Docket 03-132
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Troy Handren against Order No. LD03-139 of the Director of Residential Rental Property dated June 11, 2003.
Order LR03-07BEFORE THE COMMISSION
on Friday, the 11th day of July, 2003.
Maurice Rodgerson, Vice-Chair
Weston Rose, Commissioner
Anne Petley, Commissioner
Order
Participants1. Appellant:Troy Handren
2. Respondents:
Patricia McLure
Billy McLure
Reasons for Order
1. Introduction
The Lessor (Troy Handren) appealed an Order of the Director of Residential Rental Property regarding property located at 224 Grafton Street in Charlottetown. The appeal was filed within the period provided in the Rental of Residential Property Act, and the Appeal was heard at the offices of the Prince Edward Island Regulatory and Appeals Commission on Wednesday, July 9, 2003.
2. Background
The Lessees (Patricia & Billy McLure) occupied the apartment from 1998 until 2003, and during that time the ownership of the building had changed hands on two occasions. This dispute arose over the decision of the Lessees to vacate the premises at 224 Grafton Street after an incident in early January in which a bottle was thrown through the front window of the subject apartment. This followed a period when there had been difficulty with another tenant in the building.
The Lessees stated they no longer felt safe in the building and decided to move out immediately, and informed the Lessor of that fact when he arrived to make temporary repairs to the window after the breakage. They believe the Lessor agreed to their decision to immediately vacate the apartment and that he told them they would be compensated.
The Lessor says he did not agree to the immediate termination of the rental agreement, and any comments he made were directed more towards calming an upsetting situation. The Lessor also states he did not have any knowledge of any security deposit paid by the Lessees. He did not receive a security deposit, and the former owner of the building did not inform him of any such deposit.
The Lessees moved out of the unit, sought a return of the security deposit and compensation.
In filing the appeal (Exhibit E-17) against the original order (Exhibit E-16) the Lessor claimed a lack of confidentiality and conflict of interest on the part of the Rental Officer resulting in an unfair hearing.
3. Decision
The Commission has considered the filed evidence and the sworn testimony of both parties. Three separate matters were addressed by the Commission; the Security Deposit, the Rent, and the allegation of lack of Confidentiality and Conflict of Interest.
Security Deposit
The Commission accepts the evidence of the Lessor that he did not obtain a security deposit from the Lessees and was not informed by the person he acquired the property from that a security deposit had been paid to a previous owner. However, that does not eliminate his obligations as a Lessor. The definition of Lessor in the Rental of Residential Property Act states:
1.(h) "lessor" means the owner 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;
The Lessor, in this case, is the successor in title. In assuming the ownership and maintaining the Lessor-Lessee relationship he assumed the obligation of Lessor to the Lessees.
Based on the evidence, the oral testimony of the Lessees, cancelled cheques and receipt, the Commission is satisfied the Lessees paid a $200.00 security deposit. The receipt (Exhibit E-5) is self explanatory, stating it is "for partial payment of security deposit for rental agreement for 224 Grafton Street." It is in the amount of $50.00 and immediately preceded the Lessees moving into the unit. The cancelled cheques (Exhibit E-4) clearly show that for a period of three months at the beginning of the rental agreement the Lessees paid $600.00 per month and thereafter paid rent of $550.00 per month. At the time of this dispute the rent was $550.00 per month.
The suggestion by the Lessor that the memo note on the cheque said "for rent" and therefore had to be for rent only and not the security deposit is rejected by the Commission. It is unlikely that rent would be reduced by $50.00 per month after only three months renting the unit. Since the written receipt was for $50.00 and indicated partial payment it is reasonable to assume that the extra $50.00 payment was for a purpose other than rent, such as the security deposit. No credible evidence was presented to dispute this sworn testimony of the Lessees.
It is also noted that this payment was made by the Lessor to the Lessees prior to the original hearing and no application was made by the Lessor disputing that payment. Nor was evidence presented that revealed damage to the unit beyond normal wear and tear that would warrant retention of the security deposit.
The Commission confirms the finding of the Rental Officer that a security deposit in the amount of $200.00 was paid by the Lessees.
