Docket A-001-97
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Kim Courts and James Greencorn (the Lessees) against Order No. LD96-245 of the Director of Residential Rental Property dated December 27, 1996.
Order LR97-1BEFORE THE COMMISSION
on Tuesday, the 18th day of February, 1997.
Linda Webber, Chair
Debbie MacLellan, Commissioner
Clayton Bulpitt, Commissioner
Order
Participants
1. Appellant:Kim Courts and James Greencorn (the Lessees)
2. Respondent:
Dave Tierney (the Lessor)
Reasons for Order
1. Background
A Notice of Appeal dated January 16, 1997 was filed by Kim Courts, Lessee, in connection with Order LD96-245 dated December 27, 1997. The grounds set out in the Notice of Appeal were:
"I appeal this order because I couldn't read & didn't understand that I could appeal the landlord's decision to keep my security deposit, so I didn't reply within 15 days."
The appeal grounds refer to the filing of a Notice of Intention to Retain Security Deposit by the Lessor. At the bottom of that Notice is a statement advising a Lessee to file an application for Determination of the Security Deposit within 15 days of receipt of the Notice if the Lessee contests the Notice. The Lessee, therefore, admits to failing to file the Notice but gives a reason.
The appeal was heard on February 4, 1997. Present were Kim Courts and James Greencorn, Lessees. The Lessor was not present for the hearing. The file contains a postal receipt showing that he received Notice of the appeal.
The background to this matter received by the Commission is somewhat different in details from the background outlined in the Order of the Director.
A one-year lease was signed by the Lessees but they never received a copy of it. They moved in to premises at 120 Westridge Crescent on August 1, 1995 but the lease did not start until September 1, 1995. Mr. Greencorn explained that he was given one month's free rent because of work the Lessees did around the property.
During the term of the tenancy the Lessees were told that the Lessor wanted to sell the property and so the Lessor ordered the Lessees to move to another of his premises – telling the Lessees that they would be "breaking" their lease if they moved somewhere other than one of his other rental units. The Lessees did not want to do this but when they phoned the Director and asked how they could "break" their lease they were told they could not legally do so.
The Commission finds this an unfortunate miscommunication between the Director and the Lessees. While Lessees can't "break" a lease, in the circumstances described here the Lessor was the one breaking the lease and the Lessees had no obligation to move into any other premises of the Lessor.
The Lessor had no legal right, from the evidence before the Commission, to ask the Lessees to move out of the premises at 120 Westridge Crescent – effectively terminating the tenancy.
The premises the Lessees then moved into at 5 Prince Street turned out to be unsuitable for a number of reasons, outlined in detail in Order LD96-245. After obtaining no satisfaction from the Lessor insofar as correcting the problems was concerned, the Lessees moved out at what they still considered to be the termination date of their lease, August 31, 1996.
The Lessor apparently claimed (pursuant to Order LD96-245) that he knew nothing about the Lessees vacating the premises until September 19, 1996 when Mr. Greencorn contacted him about returning the security deposit. However, the Lessees state, and the Commission accepts, that Ms. Courts telephoned the Lessor the day before the Lessees came to the Commission office and filed Form 2, Application for Enforcement of Statutory or Other Conditions of Rental Agreement. After the Lessor told the Lessees he wouldn't return it, they decided to seek help from the Rentalsman. Form 2 was filed on September 18, 1996.
After the Lessees took these steps, the Director wrote a letter to the Lessor which letter prompted the Lessor to file Form 8, Notice of Intention to Retain Security Deposit. This was not filed with the Commission until September 30, 1996. It is dated September 25, 1996. On its face it says the Lessees moved out on September 10, 1996. A handwritten note initialled by the Director is attached to Form 8 and reads as follows:
Sept 30/96
Lessor advised that the date Lessee vacated on Form 8 is Sept 19/96 not Sept 10/96.
No explanation for this change of date is given, either in the note or in Order LD96-245.
The date when Form 8 was served on the Lessees is also at issue. Order LD96-245 states the Lessee Courts acknowledged she received it but inaccurately states that she received it "in the mailbox of their residence." No date is stated.
