Docket A-011-01
IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Adam Affleck against Order No. LD01-172 of the Director of Residential Rental Property dated August 23, 2001.
Order LR01-11BEFORE THE COMMISSION
on Monday, the 22nd day of October, 2001.
Maurice Rodgerson, Panel Chair
Norman Gallant, Commissioner
Arthur Hudson, Commissioner
Order
Participants1. Appellant: Adam Affleck, (in person)2. Respondent: Bill and Sally Devine, (by telephone)
Reasons for Order
1. Introduction
The Appellant, Adam Affleck, is appealing Order LD01-172 (Exhibit E-9) of the Director of Residential Rental Property issued on August 23, 2001.
The Commission heard this appeal October 2, 2001. Adam Affleck was present at the hearing and Bill and Sally Devine participated via telephone.
2. Background
The Lessee, Adam Affleck, rented a house located at 2 Carrington Road in Stratford, P.E.I. from the Lessors, Sally and Bill Devine. A one-year rental agreement was signed and a rent of $1,500.00 per month was agreed upon.
Three people occupied the home and, for a time at least, shared the expenses; however the Lessee was the only tenant to sign the rental agreement.
Mr. Affleck contends he rented the house with the understanding he could use the basement for his business, Furniture Medic, and it appears the rent payments were made from an account assigned to Furniture Medic.
He states that in conversation with the Lessors he received verbal agreement to convert the basement into a workshop and purchased the supplies necessary to do so. While there was not a written agreement covering this activity, he says that when he asked about recovering the costs of the work he was told it would be worked out later. The basement was divided off with open studs, and the Lessee says he added chipboard material to create walls, added several benches and upgraded the lighting.
Mr. Affleck also raised the matter of heating costs. He stated the house was advertised for rent at $1,600.00 per month and he asked that the Lessors include heat in that charge. A rent of $1,500.00 per month without utilities was agreed. He says the Devine's told him the heating costs would in the area of $100.00 a month, however it was more than three times that amount.
There was also an issue with water quality, and the Lessee states he had to have a plumber come and look at the well and replace a valve because of murky water. He also had furnace repairs carried out at his expense. (Exhibits E-16, E-17, E-18)
Mr. Affleck admits some cheques did not clear because of insufficient funds but he provided replacement cheques, and believes that the two months rent that is still outstanding should be assigned to him to cover the costs of work done in the basement and the furnace and pump repairs.
The Devine's state they have a signed rental agreement and the Lessee violated that agreement by not paying two months rent. They stated that no assurances were offered regarding the cost of heating and the only point that was stressed was that it was the Lessee's responsibility.
They contend the Lessee did not contact them about the problems with the water or the furnace, and if they had been contacted they would have ensured the repairs were made because the home is under warranty.
They were aware the Lessee operated a furniture repair business and had some understanding that the basement would be used as part of his business, but they were told that any work, in terms of closing in the rooms, would be temporary and the materials would be removed when the Lessee vacated the premises. The Devine's stated that at no time did they agree to even consider covering the costs of such changes.
The Lessors state they were more than patient with the Lessee in dealing with seven NSF cheques (Exhibit E-7) over the short period he rented the house. They also contend he agreed to pay the two months rent owing when he visited the house at the time the Lessors were on the Island.
The Devine's say they also gave the Lessee a further break by agreeing to let the lease terminate one month early because the Lessee told them he was getting married.
3. Decision
ISSUES
The Commission will address three issues raised at the hearing: outstanding rent; furnace and pump repairs; renovations to the basement.
Outstanding Rent - It is clear that a rental agreement was signed. Neither party contests this fact and a copy of a signed rental agreement is before the Commission (Exhibit E-5). The agreement is not a complete reproduction of the current Standard Rental Agreement, and the pages are not initialed, but the agreement does indicate the amount of the rent and that the utilities are not included. Again these facts are not in contention.
It is obvious, given seven NSF cheques and two months rent not paid over an eleven month period, that the Lessee was having difficulty meeting the rent payments; however, that in no way diminishes the Lessee's obligation to pay.
It is the Commission's decision that rent in the amount of $3,000.00 is owed by the Lessee. The lease terminated in May 2001 and the rent payments are for a period prior to that, which means the payments have been outstanding for at least six months. The Commission therefore orders that rent in the amount of $3,000.00 be paid by October 30, 2001.
Furnace and Pump Repairs – The Lessee testified at the hearing that he paid for repairs to the furnace and to the water pump. The Commission permitted him additional time to provide receipts for this work. A receipt was provided from B&P Plumbing and Heating (Exhibit E-16) for furnace repairs at 2 Carrington. A canceled cheque payable to B&P Plumbing and Heating (Exhibit E-17) from Furniture Medic for the amount of the bill was also provided.
An invoice from Blair Gillis Plumbing and Heating Ltd. (Exhibit E-18) was also submitted to the Commission.
