Docket A-008-01
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Wayne & Hilda McQuaid against Order No. 01-119 of the Director of Residential Rental Property dated June 19, 2001.
Order LR01-08BEFORE THE COMMISSION
on Thursday, the 26th day of July, 2001
Maurice Rodgerson, Panel Chair
James Carragher, Commissioner
Kathy Kennedy, Commissioner
Order
Participants1. Appellant:Wayne McQuaid and Hilda McQuaid
(Ms. McQuaid present)
Geoffrey D. Connolly, Legal Counsel
(present)2. Respondents:
Rob MacKay and Tammy MacKay
(both present)
Reasons for Order
1. Introduction
The Lessees (Respondents Rob MacKay and Tammy MacKay) occupied a mobile home in the Circle M Trailer Park from the summer of 1996 until January of 2001. The park is owned by the Appellants, Wayne McQuaid and Hilda McQuaid.
The Lessees notified the Lessors in writing that they planned to sell the mobile home.
In a discussion between Rob MacKay (Lessee) and Hilda McQuaid (Lessor) the Lessees were informed that the mobile home had to be removed from the present site by either the Lessees or the future purchasers of the mobile home.
The Lessors followed this request up with a letter (Exhibit E-2) to the real estate agent acting on behalf of the Lessees. It reaffirmed the position of the Lessors that the lease did not have a sublet provision and the trailer will have to be removed at the time of closing.
The Lessees state the demand of the Lessors is restricting the potential sale of their mobile home and is in contravention of the Rental of Residential Property Act, specifically as it applies to mobile homes.
The Lessors state the lease is month-to-month and therefore cannot be sublet to a new purchaser. Further, the Lessor plans to upgrade the park and is taking the opportunity of the Lessees moving to require that the mobile home they occupied be moved from the park.
The Lessees filed an APPLICATION FOR ENFORCEMENT OF STATUTORY OR OTHER CONDITIONS OF RENTAL AGREEMENT (Exhibit E-1) which resulted in a hearing before the Director of Residential Rental Property.
The Director issued Order 01-119 (Exhibit E-7)
This Order was appealed by Geoffrey Connolly on behalf of the Appellants (Exhibit E-8).
That appeal is the subject of this hearing.2. Issue
The issue is the ability of the Lessors to require a mobile home to be removed from the park upon sale, vs. the ability of the Lessees to transfer the mobile home site to the purchaser of their mobile home.
3. Decision
The legislation requires the Commission to conduct this hearing on a de novo basis.
At the outset, the Commission recognizes the rather unique and challenging issue involved in this matter. A mobile home, located in a park, has some obvious differences from other rental units. While the rental unit may or may not be owned by the lessees, the actual site is normally leased.
The Rental of Residential Property Act recognizes the special circumstances of mobile homes and includes a specific section under the title of STATUTORY CONDITIONS RESPECTING MOBILE HOMES AND SITES.
The Commission is bound by the legislation within which it operates, and must reach decisions based on the legislation as it is written and enacted by the Legislative Assembly. The Commission cannot add words to the legislation, nor can it subtract words. However, the Commission must interpret and apply the language of the legislation.
In this particular appeal, two sections of the Rental of Residential Property Act have been advanced for consideration.
Section 6.5(1) states:
"Where a fixed term rental agreement is for a period greater than six months, the lessee may assign or sublet the premises subject to the consent of the lessor, which consent will not unreasonably be withheld or charged for unless the lessor has actually incurred expense in respect of the grant of consent, in which case he shall be entitled to recover such reasonable expenses as were actually incurred."
The Standard Form of Rental Agreement was used in this case (Exhibit E-5). The section titled FIXED TERM is not filled in and the Lessor stated in her testimony that month-to-month leases are the only type she will sign. The Lessees have not claimed that the lease was a fixed term. The Commission is satisfied the lease arrangement is, in fact, on a month-to-month basis and the provision in Section 6.5(1) therefore does not apply in this case.
However, the term month-to-month lease does not mean that the lease automatically terminates at the end of each month and must be specifically renewed. In fact, the Rental of Residential Property Act clearly recognizes month-to-month leases and sets out various provisions covering such leases, including the method of terminating such an arrangement for a variety of reasons.
No evidence has been presented to the Commission that either party followed these provisions in this case.
The Lessees state they informed the Lessor of their intent to sell the mobile home, not any intent to terminate the lease. The Lessor testified the rental agreement was terminated, but offered no evidence to support this statement, and did not disagree with the Lessees contention that rental cheques have, and continue to be cashed although the lessees no longer live in the unit.
The Commission is satisfied a month-to-month lease of the mobile home site remains in effect.
Section 12 of the Rental of Residential Property Act also provides insight into this matter.
Section 12 states:
"A lessor shall not terminate a rental agreement, whether of fixed or indeterminate duration, other than for a cause set out in Section 13, 14 or 15."
