Dispute Resolution Services

Residential Tenancy Branch Office of Housing and Construction Standards

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Administrative Penalty Decision

DISPUTE CODES: CNR, DRI, LAT, LRE, MNDC, RP, RR, O, FF INTRODUCTION This hearing involved a determination if the Respondent should be ordered to pay a monetary penalty, pursuant to section 94.1(b) of the Act, for failing to comply with a decision or order of the director. By letter dated December 15, 2011, the Respondent was notified of an investigation into these matters, and was provided with a copy of a report entitled Administrative Penalties Investigation (the “Investigation Report”). The Respondent was informed that he had a right to be heard on the matter and that a hearing scheduled for January 30, 2012, would be conducted by way of written submissions. Section 36 of the Residential Tenancy Regulation, B.C. Reg. 477/2003, (the “Regulation”), provides that the “opportunity to be heard” may be through written submissions. At the request of legal counsel for the Respondent, the hearing was adjourned to March 1, 2012. Under authority granted to me by the director, I have made a determination in this matter and it is set out in this decision. ISSUES TO BE DECIDED Has the Respondent failed to comply with a decision or order of the director? Should an administrative penalty be imposed? If an administrative penalty should be imposed, what is the appropriate penalty?

Page: 2 BACKGROUND AND EVIDENCE Background Due to the rather complicated nature of this matter, as well as the multiplicity of proceedings involved, it is necessary to provide a summary of prior events. The matter began with three hearings conducted in 2010, to resolve a dispute between a Tenant who resides at the subject rental unit, and the Respondent who is the Landlord for the subject rental unit and accompanying residential property. It appears that the Tenant was at one time an employee of the Landlord, as the building caretaker or manager. The subject rental unit is in a residential building with multiple rental units. The issues in the hearings included, but were not limited to, whether the Respondent should be ordered to make certain repairs to the building where the rental unit is located, and in particular, to make repairs to the leaky roof on the building. On July 19, 2010, a Dispute Resolution Officer (“DRO”) provided written reasons following a hearing, and concluded that on the issue of the leaky roof she had no jurisdiction under the Act to order the Respondent Landlord to make global repairs on areas of the building which do not directly impact the rental unit or common property used by the Tenant (the “July 2010 Decision”). The Tenant applied for a Judicial Review of the July 2010 Decision in the Supreme Court of British Columbia, which was heard on January 20 and 21, 2011. The Honourable Mr. Justice Burnyeat heard the Judicial Review, and provided Reasons for Judgment on February 4, 2011. Mr. Justice Burnyeat held that the DRO erred in law and exceeded her jurisdiction when she found she did not have jurisdiction to order general repairs at the building: Collard v. British Columbia (Residential Tenancy Act Dispute Resolution Officer), 2011 BCSC 136, Vancouver Registry: S106268 (the “Judicial Review”). At paragraph 29 in the written reasons of the Judicial Review, the Honourable Mr. Justice Burnyeat held:

“The argument cannot be made that the obligations of the landlord in any resulting dispute before a DRO are limited to the particular unit of the tenant plus the common property. Rather, the tenancy agreement itself establishes an obligation on a landlord to maintain all of the ‘residential property’.”

Page: 3 In coming to this finding, the Honourable Mr. Justice Burnyeat reviewed sections of the Act dealing with the maintenance of rental properties, and ordered the application of the Tenant to be returned to the Residential Tenancy Branch (the “Branch”) for a new hearing on this issue. The new hearing was conducted on May 18, 2011, with the parties appearing in person (the “May 2011 Hearing”). During the course of the May 2011 Hearing, the parties negotiated a resolution to the dispute, which the DRO recorded in a written decision dated May 20, 2011, as set out below. The Respondent, identified as the landlord below, was ordered to comply with all aspects of the agreement, and in fact, it is the Respondent’s alleged breach of this order which has led to the hearing before me. The parties negotiated as follows:

“During the hearing the parties undertook to determine a course of action intended to resolve the dispute. In this regard, section 63 of the Act speaks to Opportunity to settle dispute, and provides as follows:

63(1) The director may assist the parties, or offer the parties an opportunity, to settle their dispute.

(2) If the parties settle their dispute during the dispute resolution proceedings, the director may record the settlement in the form of a decision or order.

Pursuant to these statutory provisions, the parties specifically agreed as follows:

i) that the success of efforts to resolve the dispute will require a good faith intent, on-going & timely communication, as well as flexibility by both parties;

ii) that communication between the parties will be principally between “KM” (advocate for the tenant) and “GM” (agent for the landlord);

iii) that the landlord will undertake to have entered into a contract for service with a “Building Envelope Professional” as soon as possible, but by no later than midnight, Tuesday, May 31, 2011;

iv) that the landlord will contract with a “Building Envelope Professional” to provide a comprehensive Report on the building which includes an Assessment and Recommendations; recommendations will be

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required to be accompanied by specific time frames for the completion of repairs deemed necessary for reasons related to health and safety [reference: Model Schedule C-D & Model Schedule D (included in the submission by the tenant’s advocate)].

v) that the landlord will undertake to deliver to the tenant a full copy of the Report provided by the “Building Envelope Professional” as soon as possible, but by no later than midnight, Thursday, June 30, 2011;

vi) that the landlord will undertake to comply with all recommendations made in the Report provided by the “Building Envelope Professional,” and complete the necessary work within the respective time frames set out in the Report;

vii) that the landlord will undertake to ensure that all work completed as a result of the recommendations made in the “Building Envelope Professional’s” Report, will be certified by the “Building Envelope Professional.” In this regard, the parties appreciate the value of having work completed by individuals qualified in the appropriate trades;

viii) that the parties will seek to reach agreement around solutions for any challenges which have either not been anticipated, or are not addressed here.”

