Reid v. Hazel View Properties Inc., 2022 NSSM 19

2022 Claim No. 514357 IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Citation: Reid v. Hazel View Properties Inc., 2022 NSSM 19 BETWEEN: CORTNEY REID Appellant/Tenant - and - HAZELVIEW PROPERTIES INC. Respondent/Landlord Hearing Date: May 18, 2022 Appearances: Tenant – Cortney Reid Landlord – Michelle Duffney ORDER and DECISION [ 1 ] This is an appeal of an Order of the Director dated April 14, 2022, ordering vacant possession of the rental unit at 16 Bently Drive, Apartment 110, Halifax, Nova Scotia, effective May 3, 2022.

As well, the Tenant was ordered to pay the sum of $4526.84 to the Landlord. [ 2 ] At the hearing before me the Tenant made reference to the effects of the Covid pandemic and the financial hardships she has endured, the rent increases that have been applied by the Landlord, and that she had been a tenant for some seven years and has been a helpful and contributing member of the apartment complex and its community . [ 3 ] Of particular significance at the hearing was the issue of the rental increases and how they were implemented.

This is an important issue since, depending on whether or not those increases were validly implemented, it may affect the amount outstanding and, may even affect whether or the Tenant was actually in arrears. Obviously, this depends on the amounts in question and the timing of those amounts in arrears. [ 4 ] In evidence was the tenant ledger for this Tenant up to May 19, 2022. At various points it shows that she was in arrears for 15 days or more.

Most typically, that is sufficient for a landlord to seek and be granted vacant possession, even if at the time of the hearing before this Court or the Residential Tenancies Director, the tenant is no longer in arrears. [ 5 ] At the hearing before me on May 18th, the Landlord representative indicated that the arrears stood at $550.88 as of that day. That

amount took account of payments made by the Tenant on May 5th of $2000, May 17 of $3000, and May 18 of $731. [ 6 ] I turn the evidence and documents regarding to the issue of the rental increases. The following

summary provides the relevant chronology: • January 2020 – The Landlord issued to the Tenant a Notice of Rental Increase to be effective on the Anniversary Date of June 1, 2020. The rent at January 2020 was $1,635 per month. By this Notice it would go to $1,695, a $60 per month increase.

I note that I was not provided with a copy of this Notice but the Tenant did not dispute that it was received and I accept that it was. • March 25, 2020 – The Landlord issued a one page update document with the heading “Support for Residents During COVID 19.” Among other things, the notice includes the following: In addition, we wanted to let you know that we have stopped the collection of rental increases and will not be collecting any further rental increases during this period of crisis commencing with the April rent payment.

Residents with upcoming rental increases will be notified before their rental increases are due. Rent will continue as per the current rent that you have been paying for the past 12 months. • June 1, 2020 – On the Tenant Ledger, residential rent is shown, for the first time, to be $1,695. For each month from June, 2019 – May, 2020, it was $1,635.

On the same day - June 1, 2020, the Tenant Ledger has an entry showing a credit of $60 with a description “COVID-19 Relief Credit.” That accounting methodology in the Tenant Ledger continues for July - December of 2020. • November 25, 2020 – The Nova Scotia Minister of Municipal Affairs and Housing, Chuck Porter, issued a Direction of the Minister under a declared State of Emergency.

Part 2 of that Direction prohibited residential landlords from increasing rent payable by an existing tenant by an amount more than 2% of the amount that was payable by the tenant immediately before September 1, 2020. • November 26, 2020 – A letter was sent from the Landlord to the Tenant which reads as follows: Dear Cortney, RE: 2020 RENTAL INCREASE REINSTATEMENT As you are aware, you have been receiving a credit of $60 per month for the rental increase that you received for June 1, 2020, your last Anniversary Date.

As this increase was established before Sept 1, 2020, and you are obligated to be paying this back on your Anniversary Date. As Hazelview (Timber Creek) internally was applying a credit due to COVID 19, this rental increase has no bearing on the new Gov’t legislation of only 2% per year. Your next rental increase will have to adhere to the 2% maximum while the State of Emergency/Pandemic is in effect. As of January 1, 2021, Hazelview will no longer be crediting your account and your rent will be as follows: January 1 st rent $1,695.00 Please ensure that your bank has sufficient funds for the January 1 st payment.

Regards, Hazelview Properties • November 27, 2020 – The Nova Scotia Minister of Municipal Affairs and Housing, Chuck Porter, issued a Revised Direction of the Minister under a declared State of Emergency.

