Order LR03-13 - Rental Appeal - A-014-03 Re: David Sanderson v. Director of Residential Rental Property (Order LD03-213)

Docket A-014-03
Order LR03-013

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by David Sanderson against Order No. LD03-213 of the Director of Residential Rental Property dated September 9, 2003.

BEFORE THE COMMISSION

on Friday, the 3rd day of October, 2003.

Maurice Rodgerson, Vice-Chair
Weston Rose, Commissioner
Norman Gallant, Commissioner

Order

Participants

1.   Appellant:

David Sanderson

2.   Respondent:

Melissa MacInnis
(Not present at hearing)

Reasons for Order

1. Introduction

The Lessee (David Sanderson) appealed Order LD03-213 (Exhibit E-4) of the Director of Residential Rental Property regarding an application for Enforcement of Statutory or Other Conditions of Rental Agreement (Exhibit E-1) regarding a rental unit located at 14C Brown's Court in Charlottetown.

The appeal (Exhibit E-5) was received by the Commission on September 19, 2003.

The hearing was held at the offices of the Prince Edward Island Regulatory and Appeals Commission on October 1, 2003.

2. Background

The Lessors offer, for rent, a number of units at Brown's Court. In some instances three students rent the unit and then share expenses. They may alternate paying the full rent, they many pay one-third each, or one person may take responsibility for paying the full rent and collecting from others in the unit.

In this case three people occupied the apartment. One of the three moved out, and the remaining two Lessees sought another tenant to share expenses. For a one month period the two remaining Lessees paid the full rent.

The Lessee in question (Ms. MacInnis) told the Director of Residential Rental Property she moved into the unit in June and was to pay rent of $300 per month. The Lessor states he was introduced to the new Lessee and they spoke about rent payments on several occasions. The Lessee vacated the apartment the end of June, and did not pay any rent.

The Lessors sought an Order from the Director of Residential Rental Property for rent owed. It was the decision of the Director that no rental agreement existed between David Sanderson and Melissa MacInnis for the premises located at 14C Brown's Court and therefore the Director did not have jurisdiction to rule on the application. That decision was appealed to the Commission.

3. Decision

The appeal is allowed.

The Commission is satisfied that, based on the evidence presented to the Director and at the appeal hearing, a verbal rental agreement existed between the Lessor and Ms. MacInnis.

Section 1(o) of the Rental of Residential Property Act defines rental agreement. It states:

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;

The Lessor testified that he became aware that Ms. MacInnis had moved into the unit when he went to collect the rent and was introduced to her as a roommate by the others occupying the unit. He further stated he collected two third's of the full months rent from the other two Lessees and a commitment from Ms. MacInnis that she would pay the other one third of the rent when she received her Employment Insurance cheque. From that moment forward the Commission believes a rental agreement existed between the two parties.

The Lessor further stated that he held several discussions with Ms. MacInnis about rent in the amount of $300 per month and Ms. MacInnis never objected to paying rent nor the amount.

There is no evidence that any action was taken by the Lessor to have Ms. MacInnis vacate the rental unit, nor that he objected to her presence there after he became aware she had moved in. In fact, the testimony of the Lessor is that he accepted her as a Lessee.

Since the Lessor was aware of the presence of Ms. MacInnis in the unit, and did not object to her presence, the Commission believes he conferred upon her a right to occupy the residential premises.

The other Lessees did not object to the presence of Ms. MacInnis and in fact introduced her as a new roommate.

Ms. MacInnis did not attend the appeal hearing, and therefore the Commission did not have the opportunity to question her directly, however she did speak to the Director prior to the original hearing.

Ms. MacInnis freely stated she moved into the unit and that she was to pay rent in the amount of $300 per month. She stated that when the Lessor was collecting rent for June she had not yet received her Employment Insurance cheque. She did not object to paying rent to the Lessor, and in fact stated she felt obligated to pay rent for June.

The Lessor further stated at the hearing that Ms. MacInnis moved furniture into the unit, specifically the bedroom that had not been occupied, and that she moved that furniture out after she decided to reside somewhere else.

It is clear from the statements of both the Lessor and Ms. MacInnis that she, in fact, occupied the unit for a period of time with the full knowledge of the Lessor.

The agreement to permit occupancy and for the payment of rent are the very essence of a rental agreement, and both existed in this situation.

The Commission is satisfied that Ms. MacInnis meets the definition of Lessee as stated in Section 1 (g) of the Act:

g) "lessee" means a person to whom permission is given, pursuant to a rental agreement, to occupy residential premises and includes his assigns and legal representatives;

It is correct that a lease was not signed by Ms. MacInnis, however a signed lease is not necessary to form a rental agreement.

Section 9 (4) of the Rental of Residential Property Act states:

(3)   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.

Based on the evidence and statements of both the Lessor and Lessee (Ms. MacInnis) the Commission is satisfied that a rental agreement existed.

It is therefore the finding of the Commission that this matter falls within the jurisdiction of the Rental of Residential Property Act, and the Application For Enforcement Of Statutory or Other Conditions Of Rental Agreement can be determined by the Director.

While it may result in further delay, the Commission is reluctant to make a determination on the actual application because the appeal focused on the issue of whether or not a rental agreement existed.

Given that the Director did not make a determination on the application regarding rent and notice, the Commission considers it appropriate that the matter be returned to the Office of the Director of Residential Rental Property for a determination on the original application (Exhibit E-1).

Order

WHEREAS David Sanderson filed an appeal against a decision of the Director of Residential Rental Property on September 19, 2003;

AND WHEREAS the Commission heard the appeal in Charlottetown on Wednesday, October 1, 2003;

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

IT IS ORDERED THAT

A rental agreement existed between the Lessor and Lessee.

The Director of Residential Rental Property has the jurisdiction to make the determination on this matter.

The Director of Residential Rental Property should proceed to make a determination on the July 14, 2003 application filed by the Lessor.

DATED at Charlottetown, Prince Edward Island, this 3rd day of October, 2003.

BY THE COMMISSION:

Maurice Rodgerson, Vice-Chair

Weston 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:

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.