Conclusion

I hereby ORDER that the landlord(s) comply with all aspects of the above agreement.”

[Reproduced as written.]

(Collectively referred to as the “Agreement”)

Three months after the making of the Agreement and the order of the DRO, the Tenant made a further application to the Branch as she felt the Respondent had not abided by the Agreement or the order. During September and October of 2011, hearings were conducted over four dates, to determine if the Respondent had complied with the Agreement and order. In the written decision of the DRO dated November 10, 2011, it was found that the Landlord had breached the Agreement (the “November 2011 Hearing”).

Page: 5 Following this, a different DRO appointed by the Branch conducted an investigation and produced the Investigation Report. Evidence of the Parties The evidence of the Branch is set out in the Investigation Report. The evidence of the Respondent is set out in written submissions provided through his legal counsel. The evidence of both parties addresses the provisions in the legislation that must be considered, before an administrative penalty is imposed, as set out in section 94.1(2) of the Act:

Before the director imposes an administrative penalty on a person, the director must

(a) give the person an opportunity to be heard, and (b) consider all the following:

(i) previous enforcement actions for contraventions of a similar nature by the person; (ii) the gravity and magnitude of the contravention; (iii) the extent of the harm to others resulting from the contravention; (iv) whether the contravention was repeated or continuous; (v) whether the contravention was deliberate; (vi) any economic benefit derived by the person from the contravention; (vii) the person's efforts to correct the contravention.

The evidence of the Branch was gathered through a review of the dispute resolution proceedings involved in this matter, and included a review of a previous dispute resolution proceeding involving the Respondent and a single room occupancy hotel he owned at the relevant time. According to the Investigation Report, the combined files reviewed contained more than 300 pages of evidence and submissions made by the parties at those respective proceedings, and included the Respondent’s evidence and submissions. In the present matter, the submissions and evidence of the Respondent are made largely in reply to the findings in the Investigation Report, and address the particular circumstances in dispute between the Tenant and the Respondent Landlord.

Page: 6 Therefore, I will set out the evidence and submissions of both the Branch and the Respondent together, in relation to each of the individual considerations which must be made:

(i) Previous enforcement actions for contraventions of a similar nature by the person

The DRO identifies one previous enforcement action for a contravention of a similar nature. The DRO outlines a series of hearings conducted in September of 2008 which dealt with applications involving more than 30 tenants of a single room occupancy hotel (the “SRO”) owned by the Respondent. I note this is a different building than the subject property here. The DRO explains that in October of 2007, the roof of the SRO leaked heavily into many rental units and caused ceilings to collapse. The local municipality ordered the SRO to be closed and the tenants had to immediately vacate the building. The DRO summarizes the SRO decision as follows:

The building caretaker of the SRO gave affirmed testimony in this hearing that he had warned the landlord in 1994 and every year thereafter that the roof of the SRO had significant problems and that water was leaking into numerous rental units. The Dispute Resolution Officer determined that during the time between 1994 and 2008 the landlord repeatedly hired unskilled tenants to perform repairs on the SRO when they should have employed skilled tradesmen. The roof of the SRO ultimately failed due to a lack of proper maintenance and repair. The Dispute Resolution Officer found that the landlords “did not operate their business or maintain the rental property in the fashion to be expected of a reasonably competent commercial landlord and that they were negligent in their duty to maintain and repair the rental property.” The tenants of the SRO were successful in their applications and awarded compensation for damage or loss due to the landlord’s “reckless disregard for the welfare of the tenants and the duty imposed on the landlord to provide housing suitable for occupation.”

[Reproduced as written.]

Page: 7 The Respondent characterizes this instance as an unrelated complaint. Furthermore, the Respondent argues that it is improper to consider this complaint as it occurred more than two years ago, and cites section 36 of the Regulation in support of this argument:

Limitation period for administrative penalties

36 (1) A notice under section 33 (2) must not be sent more than 2 years after the facts on which it is based first came to the knowledge of the director.

The Respondent argues that the two year limitation period in the Regulation must be read into section 94.1(2)(b)(i) of the Act, thereby prohibiting the director from considering previous enforcement actions taken more than two years ago. The Respondent argues it would be an error in law for the director to consider previous enforcement actions which occurred beyond the two year limitation period.

The Respondent further argues that the SRO complaint relates to a substantively different matter, as the issue there was in relation to the duty of the Respondent to maintain and repair that property. The Respondent states the matter in issue here is whether or not the Respondent has failed to comply with an order of the director.

The Respondent further submits that it has not been proven by the Tenant on the civil standard that the rental unit property is in a general state of disrepair.