Part 2 of that Revised Direction prohibited residential landlords from increasing rent payable by an existing tenant by an amount more than 2% of the amount that was payable by the tenant immediately before September 1, 2020. • January 1, 2021 – The Tenant Ledger shows rent for $1,695 but there is no longer the separate COVID Relief Credit of $60. • January 11, 2021 – The Landlord delivered a Rental Increase Notice to the Tenant effective the Anniversary Date of June 1, 2021, with the rent going from $1,695 to $1,728.90. • January 20, 2022 – The Landlord delivered a Notice of Rent increase to the Tenant effective on the Anniversary Date of June 1, 2022, increasing the rent from $1,728.90 to $1,763.48. [ 7 ] From this set of facts the following issue arises: did the Notice of Rental Increase given in January 2020 have continuing validity in light of the Notice from the Landlord of March 25, 2020, such that the Landlord could validly reinstate the $60.00 increase communicated to the Tenant in January, 2020. [ 8 ] For the reasons that follow, I have concluded that the Landlord could not validly reinstate the $60 increase.

In my opinion, the notice of January, 2020, was rendered invalid by the notice of March 25, 2020. Analysis [ 9 ] Of central importance in this analysis is

Section 11 of the Residential Tenancies Act , RSNS 1989, c. 401 , which reads:

Restrictions increasing rent 11

(1) A landlord shall not increase the rent to a tenant for the twelve-month period following the commencement of a week-to-week, month-to-month, year-to-year or fixed-term date.

(2) Where a landlord intends to increase the rent payable after the first twelve-month period, the landlord shall give the tenant a notice in writing stating the amount and effective date of the increase in the case of (

a) a year-to-year lease, four months prior to the anniversary date; (

b) a month-to-month lease, four months prior to the anniversary date; (

c) a week-to-week lease, eight weeks prior to the anniversary date; (

d) a manufactured home space lease, seven months prior to the anniversary date, and in no case shall a landlord increase the rent to the tenant more than once in a twelve-month period and without proper notice prior to the anniversary date in each subsequent year. (2A) Notwithstanding subsection (2), where the landlord is a housing association within the meaning of the Co-operative Association Act , the landlord may establish a common anniversary date for the increase of rent payable by tenant in accordance with the regulations and that date is thereafter the anniversary date respecting tenancies in the buildings owned by the association and the notice periods referred to in that subsection apply with respect to those tenancies.

(3) In the case of fixed-term lease, the lease shall indicate the amount and effective dates of any increases and in no case shall the rent be increased to a tenant more than once in a twelve-month period.

(4) The deletion or withdrawal of a service is deemed to constitute a rental increase.

(5) Where a landlord discontinues a service, privilege, accommodation or thing and such discontinuance results in a reduction of the tenant’s use and enjoyment of the residential premises, the value of such discontinued service, privilege, accommodation or thing is deemed to be a rent increase for the purpose of this Section.

(6) Nothing in this

Section applies to increases or decreases based solely on the income of a tenant pursuant to a public housing program. [ 10 ] I would also mention the Interim Residential Rental Increase Cap Act , SNS 2021, c. 22 , which continues the 2% maximum rental increase cap until December 31, 2023.

The Minister’s Direction would have terminated on February 1, 2022. [ 11 ] The Landlord’s position was that the increase itself was effective on the Anniversary Date of June 1, 2020, and all that actually happened is that the $60.00 credit that had been applied as of June 1, 2020, was no longer to be applied as of January 1, 2021. [ 12 ] From the Tenant’s part she states that in November, 2020, she received a rental increase effective five weeks later and then received another increase that very month to be effective June 1, 2021.

She questions how that can be legally valid. [ 13 ] The basic requirements for implementing a rental increase are contained in the Residential Tenancies Act in

Section 11 .

The essential requirements are: • A written notice • Given four months prior to the anniversary date • Stating the amount of the increase • Stating the effective date of the increase • In no case shall a landlord increase the rent to the tenant more than once in a twelve-month period • In no case shall a landlord increase the rent without proper notice prior to the anniversary date in each subsequent year (“proper notice” being adherence to the first four bullets above). [ 14 ] Does what the Landlord did here comply with this requirement to give a tenant notice in writing stating the amount and effective date of the increase? [ 15 ] If the question was asked in January, 2020, the answer would be yes.

However, once the notice went out in March, it is my view that it nullified the validity of the January notice. [ 16 ] The reason for this is that there was no longer any effective date of the increase.. A non-interested reader of the March 25 notice would conclude that there would be no rental increase from April until at least the “period of crises” ended, to use the words in the Landlord’s notice.

