Charlottetown tenant awarded $7,800 in illegal rent increase case

The Island Regulatory and Appeals Commissionrecently awarded $7,800 to a tenant who was able to prove that her landlord was charging her nearly double the amountpaid by aprevious renter.

The tenant first took her complaint to IRACon March 29, 2019, arguing that the increase was illegal. The tenant won her case and the landlord appealed.

During the appeal, the commission heard that the tenant agreed to pay $1,500 per month unheated for the unit. The landlord told the hearingthe unit was vacant when they purchased the duplex in 2016and theyfelt $1,500was an appropriate price, based on having spoken with some international students.

Previous rent was $800

The tenant testified shepaid that amount for several monthswhen shediscovered what prior tenantshad been paying. The tenantalsofound an online post that listed the unit for $800per month unheated.

The landlord arguedtheyhad no idea what the rent was before they bought it.The landlord also took issue with the tenant forbringing up the previous rent 11 months into the lease.

The commission'sdecision explains that rent increases are controlled and limited by legislation. This applies whether a tenantchanges or the unit remains vacant for a time, or if the building is sold.

Lack of knowledge not a defence

The commission wrote, "In Prince Edward Island, the Rental of Residential Property Act ... provides for a system of rent control whereby rent runs with the residential unit. When a lessee surrenders possession of that unit to the lessor, that rate of rent still remains fixed to that unit."

A landlord can only increase rentonce every 12 months and that increase can only bethe amountallowed by IRAC. Right now that's between 1.5 per centand 2 per centdepending how the unitis heated.

A landlord can apply for a rent increase beyond that, but would have to prove need. IRAC will consider factors such as increased operating costs or capital expenditures and return on investment.

The landlord in this case didn't have permission for the large increase andargued they weren't familiar with the Residential Property Act. The commission responded saying "lack of familiarity of the act does not in any way mitigate the requirements."

More cases coming forward

The appeal was denied on May 30, 2019. IRACordered that landlord hasto refund$7,800 and that the monthly rent for the unit remain at $800 until a legal increase is allowed.

A spokesperson for IRAC told CBCNewsthatdue to the current rental crisis on the Island, the number of complaints from tenants about illegal rent increases and the number of landlords applying to increase rent beyond the allowable increase has risen significantly.

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