The Act also requires interest be paid on the security deposit. Section 10(4) of the Act states:
(4) Subject to subsection (5), the security deposit, together with the interest set out in subsection (3) shall be returned to the lessee within ten days of the date on which the lessee delivers up possession of the residential premises.
The Commission confirms the interest calculation and finds that the security deposit and interest total $221.50 is owed by the Lessor to the Lessee.
Rent
Two different versions of the circumstances surrounding the decision to move from the apartment were presented to the Commission. Both parties agree that the incident of the bottle being thrown through the window precipitated the decision to move out.
A dispute exists over whether the comments made by the Lessor and Lessee the evening of the incident constitutes an agreement for the apartment to be immediately vacated.
The Lessees claim the Lessor knew they were moving out and agreed with that decision. The Lessor states he understood the desire of the Lessee's to move and was sympathetic to that concern but he did not waive his right to proper notice by saying "I don't blame you" in response to the statement they were moving out. There was also some suggestion of compensation, but what type or form of compensation was never specifically discussed and was not considered by the Commission.
The Rental of Residential of Property Act sets out the requirements for proper notice.
Section 11(2) states:
(2.1) Where premises are let by rental agreement from month to month or week to week,
(a) a notice of termination shall be served by the lessee on or before the due date for the payment of rent; and
(b) service pursuant to clause (a) terminates the rental agreement on the day preceding the day that would otherwise be the next rental payment due date following the date referred to in clause (a). 1999,c.6.s.2.
Section 18 sets out the form the notice must take.
18. (1) A lessor and lessee shall give notice to terminate in writing in the form prescribed by regulation.
(2) A notice to terminate
(a) shall be signed by the person giving the notice, or his agent;
(b) shall identify the premises in respect of which the notice is given;
(c) shall state the date on which the notice is to be effective; and
(d) where notice is given by the lessor, shall state the reasons for the termination. 1988,c.58,s.18.
The fact that such notice was not given in this case is not disputed. Rent had been paid for the month of January and notice was not given at that time. The Lessees decided to move after the incident on January 6th. Written notice was never given.
The Rental of Residential Property Act sets out a number of responsibilities for both Lessors and Lessees. In situations where these requirements are not met either party may apply to the Director of Residential Rental Property for remedy. For example Section 6 sets out a number of Statutory Conditions; however Section 8 requires a written application to the Director seeking remedy.
While quiet enjoyment is a statutory condition there is no evidence to confirm the bottle throwing incident was something other than a random act of violence. The Lessees link the incident to previous tenants of the other apartment in the unit. That situation may have raised questions about quiet enjoyment for the Lessees (Exhibits E-12 and E-13), but an application was not made to the Director, and in any event that situation was addressed by the Lessor prior to the bottle throwing incident. The Lessees of the other unit were evicted the end of December.
The Commission notes the incident was obviously very upsetting for the Lessees, especially given the fact young children were in the house, witnessed the incident and could have been injured (Exhibits E-11, E-13, and E-14). The Commission understands and sympathizes with the decision to move, but the incident does not eliminate the requirements of the Act, and the Commission is bound by the requirements of the Act.
In this situation, where the parties have very different versions of the same conversation, the Commission is guided by adherence to the Rental of Residential Property Act.
The Commission is not satisfied that the statement "I don't blame you" or other actions of the Lessor can be accepted as agreement to waive the notice requirement and return rent. The fact the Lessor immediately put the property up for sale can not be interpreted as an understanding the Lessees could move out and have rent returned.
A vehicle, owned by the Lessees, remained on the property for some time after the Lessees left the unit, and the Lessor states the keys were not returned.
It is therefore the finding of the Commission that proper notice was not given and rent for the month of January in the amount of $550.00 is due to the Lessor. The decision of the Rental Officer to order return of rent in the amount of $425.26 is set aside.
Confidentially –Conflict of Interest
The Lessor raised several points about the conduct of the Rental Officer that answered his questions and conducted the original hearing. He stated he had concerns about confidentiality and that the Rental Officer was in a Conflict of Interest situation. These are serious allegations and the Commission is compelled to consider these allegations and comment on them.