In March, 2020, that was unknown. [ 17 ] The requirement that there be an effective date is an absolute requirement for a notice to be valid under s. 11 of the Residential Tenancies Act . [ 18 ] But the Landlord argues, at least as I understand it, that there actually was a $60 rent increase effective on the June 1, 2020

Anniversary date, and what was taking place was that they were applying a $60 credit and because of this, the increase should be seen as having taken place as at June 1, 2020. [ 19 ] With respect, I do not accept this characterization. [ 20 ] For one thing, nowhere in the March 25, 2020, notice is there any reference to a credit being applied.

Indeed, the last sentence in the paragraph states: “ Rent will continue as per the current rent that you have been paying for the past 12 months .” [ 21 ] That statement contradicts the position that the rent was being increased on June 1, 2020. [ 22 ] “Rent” is defined in the Act as follows: 2 (g) “Rent” means money or other value payable in consideration of the right to possess or occupy residential premises. [ 23 ] The “money payable” on a monthly basis for this Tenant between June 2020 and December 2020 was $1,635 (which, actually, had been the monthly amount since June, 2019).

Money is liquid, and like water, if you add some amount to a cup and then immediately take the same amount it away, you have exactly the same amount you started with. [ 24 ] It is often said that the law looks to substance and not to form. Here the substance of the matter is that the rent did not increase on June 1, 2020. There is also a legal doctrine that says a party cannot both approbate and reprobate. In plain language, it means that a party cannot both give and take away.

How a landlord does its accounting in the tenant ledger cannot change what it has communicated in the March Notice and how an objective reader would understand those words. [ 25 ] I cannot accept that, in light of the January and March notices, there was a rent increase in June, 2020. [ 26 ] In my view, the rent increase was to be effective on January 1, 2021 and it is the letter of November 26 which clearly advises of that effective date of the increase, to $1,695. But now the notice does not meet another requirement of

section 11 – that it be given four months’ prior to the anniversary date. [ 27 ] All of the requirements of s. 11 must be satisfied for a rental increase notice to be valid. [ 28 ] I also would note subsections (4) and (5) of

Section 11 quoted above:

(4) The deletion or withdrawal of a service is deemed to constitute a rental increase.

(5) Where a landlord discontinues a service, privilege, accommodation or thing and such discontinuance results in a reduction of the tenant’s use and enjoyment of the residential premises, the value of such discontinued service, privilege, accommodation or thing is deemed to be a rent increase for the purpose of this Section. [ 29 ] While a rental credit would not be considered a “service” it certainly could be considered a “accommodation.” [ 30 ] By analogy to subsection (5), the discontinuance of a credit, would be seen as a rent increase.

The effective date of that discontinuance of the credit was January 1, 2021, and that therefore was the effective date of the rent increase of $60 per month. [ 31 ] Clearly, the notice of that discontinuance, of November 2020, did not meet the requirement of being four months before the June 1, 2020, Anniversary date. [ 32 ] On the foregoing analysis, I conclude the increase applied January 1, 2021, was invalid. [ 33 ] As further support for this conclusion, I refer to the Nova Scotia

Interpretation Act , RSNS, 1989, c. 235 Section 9(5) which reads:

(5) Every enactment shall be deemed remedial and interpreted to insure the attainment of its objects by considering among other matters (

a) the occasion and necessity for the enactment; (

b) the circumstances existing at the time it was passed; (

c) the mischief to be remedied; (

d) the object to be attained; (

e) the former law, including other enactments upon the same or similar subjects; (

f) the consequences of a particular

interpretation; and (

g) the history of legislation on the subject. [ 34 ] I note particularly the reference to attainment of objects in the preliminary words and in sub-clause (

d) as well as (f), the consequences of particular

interpretation. [ 35 ] In my view there are at least two objectives of the four months prior to the anniversary date requirement for rental increase. One is to give the tenant some advance notice to prepare for an increased amount of rent. This is a general objective and works hand-in-hand with the other requirement that there will in no case be more than one increase within a 12 month period.

