On November 14, 2016 the Commission
received a Notice of Appeal from a lessee, Karen MacKinnon (the
"Appellant"), requesting an appeal of Order LD16-322 dated October 26, 2016
issued by the Director of Residential Rental Property (the "Director").
By way of background, on December
31, 2015 a lessor, Lida Holdings Inc. (the "Respondent") filed with the
Director a Form 2 - Application for Enforcement of Statutory or Other
Conditions of Rental Agreement seeking: an order to authorize the
termination of the rental agreement; a finding that rent is owed; and an
order that an amount found to be owed be paid.
With the Form 2, the Respondent filed a Form 4 - Notice of
Termination by Lessor of Rental Agreement dated November 5, 2015.
The matter was heard by the Director
on October 20, 2016 and in Order LD16-322 the Director ordered:
"IT IS THEREFORE ORDERED THAT
The lessee shall pay to
the lessor the sum of $657.53 on or before December 31, 2016."
The Commission heard the appeal on
December 1, 2016. The Appellant
was present. William Pepperdine
testified on behalf of the Appellant.
The Respondent was represented by Rick Li ("Mr. Li").
The Appellant presented one
additional document. The
Appellant told the Commission that Exhibit E-9 is the actual Form 4 Notice
of Termination by Lessor of Rental Agreement (Form 4) that was taped to her
The Appellant submitted that there
were discrepancies between Exhibit E-9 and the Form 4 Exhibit E-2 which had
been filed with the Director.
Most notably, Exhibit E-2 states that the premises must be vacated on or
before November 24, 2015 while E-9 states the premises must be vacated on or
before November 14, 2015.
The Appellant stated that she wished
to remain in the premises on a month to month basis.
However, the Appellant testified that the Respondent's property
manager insisted that she sign a new lease or "we will throw you out".
The Appellant testified that she
moved out of the premises on November 7, 2015.
Mr. Li stated that the Appellant had
signed a one year fixed term lease with the previous owner of the premises.
Mr. Li presented one additional document, Exhibit E-10, a copy of the
Form 1 Standard Form of Rental Agreement between the Appellant and the
previous owner of the residential premises, effective from November 1, 2014
to October 31st, 2015.
Mr. Li stated that if the Appellant
were to leave she would need to give two months written notice prior to the
end of the lease. The Respondent
purchased the premises in 2015.
Near the end of October 2015 there was no word from the Appellant as to
whether she would stay or leave.
The Respondent tried to have the Appellant sign a new lease, but she would
not sign. The Appellant did not
pay her November rent and thus a Form 4 was issued.
The premises were leased to a new tenant with a rental agreement
commencing December 1, 2015.
Therefore, Mr. Li maintains that he is entitled to the entire rent for the
month of November 2015 in the amount of $800.00.
Mr. Li was not able to explain the
discrepancies between Exhibits E-2 and E-9, both of which were signed by the
Respondent's property manager.
Mr. Li also requested a return of
his $30.00 filing fee.
The Commission agrees with the
Director's Order in its entirety based on what had been presented at the
October 20, 2016 hearing.
However, the Director did not have the benefit of Exhibit E-9 presented to
the Commission on December 1, 2016.
Subsection 13(1) of the
Rental of Residential Property Act reads:
Where a lessee fails to pay rent in
accordance with the rental agreement, the lessor may, on any day following
the day the rent was due, serve the lessee with a notice of termination to
be effective not earlier than twenty days after the date it is served.
A Form 4 Notice of Termination by
Lessor of Rental Agreement is a method whereby a lessor choses to initiate
the termination of the rental agreement and specifies a date for the lessee
to vacate the premises which also serves as the termination date.
The vacate date is specified by the lessor within the sentence, "You
must vacate the premises on or before the _ day of _, 20_."
Immediately under this sentence it is noted that for "reason (a)"
[failure to pay rent] the date must be "at least 20 days from date of
service of notice".
Where the lessee fails to pay rent,
the lessor terminates the rental agreement by serving the Form 4 on the lessee, unless the lessee (i) invalidates
the Form 4 by paying all rent due within 10 days of receiving the Form 4 or
(ii) the lessee applies, within 10 days of receiving the Form 4, to the
Director to set aside the Form 4 and the lessee is successful on that
application. Unless the lessee
continues to occupy the premises beyond the termination date, the lessor
cannot seek rent beyond the termination date.
At the hearing before the
Commission, Mr. Li could not explain the discrepancy between the Exhibit E-2
Form 4 and the Exhibit E-9 Form 4.
The Commission finds that the Form 4
identified as Exhibit E-9 was in breach of subsection 13(1) as that Form 4
required the Appellant to vacate the premises only 9 days from the vacate
The Commission accepts the testimony
of the Appellant, which was not challenged by the Respondent, that it was
the Exhibit E-9 Form 4 and not the Exhibit E-2 Form 4 which was taped to her
door. Whether this Form 4 was
served in ignorance of the law or whether it was served as a deliberate
attempt to persuade the Appellant to vacate the premises early, the date
chosen on the Form 4 taped to the Appellant's door was unlawful.
The Commission is of the view that
the Respondent cannot use the early unlawful date for the purpose of
motivating a tenant to leave early, and then avail itself of the later
lawful date for the purpose of termination of the rental agreement with
respect to calculating rent owed.
Given that the Appellant was already out of the premises, and the
Respondent selected an early vacate date, the Commission holds the
Respondent to the date specified on the Form 4 actually served on the
Appellant (Exhibit E-9) and finds that the Respondent terminated the rental
agreement effective November 14, 2015.
Accordingly, the Appellant owes the
Respondent rent for the period of November 1 to November 14, 2015,
calculated as $800.00 x 12 divided by 365 days X 14 days = $368.22.
With respect to a return of the
Respondent's $30.00 filing fees, the Director has explained in Order
LD16-322 that the Director does not have jurisdiction to award costs.
An administrative tribunal, such as the Office of the Director of
Residential Rental Property and such as the Commission, obtains its
jurisdiction and its powers from legislation.
Rental of Residential Property Act nor the
Island Regulatory and Appeals Commission
Act gives the Director or the Commission
the power to award costs. As
such, neither the Director nor the Commission can order the Appellant to pay
the cost of the fees paid by the Respondent.
pursuant to the
Island Regulatory and Appeals Commission
Act and the
Rental of Residential Property Act;
IT IS ORDERED THAT
The appeal is allowed.
The Appellant [lessee] shall pay to the
Respondent [lessor] the sum of $368.22 on or before December 31, 2016.
at Charlottetown, Prince Edward Island,
this 2nd day of December, 2016.
John Broderick Commissioner
Ferne MacPhail, Commissioner
Peter McCloskey, Commisisoner
Sections 26.(2), 26.(3), 26.(4) and
26.(5) of the
Rental of Residential Property Act
provide as follows:
26.(2) A lessor or lessee may, within fifteen
days of the decision of the Commission, appeal to the court on a
question of law only.
(3) The rules of court governing appeals apply
to an appeal under subsection (2).
(4) Where the Commission has confirmed,
reversed or varied an order of the Director and no appeal has been taken
within the time specified in subsection (2), the lessor or lessee may
file the order in the court.
(5) Where an order is filed pursuant to
subsection (4), it may be enforced as if it were an order of the court.
NOTICE: IRAC File Retention
In accordance with the
Commission's Records Retention and Disposition Schedule, the material
contained in the official file regarding this matter will be retained by the
Commission for a period of 2 years.