On September 13, 2018 the Commission
received a Notice of Appeal from Josina Frizzell (the "Appellant"),
requesting an appeal of Order LD18-288 dated September 10, 2018 issued by
the Director of Residential Rental Property (the "Director") requiring her
to surrender the residential premises that she was occupying.
By way of background, on August 29,
2018 Josh Cormier (the "Respondent") filed with the Director a Form 2
Application for Enforcement of Statutory or Other Conditions of Rental
Agreement seeking an order that possession of the residential premises be
surrendered to the Respondent for non-payment of rent and directing the
Sheriff to put the Respondent in possession.
Attached to the Form 2 was a Form 4 - Notice of Termination by Lessor
of Rental Agreement dated July 23, 2018.
The matter was heard by the Director
on September 5, 2018 and in Order LD18-288 the Director determined that rent
had been unpaid and ordered:
1. Possession of
the residential premises be surrendered to the lessor and the Sheriff is
directed to put the lessor in possession of the residential premises by 2:00
p.m. on Thursday, September 13, 2018."
The Commission heard the appeal on
September 25, 2018. The
Appellant was present. The
Respondent participated by speakerphone.
The Appellant testified that she and
the Respondent purchased a residential property located at 120 South Drive
("the house") in 2015. The
Appellant provided the Respondent with funds for the down payment and for
closing expenses for the purchase of the house.
She did not quantify these payments in her testimony before the
At that time the Appellant and
Respondent were a couple and they lived in the house with their child.
The Appellant and Respondent later separated.
The Appellant wanted to stay in the house and did not want to sell
it. The Appellant and the
Respondent entered into what she described as a "rent to own" arrangement
whereby she provided the Respondent with reimbursement for the mortgage
payments. The Appellant was to
pay utilities and other expenses for the house directly.
The Appellant filed several
additional documents shortly before the commencement of the hearing.
An Agreement of Purchase and Sale for the house was signed by the
Appellant and Respondent but
listed the Purchasers as Josh Cormier and a third party later identified in
testimony as the Respondent's grandfather (Exhibit E-13).
A mortgage approval document for the property listed Joshua Cormier
and the same third party as "Borrowers" (Exhibit E-14).
The Appellant also filed copies of account details (E-15), Interac
e-Transfer statements (E-16) and Interac accepted statements (E-17) in an
effort to establish her reimbursement of mortgage payments paid on the house
to the Respondent. The Appellant
filed a series of text messages (E-18) in which the parties discussed
keeping or selling the house.
The Appellant's summarized her
position by indicating that she was not paying rent but was paying the
mortgage and bills for the house.
The Respondent testified that he and
the Appellant bought the house in 2015 as a couple.
The Respondent stated that he and the Appellant separated in November
2016. His position is that they
then entered into what the Respondent characterized as a verbal rent to own
agreement whereby the Appellant would pay the Respondent the mortgage
payments on the house, as the mortgage was in the Respondent's name.
The Appellant would also pay the heating oil bills and utilities.
The Respondent testified that, for a
time, the Appellant provided him with e-transfers for the mortgage.
These payments then stopped.
The Respondent referred to Exhibit E-6 and noted that utilities were
shut off for non-payment.
The Respondent acknowledged that the
Appellant had paid between $7000.00 and $8,000.00 to him in 2015 for the
down payment on the house.
The Respondent submitted that the
rent to own agreement was not honoured when the mortgage payments from the
Appellant to himself stopped.
The Respondent stated that while the Appellant believes she has a right to
the house she has not gone to court to pursue that right.
The Respondent summarized his
position by alleging that the Appellant does not have an ownership interest
in the house but was occupying the house and, therefore, she owes him rent
and he is entitled to have possession of the house surrendered to him.
The appeal is allowed for the reasons that follow.