The mailbox in question was located at 7 Northridge Parkway, the home of Mr. Greencorn's sister. The Lessees state they gave that address to the Lessor as their forwarding address because they did not know where they would be living. The Lessees did not know exactly when they got the Notice but it was "within a few days" of it being put in the mailbox, possibly even the next day.
Upon receiving the Notice the Lessees admit they did not file a form contesting the notice. Their reasons prompted this appeal. They also admit to not giving a written Notice of Termination as required by the Act. They thought they were free to leave when their lease expired.
2. Decision
The Commission notes that the Lessees failed to give the required Notice of Termination. However, in the circumstances it is likely the Lessor would be estopped from any claim against them on that basis. He himself misled the Lessees into believing he had a right to force them out of premises they wanted to live in, into premises they were unhappy with. These actions by the Lessor effectively terminated the lease—apparently without legal justification.
As for the dispute over the security deposit, the Commission finds that errors have been made by both the Lessor and the Lessees. The evidence is contradictory as to when the Lessor knew of the Lessee's vacating the premises as well as when the Lessees were served with their notice. Form 8, filled out by the Lessor, states the Lessees moved out on Sept. 10 – 15 days before the date of the Notice itself. The handwritten note of the Director suggests the Lessor changed his mind and decided that Form 8 should state Sept. 19, 1996 as the date the Lessees vacated the premises. The Lessees actually vacated on August 31, 1996. No explanation is given for the change of dates on Form 8. The evidence of the Lessees is that the Lessor knew of their departure by September 17th at the latest because that is the day they called about their security deposit.
As for service on the Lessees, that is also not clear, as was described above.
The Rental of Residential Property Act states at Section 33 that if a document is not delivered personally to the person to be served, then it should be mailed to one of the places cited in 31(1)(b). While the Notice was dropped in the mailbox at the Lessee's sister's house, this is not personal service. If it had been mailed it would have been deemed to have been delivered on the third day after the date of mailing. Three days after September 25, 1996 is September 28, 1996. If the Lessor knew – as the Lessee Courts testifies he did from their telephone conversation the day before Form 2 was filed – on September 17, 1996 that the Lessees had moved out and were looking for their security deposit, then his 10 days for service of Form 8 was up on September 27, 1996. So his failure to serve them personally would be fatal to his claim.
At the same time, the Commission does not accept the reason given by the Lessees as sufficient reason to overturn the decision of the Director. While it is regrettable that the Lessee Courts was not able to read the Form 8, the Lessee Greencorn was able to do so. Anyone served a Notice has an obligation to read it carefully or have its contents read to them, and the Notice is clear on its face.
However, the Commission is not prepared to support the cutting off of a right to a hearing under the Act unless the evidence clearly supports such a decision. Given the lack of certainty about when the Lessor knew the Lessees had vacated, as well as the lack of certainty about when they received their Notice – service not having been done in accordance with the Act – the Commission is not prepared to deprive the Lessees of their right to a hearing about their security deposit. While the evidence is not clear that the Lessor has served the Lessees within the time required by the Act, it is not clear that he did not, either.
In the circumstances, fairness would seem best served if this matter were sent back to the Director for a hearing to determine whether or not there is any reason for the lessor not to return the security deposit.
For the reasons given, the appeal is allowed. The matter is referred back to the Director for a hearing in connection with the security deposit.
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Kim Courts and James Greencorn (the Lessees) against Order No. LD96-245 of the Director of Residential Rental Property dated December 27, 1996.Order
WHEREAS
Kim Courts filed an appeal against a decision of the Director of Residential Rental Property dated December 27, 1996;AND WHEREAS
the Commission heard the appeal in Charlottetown on February 4, 1997;NOW THEREFORE
, for the reasons given in the annexed Reasons for Order;IT IS ORDERED THAT
1. The appeal is allowed;
2. The matter is referred back to the Director for a hearing in connection with the security deposit.
DATED
at Charlottetown, Prince Edward Island, this 18th day of February, 1997.BY THE COMMISSION:
Linda Webber, Chair
Debbie MacLellan, Commissioner
Clayton Bulpitt, 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.