On December 6, 2019 the Commission
received a Notice of Appeal from a lessor, John Trainor ("Mr. Trainor") on
behalf of himself and another lessor, William Almon ("Mr. Almon")
(collectively the "Appellants"), requesting an appeal of Order LD19-494
dated November 19, 2019 issued by the Director of Residential Rental
Property (the "Director").
By way of background, on October 30,
2019 two lessees, Susan Corrigan ("Ms. Corrigan") and Hallie MacLeod ("Mr.
MacLeod") (collectively the "Respondents") filed with the Director a Form 6
- Application by Lessee to Set Aside Notice of Termination.
Attached to the Form 6 was a Form 4 - Notice of Termination by Lessor
of Rental Agreement dated October 29, 2019 signed by Mr. Trainor.
The reason that the Notice of Termination by Lessor was served was
"I want to renovate the
premises in the manner described on Appendix "A" attached hereto, and the
renovations cannot be carried out while you are occupying the premises (s.
15(1)(c)) of the Act.
The particulars of termination
"Appendix A: Renovate kitchen,
replace cabinets, counter top and flooring.
Also, replace other flooring in the hallway and bedroom. New
paint for the ceilings and walls, change bedroom and closet doors."
The matter was heard by the Director
on November 19, 2019 and in Order LD19-494 the Director ordered:
"IT IS THEREFORE ORDERED
The lessees' application to set aside the Notice of
Termination by Lessor of Rental Agreement (Form 6) is allowed and the rental
agreement shall continue to be in full force and effect."
The Commission heard the appeal on
January 14, 2020. The Appellants
were present and represented themselves.
The Respondents were present and represented themselves.
Mr. Trainor testified that he and
Mr. Almon have owned the four unit apartment building for approximately 17
years. During this time period they
have renovated the other three units.
This unit, apartment #2, is the last unit to be fully renovated.
Some renovations to apartment #2 have already been done.
He testified that the living room floor is uneven and needs either a
concrete over-floor or a wooden sub-floor to raise the floor by four or five
inches. He stated that the
heating system for the living room will likely need to be moved as a result
of raising the floor. The
Appellants also intend to replace the rest of the doors, renovate the
kitchen and replace the rest of the flooring.
The wall behind the lower kitchen cupboard will be repaired.
They also intend to paint the entire apartment and replace light
Mr. Trainor testified that though he
and Mr. Almon both work full time, they would be doing most of the work
themselves. As of the date of the hearing, no other tradespeople had been
hired. Mr. Trainor estimated the renovations could take from three weeks to
several months to complete. The
Appellants submitted as Exhibit E-11 a "Cash Estimate" from Kent Building
Supplies dated January 8, 2020, listing the materials anticipated to be
required to complete the planned renovation, which totalled $9,938.89. Due
to time management, dust, and possible damage to contents, the Appellants
request that the Respondents vacate the apartment.
The Respondents testified that some
renovations, including a complete renovation of the bathroom, have already
been completed without the need for them to vacate the apartment.
The Respondents wish to stay in their apartment and are prepared to
live through these renovations.
The Respondents testified that on
October 22, 2019 they received a Form 1 Notice of Increase in Rent of
Residential Premises dated October 16, 2019 seeking to increase the rent by
a stated $12.00 per month resulting in a stated total rental rate of $600.00
per month (Exhibit E-3) The percentage rental increase was not specified.
The same day the Respondents received the Form 1 they texted Mr.
Trainor, pointing out that the maximum allowable rent increase was 1.3%
which would result in a rental increase to $585.50 not $600.00.
The Respondents then testified that on October 29, 2019 they received
a Form 4 Notice of Termination by Lessor of Rental Agreement, seeking to
terminate the rental agreement effective December 31, 2019 to carry out
The Commission panel inquired of Mr.
Trainor as to what had changed between the service of the Notice of Increase
in Rent on October 22, 2019 and the service of the Notice of Termination on
October 29, 2019. Mr. Trainor responded:
"Susan Corrigan told me she
wasn't comfortable paying me that rental increase and I decided at that
point, you know, this is a good opportunity for me to renovate the property,
the unit, and I said I did have someone approach me about buying the
property and that's the last unit in there that has to be renovated so again
our investment and we're just looking to trying to improve the value of it
Mr. Trainor later clarified that he
did not receive the inquiry regarding a possible purchaser between October
22 and October 29, 2019. The Respondents noted that another unit within the
building was recently advertised for $950 per month (see Exhibit E-10).
In response to further questioning
from the Commission panel inquiring as to whether he would be proceeding
with the renovations if the Respondents had agreed to the rental increase,
Mr. Trainor stated "I probably would have said you could stay another year."
The Commission denies the appeal and
confirms Director's Order LD19-494.
Section 15.(1)(c) of the
15. Personal use, renovations,
(1) Where the lessor in good
faith seeks to
(c) renovate the premises
where the nature of the renovations are advised to the lessee and are such
that the renovations cannot be carried out while the lessee occupies the
the lessor may serve the
lessee with a notice of termination to be effective not less than two months
after it is served.
In the evidence before the
Commission, it is apparent that the Respondents were able to continue to
live in their apartment while other renovations, including a complete
'gutting' of the bathroom (as evidenced by photographs provided by the
Respondents), were done.
While the proposed renovations would
be inconvenient to the Respondents, the Commission finds that such
renovations could be carried out while the Respondents continue to occupy
the apartment. In making this
finding, the Commission agrees with the findings of the Director in Order
In Director's Order LD19-494 it is
noted that the rent for the Respondent's apartment is $578.00 per month.
In Order LR19-33 dated September 17,
2019, the Commission set the allowable percentage rent increase for the
period January 1, 2020 to December 31, 2020 at 1.3 percent.
The evidence before the Commission
reveals that the Appellants initially sought an increase in rent.
The Respondents received the Form 1 increase in rent notice on
October 22, 2019 and pointed out flaws in this notice to Mr. Trainor that
same day. One week later, the
Appellants served the Respondents with a Form 4 seeking a termination of the
rental agreement on the basis of proposed renovations.
Section 15.(1)(c) requires a lessor
to seek the renovation in good faith.
Mr. Trainor acknowledged that the decision to serve the Form 4
seeking termination of the rental agreement was a result of the Respondent's
taking issue with the Form 1 that he originally served. Though the
Commission acknowledges and appreciates Mr. Trainor's candor in his
responses to questioning, the facts in this appeal persuade the Commission
to find that the Appellants did not act in good faith when they tried to
terminate the rental agreement after attempting a flawed and unlawful rental
As the Commission finds that the
renovations can be carried out while the Respondents continue to occupy the
apartment and the Commission further finds the Appellants did not act in
good faith, the appeal is denied.
pursuant to the
Island Regulatory and Appeals Commission
Act and the
Rental of Residential Property Act
IT IS ORDERED THAT
1.The appeal is denied.
2. Director's Order LD19-494 is confirmed.