Order LR10-21 - Rental Appeal - Docket LR10010 - Colleen and Scott Stewart v Director of Residential Rental Property

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Docket LR10010
Order LR10-21

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Colleen and Scott Stewart against Order No. LD10-127 of the Director of Residential Rental Property, dated May 7, 2010.

BEFORE THE COMMISSION

on Wednesday, the 4th day of August, 2010.

Allan Rankin, Vice-Chair
David Holmes, Commissioner
Michael Campbell, Commissioner

Order

On May 27, 2010 the Commission received a Notice of Appeal from Colleen Stewart and Scott Stewart (the Appellants) requesting an appeal of Order LD10-127 dated May 7, 2010 issued by the Director of Residential Rental Property (the Director).

By way of background, Jerry Jesso (the Respondent) provided to the Appellants a Form 2 – Application of Enforcement of Statutory or Other Conditions of Rental Agreement dated January 12, 2010. On the same date, the Respondent filed with the Director a Form 13 – Application by Lessee for Review of Proposed Rent Increase.

In Order LD10-127, the Director found that:

“IT IS THEREFORE ORDERED THAT

The Lessors shall pay to the lessees the sum of $1,430.00 on or before June 7, 2010.”

The Commission heard this appeal on June 21, 2010. Colleen Stewart (Mrs. Stewart) represented the Appellants and appeared by way of speakerphone. Jerry Jesso and Michelle Jesso (the Respondents) also appeared.

EVIDENCE

The Appellants stated they had withdrawn an original application filed with the Director to increase the rent to $800 when they had come to an agreement with the Respondents to increase the rent from $620 to $750. They also reported they were told that the heat for a year was around $1500 when in fact it was closer to $4500 per year, thus were losing money at the old rate. The Appellants agreed that in lieu of a security deposit, the respondents did some painting in the premises. The Appellants contend that $40 of rent was left unpaid in 2009 and submit that this sum be applied to reduce the amount they are required to reimburse the Respondents.

The Respondents stated that there was one hot water heater for the 2 apartments but the heater was wired into the respondent's electric panel; thus justifying the $25 monthly electric credit. The Respondents reported that they did the paint job and the rental unit was clean when they left.

The Respondents also told the Commission, that when they agreed to pay the increased rent, they did not have knowledge that pursuant to the Act, the rent could not be increased above the rate set by the Commission for that year.

DECISION

The Commission denies the appeal for the reasons that follow.

The Appellants increased the rent in contravention of subsection 23 (1) of the Rental of Residential Property Act (the Act) which states:

Except as provided in subsection (3) and notwithstanding the terms of any rental agreement, the amount of any rent increase between January 1 and December 31 of any year shall not exceed the percentage amount which is established by an order of the Commission and published in the Gazette.

Subsection (3) referred to above states:

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.

The Appellants had made an application to the Director to increase the rent to $800 per month in compliance with the Act but later withdrew that application. The Appellants and Respondents entered into a private agreement to increase the rent to $750 per month but such agreement is in violation of section 23 of the Act. The $130 per month increase pursuant to the private agreement is illegal, unenforceable and must be repaid.

The Commission finds that the Director correctly applied the law and accordingly, the appeal is hereby denied.

NOW THEREFORE, pursuant to the Island Regulatory and Appeals Commission Act and the Rental of Residential Property Act:

IT IS ORDERED THAT

1. The appeal is hereby denied.

2. Order LD10-127 issued by the Director is confirmed in its entirety.

DATED at Charlottetown, Prince Edward Island, this 4th day of August, 2010.

BY THE COMMISSION:

Allan Rankin, Vice-Chair

David Holmes, Commissioner

Michael Campbell, 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.

NOTICE: IRAC File Retention

In accordance with the Commission's Records Retention and Disposition Schedule, the material contained in the official file regarding this matter will be retained by the Commission for a period of 2 years.