(ii) The gravity and magnitude of the contravention The evidence of the Branch is that the Respondent was ordered to comply with the Agreement and engage a “Building Envelope Professional” to provide a comprehensive report on the Residential Property, which would include an assessment and recommendation for repairs to the residential property. According to the evidence of the Branch, “The recommendations required were be accompanied by specific time frames for the completion of repairs deemed necessary for reasons related to health and safety.” The Respondent was to deliver to the Tenant a full copy of the report provided by the “Building Envelope Professional” no later than midnight, June 30, 2011. The evidence of the Branch is that on May 30, 2011 the landlord entered into a contract with an engineering company to conduct a “preliminary, visual review” of roof areas and affected suites of the subject property. The DRO sets out that the, “… engineer stated

Page: 8 that this was not a comprehensive assessment of the building envelope at the Residential Property as he was not hired to complete a comprehensive investigation of the building envelope.” The DRO argues that the evidence indicates,

“Comprehensive repairs have not been completed on the Residential Property and the [Respondent] continues to potentially put the tenants at risk for injury or loss due to water leaking in to the rental units through the roof of the Residential Property. The [Respondent] also continues to put the tenants at potential risk for injury or loss as the structural integrity of the Residential Property may have been severely compromised and the roof of the Residential Property and/or ceilings in the rental units may suffer failure and collapse due to the chronically, unattended water leak.”

The Respondent argues that the gravity and magnitude of the contravention does not warrant an administrative penalty being made. The Respondent argues that only the Tenant is complaining of water leaks and these are in unit 201, and there are no other complaints about the property. In evidence the Respondent provided a copy of a report dated May 30, 2011, from a building envelope engineering company, indicating the services to be performed were limited to “… a visual review of the roof areas and the affected suites…” and, “Provide a brief report including observations, discussions and recommendations” (the “Visual Review Contract”). The Visual Review Contract resulted in a report, dated July 8, 2011, being made to the Respondent and setting out recommendations for repairs (the “Visual Report”). The engineer writing the Visual Report states, “The [Respondent] advised that Units 201, 202, and 203 have reported water ingress to their kitchen and living room ceiling.” The Visual Report further sets out that, “The living room ceiling of unit 202 contains signs of water ingress… Water staining is approximately 10’L and 8’ W.” The Visual Report also sets out that a, “… 4’ x 4’ opening was made (by others) in the living room ceiling of Unit 203.”, and states that through this opening, “The roof framing includes several new joists that come with new metal hangers. It appears there was previous structural repair at this location”, and “Minor evidence of mould was observed on several framing members.”

Page: 9 The building envelope engineering company provided a report on the scope of work to be carried out, entitled “Scope of Work for Target Waterproofing Repair at Unit 201, 202, and 203 Roof, Unit 301, 303, and 303 Base of South Exterior Walls.” This report was dated October 7, 2011, and sets out approximately 12 different tasks to complete the required work. The building envelope engineering company also conducted reviews of the recommended work as it was being performed and at its completion. According to the reports provided, this targeted work was completed on January 27, 2012. The Respondent also argues that there have been no findings of fact that the tenants of the rental unit property are in danger and that there are no immediate health and safety concerns. The Respondent argues that the targeted repairs were well executed. The Respondent has submitted in evidence that in early January of 2012, a contract was made with a different engineering company. This resulted in that company providing a “Structural Review and Building Envelope Condition Survey” on February 8, 2012, to the Respondent (the “Comprehensive Report”). As the health and safety of all the tenants of the rental property are of paramount importance in this matter, and the condition of the building is at question, I feel it is important to summarize some of the observations and recommendations made in the Comprehensive Report: “A visual review of fascia boards revealed extreme decay.” [Page 3] A previously open walkway at the building has had a roof and wall constructed to cover it in. In relation to this walkway, the Comprehensive Report states: “The exterior of this wall is covered in shingles, applied over painted plywood.

The shingles are in very poor condition. The hallway is un-heated and un-insulated. Deck membranes on all 2nd floor decks, which are recessed into all elevations, are non-existent. Deck railings and deck trim boards are very decayed on the south elevation and should be removed and replaced as needed. [Page 3]

Later in the Comprehensive Report the engineering company notes that the walkway enclosure,

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“… was not completed to the application (sic) building Code, and it is assumed that this work was not completed with a building Permit.” [Page 6, paragraph 1.6]

The Comprehensive Report also sets out the following: “A visual-only review of the east, west and north 1st and 2nd floor elevations

indicated that good overhang protection and good maintenance of building components appear to have prevented major moisture ingress.” [Page 4]

“The moisture probes, core samples and visual building envelope review indicate

that the building is in need of localized repair and maintenance.” [Page 4] The Comprehensive Report then sets out eight main recommendations for these repairs and maintenance. It summarizes the survey findings: “The use of good quality fir planking and studs for the construction of the building

appears to have allowed the building to survive extensive rot damage in the plugged rainwater leader areas. Removal of interior gypsum wallboard finishes in these areas will allow for evaluation of wood structure and will allow for replacement of water damaged insulation and interior finishes.

Repair to rot damaged walls will require removal of stucco, followed by rot repair

and replacement of cladding… Overall, the building has good performance. Good overhangs and the use of rot

resistant fir for exterior planking and studs have resulted in good performance of wall systems, except where maintenance issues have resulted in long-term exposure to high levels of moisture.” [Page 5]

(iii) The extent of the harm to others resulting from the contravention

In the Investigation Report, the Branch argues that, “The extent of the harm to others is a lack of peace and quiet enjoyment for the tenants due to the water ingress into the rental units.” Furthermore, the DRO sets out in the Investigation report that,

“When considering the ultimate failure of the roof at the SRO, it must be considered that at the Residential Property harm to others may ultimately be catastrophic physical injury, property damage or loss due to mold or the collapse of the ceiling or roof as a result of the potentially weakened structural integrity of

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the building from the chronically, unattended water ingress created by the failure of the building envelope.”

