The Island Regulatory and Appeals Commission announced today it has issued an Order varying the allowable rent increase for 2009 as it applies to heated premises.
The new allowable rent increase for heated premises will be five (5.00) percent. The allowable increases for unheated premises and mobile home sites will remain at three (3.00) percent.
The Commission noted that the price of home heating fuel has reduced significantly since the nine percent allowable increase was set in September and therefore the heating costs component of the allowable rent increase has been cut from six percent to two percent resulting in an overall allowed increase of five percent for heated premises.
The Commission has the authority under Section 12 of the Island Regulatory and Appeals Commission Act to vary orders where a material change of circumstances has occurred.
The Rental of Residential Property Act specifically limits rent increases to once in a twelve-month period, however it is silent on the matter of rent decreases. Therefore the Commission has determined that it has the authority to vary the allowable increase for 2009, something the Commission was not able to do last year when the allowable rent increase was set at one percent and heating costs skyrocketed. Landlords were hit hard by those rising costs, but the Commission is confident the new allowable rate will recover those costs over time.
Market indications at the time the allowable rent increase was originally determined for 2009 suggested that record-high home heating costs would continue, however, the turmoil in world financial markets, the slowdown in the economy and the resulting reduced demand for petroleum products have sharply reduced home heating fuel prices.