Docket A-004-98
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Alf and Chrissy Blanchard (the Lessors) against Order No. LD98-110 of the Director of Residential Rental Property dated July 14, 1998.
Order LR98-5BEFORE THE COMMISSION
on Tuesday, the 25th day of August, 1998.
Ginger Breedon, Vice-Chair
Norman Gallant, Commissioner
Clayton Bulpitt, Commissioner
Order
Participants1. Appellant:Alf and Chrissy Blanchard
(the Lessors)Represented by:
Donald K. MacKenzie
(Legal Counsel)2. Respondent:
William and Theresa Laybolt
(the Lessees)
Reasons for Order
1. Introduction
Alf and Chrissy Blanchard are appealing Order LD98-110 of the Director of Residential Rental Property issued by John L. Keizer, a delegated Residential Rental Property Officer of the Director (the Residential Rental Property Officer) on July 14, 1998. Order LD98-110 directed that the Lessors' application seeking rent of $660.00 from the Lessees for the month of March 1998 for a rental unit at 86A Norwood Road, Charlottetown, P.E.I. was denied.
The Lessors appealed the Director's Order on August 5, 1998 (Exhibit E-5) for the following stated reasons:
The Real Property Officer (sic):
1. misinterpreted the law in relation to the requirement for written termination;
2. misinterpreted the law in relation to the timing of the required notice;
3. failed to consider evidence put before him;
4. made a decision wholly inconsistent with other decisions of the Director of Residential Rental Property which was thereby prejudicial to the Appellants.
The Commission heard the appeal on August 20, 1998 at the Commission's offices in Charlottetown, Prince Edward Island. Those present at the hearing were Donald K. MacKenzie, Legal Counsel representing the Lessors, and Theresa Laybolt on behalf of the Lessees.
Mr. MacKenzie indicated that his clients, the Blanchards, could not be present for the hearing as they are currently residing in British Columbia. He further indicated that where he would be providing testimony on matters passed on to him by the Blanchards, he could only provide to the Commission what the Blanchards had told him. Mr. MacKenzie noted that this would constitute hearsay evidence, and that his clients wished to apologize for not being able to be present at the hearing to provide their testimony in person.
2. Background
Documents from the office of the Director of Residential Rental Property pertaining to the appeal were tabled at the hearing and identified as Exhibits E-1 through E-7. These documents had been previously circulated to the parties to the appeal.
Mr. MacKenzie tabled an additional Exhibit he wished to refer to during the hearing. This Exhibit, identified by the Commission as E-8, is a copy of Order LD98-084 of the Director of Residential Rental Property dated May 25, 1998.
In presenting the case for the Lessors, Legal Counsel referred to the stated grounds for the appeal he had identified in the Notice of Appeal (Exhibit E-5) filed by him on behalf of the Lessors. He then went through each of the four identified reasons for the appeal starting with the timing of the Lessees' notice of termination.
The Lessors' Legal Counsel noted that Section 11(2)(b) of the Rental of Residential Property Act provides the following direction regarding termination notices:
11(2) A notice of termination is to be served by a 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;
He further indicated that his clients are adamant that the Lessees' telephoned them on February 1, 1998 to inform them that they would be vacating the rental unit effective February 28, 1998. He pointed out that it is his opinion that a notice given on February 1, 1998 does not meet the requirements to provide a time period "of at least one month before the due date for the payment of rent" which, in this case, is the first day of the month. It is the Lessors' Legal Counsel's contention that such notice would have had to been given on January 31, 1998 if the requirements of Section 11(2)(b) of the Act are to be met.
Legal Counsel for the Lessors then addressed the third reason presented for the appeal – (the Director) failed to consider evidence put before him. Legal Counsel drew the Commission's attention to the last paragraph on page 4 of the Order LD-110 (Exhibit E-4) where the Residential Rental Property Officer states that the Lessors acted upon the Lessees' communication that they would be vacating the rental unit effective February 28, 1998, by showing the unit during February to prospective lessees. Legal Counsel further advised that he believes the Residential Rental Property Officer based at least some of his final decision on the fact that, by showing the rental unit during February to prospective lessees, the Lessors were acknowledging that they had received proper notice of termination from the then current Lessees.
Legal Counsel testified he had pointed out to the Residential Rental Property Officer at the hearing before him that this action by the Lessors was based on the requirements of Section 29 of the Act which are:
29. If the lessee abandons the premises or terminates the rental agreement otherwise than in accordance with this Act, the lessor shall mitigate any damages that may be caused by the abandonment or termination to the extent that a party to a contract is required by law to mitigate damages.
Legal Counsel's position is that his clients, the Lessors, were simply attempting to mitigate damages by showing the rental unit in February and not, in any way, accepting that proper notice of termination of the rental agreement had been provided by the Lessees.
In response to a question from the Commission, the Legal Counsel for the Lessors indicated that the Lessors had not been successful in renting out the affected rental unit during March and that new lessees did not move in until April 1, 1998.
Legal Counsel then addressed the first reason identified in the Notice of Appeal, that being the requirement for a written termination notice. Legal Counsel pointed out that Section 18(1) of the Act very clearly establishes that a notice of termination must be in writing. Section 18(1) reads as follows:
18(1) A lessor or lessee shall give notice to terminate in writing in the form prescribed by regulation.
Legal Counsel acknowledged that the Lessors had been advised verbally by the Lessees that they were leaving the rental unit effective February 28, 1998. He was equally clear, however, that the Lessors did not receive a written notice as required by Section 18(1) of the Act and, as a result, a legal notice of termination could not and did not exist.
