Lawrence Krimker, CEO of Crown Crest Capital Management, along with twelve of his companies, are caught in the throes of a potential class action lawsuit. It is alleged that the Toronto-based CEO and his companies encumbered HVAC rental customers’ homeowner titles in exchange for steep sums of money.
The lawsuit, represented on behalf of Toronto residents Goren Donev and Alga Bonnick, contains allegations that all thirteen entities violated Ontario’s Consumer Protection Act. Their purported misconduct includes not informing their rental customers about security interests valued in the thousands of dollars against their home titles. Lamentably, these companies also supposedly pursued door-to-door contract sales, a practice prohibited in Ontario since 2018.
Such security interests, akin to liens, offer financial collateral for lenders. In this scenario, they secured the value of the companies’ heating, ventilation, and air conditioning (HVAC) units. Even though this practice is prevalent in the home equipment rental industry, the interests typically match the equipment’s cost. However, the combined interests against the homes of Donev and Bonnick surpassed a hefty $20,000.
According to Mohsen Seddigh of Sotos Class Action law firm in Toronto, such exploitation is widespread in the home equipment industry. Homeowners often have no choice but to pay the costly security interests placed on their titles by lenders seeking to profit.
Crown Crest Capital Management, in a statement released in June, refuted all claims against it and an unmentioned ‘senior executive’. Notably, Lawrence Krimker didn’t respond to a series of comment requests from June through September.
In a defence statement submitted on behalf of Krimker, all the allegations against him were adamantly denied. The CEO’s defence argues that he remains uninvolved in routine operational activities as a legally separate entity from his companies. On the contrary, the consumer’s claim alleges Krimker was the intricate mind behind the operation, subtly acting through multiple companies to dodge accountability, thus making him jointly liable.
The proposed class action is currently awaiting a certification hearing. If certified and victorious in the subsequent trial phase, all existing interests will be removed from consumers’ titles. Furthermore, class members will collectively receive equivalent to $5 million in damages.
Both Bonnick and Donev’s cases present concerning parallels of unsuspecting homeowners who were not informed of the contract’s repercussions or the total payables. Insidiously, the agreements included a clause allowing the supplier to register a security interest against homes without the homeowner’s consent or notification. Consequently, homeowners found themselves unable to freely transact with their properties.
As Seddigh describes, many homeowners remain oblivious of these interests until they attempt to sell or re-mortgage their homes. In frustration, they often feel compelled to bear the high costs of these interests. He refers to this predatory practice as akin to ransoming homeowners, chiefly affecting senior citizens and non-English speakers.
The trial is yet to pass judgment on the accusations against the 13 corporations and Krimker. Sotos Class Action anticipates the action’s certification hearing to occur early next year.