Order LR95-07 - A006-95 - Rental Appeal - David Dodds v. Terri Hardwick & Thomas Matheson (Jun 29, 1995)

Docket A-006-95
Order LR95-7

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by David Dodds (the Lessor) against Order No. LD95-076 of the Director of Residential Property dated March 22, 1995.

Thursday, June 29, 1995

John L. Blakney, Vice-Chair
Anne McPhee, Commissioner
Carl Riggs, Commissioner

Order

Participants

1. Appellant

David Dodds (the Lessor)

2. Respondents

Terri Hardwick & Thomas Matheson (the Lessees)

Reasons for Order

1 Background

Prior to July 1, 1993 Terri Hardwick and Thomas Matheson (the Lessees) moved into the residential premises located at Apartment #12, 40 Hillsborough Street, Charlottetown, P.E.I. The Lessees entered into a rental agreement to rent the premises with David Dodds, the Lessor and no security deposit was required or paid.

On October 21, 1994, Thomas Matheson signed a form confirming that on October 19, 1994 verbal notice was given to the Lessor to indicate that the Lessees would be terminating the rental agreement and leaving the premises at 40 Hillsborough Street on October 31, 1994.

According to Section 11(2):

11(2) A notice of termination is to be served by the lessee

(b) if the premises are let from month to month, at least one month before the due date for payment of rent, to be effective on the day preceding the due date.

On November 7, 1994, Richard Kitson signed a form indicating that he would enter into an agreement and take up residency as early as possible at 40 Hillsborough Street.

On February 15,1995, the Lessor filed with the Director of Residential Rental Property Form 2 Application for Enforcement of Statutory or Other Conditions of Rental Agreement alleging the Lessees left at the end of October after giving notice by telephone in the middle of the month. The application indicates that the Lessor seeks a remedy by way of the Director finding that rent is owed by the Lessees and issuing an order that an amount found to be owed be paid to the Lessor.

Boyde White, the Rental Property Officer, in this instance, held a hearing with the Lessor and the Lessee in the matter of the application on March 22, 1995. After hearing the matter, he issued Order LD95-076 ordering that:

1. Rent in the amount of $141.00 is found owing by the lessees to the Lessor. This amount represents nine (9) days rent from November 1 to November 9, 1994.

2. The Lessees shall pay the lessor $141.00 on or before April 21, 1995.

Subsequently, the Lessor submitted a Notice of Appeal, pursuant to Section 25 of the Act to the Island Regulatory and Appeals Commission appealing the decision and order.

The Commission held a hearing on April 28, 1995 to hear the matter.

2 Decision

The parties agree on the fact that the Lessees did not comply with the Act when they failed to give a proper notice of termination of the rental agreement. Consequently, what is to be determined in this case is whether or not the Lessees owe rent for the month of November, 1994 or a part of the month and if rent is found to be owed, how much? They also agree that no rent was paid by the Lessees for the month of November.

The Commission understands from the evidence that the Lessees took up residence at 40 Hillsborough Street some time prior to July 1, 1993. Although the rental agreement applied to July 1st, the Lessor allowed the Lessees to enter the premises to clean the apartment some time before July 1st. This situation was similar to that of the new lessee Richard Kitson. In both cases the lessees had the opportunity to enter the premises and prepare it for their habitation. The Lessor allowed them to enter the premises and did not charge them rent. It is clear to the Commission that the Lessor through his own choice has agreed on both occasions to allow lessees entry to prepare the unit for their own habitation without collecting rent for the period leading up to the effective date of the rental agreement.

The Lessor submits that the Lessees left the apartment dirty and in a damaged state and rent should be paid for non-compliance with Statutory Condition 4 because in such a case the Director:

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

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

Upon a review of the Act the Commission can find no authority for it to order that rent be paid for the condition a rental unit is left even in circumstances where there is willful damage on the part of a lessee. It is the Commission's opinion that the Act provides for security deposits to compensate lessors in situations where the lessees have caused damage. In this instance no security deposit was paid and therefore there can be no amount ordered to be retained. The matter confronting the Commission relates to a determination on rent owing and no order can be made on rent owing for non-compliance with Statutory Condition 4. If there is no security deposit to be retained by the Lessor then there is a court process to pursue compensation for non-compliance with Statutory Condition 4.

