice does not appear to be appropriate.
“If the landlord gives proper notice of termination and the tenant voluntarily moves out in accordance with the notice, the tenancy is terminated on the effective date of the notice. No rent is payable after the termination date, other than existing arrears,” said spokesman Mark Cripps.
Nevertheless, Suite has been so successful that it now offers debt collection services to other landlords.
Legal or not, the fallout is that recently evicted tenants, many already in dire financial straits, get saddled with a new debt — often in the thousands of dollars.
MetCap evicts you, but you must give them notice
Eviction orders are issued by the Landlord and Tenant Board at the request of the landlord. They include a move-out date and a table calculating the total amount of outstanding debt. Even when a MetCap tenant follows the order to a T, the company will still pursue them for the next two months’ rent.
“I routinely came across tenants who sought legal advice after receiving debt collection notices after moving out of a MetCap building,” said Jonathan Robart, a staff lawyer at the Scarborough Community Legal Services. “This happened on a frequent basis and I can tell you they were scared to death.”
Merrill points to a court ruling that’s more than 20 years old to justify the practice. He says he’s not aware of more recent judgments that have overruled Pajelle v. Braham, decided in 1993.
“Until the Divisional Court ruling that supports MetCap’s position on this matter is struck down, we believe this to be law in Ontario,” Merrill wrote.
Ken Hale, director of legal services at the Advocacy Centre for Tenants Ontario, says tenant law has changed several times since the Pajelle case, and pointed to Boardwalk v. Fraser, a 2013 small claims court decision that rules the new legislation doesn’t allow the practice.
Hale doubts MetCap’s legal logic and questions why the company relies on such an old case to justify its debt collections instead of litigating one on its own.
“If this argument is so iron clad, why isn’t there one case where they’ve taken this to court to prove they can collect this vacancy charge?” he asked. “Instead they rely on their process of interfering with people’s credit rating in order to collect the money.”
Eviction came after years of hardship
When Cyrilla Hamlet moved out of her Scarborough highrise in October 2012, her life was falling apart. Her son had been murdered. She says she was depressed and suffered from migraines.
The 67-year-old grandmother says she got help from her pastor and the rent bank, but CPP and Old Age Security weren’t enough to make ends meet. When the bank refused to extend overdraft protection, her rent cheque bounced and she was evicted.
Hamlet had no idea that she was about to embark on a two-year battle with MetCap and Suite over thousands of dollars of debt that appeared after she left.
“Why do I have to be paying?” she asked. “It’s not fair.”
Suite’s letter to Hamlet arrived six weeks after she moved out. Though her eviction order showed that MetCap had to refund $27.54 of her rent deposit, Suite claimed that she had a “delinquent” account and instead owed them $2,731.12 for two months’ rent plus eviction fees. She had until Christmas Day to pay in full.
“I do not agree with the amount claimed for arrears,” Hamlet wrote back. “I was evicted from my former residence . . . by the Landlord and Tenant Board. This order terminated my tenancy.”
Hamlet was supposed to be out by October 22 but stayed until October 30. In her letter, she offered to pay the Landlord and Tenant Board mandated charge of $27.81 for each of the eight days she overstayed. Minus the $27.54 MetCap owed her, she calculated that she only owed $473.04.
“If it is still your contention that I owe arrears of $2,731.12 then I dispute the matter and suggest you pursue your claim in court,” she wrote.
Suite didn’t go to court. Instead it registered the four-figure debt with Equifax and TransUnion, Canada’s two major credit bureaus, and did the same for Hamlet’s niece, Beverly, who had co-signed her lease. “She can’t do anything and I feel so bad that it’s because of me,” Hamlet said.
Hamlet now lives with Beverly and her husband near Hwy. 401 and Markham Rd. It has brought her some stability, but she feels terrible that her debt has been registered on Beverly’s credit record.
“I just wanted to help her,” Beverly said. “Please don’t incriminate me.”
Disputed debt ruins credit rating
The problem is that credit bureaus don’t verify the debts that are reported to them, said Anna Rosenbluth, a staff lawyer at Flemingdon Community Legal Services who took on Hamlet’s case.
“To report a debt to a credit bureau, you don’t need any proof,” she said. “There has to be a higher threshold.”
Like lawyers at clinics across the city, Rosenbluth said she “frequently” met people who were being pursued for debts after moving out of MetCap buildings.
After Rosenbluth contacted Suite, MetCap rebated Hamlet a month’s rent because her unit had been rented out. But the company maintained that she owed $1,420 for one month’s rent plus eviction fees.
Rosenbluth made a complaint to the Ministry of Consumer Services, saying that Suite reported Hamlet’s debt to Equifax and TransUnion, ignoring the fact that she had written to contest the amount owed.
Because a regulation in the Collections Agencies Act stipulates a collection agency cannot pass along false or misleading information, Rosenbluth alleged that Suite had contravened the law. “Our point is: before you report the debt, you need to give people a genuine opportunity to respond,” she said.
The ministry responded after many months, and closed the case because Suite had decided to stop pursuing the debt, which remains on both women’s credit score.
While Equifax did not return the Star’s request for comment, Dave Blumberg, public relations director for TransUnion, said anyone can dispute information on their credit file and “TransUnion is obligated to confirm, and if applicable, correct the data.”
The Ministry of Consumer Services has received 13 complaints against Suite Collections since the beginning of 2013 and has issued two caution letters to the company in that time. Over the same period, one complaint was made about MetCap. The ministry has not levied any fines nor commenced any prosecutions against either company.
“We were disappointed with the ministry’s response,” Rosenbluth said. “We’re hoping some publicity will help bring accountability to this sector.”
“It’s not even a real debt.”
Wesley Harkness was midway through a breakup with his girlfriend when he fell behind on his rent in a MetCap building on Jameson Ave. in Parkdale.
He received his eviction notice on May 8, 2010, and moved out May 16, the day before he was required to. Following instructions on the eviction order, he paid his superintendent $365.
“It said right there on the paperwork for the eviction how much you owe,” the 39-year-old actor told the Star. “That didn’t matter.”
That September, Harkness got a letter from Suite claiming he owed $1,189.68, an amount that was reduced to $824.68 once his payment was accounted for.
“Before I had a chance to discuss things with MetCap, they had already forwarded the debt to the collection agency and put it on my credit report,” he said. The debt is still plaguing him more than five years later.
Harkness doesn’t understand how a tenant can be required to give notice when it’s the landlord kicking them out.
“You can’t give your notice because they’ve given you their notice that they’re coming to change the locks,” he said.
Harkness says Suite has never charged any interest; they’ve even offered to take a reduced amount. He wonders why they don’t just take him to court.
“They’re just trying to get anything they can . . . It’s not even a real debt,” he said. “If a judge tells me that I owe the money, I will find a way to pay it. I want that to go through the court so that I know if I pay they won’t turn around and say I owe more.”
Author: Marco Chown Oved
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