Legal Counsel also pointed out that the Residential Rental Property Officer had included in his decision reference to his belief that Sections 11 and 18 of the Act provide the right for a lessor to ask or demand that a lessee give notice of termination in writing. Legal Counsel strongly refuted this position and referred to the involved Sections which he believes clearly place the onus on the party giving the notice of termination to do so in writing.
Finally, Legal Counsel for the Lessors addressed the fourth reason identified in the Notice of Appeal, this being that the decision made in Order LD98-110 was inconsistent with other decisions of the Director and, thereby, prejudicial to his clients, the Lessors. In expanding on this, Legal Counsel drew the Commission's attention to an earlier Order of the Director (Exhibit E-8) which dealt with another matter relating to the rental arrangements between the two parties to this appeal. Legal Counsel pointed out that in this Order, which involved the disposition of the security deposit, another Residential Rental Property Officer had rejected the Lessors' claim to retain the security deposit for purported damages and rent owing. The basis for this rejection was that the Lessors had not filed the proper written notice of intention to retain the security deposit, as required under Section 10(5) of the Act.
Legal Counsel for the Lessors questioned how this previous decision could be fairly compared to the decision being appealed in this hearing, where the involved Residential Rental Property Officer accepted a verbal communication as an appropriate notice of termination when, like the security deposit notice, the Act requires the termination notice to be in writing. Legal Counsel further questioned how this inconsistency could be justified and that its existence is directly prejudicial to his clients' interests.
In presenting the case for the Lessees, Mrs. Laybolt indicated that she had been renting units since she was eighteen years old, and had always given notices of termination verbally and had never encountered any problem in doing so. She also pointed out the Lessors lived downstairs from her unit and, that if they had wanted a written notice, why did they not ask her as she would have been happy to provide one.
The Lessee further testified that her conversation with the Lessors, in which she informed them that the Lessees would be moving out effective February 28, 1998, had taken place on January 31, 1998 and not February 1, 1998 as identified by the Lessors. She also questioned the date of March 10, 1998 identified by the Residential Rental Property Officer on page 2 of Order LD98-084 (Exhibit E-8) dealing with the security deposit on the affected unit. The Lessee stated this date should be April 10, 1998.
The Lessee's final testimony was that she did not know she was required to provide a written notice of termination and, if she had known or had been asked, she would have done so.
3. Decision
Based on the evidence filed, all the evidence presented by the parties at the August 20, 1998 hearing and the provisions of the Rental of Residential Property Act and its regulations, the Commission allows the appeal.
In reaching this decision, the Commission recognizes the merit of the arguments put forward by Legal Counsel for the Lessors pertaining to the provisions of Section 29 of the Act, which requires a lessor to take action to mitigate damages, and the inconsistency between two Orders of the Director of Residential Rental Property (LD98-084 and LD98-110, exhibits E-8 and E-4 respectively) in dealing with the required provision of written notices under the Act.
The Commission also understands the arguments put forward by Legal Counsel for the Lessors concerning the timing involved in the service of a notice to terminate, as provided in Sections 11(1), 11(2)(b) and 18(1) of the Act. The Commission is aware that there is a question of interpretation involved in this matter and further notes that there is disagreement between the two parties on what date – January 31, 1998 or February 1, 1998 – the verbal communication took place between the Lessees and Lessors. For these reasons and because there is significant other grounds on which to arrive at a decision, the Commission has decided not to give consideration to the question of timing in making its overall decision on the appeal.
The Commission's main consideration in reaching its decision on this appeal is the issue of a written notice of termination. The Commission notes that the Lessees and Lessors agree that a written notice of termination of rental agreement was not provided by the Lessees in this case. As pointed out by Legal Counsel for the Lessors, the Act is very clear in Section 18(1) that a notice of termination must be in writing. The Act does not provide any qualifiers or exceptions to this requirement.
Since a written notice of termination was not provided by the Lessees in this case, the Commission finds the Lessees are responsible for the rent on the unit for the month of March 1998. The Commission understands the rent amount for that month is $660.00.
In making its decision on this appeal, the Commission wishes to note that it accepts that the Lessees acted in good faith in verbally informing the Lessors that they would be moving out of the rental unit effective February 28, 1998. However, the Commission, like any other organization or person, is bound by the law as it is written. In this case, the law is very clear that a notice of termination must be in writing.
The Commission therefore allows the appeal and makes the following order.
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Alf and Chrissy Blanchard (the Lessors) against Order No. LD98-110 of the Director of Residential Rental Property dated July 14, 1998.
Order
WHEREAS
Donald K. MacKenzie, on behalf of Alf and Chrissy Blanchard, filed an appeal against a decision of the Director of Residential Rental Property dated July 14, 1998;AND WHEREAS
the Island Regulatory and Appeals Commission heard the appeal in Charlottetown on August 20, 1998;NOW THEREFORE
, for the reasons given in the annexed Reasons for Order;IT IS ORDERED THAT
1. The appeal is allowed;
2. Rent in the amount of $660.00 is owed by the Lessees to the Lessors;
3. The Lessees are to make the payment or payment arrangements suitable to the Lessors for the amount owing on or before September 25, 1998.
DATED
at Charlottetown, Prince Edward Island, this 25th day of August, 1998.BY THE COMMISSION:
Ginger Breedon, Vice-Chair
Norman Gallant, 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:
(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.