A Prince Edward Island landlord failed to establish damage and electricity claims against a tenant’s security deposit after providing no statutory inspection reports and no reliable basis for an added heat-pump charge. In Shi Xia Xing v. Noor Fatima, 2026 PEIRAC 16, the Island Regulatory and Appeals Commission ordered the return of the full $950 deposit plus $23.66 in interest.
The March 30 decision dismissed the landlord’s appeal but varied the earlier order after confirming that the tenant had paid an additional $200 deposit. The resulting payment was due by April 7, 2026; the reasons do not establish whether it was subsequently made.
Deposit deductions disputed
The tenant rented a room with shared facilities under a fixed-term agreement beginning in April 2025. The parties later agreed to end the tenancy on August 31, 2025. The landlord sought $300 for damage and $109.88 for a share of additional electricity costs attributed to heat-pump use.
The tenant disputed responsibility for the alleged damage, including the prior condition of fixtures and marks on the walls. The landlord had not completed signed move-in or move-out inspection reports. Instead, the landlord relied on photographs, oral evidence and an estimated repair amount.
The Rental Office had directed repayment of the deposit and interest. On appeal, the commission had to decide whether the landlord had proved a legal and evidentiary basis to retain money. The landlord bore that burden on a balance of probabilities.
Missing inspections left a gap in proof
The commission explained that statutory condition inspections are mandatory for tenancy agreements beginning on or after April 8, 2023. Asking a tenant to identify problems informally is not a substitute for the required inspection process and records.
The missing reports did not make every damage claim legally impossible. But they deprived the landlord of a reliable agreed baseline for comparing the property’s condition at the start and end of the tenancy. Objective, compelling evidence would be needed to establish the claimed change in condition.
The photographs did not establish that baseline, and the landlord supplied no written estimate or invoice supporting the $300 repair figure. The commission also treated minor adhesive-related paint marks as reasonable wear and tear in the circumstances, rather than a compensable loss.
Electricity allocation was not established
The landlord calculated the electricity claim by assigning 20 per cent of the bills for June, July and August to the tenant. The commission found no reliable explanation showing that this percentage represented additional consumption attributable to her heat-pump use.
There was no adequate baseline, comparative consumption evidence or metering to support the allocation. Nor was there proof of a contractual agreement requiring the claimed payment, such as a written lease term or addendum.
The landlord also said the money would be redistributed to other tenants. The commission found that this did not establish a loss suffered by the landlord and rejected using the security deposit to impose a retroactive cost-sharing arrangement.
The electricity claim therefore failed on both contractual and evidentiary grounds. The decision does not prevent landlords and tenants from making supported utility arrangements; it rejects an unproved charge imposed against this deposit.
The commission confirmed after the hearing that the tenant had paid $750 initially and a further $200. Its final order required repayment of all $950, together with $19.41 interest on the first payment and $4.25 on the second, totalling $23.66.