[ 36 ] The second objective, which is more specific, is intended to allow the tenant to consider whether or not they will stay in those premises at the intended new rental level or whether they will find new premises. [ 37 ] Bearing in mind that the notice period a tenant is required to give in Section 10(1)(

a) is three months before the expiration of the rental year, this gives the tenant a full month to consider the intended increase and whether to accept it by doing nothing or decide to give notice of termination. [ 38 ] I am mindful that these requirements would have likely been considered by the legislators as providing some degree of protection to tenants when the provisions of the Rent Review Act were eliminated a number of years ago. [ 39 ] An

interpretation of

Section 11 in favour of what the Landlord purports to do here would or certainly could have the effect of nullifying these objectives. Here for example, the Tenant had a little over one month notice of when the actual rent was being increased, rather than four months. [ 40 ] As well, at that point she presumably lost her ability to potentially look at other rental possibilities prior to February 1, 2020.

While there was no evidence that the Tenant took any such steps, I would maintain that the point is still legitimate in the overall consideration of the objectives sought to be attained by the legislative provisions. [ 41 ] Also, having an increase on January 1, 2021, and June 1, 2021 offends the prohibition against having more than one increase in a 12 month period. [ 42 ] All of the preceding analysis is, in my view, consistent with and not affected by any the provisions contained in the Direction of the Minister of November 27, 2020, or the Interim Residential Rental Increase Cap Act . [ 43 ] The facts here also potentially engage the doctrine of promissory estoppel which, in basic terms, prevents a party from seeking to enforce their strict legal rights, after having previously represented that they would not do so, particularly where the other party has reasonably relied on the representations.

It is recognized however that the party may re-institute their strict legal rights upon giving reasonable notice of their intention to do so. The difficulty with applying that here is that s. 11 of the Act must still be complied with and, for the reasons outlined above, the notice given in November, 2020, does not so comply.

Most glaringly, it would then mean there were two increases with a 12-month period. [ 44 ] I find the implementation of the rent of $1,695 as of January 1, 2021, to be invalid and must be set aside. [ 45 ] Before leaving this issue, I should acknowledge that what the Landlord did in March of 2020 was certainly well-intentioned and commendable, and very much consistent with the prevailing attitude at the time of the emerging pandemic that “we are all in this together” and we all need to do our part.

Unfortunately for the Landlord, the manner in which it was done leaves me with no alternative but to come to the conclusion I have. While it probably goes without saying, the role of any court, including the Small Claims Court is to apply the law, both statute law and common law.

Section 11 of the Residential Tenancies Act and its several requirements must be complied with in order to validly implement a rental increase. [ 46 ] Turning to the subsequent rental increase notices – the one done in January of 2021, effective June 1, 2021, and in January 2022, effective June 1, 2022, are, in my view, effective although the amounts need to be adjusted because of the invalidity of the purported 2020/2021 increase. That is to say, the increase of January 2021, effective June 1, 2021, will be for rent of $1,635 with a 2% increase. I calculate that increase to be $1,667.70.

That would be the effective monthly rent from June 1, 2021 to May 1, 2022. [ 47 ] The effective monthly rent as of June 1, 2022, would be $1,701.05, after applying a 2% increase. [ 48 ] I have prepared a revised Tenant Ledger which is attached as a

Schedule to this Decision. It covers the period January 1, 2021, up to May 30, 2022.

In preparing this, I would note the following: • I started with the amount shown for the Balance on January 1, 2021 of the Landlord’s Tenant Ledger - $635.00; • I used the revised rent amount of $ 1,635.00 for the monthly rent amount for January – May, 2021; • On June 1, 2021, the rent goes up to $ 1,667.70, reflecting a 2% increase; • On June 1, 2022, it will go up to $1,701.05; • I adjusted the late payment charges to reflect the revised rent amounts; • I have dispensed with including any reference to free parking or free storage.

This shows up every month and shows charges for garage/parking and a charge for storage of respectively $30 and $20 each and corresponding credits in identical amounts.

For some reason, unknown to me, but not dissimilar to what took place with the COVID Relief Credit, these items are entered in the ledger every month but ultimately, they are a “wash” and make no difference in the bottom line amount; • I have included a payment of $550.88 which the Tenant indicates she paid on May 30. [ 49 ] Based on this calculation, the revised Tenant Ledger shows a credit balance in favour of the Tenant of $1,098.48 as at May 30, 2022.

Given the potential for a mathematical or other error in my calculation in the revised Ledger, I will allow either or both parties 20 days following the date of this decision to make submissions to me in that regard. [ 50 ] As will be seen, the Tenant was still in arrears on a number of occasions, even with the revised rent figures. The Landlord’s assertion that this was an ongoing issue indeed is substantiated.

