North Bay, Ont., tenant says he’s worse off after accepting landlord’s $40K offer to move out

After a months-long fight with his landlord, Shannon Lucas accepted a $40,000 payout to move out of a North Bay, Ont., townhouse, but says he would give it all back if he could stay.

The landlord says the building needed extensive renovations and that Lucas could have moved back in after the work was done. 

But Lucas says housing is so expensive in North Bay that the “cash for keys” offer wasn’t enough to allow him to find an affordable place to live on his own. 

Lucas and another tenant who lived in a row of townhouses at 431 2nd Ave. W. allege their new landlord pressured them to leave their units so he could increase the rents following renovations.

Lucas lived there from 2017 to 2025, and said that by the time he moved out, his rent was $1,008 a month plus hydro. He said his monthly rent was around $850 when he first moved in.

Lucas said he has multiple sclerosis, an autoimmune disease of the central nervous system that affects his ability to work full time. He said the rent was manageable, considering his condition and how it affected his income.

“You can’t find a comparable location.”

During this time, Lucas said, he formed close bonds with many neighbours.

“Everything’s good. We do barbecues. It’s a little community.” 

In April 2024, Madigan Properties Inc. purchased the property. Shortly thereafter, Lucas said, a man who didn’t identify himself visited him and his neighbours. 

Lucas alleges the man said they’d get cash payouts to move out. He said the man offered different amounts to move within a certain period of time: $5,000 to leave within the next month, $4,000 for  two months and $3,000  for three months.

“But if you wait until four months, then unfortunately you won’t get anything,” Lucas said the man told him.

Lucas’s neighbour, Abigail Carper, said the same man, who noted he represented Madigan Properties without providing his name, gave her a similar offer.

Lucas said the man gave him until that evening to sign a moving agreement or the cash offers would be off the table. Lucas refused to sign.

The next day, he said, the man returned and offered him $10,000 to move out. Again, Lucas wouldn’t sign.

CBC News asked Madigan Properties to confirm both tenants’ accounts of the initial cash offers they described, but a response from the company’s legal counsel didn’t directly address that question.

“Mr. Lucas was obviously not pressured into signing any agreement as he elected not to sign any agreement,” the email said.

Lucas and Carper said that in their dealings with both the owner of the company, Dan Madigan, and the man purportedly representing the company, they believed the building’s need for renovations was used as a pretense to evict them.

Sangster Law, the firm that represents Madigan Properties, responded to CBC News by email about the eviction notices.

“Before purchase [in 2024], a property inspection was conducted and illustrated many health and safety issues with the building that would need to be remedied,” wrote Mavis Leblond, a staff member with the firm. “Madigan Properties then hired a construction company to investigate the extent of the renovations needed.”

Leblond said the work needed “was so extensive that not even tenant items could remain in the units as they were at serious risk of damage due to the extent of the renovation and remedial work.” CBC News has not independently verified the extent of renovations needed.

In a phone conversation between Dan Madigan and Lucas in December 2024, Madigan’s legal counsel said he told Lucas that he had the legal right to return to his unit once the renovations were completed and be paid three months’ rent for his troubles, as per Ontario’s Residential Tenancies Act.

Lucas said moving out for renovations would have been costly, even with three months of rent.

He told CBC News he asked Madigan if he could move into a vacant unit in the building, but the landlord denied his request.

“I didn’t feel comfortable leaving the property at all,” Lucas said.

However, Madigan’s legal counsel said in the email that all tenants and their belongings had to be moved out to complete renovations.

Lucas said he also raised his concerns in his phone call with Dan Madigan, noting that three months of rent would not cover the costs of moving and likely renting at a higher monthly rate.

The statement from Leblond said the company had a duty to provide a safe and healthy environment for his tenants by addressing the issues with the building.

“It is situations like these that place other tenants at risk,” it said.

“Landlords are becoming more reluctant to complete renovations for this exact reason. Over time, these units become dilapidated and place the tenants at risk of mould, electrical issues, flooding and many other issues.”

In a followup email, Madigan’s lawyer, Liam Sangster, said Madigan informed Lucas his unit would likely be renovated in three to four weeks.

Puneet Shroff, a real estate lawyer with Sorbara Law in Waterloo, Ont., said that when a tenant moves out due to major renovations and later returns, the landlord is limited to what is called an “above-guideline” rent increase.

In 2026, the guideline or cap on rental increases for buildings built before Nov. 15, 2018, is  2.1 per cent, and in 2025 it was 2.5 per cent. The above-guideline rules let landlords increase rent by an additional three per cent on top of the regular cap.

Because of Lucas’s refusal to sign any agreements to move out, Madigan brought the case to Ontario’s Landlord and Tenant Board (LTB).