The Rental of Residential Property Act places several responsibilities on the Director and staff. These are outlined in Section 4 (2) of the Act:
(2) In addition to the functions hereinafter specifically set out, the functions of the Director include
(a) providing information to the public to promote understanding of rights and responsibilities under this Act;
(b) advising lessors and lessees with respect to matters relating to rental agreements;
(c) receiving and investigating allegations of violations of rental agreements, or of this Act or the regulations;
(d) holding hearings, giving notice thereof to the parties, determining matters of procedure at hearings and making decisions or orders with respect to matters relating to the rights of lessors or lessees arising pursuant to this Act or otherwise;
(e) entering and inspecting residential premises, after serving an inspection order, for the purpose of carrying out his powers or duties under this Act or the regulations.
The functions indicate the Officers provide information, advise on rental agreements, receive allegations, conduct investigations, hold hearings and issue orders.
The performance of these duties can result in situations whereby the Officer is required to provide information to interested parties and if that does not resolve the matter conduct a formal hearing.
The public may interpret the efforts of the Officer to explain the Act as "telling them what to do" and therefore as a result they expect the Rental Officer to support their position at a formal hearing. However, the role of the Rental Officer is not to be an advocate for either the Lessor or the Lessee. Rental Officers are trained to provide information, to refer individuals to the Act, to explain the provisions of the Act, but these actions do not require them to be an advocate for that individual. In fact the Rental Officer must avoid taking sides in an issue and remain open to evidence that may be presented at a hearing.
In this case the Lessor referred to the Rental Officer looking at information in the file. Such information is available to the parties to a hearing so the Rental Officer would have access to such information and would not be violating confidentiality by reviewing that material. The efforts of the Rental Officer centre on explaining the Rental of Residential Property Act and settling disputes. Therefore access to, and use of, file information is not only logical but essential to the performance of their duties.
In his Notice of Appeal (Exhibit E-17) the Lessor states "He told me that he could not discuss his decision, but due to his lack of confidentiality, he went over his decision with me." This is an unfounded allegation and clearly no breach of confidentiality occurred.
In the hearing setting it is essential that the Rental Officer not only treat both parties fairly, but appear to do so. The fact the Officer may have explained provisions of the Act to one or both partiers does not mean they should greet them like an old friend at the hearing. The hearing is a formal process, not an office one-on-one discussion and therefore must be conducted in a more formal manner. It may appear to a party that they are being treated differently, because they are, and they must be. That does not however, give rise to a Conflict of Interest.
Rental Officers do provide information about the Rental of Residential Property Act, and they do conduct hearings. They are required to do so by the legislation. Meeting the requirement of the Act is not a Conflict of Interest, nor is it a Conflict of Interest to formally introduce oneself in a formal hearing.
The Commission takes very seriously the statements of the Lessor that he believed the Rental Officer violated confidentiality and was in a Conflict of Interest. However, the evidence does not support such allegations.
The Commission believes, upon reviewing the statements of the Lessor and the requirements of the Act, that the Rental Officer made a sincere, open and honest effort to perform his duties in a professional manner and in keeping with the requirements of the Act in addressing the dispute between the parties.
Therefore the allegations of any breach of confidentially and Conflict of Interest is rejected.
Order
WHEREAS
Troy Handren (Lessor) appealed Order LD03-139 of the Director of Residential Rental Property;AND WHEREAS
the Commission heard the appeal in Charlottetown on Wednesday, July 9, 2003;NOW THEREFORE
, for the reasons given in the annexed Reasons for Order;IT IS ORDERED THAT
- The Security Deposit and due interest in the amount of 221.50 is awarded to the Lessees;
- Rent in the amount of $550.00 for the month of January is due to the Lessor and the Order of the Director that a portion be returned to the Lessees is set aside.
- The allegations of breach of confidentiality and Conflict of Interest against the Rental Officer are rejected.
DATED
at Charlottetown, Prince Edward Island, this 11th day of July, 2003.BY THE COMMISSION:
Maurice Rodgerson, Vice-Chair
Weston Rose, Commissioner
Anne Petley, 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.