P.E.I. commission sets aside $1,638.39 rental award over closed application

The Island Regulatory and Appeals Commission in Prince Edward Island has set aside a $1,638.39 award to a tenant because the Rental Office proceeded with an application it had already closed. In KY Home Solutions Inc. v. Oceane Lepage, 2026 PEIRAC 72, issued October 22, 2026, the commission allowed the landlord’s appeal and left the application closed.

The panel of Pamela J. Williams, K.C., and Gordon MacFarlane found that the Rental Office should not have proceeded after expressly telling Lepage that the matter would not go ahead. Its decision, Order LR26-58, made no determination on the substance of her claim for the return of a security deposit.

Requests went unanswered

The dispute arose from a room rental with shared common spaces. The written tenancy agreement ran from September 5, 2024, to August 31, 2025, at $800 a month. Lepage paid an $800 security deposit. Both sides agreed she moved out in April 2025, although they disputed the exact date.

On May 5, 2025, Lepage emailed the Rental Office and the landlord an application seeking her deposit back. The office asked her on June 26 for a copy of another application she had referred to in her filing, then followed up on July 3.

On August 8, the office asked whether she intended to proceed. After receiving no response to its requests, it advised her on September 16, 2025, that the matter would not proceed and the file would be closed. The landlord was not notified of the closure.

Lepage contacted the office again on February 11, 2026, saying she still wanted to pursue the application. Nearly five months had passed since the closure notice. The office resumed processing the matter and scheduled a hearing.

Hearings followed the closure

A hearing set for June 9, 2026, did not proceed. The landlord’s representative called in, but Lepage did not join. The Rental Officer tried to reach her and sent another copy of the hearing notice. Lepage contacted the office that day and said she had not received the original notice and had not known about the hearing.

Both sides participated in the rescheduled July 14 hearing. They confirmed receiving the evidence package and Lepage’s additional evidence, and that the package contained all evidence submitted to the office. Further submissions received after the hearing were shared with the other side and added to the record.

On July 27, the Rental Office issued Order LD26-260, requiring the landlord to pay Lepage $1,638.39 by August 31, 2026. KY Home Solutions appealed on August 12. The commission heard the appeal by telephone on September 1, with both sides participating.

After that hearing, the commission obtained the office’s June, July, August and September 2025 emails to Lepage. Commission staff shared them with the parties and gave each an opportunity to respond. Neither made further submissions.

Participation did not resolve the closure issue

The commission treated the wording of the September notice as significant. It was more than a request for missing information: the office had expressly said the matter would not proceed and the file would close.

The record contained no decision, order, direction or other communication formally reopening the application. Instead, after Lepage’s renewed request, the office scheduled a hearing and eventually issued the payment order.

The panel acknowledged that both parties had participated in the July hearing and had opportunities to present evidence and submissions. That participation did not answer the separate question of whether the office should have considered an application it had already closed.

In these circumstances, the commission found the closure reasonable. A party who brings a matter to the Rental Office is responsible for responding to its inquiries promptly, the panel said.

Award set aside, merits undecided

The commission’s three operative directions confirmed that the application was closed on September 16, 2025, set aside Order LD26-260 and made no further determination of the claim’s substantive merits. The ruling therefore does not establish that the landlord was entitled to keep the deposit.

The decision’s notice, citing the Residential Tenancy Act, states that either party may appeal to the Court of Appeal within 15 days of the commission’s decision on a question of law only. It also describes filing a commission order with the Supreme Court, where the commission has confirmed, reversed or varied an order of the Director, for enforcement as a court order.