It is clear from the evidence that the new lessees occupied the premises sometime during the afternoon of November 10, 1994, for purposes of cleaning the rental unit. The Lessor conferred upon the new lessee, Richard Kitson, the right to occupy the premises. It would not be reasonable to think that once the new lessees began to clean the unit for their own habitation that the former Lessees—Hardwick and Matheson could re-enter or re-occupy the unit to complete the term of their rental agreement. Perhaps this situation could occur if there was an intention to co-habit the premises but there is no evidence that he rented the unit to two separate lessees. The arrangement between the Lessor and the new lessee was their business. The Commission does not question the Lessor's right to select whom he wants to clean his apartment units. In this case, as in others, the Lessor compensated the new tenants for their work effort to clean the apartment by allowing them early occupation. Consequently, the Commission finds that the rental agreement between the Lessor and Hardwick and Matheson terminated when the new Lessees occupied the premises—sometime on the afternoon of November 10, 1995.

The Commission agrees with the Lessor that if he had not rented the unit until December 1, 1994 that the Lessees would be responsible for the payment of rent to cover the entire month of November. However, in this case it has been determined that a new lessee was permitted to occupy the premises thereby making it unreasonable for the former Lessees to re-occupy the unit. Again it is not reasonable to think that the new lessees would begin to clean the unit only to have the former lessees return a few days later to occupy the premises until the end of the month. This could not have been the intention of any of the parties including the Lessor. Consequently, the Commission finds that the residential unit was not available to Hardwick and Matheson once the new lessees occupied the premises on the afternoon of November 10th.

Section 1(n) defines rent to mean:

the amount of the consideration, whether or not in money, paid, given or agreed to be paid or given by a lessee to a lessor for occupancy of residential premises and for any service, privilege or thing that the lessor may provide for the lessee, whether or not a separate charge is made therefore.

Based on the above, sometime during the afternoon of November 10th all services and privileges provided to Hardwick and Matheson by the Lessor ceased and therefore the Commission finds there is no rent to be charged after that time because no services were provided by the Lessor.

In the result, the Commission finds that the Lessees do owe the lessor an amount of rent for a part of the month of November. The special circumstances of this case leads the Commission to find that the final day of occupation should be divided between the new lessee and Hardwick and Matheson. Therefore, the Commission finds the Lessees owe rent for 9.5 days at a rate of $15.67 per day or an amount of rent equal to (9.5 days @ $15.67 per day) $148.87.

The Lessor argued that he should be compensated because the Lessees were overholding lessees (Section 19) and that in accordance with Section 29 he should be permitted to mitigate any damages resulting from the manner in which the Lessees left the unit. He argued that the Lessees left the unit in an unacceptable condition and therefore continued to use and occupy or overhold the premises. Again the Commission finds that these issues relate to the condition of the unit which is a matter related to security deposit and not rent owing. In cases where a security deposit has been paid to the lessor and the lessor finds that there has been damage to the unit and therefore grounds for retaining the deposit, or apart of it, then there is a specific procedure under the Act for retaining an amount of the deposit. However, in cases where there is no security deposit neither the Director nor this Commission has the authority to order that compensation be given under such circumstances, that is a matter for another jurisdiction.

Accordingly,

1. The Order of the Director is varied;

2. Rent in the amount of $148.87 is found owing by the Lessees to the Lessor.

3. The Lessees shall pay the sum of $148.87 to the Lessor on, or before, July 14, 1995.

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by David Dodds (the Lessor) against Order No. LD95-076 of the Director of Residential Property dated March 22, 1995.

Order

WHEREAS David Dodds filed an appeal against a decision of the Director of Residential Rental Property dated March 22, 1995;

AND WHEREAS the Island Regulatory and Appeals Commission heard the appeal in Charlottetown on April 28, 1995;

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

IT IS ORDERED THAT

1. The Order of the Director is varied; and

2. The Lessees pay the sum of $148.87 to the Lessor on or before July 14, 1995.

DATED at Charlottetown, Prince Edward Island, this 29th day of June, 1995.

BY THE COMMISSION:

John L. Blakney, Vice-Chair
Anne McPhee, Commissioner
Carl Riggs, 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.