Docket A-017-02
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by David LeMaire (the Lessee) against Order LD02-230 of the Director of Residential Rental Property dated October 31, 2002.
Order LR02-13BEFORE THE COMMISSION
on Monday, the 16th day of December, 2002.
Maurice Rodgerson, Panel Chair
Weston Rose, Commissioner
Norman Gallant, Commissioner
Order
Participants1. Appellant:David and Judy LeMaire (by phone)
Stephane Beaulieu – witness (in person)
2. Respondent:
Madeline & Wally Walsh
Reasons for Order
1. Introduction
The Lessees appealed Order LD02-230 of the Office of the Director of Residential Rental Property, dated October 31, 2002. The appeal was received by the Island Regulatory and Appeals Commission on November 21, 2002, and the appeal hearing was held on Tuesday, December 10, 2002. The Appellants/Lessees, David and Judy LeMaire participated via telephone as they no longer reside in the Province. The Respondents/Lessors, Madeline and Wally Walsh were present for the hearing. A witness for the Lessees, Stephane Beaulieu appeared in person.
2. Background
The Lessees had been renting a house from the Lessors and had signed a one year rental agreement which was then renewed for an additional year, terminating on May 31, 2002.
Some time prior to the end of the rental agreement the Lessees accepted employment out of the country and state they attempted to sublet the home for the final two months of the rental agreement but were frustrated in those efforts by the Lessors. They then sought to terminate the rental agreement.
The Lessors state nothing was presented to them in writing about possible sublets, and the first they learned of the notion of a sublet was after the house had been advertised in the local newspaper. They have a signed rental agreement and the Lessee should honour that agreement.
The Lessees vacated the house prior to the end of March. The rent was paid until the end of March.
3. Decision
Audio Tape:
As a preliminary matter, the Commission addressed the issue of an audio tape which the Lessees claim is a recording of a conversation with the Lessor about the issue before the Commission.
The Lessors state the recording was made without their consent and they believe their rights were violated.
Noting the objection of the Lessors, the Commission declined to admit the audio recording into evidence. Since both parties involved in the taped conversation were also involved in the hearing they would be able to offer their own verbal evidence about the conversation.
Termination of Agreement:
Based on the evidence presented, the Commission is satisfied that a valid, signed rental agreement existed between the parities (Exhibit E-2) and this agreement covered June 1, 2000 until May 31, 2001, and then was renewed from June 1, 2001 until May 31, 2002.
The Lessees sent the Lessors a notice of termination of the rental contract (Exhibit E-4) which stated it serves as one month notice of the intention to vacate the premises.
Section 11 of the Rental of Residential Property Act sets out the requirements for a Lessee to terminate a rental agreement. Subsection (2) states:
(2) Where premises are let under a fixed term rental agreement,
(a) a notice of termination shall be served by the lessee not less than sixty days before the expiry of the term; and
(b) service pursuant to clause (a) terminates the rental agreement as of the last day of the term.
The Commission finds that a fixed term rental agreement existed between the Lessor and Lessee, therefore the agreement could not be terminated on the same basis as the one month's notice required for units rented on a month to month basis. Hence, the application of the Lessees to terminate the rental agreement on one months notice is denied. The Commission accepts the letter (Exhibit E-4) as notice the agreement would not be renewed.
Subletting:
Section 6 of the Rental of Residential Property Act sets out a number of statutory conditions that apply to rental agreements between Lessors and Lessees. Subsection 5 specifically addresses the matter of subletting of premises, and states:
(1) Where a fixed term rental agreement is for a period greater than six months, the lessee may assign or sublet the premises subject to the consent of the lessor, which consent will not unreasonably be withheld or charged for unless the lessor has actually incurred expense in respect of the grant of consent, in which case he shall be entitled to recover such reasonable expenses as were actually incurred.
At the appeal hearing the Lessees stated they sought to have someone rent the house for the two months remaining on the agreement, the Lessors stated they were willing to rent to someone for two months, and the Lessee's witness (Stephane Bealieu) stated he was willing to rent the unit for two months.
The Commission places considerable weight on Mr. Bealieu's testimony. Although appearing as a witness for the Lessees he is a third party, with nothing to gain in the matter under dispute. He became involved because he was moving to the Province to replace the Lessee who was moving out of the country.
Mr. Bealieu stated his employment in Charlottetown was confirmed by March 10, 2002. He was then contacted by the Lessee about fulfilling the rental agreement and he expressed interest. He testified he was then called back by the Lessee and told that the Lessors would like him to rent the house for 14 months. Mr. Bealieu says after thinking it over he indicated he was not willing to agree to renting the house for 14 months, but remained willing to assume the rental agreement for the two months remaining on the existing agreement.
It is noted that the testimony indicates the Lessees made the initial contact with Mr. Bealieu and it was in their interest to sublet the house. Mr. Bealieu also testified that the original discussion had been about taking over the existing agreement (2 months) but in the subsequent call from the Lessees he was told the Lessors were demanding 14 months. While Mr. Bealieu did not speak directly with the Lessors, the Commission can not find any reason to believe the Lessee would deliberately discourage Mr. Bealieu from renting the unit by suggesting it had to be for 14 months rather than two months.
In fact the Lessees ran an ad in the newspaper looking for potential candidates to sublet the house (Exhibit E-3), and developed a list (Exhibit E-7) of possible renters. It would not make any sense for them to deliberately misinform a potential candidate for sublet as it would have direct financial consequences for them.
The Lessors state they did not receive an offer in writing and were not contacted by Mr. Bealieu. However, a written agreement would normally follow a verbal indication the option was acceptable. Given his testimony about what he was told by the Lessee, it is understandable why he would consider the two month rental rejected, and therefore not contact the Lessors.
Given these circumstances, the testimony, and the information presented at the hearing, the Commission believes a reasonable option existed to sublet the house for the final two months of the agreement.
The Act states the consent of the Lessor is required but "consent will not unreasonably be withheld". The Commission was not presented with any evidence to indicate reasonable grounds for the Lessors to withhold consent to sublet to Mr. Bealieu.
It is the finding of the Commission that the Lessees had the right to sublet the premises and Mr. Bealieu was willing to rent the house for the two months remaining on the agreement. Therefore the Lessees are not liable for rent for the months of April and May 2002.
Timing:
The Notice of Appeal (Exhibit E-14) also questioned the period of time between the original hearing (April 9, 2002) and the decision of the Rental Property Officer (October 31, 2002).
While recognizing that the Act does not set time limits and the broad range of rental disputes addressed by Rental officers requires setting priorities, the Commission notes that 195 days is an extensive period of time to render a decision.
Order
WHEREAS Order LD02-230 of the Office of the Director of Residential Rental Property was appealed by David LeMaire to the Island Regulatory and Appeals Commission on November 21, 2002;
AND WHEREAS the Commission heard the appeal in Charlottetown on Tuesday, December 10, 2002;
NOW THEREFORE, for the reasons given in the annexed Reasons for Order;
IT IS ORDERED THAT
- The Lessees are not liable for rent for the months of April and May, 2002;
DATED at Charlottetown, Prince Edward Island, this 16th day of December, 2002.
BY THE COMMISSION:
Maurice Rodgerson, Panel ChairWeston Rose, Commissioner
Norman Gallant, Commissioner
NOTICE
Sections 26.(2), 26.(3), 26.(4) and 26.(5) of the Rental of Residential Property Act provide as follows:
(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.