Order LR05-06
IN THE MATTER of the Rental of Residential Property Act, R.S.P.E.I. 1988, Cap. R 13.1,and
IN THE MATTER of establishing the allowable percentage rent increase for 2006, pursuant to Sub-section 23.(1) of the Rental of Residential Property Act.Tuesday, September 06, 2005
Brian J. McKenna, Vice-Chair
Weston Rose, Commissioner
James Carragher, Commissioner
Anne Petley, Commissioner
Order
WHEREAS pursuant to the provisions of Sub-section 23.(1) of the Act, the Commission is required to establish the allowable percentage of rent increase for 2006;
AND WHEREAS pursuant to the provisions of Sub-section 23.(2) of the Act, the Director of Residential Rental Property has invited written representations from lessors and lessees to assist in establishing the annual prescribed percentage rent increase, which request was by way of a notice in the printed media.
AND WHEREAS in setting the prescribed percentage rent increase the Commission has considered the following: representations received pursuant to Sub-section 23. (2) of the Act, the vacancy rates for the province, a review of the economic outlook for the province, a review of the Consumer Price Index forecasts for 2006, a weighted model of estimated cost components for 2005 and 2006, previous allowed rent increases, the increase in the consumer price index and the increase of weekly wages and salaries.
AND WHEREAS the Commission has carefully considered the increase in costs as a result of the significant rise in the price of furnace oil for lessees as well as for lessors who pay for the heating of premises.
AND WHEREAS the Commission recognizes that lessors who provide heating services have incurred a greater increase in operating costs than the lessors who do not pay for such services as a condition of the rental agreement.
AND WHEREAS the Commission has concluded that separate rates of rent increase are necessary for 2006 in recognition of this distinction.
AND WHEREAS the Commission is also aware of the recent volatility in the heating fuel market which makes it difficult to project with any certainty future heating fuel costs, and it also recognizes that allowable rent increases, if applied by the lessor, become part of the ongoing rent for the involved units.
The Commission concludes these conflicting circumstances dictate establishment of an allowable rate which addresses, over the longer term, the current increased fuel costs.
NOW THEREFORE, pursuant to the Rental of Residential Property Act,
IT IS ORDERED THAT
The allowable percentage rent increase for 2006 for unheated premises shall be three and one-half (3.50) percent.1.
2. The allowable percentage rent increase for 2006 for heated premises shall be seven and one-half (7.50) percent.