Ontario’s condominium management regulator is investigating SIREG Management after the company told investors it could no longer guarantee rent payments, leaving some owners scrambling to collect rent directly from tenants.
The investors for many of the 21 buildings SIREG operates have been left scrambling, with some showing up to units to collect rents from tenants in person. The company runs about 1,800 condo units across Ontario including Sarnia, Kitchener, Welland, North Bay and London’s Kipps Lane.
Some tenants at Kipps Lane in London told CBC News they didn’t know they were living in investor-owned condo units because their rent cheques went to SIREG.
A handful of investors who spoke to CBC News said they were generally happy with their investments until last week when the company dropped a bombshell, telling them they could no longer guarantee rent payments.
In a statement to CBC News, the Condominium Management Regulatory Authority of Ontario (CMRAO) confirmed they’ve received five complaints about SIREG and have “commenced investigations into the matters raised.”
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The CMRAO licenses condo managers, operates a public registry of condo management boards and can issue penalties in cases in which a tribunal determines there have been violations of its code of ethics.
Since the early 2010s SIREG has bought older rental buildings, converted them to condos and sold them to investors seeking rental income. Under the arrangement SIREG was to manage the properties, collect rents and pay the condo board management fees. After those costs were covered, investors were paid monthly rent dispersals.
SIREG condos were pitched as hands-off investments, allowing buyers to become landlords at a low entry price with no need to deal with tenants. Investors had no information about their tenants, including contact information.
The same statement said SIREG president Todd C. Slater had stepped away for health reasons. Another statement said Reflect Advisors has been appointed to lead the company’s management team and to “preserve value for the company and its stakeholders.”
Amid the turmoil some condo owners have started to approach tenants in an attempt to collect rent themselves. Other owners are sharing information and contact information on new Facebook groups.
Calls to SIREG for comment on Monday went unanswered.
Patrick D’Sa owns two condos in two SIREG-run buildings in the 700-block of Kipps Lane in London. D’Sa, who lives in Toronto, visited the units he owned for the first time on Monday.
He told CBC News he was shocked by the buildings’ overall state of disrepair. He said he understands why tenants are feeling uneasy when approached by landlords they don’t know.
He said he’s taking a soft approach in his first discussion with tenants.
“I don’t want to scare people and they don’t know me from boo,” said D’Sa. “I’m giving them a letter showing them that I am the owner and if they could contact me, we’ll talk about things going forward. They shouldn’t feel afraid that they’re going to lose their home.”
D’Sa said he’s concerned about the overall financial health of the condo board managing the Kipps Lane buildings. Most condo boards are composed of owners who live in the buildings.
According to information on the CMRAO registry, directors of the boards that manage 756 and 754 Kipps Ln. each have three directors: Todd Slater, his wife Sheila Vos Slater and Michael Sackmann. When contacted by CBC News, Sackmann said he didn’t want to comment and said his employment at SIREG ended last week.
D’Sa said some investor-owners are trying to organize and force condo board meetings with enough votes to oust SIREG from control.
Meanwhile, some tenants say they are uncomfortable being approached by people they don’t know and being asked to pay rent directly to them.
Alexandra Stuart, who lives at 756 Kipps Lane, said she hasn’t been approached by the owner of her unit, but many of her neighbours have.
“Tenants are shocked that their units are owned,” Stuart said.
She said tenants understand that investors need to collect rent to cover their mortgages and other expenses, but are concerned about how the sudden change is being handled.
“We understand the owners’ plight, they need to collect their rents and pay their mortgages but our legal obligation is to SIREG,” she said.
“Threatening tenants with new leases and ‘Pay us now’ is making us angry. For the investors it was supposed to be hands off, now they’re at our doors.”
The situation has left both tenants and investors trying to understand what happens next, including who is responsible for collecting rent, paying bills and managing the buildings as the CMRAO investigates.
