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Landlord Rolf Baumann said he has experienced part of a growing trend of foreign diplomats skipping out on rent, walking away from leases and damaging rental units in Ottawa.Vergil Kanne

An American diplomat will pay an Ottawa landlord more than $10,000 in owed rent and legal fees in the wake of an Ontario Superior Court ruling that her diplomatic immunity doesn't cover rent disputes.

Justice Rohan Bansie ruled last week that Betsy Zouroudis's diplomatic status doesn't exempt her from paying back rent to her former landlord, Rolf Baumann. Ms. Zouroudis, who works at the U.S. embassy in Ottawa, and Mr. Baumann reached a settlement on Tuesday morning, less than an hour before she was scheduled to appear before an Ottawa court to determine how she would pay the landlord.

Mr. Baumann said Ms. Zouroudis has agreed to pay back $8,625 – two months rent – plus $1,500 in legal fees. For the landlord, who has rented his properties to diplomats in Ottawa for 25 years, it's not about the money.

"What this means is that there are mechanisms for anybody that's going to enter into a contractual obligation with a diplomat … to be able to have it enforced and supported by the Canadians laws," Mr. Baumann told The Globe and Mail.

"I don't necessarily see it as a win. I see it more as a public-awareness exercise."

Mr. Baumann said he has experienced part of a growing trend of foreign diplomats skipping out on rent, walking away from leases and damaging rental units in the capital. The dispute with Ms. Zouroudis was the last straw for him.

The problems started last year when other tenants in Mr. Baumann's high-end townhouse made a noise complaint against Ms. Zouroudis. After repeated complaints, Mr. Baumann asked Ms. Zouroudis to move out; he said she agreed to vacate the unit in May, 2017.

However, when Mr. Baumann went to show the unit to a new potential tenant, he discovered that Ms. Zouroudis was still living there. After consulting with the U.S. embassy, Mr. Baumann agreed to allow Ms. Zouroudis to stay until September, 2017.

Mr. Baumann said Ms. Zouroudis then moved out without warning in July, refusing to pay the two months of remaining rent. He said he couldn't rent the unit to anyone else, as Ms. Zouroudis kept the key until October.

He took Ms. Zouroudis to the Landlord and Tenant Board, which ordered her to pay Mr. Baumann $8,625. She did not pay.

In January, Mr. Baumann received a letter from Ms. Zouroudis's lawyer claiming that her diplomatic status exempts her from having to pay the money.

"Ms. Zouroudis is an an agent of a foreign state and as such enjoys immunity from civil matters throughout Canada," wrote Murray Snider, Ms. Zouroudis's laywer.

Mr. Snider cited the Vienna Convention on Diplomatic Relations, which exempts foreign diplomats from civil lawsuits and criminal prosecution in their host country. The convention also requires diplomatic agents to respect the laws of the host country.

Last week's ruling by Justice Bansie found that while Ms. Zourdouis has diplomatic status under the Vienna Convention, the rental dispute is not covered by the exemption. Justice Bansie cited Article 31, which states that diplomatic immunity does not apply to commercial transactions carried out by the diplomat in the host country.

"The underlying activity, being the landlord and tenant relationship between the parties, was a commercial activity," wrote Justice Bansie in his Feb. 2 judgment.

Ms. Zouroudis's lawyer did not reply to a request for comment Tuesday.

According to her LinkedIn profile, Ms. Zouroudis still works as an executive assistant in the U.S. embassy's political section. An embassy spokesperson said they would not comment on the matter.

Global Affairs Canada said the government expects foreign representatives from any country to respect Canadian laws and regulations.

"We expect that residential lease agreements signed by foreign representatives will be negotiated and executed in good faith, and that all reasonable steps will be taken to comply with Canadian laws and regulations, including those relating to the termination of leases," spokeswoman Amy Mills said in a statement last month.

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