Canada

City cracks down on shell corporations over abandoned properties

Since the city tightened its bylaw standards last summer, its attorneys have won 100 percent of cases involving blighted structures

During the months of June, July and August, the city of Sault Ste. Marie has filed 26 charges in connection with vacant properties believed to be owned by shell corporations.

Jeffrey King of the city’s law department says 11 such charges were filed in June, five in July and 10 in August.

And that’s not the whole story.

King says 30 more charges were filed in the same three months related to properties not believed to be owned by shell corporations, which are sometimes used to hide ownership of assets.

King adds that since the city tightened its bylaw standards and prosecution procedures last summer, his attorneys have won convictions in 100 percent of cases involving blighted structures.

In a report prepared for Tuesday’s city council meeting, King provided the following list of recent convictions:

  • 102/104 Albert St. E. owned by 12951274 Canada Inc. (1 Hunter Hamilton) – Vacancy Bylaw Provisions – Building Order – Ordered $1,000 plus additional victim fine and court costs (hereinafter “Plus Plus”) – First Offense
  • 427 Sherbourne St. owned by 12864843 Canada Inc. (1 Hunter Hamilton) – property standards provisions (steps) – building order – fined $2000 plus plus – first offense (although technically second if you look at the directorship of the numbered company) – prosecution continues in relation to various properties under this property and should see sanctions continue to increase
  • 38 Copernicus Dr. owned by 370893 Ontario Ltd. – provisions of the Vacancies (Home Works) Bye-law – 15.2 building contract – fined $1000 plus plus – first offense
  • 22 Manilla Terrace – Northern Caboodle Inc. – vacancy bylaw provisions – building contract – fined $2000 plus plus – first offense
  • 60 London – individual ownership – two co-owners each fined $400 plus plus on first offense – vacancy by-law provisions – building contract
  • 368 Cathcart St. – individual ownership – two co-owners each charged $400 plus plus first offense – property standards (exterior cladding) bylaw provisions – building code
  • 431 Charles St. – personal property – owner charged $200 plus plus first offense – property standards bylaw provisions (abandoned vehicle) – building order

“The City Council equipped law enforcement and prosecution with a strong tool last summer. The above convictions and fines are testament to this fact and continued enforcement will send a strong message of deterrence to repeat offenders,” says King.

“Staff will continue to monitor grass trends in general as provincial movements see the benefits of allowing growth to exceed the by-law limit to assist plant pollination.”

“As of the date of this report, we see no need to make any changes to the city’s property standards bylaw or yard maintenance bylaw,” King advised Mayor Provenzano and city councilors.

Speaking this week at a District 2 Council candidate meeting, Coun. Luc Dufour talks about the problems with the city’s old property standards rules

“The property standards bylaw that Sault Sainte Marie had in 2018 was based solely on the Ontario Building Code.”

“The Ontario Building Code only deals with the structural stability of buildings,” Dufour said.

“When the city began to sue [old Sault Area Hospital’s] owner under that bylaw, the entire prosecution was based on the question of structural stability.”

“That allowed the owner to hire an engineer who could write a letter and say, ‘Oh, the building isn’t falling. That closed the case.”

Additional information is currently being added to this article.

Tuesday’s City Council meeting will be streamed live on SooToday at 4:30 p.m.