The Respondent argues that the Tenant is the sole source of the complaints about the building, and that “… any health and safety concerns are unsubstantiated.” I note that the Respondent argues throughout their submissions, and in earlier proceedings which have occurred, that the Tenant is the only person complaining about the building. For example, in submissions made for the November 2011 Hearing, the Respondent characterizes the Tenant as, “… a disgruntled, former employee with an axe to grind…” [Written closing arguments of the Respondent for the November 2011 Hearing, paragraph 23, page 14.]

(iv) Whether the contravention was repeated or continuous The DRO sets out that,

“Testimony in [the May 2011 Hearing and the November 2011 Hearing] confirms that the landlord was made aware of maintenance issues with the Residential Property that included the water ingress into the rental units from the roof as early as April 2005. In November 2009 the landlord was notified that four suites on the second floor of the Residential Property had leaking ceilings and a resident of one of the landlord’s properties was hired to complete repairs.”

The DRO then recounts testimony from the engineer who completed the Visual Report in the 2011 November Hearing:

“During cross examination the witness [the engineer] testified that the landlord did not tell him that 4 suites leaked in November, 2009, or that leaks had been patched prior to then, or that other 7 second floor suites have leaked and been patched, or that rear suites leaked and were patched and then continued to leak.”

[Reproduced as written.]

The DRO also sets out that evidence provided for the May 2011 hearing indicates several years of problems at the building:

• “Suite 201 – One of four leaking rental units in mid-November 2009. Further leaking documented in march/April 2010 and January 2011. Ceiling patch-repaired prior to November 2009.

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• Suite 202 – Active leaks reported May/June 2011 • Suite 203 – Ceiling actively leaking April 2005 to summer 2009. Further

leaking documented April 2010 and January 2011. Ceiling patch-repaired prior to November 2009.

• Suite 206 – Leaking during heavy rains and snow of 2008-2009. • Suite 208 – Living room leaked prior to 2008. Ceiling patch-repaired spring of

2009. July 2009 and November 2009 unit is leaking. • Suite 211 – Leaking mid November 2009. Ceiling previously patch-repaired. • Suite 213 - Leaking mid November 2009.”

[Reproduced as written.] The Respondent argues that any delay in the remediation process at the building, “… should be taken in light of the interference of the Tenant.” This allegation arises from testimony in the November 2011 Hearing that the Tenant sent the engineer conducting the Visual Report a letter and some photographs. According to the decision from that hearing, a witness stated that, “… the engineer backed off after receiving photographs and a letter from the tenant.” The DRO then writes, “I accept the testimony that the landlords felt that the tenant was interfering.” [Page 12] (Emphasis added.) I note that the DRO in the November 2011 Hearing also ordered the Respondent to comply with the Agreement made in the May 2011 Hearing.

(v) Whether the contravention was deliberate The DRO alleges that the Respondent,

“… has a history of consistently not completing maintenance on the Residential Property or having sub-standard repairs made to the building. The landlord also has a history of completing repairs themselves instead of hiring certified trades people.

When the landlord received the July 8, 2011 report from the engineering company, the landlord did not provide the tenant with a copy as required under the Order. The landlord then on September 27, 2011 was provided with a ‘scope of work’ by the engineer and only disclosed the reports existence on September 29, 2011 when the landlord wished to testify about its contents on that day for file

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778944. The decision for 778944 notes: ‘When asked why the report in July was not provided as required in a previous order, the engineer testified that the landlord’s agent told them not to interfere.’ “

[Reproduced as written.] The DRO comes to the conclusion, “… non-compliance with the Residential Tenancy Branch Order must be viewed as standard protocol on the part of the landlord.” The Respondent replies that he has made repairs to the building when asked by the Tenant, and that the repairs were well executed. The Respondent again alleges that any delays in relation to the remediation process or in providing copies of the reports to the Tenant, “… must be viewed in light of the ‘interference’ on the part of the Tenant.”

(vi) Any economic benefit derived by the person from the contravention The DRO sets out that the contravention has allowed the Respondent to derive an economic benefit by not having to outlay the funds required to make the, “… extensive, costly repairs…”. The DRO also alleges that the Respondent is avoiding repairs as he does not want to impact the tenancies at the building, or in other words, the Respondent does not want to lose rental income if the renters have to leave the building during the repairs. The DRO also alleges that the Respondent,

“…maintains an economic benefit by accepting rent for and keeping potentially sub-standard rental units in the Residential Property tenanted. The landlord has also had an economic benefit by completing repairs themselves or hiring unqualified persons to complete repairs at the Residential Property.”

The Respondent replies that he has gained no economic benefit, and in fact, has incurred significant expense in performing work at the building. The Respondent submits that since the Tenant was awarded aggravated damages of $3,400.00 in the November 2011 Hearing, the Respondent has already been “punished” by the Branch.

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(vii) The person's efforts to correct the contravention At the time of the Investigation Report, ostensibly created in early December 2011, prior to the 15th of the month, the DRO reported that the,

“… landlord has taken minimal steps in determining what repairs will be required to stop the leaks into the rental units at the Residential Property and whether or not there has been a failure of the building envelope by not complying with the Order and having a comprehensive inspection completed. Therefore the landlord has not complied with the Order from the Residential Tenancy Branch.

