Order LR05-11 - Rental Appeal - A-013-05 Re: Beverly Doyle v. Director of Residential Rental Property (Order LD05-11)

Docket A-013-05
Order LR05-11

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Beverly Doyle against Order No. LD05-255 dated September 23, 2005.

BEFORE THE COMMISSION

on Monday, the 7th day of November, 2005.

Weston Rose, Commissioner
Kathy Kennedy, Commissioner
Anne Petley, Commissioner

Order

Participants

1.   Appellant:

Beverly Doyle

2.  Respondent:

Archibald Bristol

Reasons for Order

1. Introduction

Beverly Doyle (the Appellant) appealed Order LD05-255 (Exhibit E-4) issued by the Office of the Director of Residential Rental Property (the Director) on September 23, 2005. The Appellant's Notice of Appeal (Exhibit E-5) was received by the Island Regulatory and Appeals Commission (the Commission) on October 3, 2005.

The Director's Order and the present appeal concern a rental unit located at 265 Dorchester Street in Charlottetown (the unit).

The appeal was heard in the Commission's main hearing room in Charlottetown, Prince Edward Island on Wednesday, October 26, 2005.

2. Background

On August 3, 2005, the Appellant applied to the Director for approval of a rent increase for the unit which exceeded the percentage established by the Commission pursuant to subsection 23(3) of the Rental of Residential Property Act (the Act). The allowable percentage increase established by the Commission for 2005 is 2.00%. The Appellant was seeking approval of a rent increase of approximately 9% which would raise the rent paid by Mr. and Mrs. Archibald Bristol (the Respondents) from $596.00 per month to $649.00 per month.

On August 22, 2005, a hearing was held by the Director pursuant to subsection 23(6) of the Act. In Order LD05-255 the Director denied the Appellant's application for an increase in rent, determined that a $96.00 per month rental increase which previously occurred in June 2004 was invalid as said increase was not approved pursuant to the provisions of the Act, and returned the rent for the unit to $500.00 per month until such time as a rent increase for greater than the allowable percentage increase has been approved.

3. Decision

The appeal is denied for the reasons which follow.

Subsections 23(3), 23(6), 23(8) and 23(9) of the Act read as follows:

23(3) Where the lessor seeks a rent increase greater than the amount permitted by subsection (1), the lessor shall apply to the Director for approval of the proposed increase not later than ten days after notifying the lessee.

23(6)  Upon receipt of an application pursuant to subsection (3) or (4), the Director shall within ten days give written notice to the lessor and lessee of the date, time, and place which he has fixed for a hearing of the application.

23(8) At the hearing both parties are entitled to appear and be heard and the Director shall consider the following factors:

(a) whether the increase in rent is necessary in order to prevent the lessor sustaining a financial loss in the operation of the building in which the premises are situate;

(b) increased operating costs or capital expenditures as advised by the lessor;

(c) the expectation of the lessor to have a reasonable return on his capital investment;

(d) such other matters as may be prescribed by the regulations.

23(9) After hearing and considering the application the Director may

(a) approve the rent increase;

(b) approve a rent increase of such lower amount as he may specify, and shall give written notice of his decision, and the reasons therefor, to all parties within thirty days of the date of the hearing

In the present matter, the Commission finds that the June 2004 rental increase of $96.00 was imposed on the Respondent by the Appellant without obtaining the approval required by the Act. The Commission agrees with the Director that this increase is invalid, and that the rent for the unit be returned to the established rent of $500.00 per month.

With respect to the Appellant's August 3, 2005 application for a rental increase, the Commission notes that the Director denied the Appellant's application for a rental increase on the basis that the calculations submitted with the application were invalid. These calculations were based on the invalid increase of June 2004. The Commission agrees with the Director's reasoning as neither the Director nor the Commission, hearing the matter de novo, would be able to make a fair and just determination on the application for a rental increase without the correct financial information.

The Commission wishes to note that the Appellant may increase rent pursuant to the allowable percentage increase. In the alternative, the Appellant may file a fresh application with the Director pursuant to subsection 23(3) of the Act using valid financial information and calculations based on current correct rent. In the event the Appellant files a fresh application using correct and accurate information, the new application will then be considered by the Director on its merits under the process set out in section 23 of the Act.

Order

WHEREAS Beverly Doyle appeals against Order LD05-255 of the Director of Residential Rental Property, dated September 23, 2005;

AND WHEREAS the Commission heard the appeal in Charlottetown on October 26, 2005;

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

IT IS ORDERED THAT

The appeal is denied.

The rent for 265 Dorchester Street shall remain at the established rent of $500.00 per month until such time as a lawful increase in rent occurs either by way of the allowable percentage increase or by way of a decision of the Director following an application under subsection 23(3) of the Rental of Residential Property Act.

DATED at Charlottetown, Prince Edward Island, this 7th day of November, 2005.

BY THE COMMISSION:

Weston Rose, Commissioner

Kathy Kennedy, Commissioner

Anne Petley, 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.