One of the properties owned by Cornwallis Developments', 21 Gates Ave., Middleton.
By Jennifer Hoegg
Tenants at Cornwallis Developments’ properties in Kentville and Middleton are feeling caught in the middle.
Kenneth Robar says he was surprised to find out his landlord was in financial trouble through a third party. The tenant of 21 Gates Ave., Middleton, said he received a letter at the end of July informing him his rent was now due to another company.
“They never told us (about the financial problems),” he said. “The only way we found out was through that letter.”
HarbourEdge Mortgage Investments issued a letter to tenants via its lawyers, informing them Atlantic Living Property Management Services had been appointed to collect rents.
“This mortgage is now in arrears,” the letters, dated July 30 and Aug. 1., stated. “Under the terms of the mortgage, HarbourEdge has the right to appoint a property manager in the place of the existing landlord to collect the rents.”
HarboureEdge filed a foreclosure action against the company July11 in Halifax Supreme Court, alleging Cornwallis Developments is in arrears on two mortgages and owes the Ontario finance company almost $8.2 million.
Cornwallis Developments president Alex Filimon declined to comment for this story. His company has not yet filed a defence to the Harbouredge foreclosure action.
“We’re all trying to figure out where all the money is going. If they’re behind on their mortgage payments, where is all the rent money is going?” Robar asked.
Atlantic Living president Patrick Johnston said his company is only involved with rent collection and Cornwallis’ employees are still handling all other aspects of the operation.
“It’s a change for the tenants,” Johnston acknowledged.
Concerns from tenants who had paid their August rents to Cornwallis before receiving the lawyer’s letter have been sorted out and he urged residents of the buildings to “stay calm.”
Any tenants who have written postdated cheques to Cornwallis should cancel their cheques, Johnston said.
That’s what a 72-year-old tenant in the new portion of the Cornwallis Inn did, after checking with officials at Nova Scotia Housing Corp. She said the landlord had already cashed her payment for August before she received the lawyers’ letter.
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The woman, who is concerned about her name being used, is one of a number of Nova Scotia Housing Corporation and social assistance recipients among tenants in the two buildings.
Robar said a Community Services employee was concerned and surprised when he showed her the letter.
“We appreciate that this is a challenging time for tenants and we hope that this matter is resolved as quickly as possible,” a spokeswoman for Community Services said Aug. 9.
“These apartment lease agreements are between Cornwallis and the tenants,” Krista Higdon stated.
“NSHDC and the department are not a party to the leases or to the administration of those leases. However, we continue to monitor the issue,” she added.
Higdon said the rents had been assigned to the lender as part of a foreclosure action.
Because the matter is now before the court, the department cannot offer further comments, she said, but she did say that under the Residential Tenancies Act, the lender or its agent must adhere to the act and all conditions of the lease.
“Residents who feel they have not been treated appropriately under their lease are advised to contact the Residential Tenancies program at Service Nova Scotia and Municipal Relations,” she added.
The Department of Community Services also has a lending agreement with Cornwallis Developments. In August 2012, the province granted Cornwallis $850,000 to subsidize the cost of 34 new housing units under the Affordable Housing Agreement.
Cornwallis’ Middleton project was awarded $224,000 under the program in March 2011 for “rental preservation” of 17 units under the program.
Cornwallis Developments has met all terms of the agreement, a department official confirmed July 31.