A comprehensive inspection of the building envelope at the Residential Property was to be conducted by a building envelope professional and a copy of the report delivered to the tenant no later than midnight, June 30, 2011.

To date the landlord has only had a preliminary report completed. The scope of work associated with this report refers only to repairs for suites 201, 203, 301, 302 and 303 and a section of the roof deck. This report does not refer to investigation of and repairs for the entire building envelope at the Residential Property.”

The Respondent argues that significant time and expense have been expended to correct any contravention and in remediating the property and an administrative penalty is not warranted. The Respondent argues that the repairs recommended in the Comprehensive Report do not directly relate to the complaints of the Tenant. The Respondent argues he is taking active steps to address the “suggestions” of the Comprehensive Report. ANALYSIS AND FINDINGS

The administrative penalties provisions pertaining to residential tenancies are set out in sections 94.1 through 94.31 of the Act.

Section 94.1 sets out that,

(1) Subject to the regulations, the director may order a person to pay a monetary penalty if the director is satisfied on a balance of probabilities that the person has

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(a) contravened a provision of this Act or the regulations, or

(b) failed to comply with a decision or order of the director.

The first issue in this matter is: has the Respondent failed to comply with a decision or order of the director? It is alleged that the Respondent failed to comply with the order from the May 2011 Hearing. In that hearing the Respondent and the Tenant entered into the Agreement. Section 63 of the Act provides that the presiding DRO may record the Agreement in the form of a decision or order. The DRO ordered the Respondent to comply with all aspects of the Agreement. I summarize this Agreement as requiring the Respondent to:

• act in good faith, be timely in communication and be flexible • that communication between the parties will be principally between “KM”

(advocate for the tenant) and “GM” (agent for the landlord) • enter into a contract with a “Building Envelope Professional” as soon as

possible, but no later than May 31, 2011, to provide a comprehensive report on the building which includes an assessment and recommendations

• to provide specific time frames for the completion of repairs deemed necessary for reasons related to health and safety

• undertake to deliver to the Tenant a full copy of the report no later than midnight, Thursday, June 30, 2011

• comply with all recommendations made in the report provided by the “Building Envelope Professional,” and complete the necessary work within the respective time frames set out in the report

• ensure that all work completed as a result of the recommendations made will be certified by the “Building Envelope Professional”

• have work completed by individuals qualified in the appropriate trades • that the parties will seek to reach agreement around solutions for any

challenges which have either not been anticipated, or are not addressed here

The Respondent promised to abide by the Agreement and was ordered to comply with all aspects of it.

Page: 16 The Respondent’s own evidence is that the first steps he took acting under the Agreement and order was to enter into a contract for a simple visual review and a brief report, not a comprehensive report by a building envelope professional. The Respondent submits in argument that,

“In hindsight, it is clear that the timelines agreed to and outlined by the May Order were not a realistic reflection of the time required to properly complete the remedial repairs…. When it became clear that it was not realistic to bring himself within full compliance of the May Order on the short timelines outlined therein, [the Respondent] focused his efforts on remeding the immediate complaints of the Tenant.” [Reproduced as written.]

Here the Respondent attempts to blame the timelines on the May 2011 Hearing order, when in fact, the timelines were established by the Respondent when he negotiated the Agreement. The order was, in fact, for the Respondent to abide by the terms of an Agreement which he himself made. It is recognized that one of the benefits of entering into such a negotiated settlement agreement is to incorporate terms that are agreeable to the party and to which the party can abide by. This provides the additional benefit of certainty, and avoids a determination made solely by the trier of fact, with which the party may not agree or may find onerous. Here the Respondent appears to be arguing that he is unable to abide by the terms of the promise he made in the Agreement, and therefore, the order was not realistic. I find this argument lacks merit and I do not accept it. If the Respondent felt the timelines were not realistic, there were provisions in the Agreement to communicate with the Tenant and they may have worked out a solution. The Respondent did not do this. He unilaterally took a much narrower route. In terms of fulfilling the Agreement and the order, I find the evidence proves the Respondent contracted for substantially narrower services than what was required in the Agreement and order. I find that the Respondent did not act in good faith in narrowing the scope of the contract, nor did he communicate with the Tenant that the scope would be narrower than that agreed to in the Agreement and order, nor did he attempt to reach a solution with the Tenant for something that could not be anticipated. Therefore, I find the Respondent breached these aspects of the Agreement. As the Respondent was ordered to comply with the Agreement and did not do so, I find he breached the order given under authority of the director in the May 2011 Hearing.

Page: 17 I also find that the Respondent did not enter into a contract for the Comprehensive Report until January of 2012, and according to the submissions of the Respondent, did not provide a copy to the Tenant until February of 2012, some eight months after the June 2011 deadline in the Agreement and order. This leads me to find the Respondent failed to meet the required deadline in the Agreement and thereby, he again breached the order to comply with the Agreement. I note the Comprehensive Report does not set out timelines for the Respondent to complete the recommended work, which was within the spirit of the Agreement. However, I do note the submissions of the Respondent are that work will begin to complete the Comprehensive Report repairs on, “… approximately April 16, 2012, and will be completed around August 10, 2012.” Based on all of the above, the evidence and argument, and on a balance of probabilities, I find that the Respondent has failed to comply with the order of the May 2011 Hearing to comply with all aspects of the Agreement. I find that an administrative penalty is appropriate in these circumstances. Prior to turning to the considerations in imposing the penalty, I wish to impress upon the Respondent that an administrative penalty is quite different than a dispute resolution proceeding. Residential Tenancy Branch publication R.T.B. – AP 1 (2011/03), explains that,

“An administrative penalty matter is different from Residential Tenancy Branch dispute resolutions in a very important way. Dispute resolution hearings are between a landlord and a tenant. Administrative penalty matters are between the provincial government and the person who is thought to have broken the law or failed to comply with a Dispute Resolution Officer’s decisions or orders.”

