On September 26, 2019 the Commission
received a Notice of Appeal from Blake Doyle ("Mr. Doyle"), the
representative of a lessor, Octavian Group Inc. (the "Appellant"),
requesting an appeal of Order LD19-406 dated October 8, 2019 issued by the
Director of Residential Rental Property (the "Director").
By way of background, on July 22,
2019 Mr. Doyle, on behalf of the Appellant, filed with the Director a Form
12 - Application by Lessor for Approval of Rent Increase Exceeding
Percentage Allowed by Regulation together with a Form 15 - Lessor's
Statement of Income and Expenses dated the same date.
Mr. Doyle also filed with the Director a Form 10 - Notice of Increase
in Rent of Residential Premises addressed to a lessee, Vicki Bryenton (the "Respondent").
The matter was heard by the Director
on August 15, 2019 and in Order 19-406 the Director ordered:
"IT IS THEREFORE ORDERED THAT
maximum allowable rent for the residential premises located at Apartment 1 -
50 Grafton Street, Charlottetown, PE shall increase effective November 1,
2019 from $785.00 to $816.50 per month."
The Commission heard the appeal on
October 8, 2019. Mr. Doyle
represented and testified on behalf of the Appellant.
The Respondent was also present.
Mr. Doyle testified that he believes
the allocation of costs associated with the whole building should be spread
over the number of bedrooms rather than the number of apartment units.
Thus, rather than attributing 1/6 of the costs to the Respondent's
apartment, 3/11 of the costs should be attributed to her apartment.
Mr. Doyle stated that the Respondent
is a great tenant. His objective
is to get the rent up to fair market value.
The Respondent testified that she
has lived in her apartment for 13 years.
She testifies that she believes she is currently paying a fair rental
rate considering the condition of the apartment as evidenced by the
photographs on file. She
contends that to justify a higher rent, repairs and updates would be
The Commission denies the appeal and
confirms Director's Order LD19-406.
The Appellant seeks a variance of
the increase ordered by the Director by attributing common building
expenses, such as the cost of heat, property tax etc. based on the
Respondent's apartment containing 3/11 of the total number of bedrooms in
the building while the Director apportioned these expenses on the basis of
the Respondent's apartment representing one out of six apartments in the
The Commission finds that
apportioning expenses based solely on the number of bedrooms is not a
suitable basis for apportionment as the size of rooms could vary widely and
thus this method of apportionment is not inherently objective.
No evidence was provided as to the
square footage of the Respondent's apartment compared to the square footage
of other apartments. In
addition, an apportionment of common expenses for each of the other five
apartments was not provided.
In the absence of the above
information, the Director acted reasonably in calculating the apportionment
on the basis of the number of apartments.
pursuant to the
Island Regulatory and Appeals Commission
Act and the
Rental of Residential Property Act
IT IS ORDERED THAT
1. The appeal
2. Director's Order
LD19-406 is confirmed.
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.