Sections 1.(g) and 1.(h) of the
Rental of Residential Property Act,
R.S.P.E.I. 1988, Cap.R-13.1 (the "Act') set out the definitions of "lessee"
(g) "lessee" means
a person to
whom permission is given, pursuant to a rental agreement, to occupy
residential premises and includes his assigns and legal representatives;
(h) "lessor" means
or other person permitting the occupation, pursuant to a rental agreement,
of residential premises and includes his heirs, assigns, personal
representatives and successors in title;
Section 1.(o) of the
Act sets out
the definition of "rental agreement":
1.(o) "rental agreement" or
"agreement" means an agreement, whether written or oral, express or implied,
whereby a lessor confers upon a lessee the right to occupy residential
Subsection 5.(1) of the
Act reads as follows:
5. (1) The
relationship of lessor and lessee is one of contract and a rental agreement
does not confer on a lessee an interest in land.
While the Director considered the
matter to be within her jurisdiction and ordered possession of the house to
be surrendered to the Respondent, the Director did not have the benefit of
hearing the testimony of the Respondent (as the Respondent did not take part
in the hearing before the Director and was represented by an agent) or the
benefit of reviewing the additional documents filed as exhibits at the
hearing before the Commission.
The evidence before the Commission
is that the parties were an unmarried cohabitating couple who for a brief
period of time occupied the house together with their child.
The Agreement of Purchase and Sale
for the house (Exhibit E-13) was signed by both parties but the names of the
purchasers were stated as the Respondent [typed] and his grandfather [name
printed by hand]. The oral
evidence of both parties confirm that the Appellant provided the Respondent
with funds for the down payment on the purchase of the house.
Although she was uncertain of the amount, the Appellant's evidence
suggested she paid the full down
payment plus other costs. The
Respondent estimated the figure paid by the Appellant as between $7000 and
The Respondent relies on an
Assignment document dated October 30, 2015 (Exhibit E-9), which purports to
assign the Appellant's rights to the house to the Respondent. The Appellant
characterized this document as being "false". The Commission makes no
finding as to the veracity of this document, but notes it is another example
of evidence filed that persuades the Commission that this is not a rental
matter, but rather a dispute over real property rights and the ownership of
The text messages contained in
Exhibit E-18 further confirms that the parties considered the matter to be a
real property dispute, frequently referencing the word "we", rather than as
a landlord and tenant matter.
Why don't we keep it, but rent it to
give it to [name redacted for privacy] when its paid off.
We can both make a little money each month off someone else renting
No!! Seriously, we will sit
down and talk about with [name redacted for privacy] too.
There's so much need for affordable apartments in Summerside.
We could easily get $800 a month if we do a Reno.
And you keep the majority of the house.
While both parties referred in their
testimony to an oral rent-to-own agreement, their characterization of their
arrangement as rent-to-own does not, on its own, make their arrangement a
rental agreement as defined in the
The testimony and documentary
evidence before the Commission are indicative of a property dispute. The
crux of the matter is the ownership of the house, and specifically, the
Appellant's right, if any, to the real property (or proceeds therefrom).
These matters fall outside of the Commission's jurisdiction under the
but fall within the jurisdiction of the Supreme Court of Prince Edward
The Commission's jurisdiction to
hear an appeal under the
Act is premised on the existence of a rental
agreement as defined in 1.(o) and further elaborated on in subsection 5.(1).
The definitions of "lessee" in 1.(g) and "lessor" in 1.(h) are also
germane to the Commission's jurisdiction.
A "lessor" is defined as "the owner or other person permitting the
occupation..." The Commission finds that this is not a lessor-lessee
relationship within the meaning of the
Therefore, the Commission allows the
appeal and hereby quashes the decision of the Director in Order LD18-288.
pursuant to the
Island Regulatory and Appeals Commission
Act and the
Rental of Residential Property Act
IT IS ORDERED THAT
The appeal is
allowed and Director's Order LD18-288 is hereby quashed.
at Charlottetown, Prince Edward Island,
this 11th day of
John Broderick, Commissioner
M. Douglas Clow, Vice-Chair
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.