Docket A-016-04
Order LR04-13

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Darlene Connolly against Order No. LD04-133 of the Director of Residential Rental Property dated May 26, 2004.

BEFORE THE COMMISSION

on Wednesday, the 7th day of July, 2004.

Maurice Rodgerson, Chair
Anne Petley, Commissioner
Norman Gallant, Commissioner

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Order

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Participants

1.   Appellant:

Darlene Connolly

2.  Respondent:

MacDonald Construction
Represented by Roddy MacDonald

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Reasons for Order

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1.  Introduction

Darlene Connolly appealed Order LD04-133 (Exhibit E-13) issued by the Director of Residential Rental Property on May 26, 2004 and relating to residential premises located at 4 Elizabeth Drive in Stratford, Prince Edward Island.

The Notice of Appeal (Exhibit E-14) was hand delivered to the Commission and received on June 11, 2004.

The appeal arises from a decision of the Director finding that the Appellant owes rent in the amount of $1,120.00 to the Respondent, MacDonald Construction.

The appeal hearing was held in the Main Hearing Room of the offices of the Prince Edward Island Regulatory and Appeals Commission on Tuesday, June 29, 2004.

The Appellant, Darlene Connolly, appeared on her own behalf.

Roddy MacDonald represented MacDonald Construction.

2.  Background

The Appellant and Respondent entered into a fixed lease agreement on July 1, 2002 for a period of one year, the agreement then converted to a month to month agreement.

Rent was in the amount of $550.00 per month, and a security deposit had been paid in the amount of $350.00.

The Respondent alleges the Appellant vacated the rental unit without notice, in early December 2003 and owed rent for December, November and an unpaid portion of the rent for June in the amount of $20.00.

The Appellant contends her rent was paid in full in June, rent for November was paid in full, and she gave verbal notice at that time that she was terminating the rental agreement December 1, 2003.

The Respondent countered that a verbal notice was never given and financial records demonstrate the rent in question was never paid.

The parties disagreed on the matter of issuing receipts, with the Appellant claiming receipts were never issued, and the Respondent indicating receipts were issued.

The parties also disagreed on the due date for rent, the Appellant stating it was the 20th of each month and the Respondent stating it was the 1st of each month.

The decision of the Rental Officer confirming rent owed in the amount of $1,120.00 with payment to be made by June 30, 2004 was appealed to the Commission.  

3.  Decision

The appeal is denied.

The Appellant stated that her arguments were already before the Commission from the original hearing before the Rental Officer and she did not believe it necessary to add any further statements.

The Notice of Appeal (Exhibit E-14) included a three page letter which specified a number of reasons for the appeal.  The Commission will attempt to address all of those points in its decision.

The Appellant contends there was a verbal rental agreement to continue to rent the unit after the fixed term lease expired in July 2003.  The Commission accepts this as a fact, given that the rental relationship did in fact continue for some period after that time and this point is not disputed.

Section 6 of the Rental of Residential Property Act indicates that such a relationship would constitute a rental agreement.

6. Notwithstanding any agreement, waiver, declaration or other statement to the contrary, where the relationship of lessor and lessee exists in respect of residential premises by virtue of this Act or otherwise, there shall be deemed to be a rental agreement between the lessor and lessee, with the following conditions applying as between the lessor and lessee as statutory conditions governing the residential premises:

As a rental agreement existed between the parties, the provisions of the Act apply to both parties.

The statement that Ms. MacDonald did not appear at the initial hearing, nor the appeal hearing is accurate, but her presence is not required by the Act, as the party to an appeal can be represented by another person.

Section 25 (1) of the Act states:

 25. (1) Any party to a decision or order of the Director, if the party has appeared or been represented at the hearing before the Director, may appeal therefrom by serving on the Commission within twenty days after receipt of the decision or order of the Director, a notice of appeal in the form prescribed by regulation.

Roddy MacDonald did represent the Respondent at the original hearing and at the appeal hearing.

The Appellant lists one of the reasons for the appeal was "all rent was paid in cash, at the request of Judy MacDonald."  The Rental of Residential Property Act does not contain a prohibition against rent payments being made in cash.

In a written submission (Exhibit E-4) the Appellant states that one of the reasons for payments in cash was due to the fact she did not have a chequing account.  The Commission therefore finds the method of rent payment was by mutual agreement, and the Commission does not have any evidence that the method of payment had any impact on this dispute.

The Appellant further claims that receipts were not issued. This point is disputed by the Respondent who claims to have issued a number of receipts. 

This is not a new issue before the Commission and the Commission strongly encourages that receipts be issued and obtained.  This is a proper business practice that should be a standard routine of rental agreements for the protection of both parties.  Properly issued and retained receipts would provide a very specific record of payments and avoid the type of claims and counter claims witnessed in this case. The Commission notes the Respondent has several rental properties, and given the very small cost involved, would encourage receipts be issued for all rent payments. 

In this case the Appellant could have demanded a receipt at the time of payment and the Respondent would be obligated to provide such confirmation of payment, especially if the payment is a cash transaction.

The Appellant submitted as evidence, a receipt she says was obtained by asking for it, which indicates to the Commission that receipts could have been obtained upon request.  Receipts were also issued for the security deposit.

The Appellant, in the written notice of appeal, stated that the rent due date changed to the 20th of the month effective August 2003, on the basis of an agreement between the Appellant and the Respondent.

