Docket A-005-98
A-006-98Order LR98-6
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by David Dodds (the Lessor) and by Paula R. Price (the Lessee) against Order No. LD98-122 of the Director of Residential Rental Property dated July 15, 1998.BEFORE THE COMMISSION
on Thursday, the 10th day of September, 1998.
Ginger Breedon, Vice-Chair
Norman Gallant, Commissioner
Weston Rose, Commissioner
Order
Participants1. Appellant:David Dodds
(the Lessor)2. Appellant:
Paula R. Price
(the Lessee)
Reasons for Order
1. Introduction
David Dodds and Paula R. Price are separately appealing Order LD98-122 (Exhibit E-14) issued by the Director of Residential Rental Property (the Director) on July 15, 1998. Order LD98-122 directed that the Lessee pay the Lessor the sum of $1,695.90 in rent owed and interest, and that payment or payment arrangements suitable to the Lessor be made on or before August 15, 1998.
In viewing the Lessor's Notice of Appeal (Exhibit E-15), the Commission noted that the Notice identifies the date of the Director's Order as June 15, 1998 and the date of the Lessor's appeal as July 6, 1998. Based on the date of receipt of the Notice (August 6, 1998), the Commission believes these dates are in error by one month in each case and should have been July 15, 1998 and August 6, 1998 respectively. The Commission accepts that the errors on the dates were simply an oversight and will hear this appeal.
The Lessor, in his appeal, indicates his reasons for appealing are that due process was denied and the rest would follow.
The Lessee's Notice of Appeal (Exhibit E-16) dated August 6, 1998 indicates that she feels she does not owe any money to the Lessor, much less interest on any such money.
In view of the fact that both parties to the Order of the Director appealed this Order, the Commission decided to hear both appeals at the same time on August 28, 1998 at the Commission's offices in Charlottetown, Prince Edward Island. Those present at the hearing were David Dodds and Paula R. Price.
2. Background
Documents from the office of the Director pertaining to the appeal were tabled at the hearing and identified as Exhibits E-1 through E-18. These documents had been previously circulated to the parties to the appeal.
The Lessor tabled an additional Exhibit which consisted of eight typewritten pages of reference notes for his presentation at the hearing. The Commission accepted this additional exhibit and identified it as E-19.
In opening his case, the Lessor indicated that he had witnesses he wished to call but they were unavailable for the hearing. He suggested that, as a result, he could have difficulty presenting his case.
The Commission pointed out to the Lessor that it is his responsibility to have his witnesses present and that this whole matter has been dragging on for a long time. The Commission directed that the hearing should continue and that it would decide at the end of the hearing whether it required further information.
The overall facts of the case may be summarized as follows.
The Lessee took up residence in a rental unit at 165 King Street, Charlottetown, P.E.I., in January 1994. She subsequently incurred some rental arrears which were still outstanding when she moved out of the unit in October, 1997.
During the tenancy on September 3, 1994, the Lessor and Lessee signed an agreement (Exhibit E-7) which provided for interest of one percent (1%) to be added to the monthly rent in the event of late payment of rent. This agreement was in addition to the standard conditions deemed to be in affect with any oral rental agreement. Section 6.8 (Statutory Conditions) of the Rental of Residential Property Act makes provision for the inclusion of a condition involving interest on late rent.
Following the move out of the Lessee from the rental unit, the Lessor made an Application for Enforcement of Statutory or Other Conditions of Rental Agreement (Exhibit E-1) to the Director seeking an order to have the outstanding rent and interest paid by the Lessee. The Director subsequently held a hearing and issued Order LD98-122 directing that the Lessee pay the Lessor $1,695.90 in outstanding rent and interest.
In presenting his appeal of this Order before the Commission, the Lessor identifies a number of matters he felt had not been properly considered by the Director in arriving at the amount of outstanding rent and interest. The first of these was the $20 charge the Lessor applied against the Lessee's August 1995 rent payment. The Lessor claims this charge is justified because the Bank would not cash the first cheque from the Lessee and he had to go back and get another cheque from her. He feels the $20 charge is fair compensation for his costs and time.
The Lessor also questions the reduction in the rent payment allowed by the Director for the month of October 1997. The Lessor argues that the Lessee should be responsible for the rent for the full month of October 1997, or at least more than the Director provided since she did not move out on October 21, 1997.
The Lessor further questions the Director's approach of stopping the interest charges on the late rent effective the date the rental agreement was ended. He pointed out that interest on outstanding taxes continue to accrue until the tax is paid.
The Lessor finally argues that the Lessee sublet the rental unit for the remaining days in October 1997 after she moved out. He believes that because the Lessee passed the keys for the unit to a neighbouring tenant in the building when she moved out instead of to the Lessor, the Lessee sublet the unit to the neighbouring tenant. As a result, she should pay rent for that time as well as the month of November 1997.
In presenting her case, the Lessee acknowledges that she may owe some rent for the rental unit at 165 King Street. She also agrees that it is her signature on the September 3, 1994 Agreement (Exhibit E-7) though she does not particularly remember signing it. She questions the interest charges on the late rent as calculated by the Director.
