Court Cases & Orders

Did Landlord Have Duty to Warn Woman of Fraudster Boyfriend?

Written by Russell Alexander / (905) 655-6335

Did Landlord Have Duty to Warn Woman of Fraudster Boyfriend?

In a decision called Larizza v. The Royal Bank of Canada, the court introduced the facts this way:

The [female] plaintiff … was the unfortunate victim of a [male] fraudster.  She met [the man] in February 2012, and married him in March 2013.  During the course of their relationship, [the man] persuaded [the woman] to sell her house, move in with him, and give him over two hundred thousand dollars. In the summer of 2013, she became aware that [the man] was not who he purported to be, and that she had lost the money she gave him.

When they had met online, the man told the woman he was a 56-year old wealthy Swiss-Canadian businessman and heir to a fortune made from the Ovaltine beverage.   In fact, he was 69 years old, born in Egypt, and had been convicted of fraud on a number of past occasions.   When the woman finally confronted him about her money, he physically assaulted her and was arrested. He was convicted of assault and fraud, and sentenced to 60 months in jail.

Their rental living arrangements while married became the focus of the woman’s subsequent legal claim against the landlord, Minto.

At the man’s urging, the woman had sold her house, quit her job, and moved into the Penthouse of the Minto-owned building in which the man had previously rented a 9th-floor unit.   That move came after the man single-handedly negotiated with Minto about the Penthouse rent and terms.  What the woman didn’t know, was that Minto had performed a credit check on the man, and finding there was “insufficient” credit information, had asked him to provide another name.  Without her knowledge, the man offered up the woman’s name and a credit check was done without her consent.  Based on her strong credit rating, Minto agreed to lease the Penthouse suite.

What the woman also wasn’t clear on at the time, was that she was listed as the tenant on the one-year lease calling for $10,225 in monthly rent.  She said she signed after being rushed into it by the man, and thought she was signing merely as an occupant.  In fact, the reverse was true.

She, therefore, sued the landlord Minto for damages, claiming it had a responsibility to take steps to: 1) protect her from the man’s fraud; and 2) alert her to the fact that she was actually the tenant on the hook for the hefty rent.  She argued that, based on Minto’s interactions with the man, and given his long history of fraudulent activities for which he had been previously convicted and imprisoned, Minto had a duty to protect her from the man’s fraud.

The court rejected the woman’s claim.  Even after seeing the man’s sketchy credit report, Minto did not have a duty to alert her about it in the time leading up to signing the lease.  Although Minto did have a duty of good faith and honesty in performing its end of the lease – by providing a habitable rental unit in exchange for rent – it also had no duty toward her in the time leading up to signing it.  Nor did it have any obligation to make it clear she was signing as the tenant, not the occupant.

Simply put:  Canadian law did not recognize a duty of care owed by landlords to tenants or potential tenants to protect them from third-party fraudulent schemes.  The court said:

There is no basis for a potential tenant entering into a lease to expect the landlord to protect him or her from the potential fraud of other people who will be occupants of the dwelling.  The reality is that it would be exceptionally intrusive for landlords to have an obligation to inquire into the legitimacy and wisdom of the decision of two people to live together.  This type of intervention bears no relation to the nature of the contractual relationship between the parties, and cannot give rise to an expectation that landlords would have such a duty.

The court added that even if landlords like Minto had such a duty, in this case, any financial harm suffered by the woman was too remote. The court granted Minto’s motion for summary judgment, obviating the need to have the matter go forward to trial.

For the full text of the decision, see:

Larizza v. The Royal Bank of Canada, 2017


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About the author

Russell Alexander

Russell Alexander is the founder of Russell Alexander Collaborative Family Lawyers and is the firm’s senior partner. At Russell Alexander, our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues, including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. We have locations in Toronto, Markham, Whitby (Brooklin), Oshawa, Concord, Lindsay, and Peterborough.

For more information, visit our website, or you can call us at: 905-655-6335.