LD24-161

Tenant application · security deposit. Outcome: granted. A. The Landlord shall pay the Tenant $3,531.19 by June 15, 2024.

Linked prior order: LR23-69

Order text

Orders of the Director of Residential Tenancy
Docket 24-226 May 21, 2024
Introduction
[1] On April 15, 2024, the Tenant filed a Tenant Application to Determine Dispute (Form 2(A)) (the “Application”) with the Residential Tenancy Office (the “Rental Office”), requesting a return of the balance of the security deposit and double the original security deposit, pursuant to the Residential Tenancy Act (the “Act”).
[2] On May 9, 2024, a teleconference hearing was held before a Residential Tenancy Officer (the “Officer”). The Tenant and a Landlord representative (the “Representative”) participated in the hearing.
Issue to be Decided
i. Is the Tenant entitled to a return of the security deposit and double the original security deposit?
Summary of the Evidence
[3] On November 1, 2023, the parties entered into a written fixed-term tenancy agreement for the Rental Unit, which converted to a month-to-month agreement. Rent was $3,500.00 due on the first day of the month. A security deposit of $3,500.00 was required and paid. The Tenant vacated on February 29, 2024, upon mutual agreement by the parties.
Tenant’s Evidence and Submissions
[4] The Tenant submitted several documents into evidence including a written submission, messages between the parties, a copy of the tenancy agreement, a video of the Rental Unit, and banking documents.
[5] The Tenant stated the Rental Unit was clean and undamaged when he vacated and that the security deposit was not returned within 15-days of the end of the tenancy. He stated part of the security deposit in the amount of $2,750.00 was returned in two e-transfers on March 17 and March 20, 2024. The Tenant requested the rest of the security deposit in the amount of $750.00 to be returned but it was not returned by the Landlord.
[6] The Tenant stated he filed the Application on April 15, 2024, and on that date the Landlord sent the Tenant an e-transfer for $750.00, but the Tenant was unsure if he should accept it or continue with the Application. He stated the e-transfer was cancelled before he decided if he was going to accept it or not.
Landlord’s Evidence and Submissions
[7] The Landlord did not dispute the Tenant’s testimony and that he is not seeking to retain any of the security deposit. He stated he is not sure why the e-transfer for $750.00 was cancelled as he did not cancel it. The Landlord stated he would e-transfer the remaining security deposit plus interest in the amount of $759.13 to the Tenant after the hearing. The Landlord stated ordering a return of double the security deposit to the Tenant is extreme.
Post Hearing Evidence and Submissions
[8] On May 17, 2024, the Tenant confirmed that he had received $759.13 from the Landlord.

Orders of the Director of Residential Tenancy

Analysis
Is the Tenant entitled to a return of the security deposit and double the original security deposit?
[9] The Application is made in accordance with clause 75 of the Act and is seeking a finding that the Landlord breached clause 40(1) of the Act. The Tenant initiated the Application and bears the onus of proving their claim on a balance of probabilities. The relevant law is as follows:
40. Return of security deposit
(1). Except as provided in subsection (2) or (3), within 15 days after the date the tenancy ends or is assigned, the landlord shall either (a) issue payment, as provided in subsection (5), of any security deposit to the tenant with interest calculated in accordance with the regulations; or (b) make an application to the Director under section 75 claiming against the security deposit.
Landlord may retain amount from security deposit (2). A landlord may retain from a security deposit an amount that (a) the Director has previously ordered the tenant to pay to the landlord; and (b) remains unpaid at the end of the tenancy.
Retention by landlord, other circumstances (3). A landlord may retain an amount from a security deposit if (a) at the end of the tenancy, the tenant agrees in writing that the landlord may retain the amount to pay a liability or obligation of the tenant; or (b) After the end of the tenancy, the Director orders that the landlord may retain the amount.
Consequences of non-compliance (4). Where a landlord does not comply with this section, the landlord (a) shall not make a claim against the security deposit; and (b) shall pay the tenant double the amount of the security deposit.
[10] The Island Regulatory and Appeals Commission (the “Commission”) in Order LR23-69, made comments as it relates to section 40 of the Act:
“Subsections 40(2) and (3) are the only exceptions to the provisions contained in section
40. The Commission finds that there is no exemption from the rigours of section 40…”
[11] The Officer finds the tenancy ended on February 29, 2024, by mutual agreement, based on the documentary evidence and testimony of the parties. The Landlord then had until March 15, 2024, to either return the security deposit and interest or file an application (Form 2(B)) with the Rental Office to retain the security deposit. The evidence establishes that the Landlord exercised neither option required by clause 40(1) of the Act. Further, the evidence and the testimony provided does not reveal a set of facts that would exempt the Landlord under clauses 40(2) or (3).
[12] Therefore, the Officer concludes that the Landlord did not comply with clause 40(1) of the Act, and is not exempted under clauses 40(2) or (3). Such non-compliance of clause 40(1) triggers clause 40(4) of the Act. As a result, the Tenant is entitled to a return of double the security deposit on the principal amount of $3,500.00 and interest on the principal amount.

Orders of the Director of Residential Tenancy

[13] The Tenant’s compensation is as follows:
Item Amount Interest on $3,500.00 (Nov. 1/23 – Mar. 17/24 $31.19 Double the security deposit $3,500.00 Total $3,531.19
Conclusion
[14] The Application is allowed.
[15] The Landlord shall pay the Tenant $3,531.19 by June 15, 2024.
[16] This Order will be served to the parties by e-mail.
IT IS THEREFORE ORDERED THAT
A. The Landlord shall pay the Tenant $3,531.19 by June 15, 2024.
DATED at Charlottetown, Prince Edward Island, this 21st day of May, 2024.
(sgd.) Mitchell King Mitchell King Residential Tenancy Officer
NOTICE
Right to Appeal
This Order can be appealed to the Island Regulatory and Appeals Commission (the “Commission”) by serving a Notice of Appeal with the Commission and every party to this Order within 20 days of this Order.
If a document is sent electronically after 5:00 p.m., it is considered received the next day that is not a holiday. If a document is sent by mail, it is considered served on the third day after mailing.
Filing with the Court
If no appeal has been made within the noted timelines, this Order can be filed with the Supreme Court of Prince Edward Island and enforced as if it were an order of the Court.