NEWS

Tenants lose as landlord TransGlobe racks up charges

01/20/2012 04:50 EST | Updated 03/20/2012 05:12 EDT

A rental company with buildings in six provinces racked up hundreds of safety complaints, but its units are still on the market under two successor entities, a CBC Marketplace investigation has revealed.

TransGlobe Investment Management had thousands of apartment units in approximately 400 buildings in B.C., Alberta, Ontario, Quebec, Nova Scotia and New Brunswick. but also a large number of complaints from tenants.

In Ontario alone, it racked up more than 240 charges for failing to complete ordered repairs and violating fire codes, amassing nearly $80,000 in fines.

Beginning in 2010 and continuing throughout 2011, however, the majority of TransGlobe's properties were purchased by TransGlobe Apartment Real Estate Investment Trust (REIT) and a number of top-level executives moved to the new company.

Kelly Hanczyk, for instance, moved from chief operating officer of the former TransGlobe to CEO of the new organization. Kristina Boyce assumed the same title, senior vice-president operations, at the new company.

TransGlobe's founder, Daniel Drimmer, started a separate rental agency in September called Starlight Investment Ltd.

Marketplace contacted a number of tenants of the original TransGlobe, and many reported ongoing problems including leaky basements and ceilings that caused mould, broken windows and repairs that went unfinished for months or even years.

Flooding in basement

Jennifer MacWaters moved into a TransGlobe Investment Management-owned townhouse in Ottawa two years ago.

The $1,240 monthly rent was manageable and the building was near to the hospital where her husband went for dialysis treatments three times a week.

However, two months later, she started noticing puddles in her basement family room. After one particularly bad storm, water flooded halfway across the floor.

Mould started to grow and MacWaters said she worried about the health of her two young children.

MacWaters said TransGlobe ignored her repair requests but was told to fix the problem after she complained to public health officials in Ottawa. However, workers simply took down the walls and left them sitting in another room for four months.

"It makes me mad. It makes me angry," she said. "I mean, it's a lot of money, we pay the equivalent of a mortgage."

Nediera Singh had a similar experience not long after she moved into a TransGlobe unit in the east end of Toronto with her two children four years ago.

A leak on the roof caused damage to her unit, creating a large hole in the ceiling that went unfixed for more than three years.

She set up buckets to catch some of the falling water.

"It's very bad," she said of the damage to her unit, which is in a building now owned by TransGlobe REIT. "It's not good for our health either."

Other tenants also said they had been asking for roof repairs for years.

'Toxic' rental market

Although cities and provinces have laws requiring landlords to provide adequate and safe housing, experts say many are rarely enforced.

"A company like TransGlobe takes advantage of the fact that this is a totally lax regulatory environment, where the interests and issues and, indeed, the basic health of tenants is not considered all that important," said Michael Shapcott from the Wellesley Institute, an independent, non-profit research and policy organization dedicated to advancing urban health.

Large companies, moreover, can often skimp on repairs and pay thousands in fines instead because it is cheaper than simply fixing its rental units, said Shapcott, director of affordable housing and social innovation at the Wellesley Institute.

"It's the cost of doing business," he said.

Many tenants have to stay in units because of a "toxic" rental market with extremely low vacancy rates, Shapcott added.

$28M in capital repairs

Hanczyk, now CEO of the new TransGlobe REIT, said his company is a separate entity and he will run the business differently.

A total of $28 million in capital expenditures, including balcony and roof repairs, were allocated in 2011, a substantial increase from the $13 million spent the year before, he said.

"I have a very strong customer-centric focus and I also believe in long-term vision for our company," he said.

Hanczyk said he could not comment on the record of the original TransGlobe, although he held a number of senior positions in the organization, including chief operating officer.

Drimmer, who kept a 20 per cent stake in TransGlobe REIT and is now head of Starlight, declined a number of requests for an interview. In a statement, he said he prefers to communicate with his tenants.

Two weeks after Hanczyk was interviewed, Singh's apartment underwent repairs.

As for MacWaters, she chose to move out of her apartment now run by Starlight and found a new place to live in Ottawa.

Starlight, in the meantime, has been aggressively buying rental buildings across the country. Since September, it has acquired 75 buildings totalling more than 6,000 residential units.

It has also started advertising its new rental units across the country.

MORE:cbcNews