The Commission is satisfied that the Lessee did pay for repairs to the furnace and the water pump. These payments do not fall under the obligations assumed by the Lessee; however, it was his responsibility to immediately notify the Lessors of any such problems and they would be directly responsible for repairs.
In order to award such costs to Mr. Affleck, the Commission would have to be satisfied that efforts to contact the Lessors to have the repairs completed had failed and therefore the Lessee had to take his own action. The Commission has received no evidence to lead it to believe that the Lessee contacted the Devine's about the problems. Given the age of the house, and the fact it was on the market for sale, it would be expected that the Lessors would take prompt action to repair such problems.
As the Lessee assumed responsibility for the repairs without authorization from the Lessors the Commission is not prepared to order re-imbursement.
Basement Alterations - A written agreement, or addendum to the Rental Agreement, concerning the use of the basement would certainly have been appropriate, and a wise consideration for both parties. In the absence of such an agreement the Commission is left with considerable divergence of opinion as to what was discussed, what was agreed, what occurred, and the value of the changes.
It appears unreasonable that a business would make alterations to a facility without some written assurance the costs of those renovations would be recovered at the end of the lease term. To do otherwise is to assume considerable risk. The Lessors admit to being aware that some portion of the business would be carried out in the home, and the rent payments were drawn on a Furniture Medic account. They also state that the placement of material (chipboard) on the studs was known but the understanding was the material would be removed at the end of the lease. The Commission notes that while the Lessors took steps to have a rental agreement signed it is silent on the basement issue. Obviously some discussion took place, and the Devine's would have more than a passing interest in renovations/business operations in the basement of a relatively new, executive style home.
Mr. Affleck provided two receipts from Bagnall's Building Supplies Limited (E-14 and E-15). The dates (first month of the lease) would suggest a reasonable period of time in which materials would be purchased for putting up walls in the basement, but delivery instructions are absent from both the invoices presented to the Commission – one is for a cash sale and the other COD. The copies filed with the Commission don't indicate the company or person making the purchases.
The Devine's statement dated October 10, 2001 (Exhibit E-19) states at least one of the invoices concerns materials bought and paid for by another individual and delivered to another site.
The receipts indicate a total of 45 sheets of Solid Waterproof OSB (1440 square feet or 180 feet of 8 foot wall), which seems to be an excessive quantity for covering walls in a basement.
One receipt (Exhibit E-14) also indicates 30 bundles of super seal 20 year black luster shingles, 2-10 KG plastic cement, and white aluminum front flashing which have no application to the type of renovations discussed at the hearing. The Lessee, in presenting the invoices, stated several other items on the bills did not apply to his claim.
For these reasons the Commission is reluctant to accept the receipts as a true and accurate indication of the cost of any changes to the basement.
It would be reasonable, that a business expecting to recover costs would keep accurate records of those costs, with specific details about items purchased, costs and payments made.
It is the responsibility of the Lessee to obtain permission for any changes to the rental unit and can be held accountable for any damage to the unit.
In the absence of a written agreement, absolute disagreement over any verbal discussions, and questionable invoices, the Commission is not prepared to award any costs to the Lessee for the basement alterations.
In his follow-up written statement (Exhibit E-20), Mr. Affleck responds to the Devine's questioning of the Bagnall's invoices by stating, "If one of them is not correct then the original is still there in their computer system. I would be happy to go and get it if need be”.
In Mr. Affleck's Notice of Appeal (Form 17) "No re-imbursement for shop (leasehold imp.)” was listed as a main reason for the appeal. In the opinion of the Commission these receipts should have been made available at the hearing. The Commission is satisfied that Mr. Affleck had, and was given, ample opportunity to produce such receipts. It should also be noted that no evidence of an agreement to have the Devine's reimburse Mr. Affleck was presented.
The Devine's statement (Exhibit E-19) says the Lessee told them he "would be putting up chipboard walls and that would be it”, and "guaranteed that they would be taken down upon his departure from the house and the lease”. They also state an electrician had to be hired "to undo the amateur job that had been done with the wiring”. The Commission therefore assumes the lighting installed by the Lessee is available to him, and the chipboard material could still be removed from the house.
In summation, the Commission denies the appeal and orders that the Lessee pay rent in the amount of $3,000.00.
Order
WHEREAS Adam Affleck filed an appeal dated September 13, 2001 against a decision of the Director of Residential Rental Property;
AND WHEREAS the Commission heard the appeal in Charlottetown on October 2, 2001;
NOW THEREFORE, for the reasons given in the annexed Reasons for Order;
IT IS ORDERED THAT
- The appeal is dismissed;
- The Lessee owes rent in the amount of $3,000.00 to the Lessors; and
- Payment to the Lessors is to be made on or before October 30, 2001.
DATED at Charlottetown, Prince Edward Island, this 22nd day of October, 2001.
BY THE COMMISSION:
Maurice Rodgerson, Panel ChairNorman Gallant, Commissioner
Arthur Hudson, 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.