Dockets A-08-04
Order LR04-11

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Deborah Kelly Hawkes against Order No. LD04-089 of the Director of Residential Rental Property both dated March 31, 2004.

BEFORE THE COMMISSION

on Monday, the 28th day of June, 2004.

Brian McKenna, Vice-Chair
Weston Rose, Commissioner
Norman Gallant, Commissioner

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Order

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Participants

1.   Appellant:

Deborah Kelly Hawkes
Lessee

2.  Respondent:

Jackie MacKay
Lessor

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Reasons for Order

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1.  Introduction

Deborah Kelly Hawkes (Appellant) has appealed Order LD04-089 of the Director of Residential Rental Property dated March 31, 2004 (Exhibit E-5).

The Notice of Appeal (Exhibit E-6) was received by the Prince Edward Island Regulatory and Appeals Commission on April 14, 2004.

The appeal arises from a decision of the Director regarding a Notice of Termination by Lessor of Rental Agreement and an Application by Lessee to Set Aside Notice of Termination.

The appeal hearing commenced on May 11, 2004 in the hearing room of the Island Regulatory and Appeals Commission, and was adjourned to May 26, 2004 in the Boardroom of Access PEI, Montague, PEI.

Deborah Kelly Hawkes appeared as the Appellant.  Jackie MacKay appeared as he Respondent.

2.  Background

The Lessee, Deborah Kelly-Hawkes, moved into premises belonging to the Lessor, Jackie MacKay, in Lower Montague, PEI on September 15, 1995, under a verbal month-to-month agreement.  The rent was $450.00 per month, payable on the first day of each month and did not include heat.  The Lessee paid $250.00 security deposit at the commencement of her lease.

In July, 2003, the Lessee paid $350.00 rent to the Lessor, leaving a shortfall of $100.00.

In January, 2004, the Lessee paid $300.00 rent, leaving a shortfall of $150.00.

In March of 2004, the Lessee paid the usual $450.00 rent but subsequently placed a stop-payment on the cheque because she felt the furnace was not working properly.

On March 4, 2004, the Lessor signed a Notice of Termination to be effective March 24, 2004.

On March 5, 2004, the Lessee filed an Application to Set Aside Notice of Termination on the following grounds.

1. that while she acknowledged that she was short in her payment of July, 2003 ($100.00) and January, 2004 ($150.00) her security deposit of $250.00 could be applied to the outstanding arrears.

2. that she put a stop-payment to her March, 2004 cheque on March 2, 2004 because of concerns regarding the proper functioning of the furnace.

On March 25, 2004, a hearing on this matter was held by the Director of Residential Property and she issued her decision on March 31, 2004.

In this decision, she determined that the Notice of Termination of Rental Agreement was valid.  She noted that the onus was on the Lessor to establish that the Notice of Termination was properly served and based on sufficient grounds.

The Director noted that Ms. Kelly-Hawkes acknowledged receiving the Notice of Termination on March 4, 2004, and to not paying the $700.00 claimed due on the date of the Notice of Termination.  She concluded that the Notice was properly served.

The Director also pointed out the following:

1. the lessee cannot direct that the security deposit be applied towards rental arrears;

2. the lessor has ten(10) days to return the security deposit to the lessee after the lessee has vacated the premises;

3. the lessee is obligated to pay the rent when due despite any complaints she may have regarding the premises;

4. the lessee could have invalidated the Notice of Termination by paying all rental arrears within ten(10) days of receipt of the Notice;

5. the lessee could have had her issues regarding the condition of the premises addressed in a separate application with the office of the Director of Residential Rental Property.

Based on her review of the evidence and the legislation, the Director found that the Notice of Termination was valid as it was properly served and was based on sufficient grounds, i.e. the non-payment of rent in the amount of $700.00.