The Appellant submitted three receipts (Exhibit E-7). On one the date is June 20, 2002, but the receipt includes a note that indicates it is the rent for July and rent is due again August 1st.   The other two receipts relate to the security deposit and are dated May 29th and June 1st.  It is clear from the evidence, and not disputed by the parties, that the original agreement required rent payment the first of each month.  The question then becomes whether it changed.

The rental record submitted by the Respondent indicates rent was due the first of the month but payments were inconsistent.  August 1, 2003 shows rent owing in the amount of $570.00.   August 13, 2003 indicates a rent payment of $550.00.  September 15, 2003 indicates a rent payment of $550.00.   A rent payment is also indicated on October 23, 2003.  This would appear to support the statement of the Appellant; however, that record does not indicate the pattern started in August, 2003.  Payments for June and July of 2003 were also closer to the middle of the month.  This appears to the Commission to support the Respondent's statement that rent payments gradually became later and later as the rental agreement continued. It is unlikely that the Respondent would agree to a change in the rent payment date and in so doing agree to a 20 day period of free rent to facilitate the change.

Even if the payment period shifted, it would not alter the obligation of the Appellant to pay rent for occupying the unit and, in fact, could serve to increase the amount owed for failure to give proper notice.

The payment of rent for premises occupied is a central aspect of the rental relationship. The Act sets out in Section 8(d) the authority of the Director to determine rent is owed:

(d.1) make a finding that an amount of rent is owed or that a security deposit, or part thereof, should be forfeited or returned;

(d.2) order that an amount found to be owed be paid;

The Appellant states that although she paid the rent on the 20th of the month she gave notice on the first of November that she planned to vacate the unit (Exhibits E-4, E-12, and E-14).

The individual to whom the Appellant states she gave notice has submitted a written statement (Exhibit E-10) that refutes that claim and states neither verbal nor written notice was given and the first indication the Appellant planned to move was the presence of a moving truck at the premises December 2, 2003.

The Act sets out requirements for the serving of proper notice.  Section 11 states:  

11.(1)  A lessee may terminate a rental agreement by serving on the lessor a notice of termination which complies with section 18.

(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 states:

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 Appellant did not comply with Section 18, nor with Section 11.

There is no evidence the Appellant paid rent for November, and by her own admission she did not pay rent for December.  Therefore the Appellant is liable for rent for both months, one of which she continued to occupy the unit, and the other during which she vacated the unit without proper notice.

If notice was given the first of November and the Appellant was correct in stating the payment date was the 20th, then the notice would take effect December 20th not December 1st.  Failure to give proper notice could carry the matter over to January 20th.

A claim of past due rent in the amount of $20.00 was refuted by the Appellant but the only evidence presented on that matter was the record of the Respondent (Exhibit E-9). 

The Commission accepts the Respondent's rental record as accurate given the fact it relates to a number of properties, runs for a longer period than the rental agreement and would be very difficult and time consuming to create solely for the purpose of the hearing on this matter.  The Respondent also stated under oath it was an accurate reflection of the rental records.

The record indicates that on June 16, 2003 a rent payment of $530.00 was paid towards the rent due for $550.00.  The $20.00 shortfall  is then carried forward through the following months, and according to the record remains outstanding. Other than saying she did not owe the rent, the Appellant did not provide any evidence to counter the Respondent's claim. The Commission accepts the evidence that $20.00 is outstanding.

The Appellant alleges assumptions that favour the Respondent. The Commission must make its decision based on the evidence and testimony presented by the participants.  The Commission must consider the credibility of the statements and evidence submitted.  Based on these factors the Commission must then make a decision on the dispute, and issue a written order with reasons.  That is the process followed in this matter.

The Appellant alleges the Respondent did not comply with the Act and therefore questions why she is being held in compliance.  The Commission makes decisions based on the applications brought before it. The Commission is not aware of any failure to comply with the Act on the part of the Respondent.  For example, on the previous matter of security deposit, the deposit was promptly surrendered to the Director's Office in full compliance with the Act.  The Director's order and the Commission's order on the disposition of the security deposit, which returned all but $22.00 to the Appellant was accepted by the Respondent although the Respondent had claimed the full security deposit.

The Appellant states the claim of rent owing is in retaliation for her actions in seeking a determination of the security deposit.  The Commission has not been provided with any evidence to support that claim.  The Appellant exercised her rights under the Act and the Respondent did the same. 

After a full review of the available evidence and consideration of the testimony provided by the participants, the Commission finds that the Appellant did not provide proper notice to terminate the rental agreement and therefore is liable for rent in the amount of $1,100.00.  The Commission also finds that rent in the amount of $20.00 was unpaid from June, 2003.

The Respondent questioned the release of the security deposit after an earlier hearing involving the same parties and same location, suggesting that if the Commission confirmed rent owed that deposit could have been directed towards that payment, rather than returned to the Appellant.

The Notice of Intention to Retain Security Deposit (Exhibit E-2) stated grounds relating to damages and clean up of the unit, and did not indicate a claim against rent owed.  Therefore the remaining amount of the security deposit was released to the Appellant after the decision on that application.

This hearing related to a separate application for Enforcement of Statutory or Other Conditions of Rental Agreement (Exhibit E-1).

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