This section makes it clear that the lessor "shall not" terminate the lease agreement without good cause, and the three sections mentioned outline the various conditions upon which a lease can be terminated.
Upon reviewing the pertinent sections, the Commission is satisfied that the tests set out in Sections 13, 14 and 15 have neither been applied, nor met in this case.
The Commission now turns its attention to Section 7.
The preamble to Section 7 states:
"In addition to the statutory conditions set out in Section 6, the following statutory conditions apply in respect of an agreement to rent a mobile home site or a mobile home."
The Commission notes that this section does not diminish any of the statutory conditions of Section 6 and those conditions remain available, in so much as they apply, to both lessors and lessees. In other words there are remedies for issues related to good behavior, quiet enjoyment, conditions of premises, and other such statutory conditions of Section 6, regardless of how Section 7 is interpreted.
Subsection 1 of Section 7 states:
"Other than withholding, on reasonable grounds, his consent to a subletting of the mobile home site, the lessor shall not restrict in any way the right of a lessee of a mobile home site from selling, renting or otherwise parting with the possession of a mobile home owned by the lessee."
The legislators obviously turned their attention to the matter of subletting by including a provision that permits the lessor, on reasonable grounds, to withhold consent to a subletting of the mobile home site.
If, as the Lessor contends, and the Commission agrees, the provision of Section 6.5(1) does not apply, then for the purpose of this matter the section reads "the lessor shall not restrict in any way the right of a lessee of a mobile home site from selling, renting or otherwise parting with the possession of a mobile home owned by the lessee."
Section 7, for the most part, enunciates a number of specific protections and responsibilities of the lessee.
Subsection 1 is designed as a protection for the lessee and it is an extremely powerful section. Terms such as "shall not", and "in any way" make it so.
The wording of this section is so strong that in the opinion of the Commission the only grounds for the Lessor interfering with the lessee selling, renting or otherwise parting with possession would be if reasonable grounds exist for the Lessor to withhold consent to a subletting of the mobile home site.
It has already been determined that this subletting provision does not apply in this particular situation.
Subsection 2 of Section 7 contains a prohibition against a Lessor receiving "any compensation or benefit from any negotiations of the lessee to trade, sell, rent or otherwise part with possession of a mobile home situate on that site…"
Once again, the intent is to protect the interests of the Lessee of a mobile home site.
The Lessees own the mobile home, and Section 7 gives them the right to sell, rent or otherwise part with possession without any unreasonable restriction from the Lessor.
The Commission also notes that the Lessees purchased the mobile home in the present park, and did not have any difficulty in obtaining a rental agreement from the Lessor. In fact they state that the reason they sought a lease agreement was to satisfy a mortgage requirement.
The Lessees also expressed a willingness to cooperate with the Lessor and other occupants of the mobile home park by ensuring the home is sold to reputable buyers.
The law prohibits the Lessor from restricting the selling or renting of the mobile home. Exhibit E-2, a letter from the Lessor's legal representative to the real estate agent with whom the Lessees' mobile home is listed, attempts to restrict the sale of the home by stating it cannot remain in the park.
The letter also serves as evidence that a buyer was found for the mobile home, but the sale did not proceed. It is contended by the Lessees that the disagreement over the transfer of the site interferes with the sale of the home.
It stands to reason that a mobile home located on a site in an established mobile home park is more saleable than a mobile home that must be removed from the site.
The Lessees bought the home in the park, and a reasonable person would assume that they could resell the home in the same manner.
The Commission is therefore of the opinion that the actions of the Lessor are in violation of Section 7.
It must again be noted that the Lessor would have access to the various other provisions of the Rental of Residential Property Act to terminate a lease for appropriate reasons.
One reason raised in the appeal hearing was a stated desire on the part of the Lessor to "upgrade the park". Under direct testimony the only plan appears to be to replace some mobile homes with mini-homes. A formal application has not been made to terminate the lease on this basis, and whether such a plan would be an acceptable reason has not been addressed in this decision.
Section 8 permits an application to the Director and the Director to investigate the matter and in the case of subsection (d) "authorize the subletting or assigning of the rental agreement".
Based on the legislation, and the facts of the case, and for the reasons outlined, the Commission determines the Lessees may assign the mobile home site.Order
WHEREAS Geoffrey Connolly, on behalf of Wayne McQuaid and Hilda McQuaid, filed an appeal dated July 11, 2001 against a decision of the Director of Residential Rental Property;
AND WHEREAS the Commission heard the appeal in Charlottetown on July 19, 2001;
NOW THEREFORE, for the reasons given in the annexed Reasons for Order;
IT IS ORDERED THAT
- The Appeal is denied;
- The Lessees may assign the mobile home site without the consent of the Lessor.
DATED at Charlottetown, Prince Edward Island, this 26th day of July, 2001.
BY THE COMMISSION:
Maurice Rodgerson, Panel ChairJames Carragher, Commissioner
Kathy Kennedy, 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.