Docket A-017-03
Order LR03-017

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Levi Cannon.

BEFORE THE COMMISSION

on Thursday, the 18th day of December, 2003.

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

Order

Participants

1.   Appellant:

Levi Cannon
(Lessee)

2.   Respondent:

Eddy Younker
(Lessor)

Reasons for Order

1.  Introduction

Levi Cannon appealed Order LD03-272 of the Director of Residential Rental Property issued on November 6, 2003.   

The Order relates to rent owed for the rental of a three bedroom house located at 827 Brackley Point Road in Charlottetown. 

The appeal was filed with the Commission on November 24, 2003. The original appeal hearing date scheduled for December 8, 2003 was postponed due to a snow storm on that date. 

The appeal was heard at the offices of the Island Regulatory and Appeals Commission on Tuesday, December 16, 2003. The Appellant, Levi Cannon, and the Respondent, Eddy Younker, were present for, and participated in, the appeal hearing.

2.  Background

The Lessee, Mr. Cannon, occupied the house at 827 Brackley Point Road from 1999 until the end of February 2003. The unit was originally rented in companion with another individual, but after 2001 Mr. Cannon became the sole Lessee.

Rent for the house was $550.00 per month. It was not uncommon for the Lessee to be behind in the rent but catch up over time. The situation deteriorated to the point where the Lessee agreed to vacate the premises at the end of February 2003.

The Lessor, Mr. Younker, filed a claim for rent owed in the amount of $1,200.00, stating he was still owed part of the rent for December 2002 in the amount of $100.00, and rent in the amount of $550.00 for each of the months January and February 2003.

The Order of the Director found rent owing in the amount of $1,100.00 with payment to be made by December 12, 2003. That decision was appealed to the Commission.

3.  Decision

The appeal is denied. 

The Commission addressed the matter before it as two separate issues. One relates to the rent issue that is disputed, the other to a rent issue that is not disputed.  

On the disputed matter of rent for December, the Commission was not presented with sufficient evidence to support the claim. The Lessor stated $100.00 is still owed in rent for the month of December 2002.  The Lessee, in answering a direct question at the appeal hearing, did not deny the $100.00 rent was owed, stating only that it was up to the Lessor to prove it was owed. No evidence was presented to the Commission to substantiate the claim, so the Commission cannot make a finding supporting the position of the Lessor that rent is owed for December.

The Commission would also note that, once again, it is presented with a situation where the failure to issue receipts for rent payments creates unnecessary uncertainty. A receipt book is a low cost investment and the simple practice of issuing a receipt for payments—which indicates the date, amount and purpose of the payment—would provide greater protection for both the Lessor and Lessee.  Such evidence would be of significant benefit in both avoiding and addressing disputes.

On the matter of rent for January and February, the Lessee freely admits that he owes rent to the Lessor in the amount of $1,100.00, however, he claims he does not have the money to pay the rent.

The Lessor and Lessee had an established month-to-month rental agreement. That is not disputed. Rent was set at $550.00 per month. That is not disputed. Rent was not paid for January and February 2003. That is not disputed. The Lessee occupied the rental property until the end of February 2003. That is not disputed.

Under the terms of a rental agreement, the Lessor agreed to grant occupancy of the unit to the Lessee, and the Lessee agreed to pay rent in the amount of $550.00 per month.

At the appeal hearing, the Lessee appeared to assume that his failure to pay rent was justified by his claim that he did not have the money to pay the owed rent—and would not have the money to pay the rent until a piece of art he has produced is sold. Such actions are not supported by the Rental of Residential Property Act.

The Act was established to protect the rights of both the Lessor and the Lessee and sets out the obligations and responsibilities of both parties.

Part II of the Act defines the nature of a rental agreement:

5. (1)   The relationship of lessor and lessee is one of contract and a rental agreement does not confer on a lessee an interest in land. 

(2)   Subject to this Part, the common law rules respecting the effect of the breach of a material covenant by one party to a contract on the obligation to perform by the other party apply to rental agreements.

In essence, the Lessor and Lessee have entered into a contractual arrangement with the Lessor providing the premises and the Lessee paying rent.

The rental agreement is not given special priority over other contractual arrangements, but neither is it given lesser status than other legal obligations.

The obligation to pay rent as part of a rental agreement is not influenced by the ability to pay. No test is set out to determine ability to pay, and the Act does not provide any mechanism for relief from the obligation based on a Lessee's claim they cannot afford the rent. Nor, on the other hand, does it provide any ability for the Lessor to reduce the space and services provided because they believe the agreed rent is insufficient. The effort is to protect the interests of both parties. Rent increases, conditions of premises, terminations of rental agreements, are all covered by the legislation. However, those matters are not in dispute in this case.

A Lessee and Lessor come to an agreement on the amount of the rent and common sense would assume the Lessee would not agree to an amount of rent that he could not afford, and the Lessor would not agree to an amount of rent that is lower than expenses.

The Commission appreciates that the Lessee is dealing with financial pressures, but the Commission also appreciates that the Lessor has financial obligations as well and holds no responsibility to carry the costs of a Lessee who fails to pay rent.  

The Commission welcomes the candor of the Lessee in stating he accepts that he owes the rent, but has no money to pay the rent; however, that does not alter the fact he entered into a rental agreement and is bound by that agreement. Admitting the fact he owes rent does not diminish his obligation to pay.

The Lessor provided a service and is entitled to be paid for that service.  There are consequences for anyone who does not pay a legal debt.

The Lessor has been owed two months rent for almost a full year, and the Commission notes that no effort has been made by the Lessee to pay that rent or reduce the amount owed.  The Lessee seems to believe the payment should only be tied to the sale of his art, yet there is no guarantee when that art object will be sold.

In filing the appeal, the Lessee stated: "To demand money this close to Christmas for a single parent is ridiculous, and the bottom line is I have no money."  It is the Lessee who placed himself in the situation of having such a demand at this time of the year because he has failed to take any action to address his obligation for ten months. 

The Commission confirms the Order of the Director of Residential Rental Property, and orders that the Lessee pay rent owed in the amount of $1,100.00 by January 15, 2004.

Order

WHEREAS Levi Cannon appealed Order LD03-272 of the Director of Residential Rental property; dated November 6, 2003;

AND WHEREAS the Prince Edward Island Regulatory and Appeals Commission heard the appeal in Charlottetown on December 16, 2003;

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

IT IS ORDERED THAT
  1. The Lessee, Levi Cannon, pay rent rent owed in the amount of $1,100.00 to the Lessor, Eddy Younker; and
  1. Such payment is  to be made on or before January 15, 2004.

DATED at Charlottetown, Prince Edward Island, this 18th day of December, 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.