The Lessee argues that while she may have owed some rent, she had done significant work on the unit for which she did not receive credit. The Lessee points out the example of the furnace work in April 1997 at a cost of $37.40 which the Director did not give her credit for in calculating rent owing.
The Lessee notes that much of the rental arrears problems happened in 1994, and that she believes she made some rental payments in cash at that time but does not have receipts to confirm this. She points out that she then began to pay by cheque to ensure a record would be available. The Lessee finally notes that she may owe two to three months rent but that this should be reduced because of the expenditures she made on the unit.
3. Decision
Based on the evidence filed, all the evidence presented by the parties at the August 28, 1998 hearing and the provisions of the Rental of Residential Property Act and its Regulations, the Commission denies the appeals and confirms the Director's order with some variances.
In reaching its decision the Commission agrees with the Director that it is difficult to analyse and reconcile the rent payment records of the Lessor and Lessee. The Commission does, however, after careful scrutiny of those records, agree with the Director's calculation of the rent owing at the time of the termination of the rental agreement as $1,051.27.
In confirming the Director's calculation of rent owing, the Commission gave consideration to the following matters brought forth by the Lessee and Lessor.
1. Neither the Act nor the standard rental agreement provide for the charging of a service charge for problem situations in handling rental cheques. The Commission therefore agrees with the Director's decision not to allow the $20 service charge applied by the Lessor to the Lessee's August 1995 rent.
2. As with the Lessor's service charge, neither the Act nor the standard rental agreement provide for a lessee to have repairs made to the unit and subsequently charge these costs back to the lessor. The Commission therefore agrees with the Director's decision to not allow the Lessee to deduct $37.40 for repairs to the furnace from her April 1997 rent payment.
3. The Commission does not believe the Lessee sublet the rental unit when she passed the keys to the neighbouring tenants. The Lessor agrees that the neighbouring tenants were going to move into the unit occupied by the Lessee when she moved out at the end of October. Therefore, while the passing of the keys to the neighbouring tenants might be somewhat inappropriate, the Commission does not see it as a sublet by the Lessee. The Lessor was aware that this took place and, if he did not want it to continue, he could have simply sought the return of the keys from the neighbouring tenant.
4. The Commission accepts the Director's decision on the rent for the month of October 1997. The testimony at the hearing by the Lessee was that she moved out at midnight on the date directed in the Director's order. The Lessor testified that he believes she actually moved out some minutes after midnight and she should, therefore, owe rent for the next day. The Commission does not accept that a few minutes difference in moving out should constitute another full day of tenancy.
5. Notwithstanding the Lessee's belief that she had paid some rent in cash, the Commission could not substantiate this without a record to confirm such payments.
On the matter of interest, the Commission is satisfied that a proper written agreement was entered into by both parties on September 3, 1994 and that, as a result, interest can be charged on late rent. The Commission also believes, however, that the provisions for interest in the signed agreement can not be applied to late rent which had been incurred prior to the agreement being entered into. That is, the interest provisions can only be applied to the late rent incurred after September 1994. No interest charges can be applied to late rent incurred before that time because the deemed standard rental agreement does not provide for such charges. Clearly, if the Lessor and Lessee wished to have the interest charges extended to the already accrued late rent, the signed agreement should have specifically provided for this.
As a result, the Commission varies the interest charge of $644.63 calculated by the Director as this charge includes interest on the late rent payments incurred prior to September 1994 for the tenancy period after that date. The Commission has calculated the interest charge on the late rent incurred after September 1994 as $189.90.
In calculating the interest owed, the Commission is aware of the Lessor's concern that the Director capped the interest charges at the time the rental agreement was terminated in October 1997. The Commission further notes, however, that this has no effect on the Commission's interest charge calculations because, with the receipt of a lump sum payment in April 1997, there is no longer any outstanding late rent incurred after September 1994. The question of whether late charges should be charged after April 1997 is, therefore, in this case, irrelevant.
The Commission is satisfied that it has sufficient information available to make a decision on the appeals.
For the above reasons, the Commission denies the appeals by the Lessor and Lessee and confirms the decision of the Director with variances.
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by David Dodds (the Lessor) and by Paula R. Price (the Lessee) against Order No. LD98-122 of the Director of Residential Rental Property dated July 15, 1998.
Order
WHEREAS
David Dodds and Paula R. Price each filed an appeal on August 6, 1998, against a decision of the Director of Residential Rental Property;AND WHEREAS
the Commission heard the appeals in Charlottetown on August 28, 1998;NOW THEREFORE
, for the reasons given in the annexed Reasons for Order;IT IS ORDERED THAT
1. The appeals are denied;
2. Order LD98-122 of the Director of Residential Rental Property is confirmed with the following variances:
- The Lessee is to pay the Lessor the sum of $1,241.17 which is made up of $1,051.27 in rent and $189.90 in interest; and,
- The payment or payment arrangements suitable to the Lessor to be made on or before October 5, 1998.
DATED
at Charlottetown, Prince Edward Island, this 10th day of September, 1998.BY THE COMMISSION:
Ginger Breedon, Commissioner
Norman Gallant, Commissioner
Weston Rose, 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.