[Emphasis added.] As such, the Branch has provided Policy Guideline 41, which provides guidance on the seven considerations which must be made and provides direction on calculating an administrative penalty. Policy Guideline 41 also sets out point values to be assigned to each of the considerations based on the weight attributed to the consideration. For ease of reference, I have included the point value attributed along with my findings on each of the seven considerations.

Page: 18 These are my findings on the seven considerations: As to consideration (i) the previous enforcement actions for contraventions of a similar nature by the person, I do not accept the argument of the Respondent that the two year limitation period in section 36 of the Regulation must be read into section 94.1(2)(b)(i) of the Act, thereby prohibiting the director from considering previous enforcement actions taken more than two years ago. I find that an ordinary reading of section 36 of the Regulation sets out its purpose – to set the limitation period for the director to take action under the administrative penalties provisions. It is intended to prohibit the director from giving a notice of opportunity to be heard letter to a person more than two years after the facts on which it was based. Since section 94.1(2)(a) of the Act requires the notice of opportunity to be heard letter to be given to a person prior to imposing an administrative penalty, the effect of section 36 of the Regulation is to create a two year limitation period, starting when the facts on which it is based first became known to the director, to initiate the administrative penalties provisions of the Act. Furthermore, one of the primary purposes of administrative penalties is to enforce compliance with the applicable legislation. In order to determine whether the person has previous contraventions or failures to abide by the legislation, the DRO must be able to review previous similar fact instances where the person has been found to have contravened the legislation or failed to comply with a decision or order. The legislation is even more specific though. Section 94.1(2)(b)(i) requires consideration of previous enforcement actions for contraventions of similar nature. I interpret this as requiring the DRO to examine instances where a party has had to enforce the decision or orders against the person, such as under sections 84, 84.1 or 85 of the Act, because the person has refused to abide by the decision or order. For example, under section 84 of the Act a landlord may have to enforce an order of possession against a tenant in the Supreme Court, if the tenant refuses to move out under the order of the DRO. Another example: if a landlord refuses to pay a monetary order from a DRO, the tenant may have to enforce the order in Provincial Court to collect the funds. Since section 84.1 grants exclusive jurisdiction to the director, if a party wishes to enforce a decision or order not within the jurisdiction of the Supreme Court or Provincial Court to enforce, the decision or order must be enforced through a dispute resolution hearing through the Branch. An example of this type of decision or

Page: 19 order is one where the person is ordered to make repairs to a rental unit and refuses to do so. Under the Act, the only forum to enforce such an order is through the Branch and a dispute resolution hearing. This leads me to conclude that simple similar fact evidence, such as the evidence involving the Respondent and the SRO with the collapsed roof, is not what the legislation requires to be considered. Rather, I find one must consider whether or not there has been an action to enforce a decision or order of the director against the person since they have failed to comply with the decision or order, or, similarly, if the person has been previously ordered to pay an administrative penalty for contraventions of the Act or Regulations. This is consistent with the purpose of the administrative penalties in the Act: to ensure compliance with orders made under authority of the director, and for contraventions of a provision of the legislation. Therefore, I do not accept the argument of the DRO that the collapse of the SRO roof involved a previous enforcement action for a contravention of a similar nature against the Respondent. While there were decisions and orders made against the Respondent as a result of the SRO roof collapse, these do not appear to meet the requirement of previous enforcement actions for contraventions of a similar nature. Despite this, I comment in obiter that there are remarkable similarities between the circumstances surrounding the collapse of the SRO roof. For example, in the SRO roof matter there was evidence of a former employee, like the Tenant in this case, warning the Respondent that maintenance work was required on the roof, for a period of several years, and some of the repair work being performed by unqualified persons. Nevertheless, I find there was one instance of an enforcement action taken against the Respondent to enforce a decision or order. This occurred in the November 2011 Hearing when the Tenant made an Application for an order to have the Respondent Landlord comply with the Agreement and therefore, the order. As there was a finding in that decision that, “… the tenant has established a breach of the agreement by the landlord…” [page 10], I find there is one instance of a previous enforcement action against the Respondent to force him to comply with the order of the director. For the administrative penalty I impose one point value for this consideration.

Page: 20 In regard to (ii) the gravity and magnitude of the contravention, I do not accept the argument of the Respondent that only the Tenant is affected in this case. As described herein, a different unit than the subject rental unit (unit 203) has a 4’ x 4’ opening in the living room ceiling. Upon reviewing the evidence it appears that this hole has been in the rental unit since at least 2010. There are notes in the engineers’ report of mould being visible here as well. There is no evidence before me this has been repaired, or there are plans to repair it. Furthermore, at least five units, separate from the subject rental unit, were impacted by repairs required under the Visual Report. The Comprehensive Report sets out repairs required for all the deck membranes on the second floor of the building, as well as decayed railings which have to be repaired or replaced. Nevertheless, the engineers inspecting and reporting on the building (which I note was performed under their respective professional seals), do not appear to raise substantial concerns for safety at the building. The policy guideline also suggests that a rent reduction order should form part of the basis to establish the value of this portion of the penalty. In the November 2011 Hearing the Tenant’s rent was reduced by 33%, as a result of the Respondent failing to abide by the Agreement. Based on these factors, I consider the gravity and magnitude of the contravention that the Respondent failed to comply with the order as being moderate in nature. There is no substantive evidence before me, such as a medical report or a warning in the expert reports, that the failure to comply with the order caused a measurable impact on the health or safety of anyone at the property, which would require a finding beyond the moderate level. For the administrative penalty I impose one point value for this consideration. As to consideration (iii) the extent of the harm to others resulting from the contravention, the DRO has argued that it must be considered that ultimately catastrophic physical injury may occur if the roof collapses, which could affect many of the renters at the building.

