This appeal asks the question of
whether a landlord can evict tenants under the
Rental of Residential Property Act when the rental agreement clearly states that the term of the
lease is for not longer than twelve (12) months.
The Appellant, Kings Square
Non-Profit Housing Corporation (the "Housing Corporation"), leased an
apartment at 139-143 Weymouth Street, Charlottetown, PE (the "Premises") to
Wilfred Doyle ("Mr. Doyle") and Shelley Mosher ("Ms. Mosher") (collectively
the "Tenants") for a one-year fixed term from September 1, 2019 to August
The rental agreement generally
follows the standard format set out in the Rental of Residential Property
Act Regulations (the "Regulations"). There is, however, a paragraph included
at the top of the document which states:
is for tenants selected to stay no more than twelve (12) months at our 6
unit apartment building at 139-143 Weymouth Street, Charlottetown.
The rental agreement also contains a
Schedule "D" which reiterates that the term of the lease is for 12 months
and cannot be renewed.
The Commission notes that in Order
LD-250 the Director of Residential Rental Property (the "Director") dealt
with the same parties in respect of the same Premises. The Director made a
determination that the Premises is exempted under the Regulations as it is
considered to be "temporary shelter", specifically a "transitional house".
The Director, in that Order, also made a finding in the alternative that if
Act did apply to the Premises, then the rental agreement could not be
terminated except for cause.
Order LD-250 was not appealed by the
Housing Corporation. Instead, the Housing Corporation initiated new
proceedings on the basis that the Premises are not exempt from the
On September 30, 2020, the Housing
Corporation served the Tenants with a Notice of Termination by Lessor of
Rental Agreement ("Form 4") with an effective date of October 30, 2020.
On October 7, 2020, the Tenants filed with the Director an
Application by Lessee to Set Aside Notice of Termination ("Form 6").
In Order LD20-298, the Director
found that the Form 4 was invalid and ordered that the rental agreement
continue to be in full force and effect.
The Housing Corporation appealed the
decision in these new proceedings.
The Commission heard the appeal on
December 3, 2020, via telephone conference call. The Housing Corporation was
represented by Counsel Michael Drake and Erin Divine; Mr. Doyle appeared on
his own behalf. Ms. Mosher did not participate.
The Commission dismisses the appeal.
There are several matters that are
not in dispute. The parties do not dispute that the rental agreement was
signed and that it contained the provisions noted above regarding the
duration of the agreement. Mr. Doyle acknowledged at the hearing that he was
aware that the fixed term of the rental agreement ended on August 31, 2020.
Mr. Doyle stated at the hearing that as far as he knew, his rent for the
unit was still being paid. Counsel for the Housing Corporation did not
dispute this assertion.
Given the history of the dispute
between the parties, for clarity purposes the Commission will consider
whether the Premises are exempt from the application of the
Act. There are
therefore two issues for the Commission to consider:
Whether the Premises are exempt from the application of the
Rental of Residential Property Act? And
Whether the Housing Corporation can enforce the fixed-term rental
agreement and evict the Tenants at the expiry of that term?
Premises exempt from the Act?
The Commission finds that the
Premises are not exempt from the application of the
As stated above, the form of the
rental agreement complies in general terms with the standard form rental
agreement set out in the Regulations.
The evidence and submissions before
the Commission do not establish that the Premises are exempt from the
application of the
Act. Subsection 1(d) of the Regulations is the only
exemption category under which the Premises could potentially fall. It reads
The following premises are exempt from the provisions of the
(d) premises which provide
therapeutic or rehabilitative services or temporary shelter such as
transition houses and hostels and other such premises which have supervisory
services as that term is defined in the Community Care Facilities and
Nursing Homes Act;
Beyond the stated term of the rental
agreement, there is no evidence before the Commission that establishes the
Premises fall under any of the categories listed in subsection 1(d) of the
Counsel for the Housing Corporation
stated, both in written submissions before the Director as well as in oral
argument before the Commission, that the Premises is not traditional
transitional housing, and that it does not offer therapeutic, rehabilitative
or supervisory services. Further, in written submissions Counsel for the
Housing Corporation stated:
The [Housing Corporation] is
just that: a Landlord, and the Tenants are simply Tenants...
The Landlord respectfully
submits that the premises fall within the operation of the Act, and are not
Put simply, the premises were
leased to the Tenants on a fixed term basis with no option to renew. There
is nothing in the nature of the premises or the rental relationship which
would provide for an exemption from the operation of the Act.
The Commission agrees with and
accepts the position put forward by the Housing Corporation. The Premises is
not exempt from the application of the
Housing Corporation enforce the fixed-term rental agreement?
The Commission disagrees with the
submissions of the Housing Corporation, and finds that, notwithstanding the
stated term of the rental agreement, the Tenants cannot be evicted based
solely on the expiry of the term.
Counsel for the Housing Corporation
argued that the issue in this case stems from the unique business of the
Housing Corporation, which provides housing to individuals and families who
are coming out of traditional transitional or emergency/short-term housing
arrangements and who would benefit from an affordable, respectable address
to enable them to get back on their feet. The Commission was advised that
the Housing Corporation has been providing this service, i.e., 12-month
fixed-term non-renewable leases, to individuals and families for the last
30-32 years. This is the first time that a tenant has declined to leave at
the end of the fixed term of a lease.
