Pauline Cauchefer did not have a problem with her tenants, who accuse her of using harassment and intimidation to kick them out of their apartment. Some of its co-owners have also been victims of his actions. They accuse her of having embezzled their money and of having violated the agreements which she had secretly concluded with them.
Even if she is only at the beginning of her eventful career, Pauline Cauchefer, owner of a dozen Montreal buildings, whose stormy relations with several of her tenants we detailed on Thursday, is already in dispute with partners. business in two of its properties. They are suing the young real estate investor in particular for having “illegally appropriated sums” and for “embezzlement”.
Read the first part of our survey on Pauline Cauchefer
PHOTO FROM FACEBOOK
Pauline Cauchefer
This is the case of two couples who bought with her an old building of seven apartments in Hochelaga-Maisonneuve in poor condition to renovate it and re-let it more expensive.
“She took our two families, she shouted at us in front of a bus”, summarizes one of the partners, Richard (fictitious name). In the midst of a depression because of his setbacks with Pauline Cauchefer, he agreed to speak to Press on condition of maintaining anonymity, in order to preserve his sanity.
“Passive investors”
It all started with an announcement linked to the Real Estate Investors Club, an organization that gives courses and tips on this industry, in December 2019. Pauline Cauchefer and another darling of the community, a certain Olivier Lepage, announce a property on the site. ‘avenue De La Salle. They are looking for “passive investors” to buy it with it and let it “optimize” it.
The case seems attractive: “75% of the renovations have already been done. Upon purchase, buyers will just have to finalize them, ”says the announcement for the beautiful gray stone property. Renovation budget: $ 180,000.
But the investment is considerable for Richard and his partners. They hesitate. Pauline Cauchefer insists, however, that they quickly buy the building she has found. “She starts to put pressure: ‘Quick quick quick, it’s a rush!” », He says.
In February 2020, they finally got their hands on the property for 1.041 million. Even if she owns 49%, the young businesswoman does not appear in the act of purchase. It only appears in a “counter-letter”, a document that was initially kept confidential.
What is a counter letter?
A counter-letter is a secret contract which mentions the real will of the parties, a will which derogates from a first apparent act. The use of such documents is not illegal in Quebec. However, real estate investors only use them in “exceptional cases”, explains Benoît Rivest, from the Center of Expertise in Notarial Law of the Chamber of Notaries. “It’s extremely rare,” he says. When this is the case, the public official “must ensure that it is done for a reason which is not unlawful”. Otherwise, his professional order forbids him to participate. “At the moral level, you have to be careful. The notary must do all the necessary verifications, ”says Benoît Rivest. Large developers who assemble land legitimately use the counter-letter to make transactions without triggering a wave of speculation. Parents can also be at odds if they help their child acquire a property. “On the other hand, if an obscure company wants to try to buy a building via a person who would not have all the capacities to buy, the notary must say that it seems curious to him. If you suspect a nominee, you have to ask questions. “
Tensions and catastrophes in series
“As of the acquisition of the building, the defendant began to behave in a strange and evasive way towards the plaintiffs”, indicates the lawsuit of Richard and his partners.
They expect her to immediately start negotiations and “optimization” work. Rather, she announces to them that she is going to Jamaica with the Real Estate Investors Club, the day after the transaction.
But above all, the building turns out to be infested with vermin and one of the apartments, which they had not visited, is in a sorry state. Even if it is in the state of construction, a tenant still lives there.
It wasn’t a slum, it was a semi-house. I would have called the fire department, they would have shut it down, it was inevitable.
Richard, Pauline Cauchefer’s business partner
Another bad news: housing that should have been available is not, and incomes are lower than expected.
Despite the gravity of the situation from the point of view of her co-investors, Pauline Cauchefer says she refuses any face-to-face meeting. She wants to communicate especially by WhatsApp and takes calls for “emergencies only,” according to court documents.
Relations are deteriorating and in March 2020, Pauline Cauchefer threatens to stop all the steps she has undertaken to take to “optimize” the building, says the lawsuit.
$ 17,497 missing
When pandemic containment ended in May 2020, Richard and his partners took matters into their own hands. They find that the site of their building is neither cleaned nor secured. For this work, however, they have already paid $ 11,497 to the Dragon Group, an entrepreneur that Pauline Cauchefer presents as part of “his team”, according to the lawsuit.
WHO IS THE DRAGON GROUP?
