An Epic Alliance investor thought they owned a home with a tenant — it had actually burned down

Fallout from Epic Alliance failure WATCH: CTV Saskatoon’s Keenan Sorokan reports on a court-ordered investigation into a failed real estate firm.

Following the collapse of Epic Alliance, one investor learned they were the landlord of a property that no longer existed.

Sharon Moormann, a property manager with Western Premium Property Management Inc. had to break the news to many out-of-province landlords that homes they assumed were in good condition — and turning over a profit — were actually in disrepair, vacant, or in one case, didn't exist any longer.

“There was a house that had burnt,” Moormann told CTV News.

When investors learned the company was shutting down during a 16-minute zoom call in January, more than 500 properties in Saskatoon went from "hassle-free" investments to headaches.

A court-ordered investigation found the $211.9 million dollars invested in the Saskatoon company is mostly gone. Attempts by CTV News to contact the company's co-founders Rochelle Laflamme and Alisa Thompson have been unsuccessful.

One of the company's lines of business was its landlord program which offered to manage properties while promising limited risk for investors — including a pledge to buy the homes from those who wished to exit the program.

Never intending to be landlords, the investors turned to companies like Western Premium, which initially managed roughly 300 of the homes over the winter.

In her decades of experience, Moormann has never seen anything like it.

"We've definitely found some problems we've never had to deal with before; there's always some new things that pop up that we haven't dealt with,” Moormann said.

“Frozen water lines, the frozen hot water heaters — the surprises that you can't see when you open the door and look around the property.”

While Western Premium is used to managing a variety of properties, Moormann said the company wasn't prepared for the influx of homes that were vacant — which according to affidavits filed at Court of Queen’s Bench from former Epic Alliance employees, made up roughly 60 per cent of Epic's inventory.

“Many of (the houses) are sold. Many (investors) have turned it back into a rental. The market did get a little flooded,” she said.

Saskatchewan Realtors Association CEO Chris Guérette said Epic Alliance’s homes haven’t greatly affected the Saskatoon real estate market as of yet.

"So far we have not seen a significant impact in the market. We are watching that monthly. So we flagged that with our economists to see what kind of negative impact there could be,” she said Tuesday.

Cameron Choquette, the CEO of Saskatchewan Landlord Association, said the fallout for the entire real estate industry could have been a lot worse if it wasn't for companies like Western Premium taking on all the extra work.

"We're extremely proud of the members in our organization that have stepped up to manage those properties, keep tenants in the properties and make sure that we don't have any run-ins with property maintenance bylaw issues currently,” he said.

Based on a complaint from an Ontario investor, the Saskatoon Police Service economic crimes unit is investigating Epic Alliance.

The Financial Consumer Affairs Authority of Saskatchewan (FCAA) is also undertaking its own separate investigation.