The Housing Corporation argues that
there appears to be a gap in the legislation in that the
Act does not
contemplate a true fixed-term arrangement with no option to renew. The
Housing Corporation submits that this gap makes it impossible for landlords
to ever evict a tenant without cause, notwithstanding that the parties may
have agreed to specific terms, such as the fixed duration of a non-renewable
Section 17 of the
Act deals with
what occurs at the end of a fixed-term rental agreement:
17.(1) Except as provided in
subsection (2), a fixed term rental agreement which has not been terminated
pursuant to section 11, 13, 14 or 15 shall be deemed upon its expiration to
be converted to a month to month rental agreement.
(2) With respect to premises
licensed under the Tourism Industry Act R.S.P.E.I. 1988, Cap. T3.3, a fixed
term rental agreement for a continuous period of one month or more which has
not been terminated pursuant to section 11, 13, 14, or 15, shall be deemed
to be terminated on the expiry date.
The Premises does not fall within
the licensing provisions of the Tourism Industry Act, and so subsection (2)
does not apply.
Part III of the
Act governs how a
rental agreement can be terminated. Section 11 describes how a tenant can
terminate a rental agreement. Sections 12-15 describes how a landlord can
terminate a rental agreement.
Section 12 is determinative in this
matter. It reads as follows:
12. A lessor shall not
terminate a rental agreement, whether of fixed or indeterminate duration,
other than for a cause set out in section 13, 14 or 15.
The Housing Corporation is correct
in noting that the
Act does not contemplate a true fixed-term arrangement.
However, the Commission finds that this is a feature, and not a bug, within
Act gives tenants the ability to
enforce the expiry date of a fixed-term rental agreement (see subsection
Act very clearly does not afford landlords the same ability, and
instead converts fixed-term agreements to month-to-month agreements (per
section 17) unless a landlord terminates the agreement in accordance with
sections 13, 14 or 15.
This interpretation of the
not novel. In Order
LR00-02 the Commission stated:
The Act provides the
opportunity for a lessor and lessee to enter into a fixed term rental
agreement. The Act also provides under Section 12 that a lessor can not
terminate a rental agreement except for cause.
The intent of Section 12 is to
provide a substantial level of security for lessees in their rental
arrangements. This is achieved by requiring the lessor to continue a rental
arrangement unless there is a specifically identified cause to permit
The Housing Corporation agrees that
the rental agreement is subject to the
Act and that a traditional landlord
and tenant relationship exists. As such, the rental agreement was deemed,
via operation of subsection 17(1), upon its expiry on August 31, 2020, to be
converted to a month-to-month agreement. The Housing Corporation has not
alleged nor applied for relief under any of sections 13, 14 or 15 of the
Act, and indeed acknowledged at the hearing that it has no grounds at the
current time to do so.
The question remains whether the
fundamentals of contract law should apply to the agreed-upon terms of the
rental agreement. The Housing Corporation argues that the fact that the
Tenants knew at signing, acknowledged in writing in June 2020, and
acknowledged at the hearing of this appeal that the rental agreement expired
in August 2020, should allow the Housing Corporation to enforce the
Schedule "D" of the standard form
rental agreement permits for the inclusion of additional terms and
conditions that may be agreed upon between the parties. Schedule "D" as set
out in the Regulations notes that "These additional terms or conditions may
not conflict with the requirements of the
Schedule "D" of the rental agreement
signed in this case included the following terms:
No Smoking of cigarettes,
cigars, e-cigarettes, cannabis or like products shall be permitted
anywhere in the premises or common areas, except in the case of a Lessee
who holds a copy of a valid and current medical marijuana certificate
which must be provided to the Lessor.
No Pets of any kind shall be
permitted anywhere in the premises or the common area.
This agreement is for a
maximum rental period of twelve (12) months from start date to finish
This rental agreement does
not have an option for renewal.
The first three, and arguably the
fifth bullets in this list do not conflict with the requirements of the
However, the Commission finds that the fourth bullet, which prescribes the
maximum rental period, is problematic.
Subsection 9(4) of the
Act states as
(4) In addition to the
statutory conditions, a lessor and lessee may provide in a rental agreement
for other benefits and obligations that do not conflict with this Act or the
provisions of the standard form.
As stated above, section 12 of the
Act is unambiguous in that a landlord may not terminate a rental agreement
except in accordance with sections 13, 14 or 15. Section 12, read together
with section 17, is a deliberate statement by the Legislative Assembly that
fixed-term rental agreements at their expiry convert to month-to-month
agreements, and cannot be terminated except for cause.
A condition in a rental agreement
which attempts to negate the provisions of section 12 and 17 of the
clearly contrary to subsection 9(4). Such a condition directly conflicts
In this case, we have a traditional
landlord and tenant relationship; a fixed-term rental agreement that has
expired and is now deemed to be month-to-month; and an acknowledgement by
the Housing Corporation that cause to otherwise terminate the rental
agreement does not exist.
Pursuant to the provisions of the
Act cited above, the Commission finds that the rental agreement continues to
The Commission wishes to express
that its findings in this case are in no way a commentary on the good and
valuable service provided by the Housing Corporation to individuals and
families who find themselves in need of affordable housing options within
the City of Charlottetown. The Commission must, however, interpret and apply
Act in its current form.
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; and
The rental agreement remains in
full force and effect.
at Charlottetown, Prince Edward Island,
this 18th day of December, 2020.
BY THE COMMISSION:
Erin T. Mitchell, Panel Chair & 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.