Renoviction at 435 Nelson St.? Owners say it's an opportunity to demolish and build bigger

Two London politicians say what's happening at 435 Nelson St. is a cut-and-dry case of renoviction, another instance of a landlord trying to oust long-term London tenants by issuing N13 notices so they can be replaced with tenants able to pay more.

In the Ontario legislature on May 29, London North Centre MPP Terence Kernaghan rose at Queen's Park with a question about the 23-unit apartment building.  

He called the building owner a "terrible landlord" who is pushing tenants out to get higher rents. 

"It's clear they're trying to scare people into leaving their homes," said Kernaghan. "When will this government actually stand up for renters and pass legislation to stop renovictions before they happen?" 

In an interview on London Morning on Monday, Ward 13 city Coun. David Ferreira accused the landlord of "scare tactics" to get the tenants out by issuing "bad faith" N13 notices. 

However in an interview with CBC News, the owners of the building say their plan now is to demolish the building and sell the land for someone else to develop. 

Either way, the seven remaining tenants will have a fight on their hands to stay in their homes and avoid having to find a new apartment in London's tight rental market. 

In March of last year, a registered Ontario corporation called 435 Nelson Inc. bought the run-down building for $4.1 million. 

The directors of that corporation are the Guelph-based husband-and-wife team, Marty Gordon and Amanda Bouck.

The couple has a YouTube channel called House Hustlers where they chronicle their successes — and challenges — of buying and renovating single-family homes with the goal of turning those properties into rentals. 

Gordon is a carpenter by trade an often appears in the videos doing his own renovation work.

The couple also operate Legend Real Estate Trust, which solicit investment options starting at $10,000 and has a fund-raising goal of $3 million. Gordon and Bouck said the real estate trust business does not include 435 Nelson St.

Built in the late 1960s, 435 Nelson St. is a two-storey walkup apartment building with 23 one-bedroom units. Shortly after the purchase, tenants like Ken Thomson began to receive offers of payment to vacate their apartments permanently. Often called cash-for-keys, such offers are legal in Ontario and are often used by landlords to entice long-term tenants to leave. 

Thomson, however, said his $1,318 rent for the one-bedroom he shares with a roommate would be impossible to match in today's rental market, even with the owner's offer of $7,500 to leave.

"I'm looking at around $2,000 for a one-bedroom," said Thomson, who's lived there for two years. "I'm comfortable here, I don't want to leave."

Tenants who did not leave the building were issued N13 notices in May.

N13s are legal notice of a landlord's intention to end tenancy for renovation or demolition. Groups such as ACORN have said N13s are often misused to oust long-term tenants in favour of new ones who can pay more. 

However in an interview with CBC News, the building's owners Gordon and Bouck said they intended to renovate the building but ran into red tape and extra costs. 

"Our plan now is to demolish and sell," said Bouck. 

The couple say shortly after taking possession, they learned the boiler that feeds the building's hot water heating system needed to be replaced. The system wasn't operating near its capacity and many of the radiators in the apartments were leaking.

They opted to replace the radiant system with electric baseboard heaters. That work started last summer, and required electricians to cut into the walls to run the cables. 

It also meant tenants, who had their heat included under their existing leases, had their hydro bills jump by up to $200 a month. Bouck and Gordon said they've compensated tenants for the extra heating cost with the exemption of one because they weren't able to obtain past bills from that tenant.

The owners said the electrical work led to another problem. In August, the city issued an "order to comply" notice at the building. That order requires the owners to apply for a building permit with scaled drawings. The order also said the wiring and new ducts for stoves and bathroom fans penetrate ceilings, affecting the building's fire rating. 

Gordon said it all combined to force them to change his plans for the building.

"It's a combination of the headaches, costs and then realizing that we can actually build a much larger building there," he said.

And so in May of this year, the remaining tenants were issued N13 notices which listed as the reason for vacating the owners' intention to have the building demolished. Gordon said his plan now is to sell the land to another developer after the tenants move out and the building is removed. 

Some tenants who spoke to CBC News believe the owners' stated intention to demolish the building is an empty threat and a ploy to get them out. As of the end of May, a demolition application had not been filed with the city, but Bouck said they can't apply for one until the tenants have moved out. 

She shared with CBC News correspondence from the city about their intention to apply for a demolition permit.

N13 notices require the landlord to provide tenants with three months rent as compensation. The N13s issued to the Nelson Street tenants say they have to vacate by Sept. 30 of this year.

N13 notices can be contested at the Landlord and Tenant Board, and three of the remaining tenants who spoke to CBC News said they intend to fight the N13s at a board hearing, mainly because they can't afford market-value rent for similar apartments.