On February 18, 2018 the Commission received a Notice
of Appeal from Robyn MacLean ("Ms. MacLean"), the representative of a
lessor, Nicholas MacLean Holdings Inc. (the "Appellant"), requesting an
appeal of Order LD18-046 dated February 8, 2018 issued by the Director of
Residential Rental Property (the "Director").
By way of background, on July 8, 2016 the lessees,
Mitch Vail and Elise Tierney (collectively the "Respondents") filed a Form 9
- Application re Determination of Security Deposit.
Attached to the application was a Form 8 - Notice of Intention to
Retain Security Deposit signed by Ms. MacLean on behalf of the Appellant and
dated July 5, 2016.
On July 11, 2016, the Director of Residential Rental
Property wrote to Ms. MacLean to inform her of the requirement under Section
10(9) of the
Rental of Residential Property Act (the
"Act") and requesting
that the security deposit plus interest be provided to her.
The matter was heard by the Director on November 23,
2017 and in Order LD18-046 the Director ordered:
"IT IS THEREFORE ORDERED THAT
1. The lessor shall pay the sum of $431.72
to the Acting Director of Residential Rental Property in trust for the
lessees on or before March 8, 2018."
The Commission heard the appeal on March 15, 2018.
The Appellant was represented by Robyn MacLean.
Elise Tierney ("Ms. Tierney") represented the Respondents.
Ms. MacLean testified that Mitch Vail had moved into
the residential premises in 2013 and the lease promotion was offered to the
Respondents each year as the rental agreement was renewed.
The final rental agreement (Exhibit R-7) was dated January 8, 2016
and contained Appendix A,
which set out the terms of the lease promotion, including
circumstances which would void the lease promotion and require a
deduction from the security deposit to reimburse the lessor for the lease
promotion. Ms. MacLean testified
that the circumstances which would void the lease promotion did happen and
accordingly the Appellant
deducted the amount of $400.00 from the security deposit.
Ms. MacLean referred to Order LR15-01 (Exhibit E-20)
and noted that the Commission had previously determined that the Appellant
could recover a similar lease promotion from the security deposit in the
event the terms of the lease promotion were not met.
Ms. MacLean also testified that Director's Order Order LD16-226 did
not accurately summarize the agreement reached between the parties in 2016.
Ms. MacLean testified that the Appellant did not submit the sum of
$827.80 in response to the Director's July 11, 2016 letter because $396.08
had been paid to the Respondents on July 5, 2016.
Ms. Tierney testified that she had previously agreed to
the retention of $400.00 from the security deposit as the Respondents had in
fact "broken the lease". Ms.
Tierney sought clarification on what the charge for cleaning supplies and
labour were for.
Ms. MacLean explained that the cleaning supplies and
labour were solely related to carpet cleaning supplies and the labour to
clean the carpet. Ms. Tierney
appeared to be satisfied with this explanation.
The Commission allows the appeal for reasons that
Commission staff confirmed that shortly before the
commencement of the hearing, Ms. MacLean had presented a cheque in the
amount of $431.72 representing the balance of the security deposit plus
Director's Order LD18-046 referred to wording contained
in Director's Order Order LD16-226 which implied that the lessor was not
seeking to retain $400.00 from the security deposit to reimburse the lessor
for the lease promotion. Ms.
MacLean testified that this summary of the oral agreement between the
parties was not accurate and Ms.Tierney testified that she had agreed that
the lessor could retain the $400.00 as the lessees had broken the lease.
The Commission finds that although it was the lessor
who had terminated the rental agreement, this termination was lawful and in
response to the initial actions of the lessees.
The parties had then come to an agreement to settle matters and this
agreement was fulfilled.
pursuant to the
Island Regulatory and Appeals Commission
Act and the
Rental of Residential Property Act;
IT IS ORDERED THAT
The appeal is allowed.
Director's Order LD18-046 is overturned.
The lessor Nicholas MacLean Holdings Inc. shall be entitled to
receive the remainder of the security deposit in the amount of $431.72
from the money deposited in trust.
The aformentioned payment shall be made
when the appeal period has expired.
at Charlottetown, Prince Edward Island,
this 15th day of
M. Douglas Clow, Vice-Chair
John Broderick, Commissioner
Jean Tingley, Commissioner
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.