Vancouver luxury rental firm says regulator's 'unfair' order freezing its accounts has been lifted

A Seabus passenger ferry, right, travels across Burrard Inlet at sunset as downtown Vancouver and the port are seen from Burnaby Mountain, on Monday, July 11, 2022. (Darryl Dyck / The Canadian Press)

A Vancouver property management company has had its trust accounts unfrozen and its licence reinstated, two weeks after a regulator's "urgent" order against it.

Rent It Furnished Inc. hired former B.C. Attorney General Wally Oppal to defend itself against what it and Oppal called "unfair" order from the B.C. Financial Services Authority, which regulates a variety of industries in the province, including real estate.

In a statement Friday, the company said the BCFSA had rescinded its order "following an urgent legal hearing that included results from KPMG's third-party forensic audit, which Rent It Furnished commissioned to vindicate itself."

The company stressed that the BCFSA's July 25 order contained "zero evidence" of a public complaint about it, nor of any misappropriation of trust funds. Rent It Furnished also claimed the BCFSA didn't give the company a chance to defend itself before issuing the order.

"The BCFSA has a legitimate role to protect the public, but this suspension didn’t fit the circumstances and caused widespread disruption to the business and members of the public who depend on it," said Oppal, in the release.

"While Rent It Furnished had some administrative issues, the order was unnecessarily punitive, especially considering the business is classified as an essential service. I am pleased the BCFSA took a second look and rescinded it."

The regulator issued its order – and a "consumer alert" – late last month, saying they were the latest steps in "a series of escalating actions" the BCFSA has taken over the last year in response to the company's "repeated failures to provide compliant financial records."

According to the BCFSA, the company and the regulator entered a consent agreement last August, in which RIF admitted to failing to identify six shortages in its trust accounts between February 2017 and September 2020. The shortages totalled roughly $5,700. 

RIF also admitted to failing to take immediate steps to rectify the shortages and failing to notify the BCFSA of a negative balance within 10 days of when it occurred.

According to the BCFSA, RIF has shown a "repeated inability to reconcile its rental trust accounts" since entering the consent agreement.

"Without complete and accurate reconciliations, trust accounts cannot be assessed to determine if funds are handled correctly in accordance with the Real Estate Services Act," the BCFSA said in a news release when it first announced the order.

"RIF was unable to identify and track specific amounts held in trust for its clients, or how much money its clients were owed."

Documents posted on the BCFSA website Friday afternoon confirm that the order has been rescinded and that Rent It Furnished must provide monthly reconciliation of its trust accounts to the regulator until a discipline hearing scheduled for Nov. 12 to 14.

"Since the urgent order, RIF has hired KPMG and provided BCFSA with trust account reconciliations that show that consumer funds are no longer at risk," the regulator said in an updated consumer alert.

"BCFSA has varied the order to allow payments from the trust account to resume."

The company maintains that consumer funds were never at risk. 

In RIF's statement Friday, founder and CEO Erika Weimer again characterized the misconduct her company admitted to as a matter of "issues with how reports were being reconciled and generated on the company’s automated systems," and said she and her staff were working with the BCFSA to resolve the issues when the regulator's order "blindsided" them.

• Read more: 'Unnecessarily punitive': Property management CEO speaks out against regulator's order freezing accounts

"I am still numb from what happened because there was zero evidence of misappropriation of trust funds, which we fought relentlessly to prove," said Weimer, in the release.

"Though the suspension was brief, thousands of our landlords and tenants were disrupted and had to seek temporary assistance outside of our company to pay and receive rent, and we were forbidden from tending to building maintenance emergencies."

Rent It Furnished said it has resumed operations and "is working diligently to process rent transactions between landlords and tenants and tend to maintenance emergencies."

The company describes itself as "a leading provider of luxury rental property in Vancouver, Toronto, Montreal, Ottawa and New York," with more than 5,000 "luxury furnished properties" under management, serving "local and international clients."