The board heard Madigan Properties’ application to evict Lucas on Jan. 13, 2025. It was dismissed because the landlord failed to compensate Lucas on time for three months of rent. 

The Residential Tenancies Act requires compensation when a tenant is evicted for a renovation.

According to the LTB’s decision, Madigan did not attempt to pay him until Jan. 12, one day before the hearing — and more than four months past an established deadline.

After a second hearing on May 6, 2025, the adjudicator ruled in Lucas’s favour because Madigan Properties had not applied for a permit for electrical work prior to submitting a notice to evict Lucas due to renovations.

“I am not satisfied that the landlord took all reasonable steps to obtain the necessary permits,” wrote LTB member Joy Xiao in the decision. “Nor am I persuaded that it was not possible to obtain the permits until the unit was vacant.”

In the email response to CBC News, a representative for Sangster Law said Madigan did not believe he needed an electrical permit from the Electrical Safety Authority for the work he intended to do in Lucas’s unit.

On May 27, one week after the LTB ruled on the case, Madigan emailed Lucas a $40,000 “cash for keys” offer to move out.

Lucas said he accepted it after a friend in Nova Scotia — where he grew up — offered to rent him a place at a reasonable rate. But that offer fell through. 

Lucas said he’s currently staying with friends and renting a room in their North Bay home for $750 a month.

“My friends are doing this because they want to help me, but they’ve never intended to rent that room.”

He said he had to get rid of most of his belongings after leaving the townhouse.

Despite the $40,000 payout, Lucas said he’s had trouble qualifying for a similarly affordable apartment because he cannot pass a credit check, due to a personal bankruptcy in 2022.

As for using that cash for a downpayment on a home, he said he’d need at least $80,000 to get mortgage payments below $3,000 per month.

His bad credit has also affected his ability to qualify for a mortgage on his own. 

Lucas said he explored purchasing a home with a co-signer, but didn’t want to leave that person on the hook if his health continued to decline.

According to ReMax’s North Bay Housing Market update, published on Sept. 3, the average price for a home in North Bay at that time was $474,821.

Carper had a smoother landing after moving out of her townhouse. She and her husband pay $1,127 in monthly rent for their current townhouse, also in North Bay.

“We got real lucky with this place,” she said.

She said she felt pressured to accept $4,000 to move and signed an N11 form to end her tenancy early.

But after signing, Carper said, she and other tenants felt they were misled about the renovations that the landlord said were necessary, so they hired a paralegal to fight the eviction.

A hearing date with the LTB was set for Oct. 7, 2024. 

Carper said that before the hearing, the landlord offered her $20,000 to move out and drop the case. She rejected the money. Madigan, the landlord, then followed up with a $30,000 offer.

In the statement to CBC News, Leblond confirmed the offer and said it was reached “in good faith with the landlord’s intention to support the tenant’s personal goals.”

Carper said her paralegal recommended she accept the offer.

She believed the LTB would have ruled in her favour, but also that Madigan would have appealed the decision.

“If it would have just been me and my husband, we probably might have stuck it out and fought,” she said. “But I had a kid and I had enough going on. I didn’t want to deal with it.”  

The email from the law firm representing Madigan Properties states the company “takes tenant relations very seriously, and has gained a strong reputation for treating tenants with respect and care, and for going the extra mile to reach resolutions that work well for both parties.” 

Stuart Bailey is a lawyer and director of the Nipissing Community Legal Clinic, which provides no-fee legal services for low-income North Bay residents.

Bailey said that in many cases, tenants who receive cash for keys offers are paying rents well below the market average because they’ve been living in the same place for years. 

He said it’s not unheard of for tenants in North Bay to get cash for keys offers in the tens of thousands of dollars.

“Some of the tenants involved have never seen the amounts of money being offered,” he said.

“I believe that they are worse off, because there’s a real affordable housing shortage in North Bay.”

Shroff, the real estate lawyer, said cash for keys offers have some advantages and disadvantages for both the tenants and landlords.

They provide certainty for both sides. All parties have a set move-out date. The money can also help tenants secure housing when supply is limited.

Shroff said it’s important that tenants understand their rights when they sign a cash for keys agreement.

“I’ve seen cases where tenants feel pressure to make quick decisions and they’re worried that if they don’t accept it immediately, the offer will disappear,” he said.

“It can lead to agreements that they later regret. Once you sign a cash for keys agreement and move out, you’ve given up your tenancy and you can’t change your mind later.”

Shroff said that in his experience, a $40,000 cash for keys payout isn’t unusual.

“The landlord, they have to do a cost-benefit calculation on whether that $40,000 might be converted to $80,000 if they were to go sell the property,” he said.

He said the offers are common because it can take months to get a hearing with the LTB. However, Shroff also noted the LTB has made recent strides to reduce the wait times for hearings, which could reduce the need for cash for keys deals.