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January 5, 2012

The Runaway Landlord, Part 1

Ryan Fedoruk, a 40-year-old former part-time English teacher, may have found his true calling in Shanghai. From the beginning of 2011 until the end, he rented close to 30 apartments, most of them concurrently, and sublet them to more than 100 fellow foreigners. On Christmas Eve, he packed his things and disappeared, allegedly owing approximately 300,000 RMB to tenants alone and causing one eviction after another.

Second-hand Landlord

Fedoruk began subletting apartments in Shanghai in early 2011. He would post ads online, particularly SmartShanghai.com using multiple accounts, and describe himself as the landlord. He would also refer to himself as the landlord in his contracts with tenants.

He rented one apartment after another, and his so-called business gained steam in the middle of the year when many newly-arrived university students, mostly from Europe, were looking for housing. At its peak, he was renting close to 30 apartments in Puxi and Pudong to more than 80 tenants at the same time.

Then the school semester started and business slowed. By mid-semester, the perpetually increasing number of tenants that he had relied on for cashflow had disappeared. He had trouble finding tenants for a couple apartments in the French Concession area and, compounding the problem, would give steep discounts to fill empty rooms in others. “For him it became nothing more than filling rooms,” wrote one tenant who worked part-time for Fedoruk. “It seemed like he was desperate.”

Over time, a rumor started going around: Ryan Fedoruk does not return deposits. In August, a prospective tenant had even written a lengthy email to warn others about renting from Fedoruk. According to her email, a realtor told her that “everyone knows Ryan. He is what we call a second-hand landlord (二房东). He rents and sublets, then he takes the money from the tenants but doesn’t pay the landlord. Always finds a way to run away.”

The email unfortunately did not circulate to many of Fedoruk’s tenants and he, according to those he abandoned, left Shanghai on December 24, 2011 without returning rent deposits and without paying rent to many of his landlords.

(Note: A “second-hand landlord” or 二房东 is someone who rents and sublets a property and is not necessarily a scammer, though the term carries a somewhat negative connotation.)

Pile of Debts

After being owed money for weeks and months, many people were losing faith in Fedoruk’s promises to pay back their deposits and sick of his excuses. He had even become lazy in creating excuses, allegedly making claims such as, “I’ll pay you back tomorrow. Tomorrow is looking prosperous,” or “I’ll pay you back Sunday. I have a winning lottery ticket.”

Daniel Kwan, a former tenant who had months ago helped Fedoruk set up his database of tenants and properties, claims to be owed deposit money and emailed other tenants asking if Fedoruk owed them as well. Replies were received and it quickly became clear that Fedoruk indeed did not return deposits to many of his tenants, especially in recent months.

Fedoruk would leave Shanghai the next day and not return, and the email would lead to a community effort to build a criminal case and find the alleged swindler.

On Christmas Day, Fedoruk became aware of the email and called Kwan from Zhuhai. “Everything is illegal! Everything is illegal! Everything is illegal!” he yelled and repeated several more times. “If you keep this up, I’m going to jail!” Kwan agreed and suggested that he pay back the people he owes.

Since then, Fedoruk has claimed to a number of his existing and former tenants that he was borrowing money against a house but refused to reveal any paperwork. “This is most likely impossible since Ryan does not make any reportable income,” wrote Albert T., one of Fedoruk’s former roommates. “He is unemployed, does not pay tax, and rents his homes illegally, which means he would probably fail the credit check.”

The day after Christmas, lawyer Eva Gao joined the effort and began collecting statements from those who rented or were renting from Fedoruk. Based on emails received by the time of this writing, she estimates that Fedoruk is alleged to owe tenants approximately 300,000 RMB, and the number is expected to grow.

Evictions

The confirmation that Fedoruk was not returning to Shanghai came when Albert, who had only recently moved into the same apartment as Fedoruk, stated that “All of his essential belonging are gone, including his personal LCD television. I honestly think Ryan is bailing out on all of us.” A week after that, Albert was evicted along with three other roommates. Fedoruk had breached the rental contract by subletting the apartment. “From my point of view, it seems as if Ryan had taken my money and then left Shanghai with all his belongings, knowing he would not come back.”

Accounts of Fedoruk cheating people who had not yet arrived in China also surfaced. “There are about six people that paid Ryan from abroad in advance to secure a spot in his place on Changyi Lu,” claimed on tenant on New Year’s Day. “These individuals will be out of money and a place to stay in Shanghai.” He was correct. On the same day that tenants of Fedoruk’s own apartment in Lujiazui was evicted, the six who had moved to Shanghai for not even a few days were given a day to vacate their apartment.

Not all evictions were obvious to even the tenants being evicted. In November, Cheong, who was overseas at the time and had already paid months of rent in advance, was informed by his roommates that Fedoruk was moving them to a different apartment “because the landlord was an ass and didn’t want to fix the house. But the real reason was that Ryan didn’t pay the landlord rent. I got this info from the agent responsible for the apartment.”

Cheong has since moved elsewhere but never got his money back from Fedoruk, putting him in financial hardship. “I had to borrow money in order to get the new room I am actually staying at. I worked my ass off to get money and Ryan would just hold on to the money. When he had the money, he just blew it off at fancy western restaurants or bars. That really pissed me off.”

Even some who were not facing eviction (yet) from the true landlords recalled being threatened by Fedoruk himself. One tenant in an all-girls apartment wrote, “Some days, Ryan is nice with us, but sometimes he’s really scary and threatens to kick us out when it comes to the rent or to the internet issues. All of that because we refused to pay the rent before the date stipulated in the contract.”

These are just some of the stories of evictions that have been received. Considering that more than a dozen apartments have allegedly been abandoned by Fedoruk when he left Shanghai and cut off contact, we expect to hear more in the coming days and weeks.

To Be Continued…

In Part 2, the law will be discussed and more information regarding the case will be revealed. You may contact Eva Gao at eva@evaslaw.com and Daniel Kwan, who contributed to this article, at daniel@dkwan.com.

January 5, 2012