Docket A-013-95
Order LR95-12

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Medical Management (the Lessor) against Orders No. LD95-167 of the Director of Residential Rental Property dated July 26, 1995.

Tuesday, October 17, 1995

Linda Webber, Chair
Debbie MacLellan, Commissioner
Emmett Kelly, Commissioner

Order

Participants

1. Appellant

Blaine MacDonald
Agent for Medical Management (the Lessor)

2. Respondent

Aravinda Maheshwari
Representing Hendrik Bouman (the Lessee)

Reasons for Order

1 Background

The Lessees Hendrik Bouman and Aravinda Maheshwari signed a lease dated April 27, 1994 for the lease of Apartment #3 at 124 Prince Street, Charlottetown, P.E.I. at the rate of $650.00 per month, from "Medical Management". There was no fixed term. The rental agreement was terminated on July 31, 1994.

The Lessees filed an Application for Enforcement of Statutory or Other Conditions of Rental Agreement (Form 2) with the Commission on March 6, 1995 seeking an order for the return of excess rent paid for the period May to July 1994.

An Order was issued on behalf of the Director of Residential Rental Property dated July 26, 1995. This Order found that $150.00 was owed by the Lessor to the Lessee for excess rent.

By Notice of Appeal dated August 15, 1995 the Lessor appealed the Order of The Director, stating:

"Order given without benefit of hearing. All evidence not heard by rentalsman nor other party. Rentalsman asked for proof previous which was given little weight."

A hearing into this appeal was held on September 6, 1995. Blaine MacDonald appeared on behalf of Medical Management. Aravinda Maheshwari appeared on behalf of the Lessees.

In addition to the documents introduced at the hearing, documents, mostly photocopies of parts of receipts and bank deposits, were filed on behalf of the Lessor on September 20, 1995. Copies were provided to the Lessees for comment.

2 Decision

The hearing began with a complaint by the Lessor's agent Mr. MacDonald about the process used by the Rental Property Officer to deal with the original application, and a statement by Mr. MacDonald that he wanted the matter sent back to the Rental Property Officer to "have a hearing" in the manner considered correct by Mr. MacDonald. Mr. MacDonald's statement was that he "never had a hearing;" he was told there would be another meeting/hearing; he was not given an opportunity to present all the evidence.

The Commission ruled that the matter would be dealt with as an appeal; the Commission has authority to deal with all matters as a trial de novo and can make all decisions required. In coming to this decision the Commission pointed out that the Rental Property Officer had held a hearing on June 5, 1995, had spoken to Frank Larter, and had received additional information from Mr. MacDonald (Ex. 3) after the hearing. As well the Commission noted that in his letter (dated June 23, 1995) to the Lessor the Rental Officer made it quite clear that the hearing was over, that the Lessor had been given an opportunity to provide additional information and three weeks had lapsed since that date, and that a decision would be made without that information if it was not received by July 4, 1995. It was subsequent to that letter that the information was filed by Mr. MacDonald. Also, the Lessee Maheshwari stated that he had never misunderstood the procedure established by the Rental Officer. It was as set out in the Officer's letter.

As a result of this decision, Mr. MacDonald was given the choice of continuing with the appeal or abandoning the appeal. He chose to continue "under protest". When asked, he stated that he was fully prepared to give his evidence and did not require an adjournment for additional preparation.

On the lessor's behalf Mr. MacDonald stated that his parents in fact own the apartments and are Medical Management. He "helps out", does things when they ask him.

The position of the Appellant Lessor is that the rent on the unit in question has at least sometime in the past been as high as $660.00 per month. The rate fluctuates depending upon the number of persons in the unit, the services supplied, and the discount the Lessor decides to give. The argument made in favor of varying rent for the number of persons in the unit is that "it costs more" if more people use water, etc.

In support of these statements the Lessor's agent provided photocopies of what apparently are parts of receipts written for rent, and parts of bank deposit slips. Many particulars are blocked out. The apartment unit is not indicated. These documents were provided after the hearing, the Commission having asked the Lessor's agent to provide whatever documentation he could in support of his verbal evidence.