Page: 21 The Respondent argues no harm to others has been proven and the repairs already made have satisfied the complaints raised by the Tenant. The Respondent also argues there have been no other Applications made against the Respondent by other occupants at the building. However, I find there is evidence that complaints may have been made which the Respondent has not recorded or disclosed in these proceedings. For example, the testimony of the engineer performing the Visual Report (outlined above), indicates the Respondent did not fully inform the engineer of prior complaints of water leaks from several of the rental units at the building. There were also no log books provided in evidence, which in the normal course of this business are used as a record of complaints made and to record requests for maintenance to be performed at the building. I also note that many building owners keep records of maintenance performed on their buildings. Here there is no evidence of such records having been provided. Furthermore, there are many reasons why other occupants at the building may not have brought an Application against the Respondent. For example, they may be aware of the Tenant’s actions and are waiting to see the outcome, or, they may wish to avoid a confrontation with the Respondent which might jeopardize their tenancy. This arises from the fact that the Respondent has responded to the Tenant’s requests for repairs on several occasions by issuing notices to end her tenancy. I note none of these notices have been found valid in the course of the various hearings. I find it is clear from the Visual Report and Comprehensive Report that other occupants at the residential property have suffered from water leaks, and that other rental units are impacted by the required remediation work. The effect of the leaks and the required maintenance must not be ignored on these other occupants, even if they have not filed applications. I find this must be considered, at the very least, a mild disruption of their right to quiet enjoyment of their respective rental units. Therefore, I find that the extent of harm to others by the Respondent’s failure to follow the order is a mild disruption of the right to quiet enjoyment. For the administrative penalty I impose two points in value for this consideration. As to consideration (iv) whether the contravention was repeated or continuous, I find that the evidence shows that the Respondent was made aware of maintenance issues

Page: 22 which included the water ingress into the rental units from the roof as early as April 2005. I also accept the evidence of the DRO that in November 2009 the landlord was notified that four suites on the second floor of the Residential Property had leaking ceilings. I do not accept the argument of the Respondent that any delay in the remediation process at the building, “… should be taken in light of the interference of the Tenant.” This appears to be more of an excuse than a reason for the delays. In any event, the Respondent breached the order prior to any interference by the Tenant. This assertion by the Respondent also seems to be contradicted by the Respondent’s own argument, “… that the timelines agreed to and outlined by the May Order were not a realistic reflection of the time required to properly complete the remedial repairs.” Nonetheless, the consideration here is to determine if the alleged contravention was repeated or continuous. As the Respondent was to have contracted with a company to prepare the Comprehensive Report and then provide a copy of the Comprehensive Report to the Tenant no later than the end of June 2011, and failed to do so until February of 2012, I find that the contravention was continuous for a period of eight months. I further find there is some evidence that the Respondent and Tenant tried to resolve the earlier leaking problems prior to coming to dispute resolution. These are the repairs that the Tenant has shown were performed by other renters of the Landlord. In fact, it was the Respondent’s use of these unskilled workers which led to the inclusion of the clause in the Agreement that the Landlord must use, “… individuals qualified in the appropriate trades.” Therefore, for the administrative penalty I impose one point in value for this consideration. As to the fifth consideration, (v) whether the contravention was deliberate, the DRO alleges that, “… non-compliance with the Residential Tenancy Branch Order must be viewed as standard protocol on the part of the [Respondent].” The Respondent replies that he has made repairs to the building when asked by the Tenant, and that the repairs were well executed. The Respondent again alleges that any delays in relation to the remediation process or in providing copies of the reports to

Page: 23 the Tenant, “… must be viewed in light of the ‘interference’ on the part of the Tenant.” [Reproduced as written.] I find that the first steps the Respondent took following the Agreement and the order were to substantially narrow the scope of the contract the Respondent agreed to enter into. I further find that the Tenant was forced to make an Application for an order for the Respondent to comply with the Agreement and the order. I conclude the Respondent acted deliberately in failing to abide by the Agreement and order. As I also find that the Respondent was asked in writing by the other party to correct the contravention through the Tenant’s application, for the administrative penalty I impose a value of two points for this consideration. As to consideration, (vi) economic benefit derived by the person from the contravention, the DRO sets out that the contravention has allowed the Respondent to derive an economic benefit by not having to outlay the funds required to make “… extensive, costly repairs…” The DRO also alleges that the Respondent,

“…maintains an economic benefit by accepting rent for and keeping potentially sub-standard rental units in the Residential Property tenanted. The landlord has also had an economic benefit by completing repairs themselves or hiring unqualified persons to complete repairs at the Residential Property.”

