LR22-52

Tenant appeal · rent increase. Outcome: denied. Both the appeal and the cross-appeal are denied and Director’s Order LD22-179 is confirmed. The Issue The Commission must decide whether the requested rent increases are justified.

Linked prior order: LD22-179

Order text

Docket LR22044 and LR22046 – Tenants of 9 (R and S) Imperial Street, Kensington, PE v. WEL Holdings Limited September 15, 2022 Compared and Certified a True Copy
(Sgd.) Susan Jefferson Commission Administrator Corporate Services and Appeals Dockets: LR22044 and LR22046
Order: LR22-52
- and - IN THE MATTER of an appeal, under section 25 of the Rental of Residential Property Act (the “Act”), filed by Fred Beairsto and Connie Arsenault against Order LD22-179 issued by the Director of Residential Rental Property and dated June 3, 2021. (CROSS-APPEAL) BEFORE THE COMMISSION ON Thursday, September 15, 2022.
Panel Chair - Erin T. Mitchell, Commissioner
M. Douglas Clow, Vice-Chair
Hearing Date: Wednesday, July 20, 2022
ORDER
IN THE MATTER of an appeal, under section 25 of the Rental of Residential Property Act (the “Act”), filed by WEL Holdings Limited against
Order LD22-179 issued by the Director of
Residential Rental Property and dated June 3,
2021.

Orders of The Island Regulatory and Appeals Commission Order LR22-51– Page 2 Docket LR22044 and LR22046 – Tenants of 9 (R and S) Imperial Street, Kensington, PE v. WEL Holdings Limited September 15, 2022 This appeal asks the question of whether the Director of Residential Rental Property (the “Director”) erred in permitting a greater than allowable rent increase for two units in a three-unit building.
BACKGROUND
Fred Beairsto and Connie Arsenault (the “Tenants”) rent units R and S located at 9 Imperial Street, Kensington, PE (the “Premises”), from WEL Holdings Limited (the “Landlord”). Rent for the units in question range from $1,112.51 to $1,121.89 per month.
On or about February 25, 2022, the Landlord provided Form 10 rent increase notices to the Tenants. On March 1, 2022, the Landlord filed with the Director a Form 12 application to increase the rent above the percentage allowed by Regulation.
In Order LD22-179 dated June 3, 2022, the Director ordered that:
a) the maximum allowable monthly rent for the Premises shall be as follows:
Unit Rent Effective Date R $1,271.59 July 1, 2022 S $1,271.59 July 1, 2022 The Landlord appealed. The Tenants cross-appealed.
The Commission heard the appeal and cross-appeal on July 20, 2022. The hearing was conducted by way of telephone conference call. The tenant Fred Beairsto participated by way of telephone conference call. The tenant Connie Arsenault did not participate. Pat Morrison and Don MacLean represented the Tenants. Rodney Peters and David Webster represented the Landlord.
Disposition
Both the appeal and the cross-appeal are denied and Director’s Order LD22-179 is confirmed.
The Issue The Commission must decide whether the requested rent increases are justified.
Analysis
Part IV of the Act governs rent increases, and sets out the factors the Director shall consider in determining whether a rent increase beyond the annual allowable amount is justified. Subsection 23(8) reads:

Orders of The Island Regulatory and Appeals Commission Order LR22-51– Page 3 Docket LR22044 and LR22046 – Tenants of 9 (R and S) Imperial Street, Kensington, PE v. WEL Holdings Limited September 15, 2022 Factors considered At the hearing both parties are entitled to appear and be heard and the Director shall consider the following factors:
(a) whether the increase in rent is necessary in order to prevent the lessor sustaining a financial loss in the operation of the building in which the premises are situate;
(b) increased operating costs or capital expenditures as advised by the lessor;
(c) the expectation of the lessor to have a reasonable return on his capital investment;
(d) such other matters as may be prescribed by the regulations.
One additional matter is set out in the Rental of Residential Property Act Regulations (the “Regulations”):
20. Additional factors
The following additional matter is to be considered under subsection 23(8) of the Act: The date and amount of the last rental increase. (EC10/89) The Tenants submitted written submissions and evidence prior to the hearing (pages 306 to 362 of the file documents), and made extensive submissions at the hearing of the appeal.
The Landlord submitted written submissions and evidence prior to the hearing (pages 262 to 305 of the file documents), and also made extensive submissions at the hearing of the appeal.
The Commission has considered all of the submissions and the evidence before it, and agrees with the Director in all findings. The Commission adopts the Director’s reasons as set out in Order LD22-179.
Going forward, the Commission adopts the traced approach used by the Director in Order LD22-179 for a refinanced mortgage where the funds in equity removed is unrelated to the upkeep, operation or improvement of the Premises.
Accordingly, Director’s Order LD22-179 is confirmed in its entirety.
NOW THEREFORE, pursuant to the Island Regulatory and Appeals Commission Act and the Rental of Residential Property Act;
IT IS ORDERED THAT
1. The appeal and cross-appeal are denied.

Orders of The Island Regulatory and Appeals Commission Order LR22-51– Page 4 Docket LR22044 and LR22046 – Tenants of 9 (R and S) Imperial Street, Kensington, PE v. WEL Holdings Limited September 15, 2022
2. Director’s Order LD22-179 is confirmed in its entirety. The maximum allowable monthly rent for the Units shall be as follows:
Unit Rent Effective Date 9R $1,271.59 July 1, 2022 9S $1,271.59 July 1, 2022
DATED at Charlottetown, Prince Edward Island, Thursday, September 15, 2022.
BY THE COMMISSION:
(sgd. Erin T. Mitchell)

Panel Chair - Erin T. Mitchell, Commissioner
(sgd. M. Douglas Clow)

M. Douglas Clow, Vice-Chair
NOTICE
Subsections 26(2), 26(3), 26(4) and 26(5) of the Rental of Residential Property Act provides as follows:
26. (2) A lessor or lessee may, within fifteen days of the
decision of the Commission, appeal to the court on a question of law only.
(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.