Subsequent to the hearing and in an effort to settle the matter, the Lessor submitted a proposal to the Director which was accepted by the Lessee on March 26, 2004.  The terms of the agreement were as follows:

1. The lessee was to pay the $450.00 rent due on April 1, 2004 on or before April 1, 2004;

2. If the April, 2004 rent was paid on or before April 1, 2004, the lessee was to be absolved from paying the March, 2004 rent in the amount $450.00;

3. If, however, the lessee did not pay the April rent by April 1, 2004, the lessee was obligated to vacate the premised as of midnight April 1, 2004;

4. If the lessee paid the $450.00 rent due on April 1, 2004 on or before April 1, 2004, the rental agreement between the lessee and the lessor was to be terminated as of midnight April 30, 2004 and the lessee was to have vacated the premises by that date and time.

These terms and conditions, accepted by both parties, were incorporated into the Director's order.

However, despite the earlier acceptance by the Lessee, she appealed the Director's decision of March 31, 2004 on April 14, 2004.

An appeal hearing in the matter was scheduled for May 11, 2004.  However, the Appellant, Ms. Kelly-Hawkes, advised that she was unable to attend at this date.

The Commission convened on May 11, 2004 for the purpose of adjourning the hearing.

On May 26, 2004, the Commission re-convened to hear the appeal with both parties being present.

Ms. Kelly-Hawkes in her grounds of appeal argues that the Director had misrepresented the facts in regards to late filing of the Application to Set Aside Notice of Termination.

Regarding this first ground of appeal, the Commission pointed out at the hearing that as Ms. Kelly-Hawkes was successful in having a hearing before the Director, it was not in her best interest to appeal that aspect.  The Appellant indicated that her concern was for others who, for various reasons, might not be able to file an appeal to the Director within the specified time frame.

The Commission noted her concern and pointed out that it could only deal with the particular situation before it and could not rule in general on matters not before it.

Secondly, the Appellant argued that as she had given notice to the Respondent of her intent to vacate the premises at the end of April, 2004, the Respondent should not have filed the Notice of Termination by Lessor of Rental Agreement requiring her to vacate the premises by March 24, 2004.

The Commission notes that the actions of the Respondent/Lessor are not matters within its control.  The decision of the Respondent/Lessor to do so was based on a non-payment of rent in the amount of $700.00.

What the Commission must decide is whether the Notice of Termination was validly served and whether there were grounds for the allegations contained in the Notice.  It does not have the ability to remove any references to the Notice of Termination as filed by the Lessor, as requested by the Appellant.

The Commission notes that Ms. Kelly-Hawkes acknowledged that she was served with the Notice of Termination on March 4, 2004 and, accordingly, must conclude, as did the Director, that the service of the Notice of Termination was valid and done in compliance with the requirements of the legislation.

As for valid grounds for filing the Notice of Termination, the Commission notes that the Appellant acknowledged that she did owe $700.00 in rent as of March 4, 2004, broken down as follows:

1. a shortfall of $100.00 in July, 2003;

2. a shortfall of $150.00 in January, 2004; and

3. non-payment of rent in the amount of $450.00 in March, 2004.

Again, the Commission agrees with the Director in her conclusion, as follows:

1. The appellant-lessee cannot direct that the security deposit of $250.00 be applied towards outstanding rental arrears.  The lessor has ten (10) days after the lessee has vacated the premises to return the security deposit.  This period of time allows the lessor time to inspect the premises for damage before deciding whether to return any of the security deposit or to return it in full to the lessee at the conclusion of the inspection.

2. Under the legislation, the appellant-lessee has ten (10) days to deliver to the lessor-respondent all of the rent due as of the date of service of the Notice of Termination and had she done so, the Notice of Termination would have been rendered void.  The Commission notes that as the appellant-lessee did not choose to exercise this option, the Notice remained valid.

3. The appellant-lessee is obligated to pay the rent despite any complaint she may have regarding the premises.  The appellant, in placing a stop-payment on her March, 2004 rent, did not act properly.  Had she wished, any issue regarding the condition of the premises could have been addressed in a separate application with the office of the Director of Residential Rental Property.

 3.  Decision

The Commission therefore concludes that the Appellant's decision to stop payment of the March 2004 rent cheque was improper.

In conclusion, the Commission agrees that the Notice of Termination was both validly served and was with foundation.  The decision of the Director in this matter is therefore confirmed and this appeal is denied.

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