During the hearing itself Mr. MacDonald was asked how he knew that the $650.00 - $660.00 rent applied to this apartment. He replied "process of elimination." He described the building as having a bachelor apartment, a two-bedroom apartment, two three-bedroom apartments and two four-bedroom apartments. Since this unit had four bedrooms he said he reviewed the receipts and was able to rule out the ones not applicable. Mr. MacDonald expressed unhappiness at finding out that five persons (3 adults, two children aged eight and three) were living in the Lessee's apartment -- apparently having based the rent upon occupancy by fewer people.

The position of the Lessees is that since the previous tenant, Frank Larter, paid only $600.00 per month (This was admitted by the Lessor's agent), they should pay only $600.00 per month.

One problem with the evidence provided by the Lessor's agent is that it is basically unsupported by documentation. There are photocopies of receipts for someone paying $630.00 for something (no clear indication that it is rent or for which unit). The only "documents" provided referring to $660.00 appear to be photocopies of bank deposits. Parts of the information on the deposit slips are blocked out. What is left doesn't indicate to what or to whom the deposit relates.

Since in this province rents are regulated under the Rental of Residential Property Act, this lack of documentation is surprising. While the Lessor's agent argued that the $660.00 rent was "legal" because the Lessor had always given the proper notice and raised it the proper amount, again, there is no documentation to support this.

While it may not be unreasonable to conclude that the highest amount charged as rent ($660.00) for which they could provide some documentation (although that documentation was not original, was obviously altered in part before being photocopied and was a deposit record, not a rent receipt) would relate to one of the four-bedroom apartments, there was no evidence to suggest the specific apartment rented by the Lessees was that apartment.

We also note that the oral evidence of the Lessor's agent is problematic because he admitted that he wasn't always around during the period of time relevant to our discussions. He was reporting what his parents had told him and what he could "infer" from what records he could find.

Even more significant, however, is that rent control legislation does not permit a Lessor to vary the rent depending upon how many people reside in an apartment or what kinds of services are provided. A lessor is also not able to give a discount to one tenant but not to another. Rent is fixed by law. Each rent relates to a specific apartment, not a specific "situation". Changes in tenants are irrelevant.

This is not to say that the Act is inflexible. Any lessor who has extraordinary expenses may apply to the Director for an increase to cover those expenses (s.23). Any lessor who wishes to discontinue a service previously included within the rent may apply to the Director for permission (s.6).

What the Lessor here has apparently done is change the rent as he saw fit, depending upon the "situation" of the Lessee. This is a violation of the Act.

The lack of good evidence in this case makes it impossible for us to trace any long-term history for this apartment. What is an undisputed fact is that the previous tenant paid $600.00 per month. This being so, the rent of $650.00 per month to the Lessees was invalid. We find, on the evidence available to us, having given the parties reasonable opportunity to provide such evidence, that the lawful rent for the apartment rented by the Lessees was $600.00 per month.

The appeal is therefore dismissed.

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Medical Management (the Lessor) against Orders No. LD95-167 of the Director of Residential Rental Property dated July 26, 1995.

Order

WHEREAS Medical Management filed an appeal against a decision of the Director of Residential Rental Property dated July 26, 1995;

AND WHEREAS The Island Regulatory and Appeals Commission heard the appeal in Charlottetown on September 6, 1995;

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

IT IS ORDERED THAT

1. The appeal is dismissed;

2. The Order of the Director is affirmed; and

3. The amount of $150.00 for rent overpayment is to be paid by the Lessor to the Lessee on or before November 1, 1995.

DATED at Charlottetown, Prince Edward Island, this 17th day of October, 1995.

BY THE COMMISSION:

Linda Webber, Chair
Debbie MacLellan, Commissioner
Emmett Kelly, Commissioner

NOTICE

Sections 13.(1) and 13.(2) of the Island Regulatory and Appeals Commission Act provide as follows:

13.(1) An appeal lies from a decision or order of the Commission to the Appeal Division of the Supreme Court upon a question of law or jurisdiction.

(2) The appeal shall be made by filing a notice of appeal in the Supreme Court within twenty days after the decision or order appealed from and the Civil Procedure Rules respecting appeals apply with the necessary changes.