Order LR00-05 - Rental - Allowable Rent Increase for 2001 (Sept. 18, 2000)

Order LR00-05

IN THE MATTER of the Rental of Residential Property Act, R.S.P.E.I. 1988, Cap. R 13.1,

-and-

IN THE MATTER of establishing the allowable percentage rent increase for 2001, pursuant to Sub-section 23. (1) of the Rental of Residential Property Act.

BEFORE THE COMMISSION
on Monday, the 18th day of September, 2000.

Wayne D. Cheverie, Q.C., Chair
Ginger Breedon, Vice-Chair
Maurice Rodgerson, Commissioner
Elizabeth MacDonald, Commissioner

Order

WHEREAS pursuant to the provisions of Sub-section 23. (1) of the Act, the Commission is required to establish the allowable percentage of rent increase for 2001;

AND WHEREAS pursuant to the provisions of Sub-section 23.(2) of the Act, the Director of Residential Rental Property has invited written representations for lessors and lessees to assist in establishing the annual prescribed percentage rent increase; which request was by way of a notice in the printed media.

AND WHEREAS in setting the prescribed percentage rent increase the Commission has considered the following: representations received pursuant to Sub-section 23. (2) of the Act, the vacancy rates for the province, a review of the economic outlook for the province, a review of the Consumer Price Index forecasts for 2001, a weighted model of estimated cost components for 2000 and 2001 and a comparison over the past eight years of the rent increases allowed, the increase in the consumer price index and the increase of weekly wages and salaries;

AND WHEREAS the Commission has carefully considered the increase in costs as a result of the significant rise in the price of furnace oil for lessees as well as for lessors who pay for the heating of premises.

AND WHEREAS the Commission recognizes that lessors who provide heating services have incurred a greater increase in operating costs than the lessors who do not pay for such services as a condition of the rental agreement.

AND WHEREAS the Commission has concluded that separate rates of rent increase are necessary for 2001 in recognition of this distinction.

AND WHEREAS the Commission is also aware of the recent volatility in the heating fuel market which makes it difficult to project with any certainty future heating fuel costs, and it also recognizes that allowable rent increases, if applied by the lessor, become part of the ongoing rent for the involved units.

The Commission concludes these conflicting circumstances dictate establishment of an allowable rate which addresses, over the longer term, the current increased fuel costs.

NOW THEREFORE, pursuant to the Rental of Residential Property Act,
IT IS ORDERED THAT

1. The allowable percentage rent increase for 2001 for unheated premises shall be one and one quarter (1.25) percent.

2. The allowable percentage rent increase for 2001 for heated premises shall be three and three quarters (3.75) percent.

DATED at Charlottetown, Prince Edward Island, this 18th day of September, 2000.

BY THE COMMISSION:

Wayne D. Cheverie, Q.C. Chair
Ginger Breedon, Vice-Chair
Maurice Rodgerson, Commissioner
Elizabeth MacDonald, Commissioner