Docket A-012-03
Order LR03-011

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Michelle Giersdorf against Order No. LD03-207 of the Director of Residential Rental Property dated August 27, 2003.

BEFORE THE COMMISSION

on Friday, the 5th day of September, 2003.

Maurice Rodgerson, Vice-Chair
Weston Rose, Commissioner
Kathy Kennedy, Commissioner

Order

Participants

1.   Appellant:

Michelle Giersdorf

2.   Respondent:

Ron Switzer, Property Care and Rental Inc. for the owner Ed Keunecke

Reasons for Order

1.  Introduction

The Lessee (Michelle Giersdorf) appealed Order LD03-207 of the Director of Residential Rental Property regarding the Notice of Termination by Lessor of Rental Agreement for a rental unit identified as Apartment # 3, 31 Passmore Street in Charlottetown.

The appeal was received by the Commission on August 28, 2003.  The hearing was held at the offices of the Prince Edward Island Regulatory and Appeals Commission on September 3, 2003.

2.  Background

The Lessee moved into the apartment at 31 Passmore Street effective May 1, 2003. The apartment was rented to the Lessee by Ed Keunecke (the owner); however the unit is managed for Mr. Keunecke by Property Care and Rental Inc.  The rent is $540.00 per month and a $270.00 security deposit was also paid. 

The Lessee agrees she was supposed to sign a lease for the unit, but claims she was told by the owner that she did not have to sign the lease until August 1, 2003.  She also testified that she made one attempt to sign the lease at the offices of Property Care and Rental Inc., but the lease was not signed because a witness was not present.  

The representative for the Lessor says he has no knowledge of such an attempt to sign the lease, nor any knowledge of an agreement for a later signing and the owner of the property denies making any such agreement.  He states there were several contacts with the Lessee by Property Care and Rental Inc. regarding the need to sign a lease (Exhibit E-9), but the Lessee did not sign.  

In a written note (Exhibit E-4) the owner states he made repeated efforts to have the Lessee sign a lease, the last time being in early June, and that no other arrangements or agreements concerning the lease were ever made.

A Notice of Termination (Exhibit E-1) was served on the Lessee July 29, 2003 to be effective August 28, 2003.  The Lessor states the reason for the notice being served was the failure of the Lessee to sign a lease for the unit which is a standard expectation of new tenants.  

Upon obtaining full time employment the Lessee states she was prepared to sign the lease, but that was rejected by the owner.  She further claims the Notice of Termination came as retaliation for a health complaint she made about dog feces on the roofed area near the patio.

The Lessee sought to have the Notice set aside.  A hearing was held by the Rental Officer and the Notice of Termination was upheld. That decision was then appealed to the Commission.

3.  Decision

The Appeal is allowed, and Order LD03-207 is set aside. 

The issue before the Commission is the Notice of Termination of the rental agreement, and the stated reason is the failure to sign a lease. 

The notice of Termination (Exhibit E-1) lists the reason for termination as "An Act or omission on your part or on the part of a person permitted in or on the residential premises property by you has seriously impaired the safety or lawful right or interest of me or other lessees in the residential property". 

This is based on Section 14(1)(e) of the Act which sets out reasons why the rental agreement may be terminated by the Lessor and states: 

(e) the safety or other lawful right or interest of the lessor or other lessee in the residential property has been seriously impaired by an act or omission of the lessee or a person permitted in or on the residential property or residential premises by him; 

The Commission was not presented with evidence that would support invoking this provision in the Act as the basis to terminate the rental agreement for failure to sign a lease.  In fact the Lessee occupied the unit for almost three months before the Notice was served, and a rental agreement was in effect.

 The Act defines rental agreements as:

o) "rental agreement" or "agreement" means an agreement, whether written or oral, express or implied, whereby a lessor confers upon a lessee the right to occupy residential premises;

It is clear to the Commission, and it is not disputed, that the Lessor and Lessee agreed to the rental of the unit and the Lessor conferred upon the Lessee the right to occupy the residential premises.  In fact a security deposit was obtained, and rent was paid over a period of several months.

Section (3) states:

A lessor and lessee who have an oral rental agreement and do not sign a standard form are deemed to have done so and all the provisions of this Act and the standard form apply.

The condition of the unit was not a factor considered by the Commission because it was not the basis of the appeal.  The history of rent payment was not considered as it was not the basis of the application for termination. The only stated reason for termination was the failure to sign a lease.

Normally a lease would be signed prior to occupancy or very shortly thereafter, but in this case that did not happen and the matter went on for some months.  The Lessee paid rent, and the Lessor responded to requests such as repairs to the bathtub.

The Commission notes that the Notice of Termination followed very quickly the dispute over dog feces on the property and the calling of an Environmental Health Officer.  The Lessor's representative admitted the feces was a legitimate concern that had to be addressed and was.  

The owner was not present at the hearing, but his representative indicated the owner was no longer prepared to sign a lease with the Lessee.

It is regrettable that the relationship between the Lessor and Lessee has been strained by this situation, and in the view of the Commission both parties have made errors of judgment in the manner they have dealt with the issues.

However, the Commission is not prepared to accept the arguments of the Lessor as valid reason for termination of the rental agreement.  No evidence was presented to suggest the failure to sign a lease "seriously impaired the safety or lawful right or interest of the Lessor or other Lessees in the building". 

Further, the Lessee testified under oath that she is prepared to sign a lease, and the Lessor's representative has described the Lessee as a good tenant.  The signing of a lease would immediately remove any impairment of "safety or other lawful right or interest" if one existed.

According to the testimony at the hearing the only individual standing in the way of a lease now being signed is the Lessor.

Therefore for the reasons stated the appeal is allowed.

Order

WHEREAS Michelle Giersdorf filed an appeal on August 28, 2003 against Order LD03-207 of the Director of Residential Rental Property;

AND WHEREAS the Commission heard the appeal in Charlottetown on September 3, 2003;

NOW THEREFORE, for the reasons given in the annexed Reasons for Order;

IT IS ORDERED THAT

  1. The appeal is allowed; and
  1. Order LD03-207 is set aside.

DATED at Charlottetown, Prince Edward Island, this 5th day of September, 2003.

BY THE COMMISSION:

Maurice Rodgerson, Vice-Chair

Weston Rose, Commissioner

Kathy Kennedy, Commissioner

NOTICE

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.