The Respondent replies that he has incurred significant expense in performing work at the building, and since the Tenant was awarded aggravated damages of $3,400.00 in the November 2011 Hearing, the Respondent has already been “punished” by the Branch. As pointed out above, administrative penalties are matters between the provincial government and the Respondent. The penalties are issued to penalize non-compliance with the legislation that regulates residential tenancies or for the failure to comply with an order under that legislation. Here the Respondent is not being “punished” for harm caused to the Tenant. Rather, the Respondent is being penalized for failing to abide by the order of the director. In written submissions for the November 2011 Hearing, the Respondent argued that the cost of the engineer and the building envelope survey have exceeded $30,000.00.

Page: 24 There is no evidence of what the costs will be to make the repairs arising from the Comprehensive Report at the building, but I find it is logical to conclude that these will at least meet or exceed the costs of the surveys and reports. I find that by delaying the Comprehensive Report, the Respondent was able to at least delay the cost of the reports and the required repairs, and this was an economic benefit of at least $20,000.00 to the Respondent. Following the policy guideline for this portion of the administrative penalty I impose four points in value for this consideration. As to the last consideration, (vii) The person's efforts to correct the contravention, at the time the DRO prepared the Investigation Report it explained that,

“To date the landlord has only had a preliminary report completed. The scope of work associated with this report refers only to repairs for suites 201, 203, 301, 302 and 303 and a section of the roof deck. This report does not refer to investigation of and repairs for the entire building envelope at the Residential Property.”

The Respondent argues that significant time and expense have been expended to correct any contravention and in remediating the property and an administrative penalty is not warranted. The Respondent argues he is taking active steps to address the “suggestions” of the Comprehensive Report.

It is clear that at the time of the November 2011 Hearing and by the middle of December of 2011, when the Investigation Report was completed, that the Respondent had not complied with the Agreement or order as required.

The evidence of the company that prepared the Comprehensive Report is that they began with an inspection of the building on January 6, 2012, which indicates the contract was made around this time.

This leads me to conclude that the Respondent only began to comply with the order after he was notified that the director was seeking administrative penalties against him. I also note there are no assurances from the Respondent that he will continue to make the repairs as required under the order, the Agreement or the Comprehensive Report.

Based on the above, I find that there have been moderate activities taking place to correct the contravention. I assess three points in value under this consideration.

Page: 25 CONCLUSION

I find that the Respondent failed to comply with an order of the director, and pursuant to section 94.1 of the Act, I am ordering the Respondent to pay a monetary penalty.

I have applied point values to each consideration and find that these total 14 points. According to the tables below, if the sum of the values is 14 then the maximum penalty is $500.00. Policy guideline 41 sets out that,

The amount of an administrative penalty may be determined by the sum of the values identified in the tables in the following section.

If the sum of values is 1-7, the maximum penalty is $250.00.

If the sum of values is 8-14, the maximum penalty is $500.00.

If the sum of values is 15-19, the maximum penalty is $1,000.00.

If the sum of the values is 20-23, the maximum penalty is $2,500.00.

If the sum of the values is 24-26, the maximum penalty is $3,500.00.

If the sum of the values is 27-28, the maximum penalty is $4,000.00. If the highest value (five) is assigned in any of the categories, the penalty is $5,000. Despite the above maximum penalties, when there is a positive value for the contravention in:

five categories, the maximum penalty is $2,500.00

six categories, the maximum penalty is $3,500.00.

all seven categories, the maximum penalty is $5,000.

Section 94.2(2) of the Act provides that if the failure continues for more than one day, separate monetary penalties, not exceeding the maximum of $5,000.00, may be imposed for each day. I find that the Respondent failed to comply with the order from June 1, 2011, when the Comprehensive Report was to have been completed, until January 6, 2012, when the Comprehensive Report was begun, for a period of 220 days.

Page: 26 Therefore, I order the Respondent to pay the penalty of $500.00 for each of the 220 days that the Respondent failed to comply with the order. Furthermore, as I have determined there is a positive value in each of the seven considerations made, I further order the Respondent to pay $5,000.00.

The sum of the daily administrative penalties and the penalty for having a positive value in each of the seven considerations is $115,000.00.

Under section 35 of the Regulation, this penalty must be paid within 60 days of the date of this order. The penalty should be paid in person or by mail to the Residential Tenancy Branch, with a cheque or bank draft payable to the Minister of Finance.

I also note that the Respondent has a right to have the director reconsider the decision imposing this penalty under the review provisions of the Act, which include:

The party was not able to take part in the hearing because of circumstances that could not be anticipated and were beyond the person’s control;

the party has new and relevant evidence that was not available at the time of the original hearing; or

the party has evidence that the decision or order was obtained by fraud, i.e., deliberate use of known false evidence to obtain a desired outcome.

Furthermore, if the Respondent believes there was an error of fact or law or that the Dispute Resolution Officer making this decision was biased, the Respondent may apply to the Supreme Court of British Columbia for a Judicial Review of the Decision.

Under section 94.1(4) of the Act, the director may, subject to the Regulations, enter into an agreement with the Respondent instead of enforcing the above penalty. Under separate cover, a copy of which is being provided to the Respondent, I have made recommendations to the director about such an agreement.

Page: 27 This decision is final and binding, except as provided under the Act, and is made on authority delegated to me by the Director of the Residential Tenancy Branch under Section 9.1(1) of the Residential Tenancy Act. Dated: March 16, 2012. Residential Tenancy Branch