This building contractor, now bankrupt, saw the Régie du bâtiment (RBQ) cancel his license in July 2021 for recourse to nominees, false advertising, incompetence and “total lack of probity”. Its president, Roch Pruneau, was for the Régie only a “guarantor of convenience”, a figurehead for two other entrepreneurs, Jonathan Robinson and Georges Langlois. The latter has already led two other companies to bankruptcy in 2013 and 2014. “The company displays work that it has never done, prides itself on having more than 45 years of experience in the construction industry. and to have carried out several major projects, all of which are false information, ”indicates the RBQ. Roch Pruneau is dying today, according to his family, and Press did not find the other ex-managers of the company.
She convinces them all the same to write a new check for $ 6,000 to Dragon to move the work forward. They will bite their fingers, since they will never hear from the company again.
Pauline Cauchefer also makes them pay $ 6,000 to Olivier Lepage, “a real estate investor specializing in flipping”, as he describes himself in advice capsules on the internet. This former broker, whose license was suspended in 2016, would have provided “strategic advice” to Pauline Cauchefer and her partners.
WHO IS OLIVIER LEPAGE?
PHOTO FROM FACEBOOK.
Olivier Lepage, an investor associated with Pauline Cauchefer
“Reputable cash home buyer” according to his website, Olivier Lepage explains that he cashed the $ 6,000 under a “verbal agreement” with Pauline Cauchefer to help him in the file. “Pauline, I’ve known her for a long time,” he said. I have a bond of trust with her. In 2016, the former broker was fined $ 3,000 and suspended by the disciplinary committee of the Organisme d’autoréglementation du courtage immobilier for a series of offenses. In particular, he had made a commitment to buy a house if he could not find a buyer for it. To reassure his client, he presented him with spurious account statements for his company and his personal line of credit. One of them had a balance of $ 110,718, while the corresponding account had only $ 10,718. The other had a balance of $ 152,545, while the account only contained $ 2,545.
In their pursuit, however, they claim that Olivier Lepage never informed them that they should pay him what they qualify as “commission”. Contacted by Press, the businessman assures us that he rather invoiced them a “finder’s fee”, and that he did indeed work on the project.
Formal notice
In June 2020, Pauline Cauchefer’s partners have had enough and put her on notice to respect their agreement by reporting on the progress of the project and providing detailed statements of account. Nothing works.
In November, they decide to sue her. According to their request, it is not fulfilling its part of the contract by not taking over the work. They also accuse him of “embezzlement” totaling $ 17,497 towards the Dragon Group.
They point out that the work on the triplex will ultimately cost $ 509,730, nearly three times more than expected. They demand his withdrawal from the project and a check for $ 180,010 for the damage caused.
A second pursuit
Richard and his partners are not the only ones to demand justice from Pauline Cauchefer. Four months later, another investor also files a lawsuit against her. His request describes the same scenario, more or less.
The plaintiff, Kai Jin, also agreed to entrust him with the project to “optimize” a building with seven apartments in Hochelaga-Maisonneuve, by signing a confidential counter-letter. Like them, he paid the down payment on his own, which amounted to $ 142,000.
In his case, the complainant states in particular that Pauline Cauchefer “illegally appropriated” $ 30,000 belonging to the company that owns the building, “for her personal benefit”. She also allegedly caused a check for $ 10,000 to be issued by mistake to the bad contractor, who refused to reimburse the sum.
Kai Jin adds that invoices for a total of $ 70,000 worth of work are missing.
In total, he claims that the mismanagement and embezzlement he accuses him of cost him $ 100,000. He demands that she quit the project and reimburse him for this sum.
In a counterclaim filed last June, Pauline Cauchefer denies these accusations en bloc. She admits having paid herself $ 30,000, but assures that she did so in accordance with their shareholders’ agreement, and that she reimbursed $ 10,000.
In addition, she says that her project with Kai Jin has been blocked “for more than a year now” and in turn demands that the court force her to resell her shares in the building.
Things also ended badly with another ex-partner, Jean-Philippe Claude, trainer at the Real Estate Investors Club of Quebec. However, he did not take legal action against her and ensures that they remained “in good agreement”.
As in Richard’s building, one of the main problems came from the contractor from Pauline Cauchefer’s “team”, the Dragon Group.
“It was difficult, it is precisely part of the renovation problems, where we had slightly longer deadlines and slightly higher costs,” he says.
Counter-prosecutions
Asked about the prosecution of Richard and Kai Jin, Pauline Cauchefer says in an email that she replied with “counter-prosecutions”. “Even more, the two lawsuits have already been the subject of an alleged withdrawal by the applicants,” she adds.
Verification done, it is not the case: the two cases must be heard in Superior Court. In Kai Jin’s case, Pauline Cauchefer canceled for health reasons an out-of-court interrogation which was to take place on November 18.
As for the property of Richard and his partners, it is today renovated. But he bitterly regrets his adventure in the building “optimization” industry. “It’s brutality that I had underestimated. ”