[ 51 ] Accordingly, the request for vacant possession is granted. The Landlord representative indicated July 31 st for that date assuming that rent was paid for June and July. I have no way to effectively monitor or supervise that and I will simply adopt that July 31 st date. [ 52 ] By the time the parties receive this decision, the rent for June will be posted and potentially paid. There will be a credit balance to account for. There will also be the security deposit of $740.00 to account for, following July 31, 2022.

At this stage, and in light of the revised rent amounts, there is nothing outstanding by the Tenant. Therefore, there will be no payment order. [ 53 ] There will, as stated, be an order for vacant possession. ORDER IT IS HEREBY ORDERED that the tenancy herein will terminate as of July 31, 2022, and the Tenant shall give up vacant possession of the premises known as Apartment 110, 16 Bently Drive, Halifax, Nova Scotia, on July 31, 2022. DATED at Halifax, Nova Scotia, this 1st day of June, 2022. MICHAEL O ’HARA ADJUDICATOR

SCHEDULE – REVISED TENANT LEDGER

SCHEDULE Transaction Description Total Payment Balance Date 01/01/2021 $ 635.00 01/01/2021 Jan Rent $ 1,635.00 $ 2,270.00 01/04/2021 Payment $ 635.00 $ 1,635.00 01/08/2021 Payment $ 650.00 $ 985.00 02/01/2021 Feb Rent $ 1,635.00 $ 2,620.00 02/05/2021 Payment $ 1,000.00 $ 1,620.00 03/01/2021 Mar Rent $ 1,635.00 $ 3,255.00 03/01/2021 Payment $ 1,245.00 $ 2,010.00 03/02/2021 Dec - March $ 65.40 $ 2,075.40 late fees $ 2,075.40 03/03/2021 Payment $ 330.00 $ 1,745.40 03/05/2021 Payment $ 1,325.00 $ 420.40 03/23/2021 Payment $ 422.80 -$ 2.40 04/01/2021 April Rent $ 1,635.00 $ 1,632.60 04/05/2021 Payment $ 25.00 $ 1,607.60 04/06/2021 April late fee $ 16.35 $ 1,648.95 04/19/2021 Payment $ 1,610.00 $ 38.95 05/01/2021 May Rent $ 1,635.00 $ 1,673.95 05/03/2021 Payment 171.95 $ 1,502.00 05/03/2021 Payment $ 1,400.00 $ 102.00 05/07/2021 Payment $ 295.00 -$ 193.00 06/01/2021 June Rent $ 1,667.70 $ 1,474.70 06/14/2021 Payment $ 1,728.00 -$ 253.30 07/01/2021 July Rent $ 1,667.70 $ 1,414.40 07/26/2021 Payment $ 1,728.00 -$ 313.60 08/01/2021 Aug Rent $ 1,667.70 $ 1,354.10 08/11/2021 Payment $ 1,000.00 $ 354.10 08/16/2021 Payment $ 728.00 -$ 373.90 09/01/2021 Sep Rent $ 1,667.70 $ 1,293.80 09/20/2021 Payment $ 1,728.00 -$ 434.20 10/01/2021 Oct Rent $ 1,667.70 $ 1,233.50 10/14/2021 Payment $ 1,728.00 -$ 494.50 11/01/2021 Nov Rent $ 1,667.70 $ 1,173.20 11/15/2021 Payment $ 828.00 $ 345.20 11/23/2021 Payment $ 900.00 -$ 554.80 12/01/2021 Dec Rent $ 1,667.70 $ 1,112.90 12/20/2021 Payment $ 728.00 $ 384.90

01/01/2022 Jan Rent $ 1,667.70 $ 2,052.60 01/12/2022 Payment $ 1,000.00 $ 1,052.60 02/01/2022 Feb Rent $ 1,667.70 $ 2,720.30 02/28/2022 late fees, Dec - Feb $ 50.04 $ 2,770.34 03/01/2022 March Rent $ 1,667.70 $ 4,388.00 04/-1/2022 April Rent $ 1,667.70 $ 6,055.70 04/11/2022 Payment $ 1,840.00 $ 4,215.70 04/13/2022 Payment $ 700.00 $ 3,515.70 05/01/2022 May Rent $ 1,667.70 $ 5,183.40 05/03/2022 Late fee-May $ 16.68 $ 5,200.08 05/05/2022 Payment $ 2,000.00 $ 3,183.40 05/17/2022 Payment $ 3,000.00 $ 183.40 05/19/2022 Payment $ 731.00 -$ 547.60 05/30/2022 Payment $ 550.88 -$ 1,098.48