FILE PHOTO - Kamloops city councillor Mike O'Reilly is seen in this photo from X, formerly known as Twitter.

Image Credit: TWITTER/Mike O'Reilly

A new lawsuit claims a Kamloops city councillor should be on the hook for a $21,700 payout to tenants who were evicted from their home three years ago.

In 2021, the tenants were evicted to make way for the new buyer, Coun. Mike O'Reilly. The Residential Tenancy Branch would later find the renters weren't properly notified, resulting in a payout equal to 12-month's rent, but it wasn't O'Reilly who was ordered to pay them.

That's because the tenants were told Bradley Alberts was going to buy the house and move in, according to a claim filed in BC's small claims court.

Alberts drew up a contract with the seller in February 2021. That original landlord, not named in court documents, gave the tenants of seven years a two-month eviction notice on March 5, so they could make way for the new buyer.

O'Reilly would later come into the deal on April 12 when Alberts assigned the contract to the city councillor, according to the notice of claim.

An assignment is a standard process used in some real estate deals, but it's also regulated in BC to prevent "shadow flipping," which occurs when the first buyer intends to make a profit on the home before the contract is completed.

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It's not clear why Alberts backed out of the deal and assigned the contract to O'Reilly, but the city councillor agreed to pay $21,500 to Alberts along with taking over the house sale — $1,500 went toward Alberts' legal fees for the assignment agreement. For $586,000, plus the assignment fees to Alberts, the two-storey Sagebrush house was a temporary move for O'Reilly and his family during a renovation at their other home.

Alberts did not respond to an attempt to reach him for comment.

In October, Alberts was ordered to pay the former tenants $21,700 because O'Reilly and his family lived in the home in the months after their eviction, rather than Alberts or his immediate family. He claims O'Reilly had an "implied obligation" under the agreement to have the seller notify the tenants of the new buyer.

"This was not done," the claim read.

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The tenants, who weren't named in the notice of claim or the published tenancy branch decision, were given until May 31, 2021, to leave. O'Reilly moved in June 2, 2021.

It was two years later, May 2023, that the tenants filed the dispute against Alberts for failing to move into the house as per their two-month eviction notice.

The province's tenancy branch sided with the tenants finding that they were told Alberts was the new owner and either he or an immediate family member would live there at least six months.

"I find that the stated purpose for ending the tenancy was not accomplished," the decision read.

The fact the contract was assigned to O'Reilly was "not an extenuating circumstance" that barred Alberts from moving into the rental unit, according to the decision. He was ordered to pay the tenants $21,600 for 12 months rent at $1,800 a month along with a $100 filing fee.

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Alberts claims O'Reilly should be on the hook for the $21,600.

"We will be crafting our response, but at the end of the day there was an agreement in place. They have their position and we have ours," O'Reilly told iNFOnews.ca. "This is nothing major. This is part of doing business when there's disagreements and you try to come up with an agreement."

He didn't say exactly why the house was assigned to him in this case, but he said he and Alberts may have considered taking on the property as a business venture.

"Ultimately I ended up being the sole purchaser of the property through a standard assignment agreement. These happen all the time, this is nothing new," O'Reilly said.

Aside from his work as an elected official, O'Reilly is a property developer and owns Comet Industries, a commercial real estate company which is behind a new industrial park in the Iron Mask area of Kamloops. There is no indication his business was involved in the Sagebrush house, which he would sell for more than a $100,000 profit.

In March 2022, it sold for $735,000, according to BC Assessment.

O'Reilly has yet to respond to the lawsuit in court. The allegations in the lawsuit have not been proven in court.

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