Executive Summary: Key Legal and Evidentiary Issues

• Whether Westphal’s water meter rule met the reasonableness standard under s. 9A(3) of the Residential Tenancies Act (RTA).

• The legal status of Policy 45 and whether it is binding or merely administrative guidance.

• Fairness of applying water meter requirements to some tenants but not all within the community.

• Consistency of Westphal’s Community Guidelines with the RTA, given the creation of tenant classes with different water obligations.

• The sufficiency of evidence supporting the claim that water meter rules promoted fair distribution of services or protected property.

• Whether the Small Claims Court adjudicator made any error of law in concluding the landlord’s rules were unreasonable.

Facts of the case

Westphal Court Ltd. (Westphal), the landlord of Woodbine Community Park, a land-lease mobile home community, implemented a rule requiring buyers of mobile homes to have a community-approved water meter installed as a condition of approving the sale. This rule, introduced in 2015 through amendments to the Community Guidelines, did not apply to existing homeowners at that time. Nicole Herd, who became a tenant in 2019, paid a $28.75 transfer fee for the existing water meter installed by the prior owner. Eloise Graves, who became a tenant in 2021, paid $320 to install a water meter on her home. Both tenants were invoiced quarterly for water usage.

Policy 45, issued by the Residential Tenancies Program and effective March 1, 2023, stated that requiring tenants in land-lease communities to install water meters at their own expense was not a reasonable rule. However, it excluded homes with pre-existing water meters from this protection. Westphal ceased requiring new tenants to install water meters after the policy came into effect but continued charging those who already had meters installed. Herd and Graves each applied under s. 13 of the RTA for removal of the meters and reimbursement of related costs. Their applications were dismissed by Tenancy Officers based on Policy 45. They appealed to the Small Claims Court, which heard their cases jointly and ruled in their favour, awarding Herd $2,511.02 (including the transfer fee and invoiced water fees) and Graves $1,769.00 (including the cost of the meter and invoiced water fees).

Outcome of the decisions

Westphal appealed to the Supreme Court of Nova Scotia, arguing that the adjudicator erred in law by finding Policy 45 inconsistent with the RTA and by ruling that their Community Guidelines were unreasonable. The Supreme Court dismissed the appeal, holding that:

• Policy 45 is administrative in nature and not legally binding.

• The landlord’s rule requiring water meters at the time of home sale was unreasonable under s. 9A(3) of the RTA because it did not apply fairly to all tenants.

• The portion of Policy 45 that excluded tenants with existing water meters created unfair classes of tenants and perpetuated an unreasonable rule.

• The adjudicator made no error of law in concluding that Westphal’s rules did not promote fair distribution of services and did not apply in a fair manner to all tenants.

• Landlords may seek rent increases through applications under s. 11(b) of the RTA to recover water-related costs rather than imposing individual water meter requirements.

The appeal was dismissed with costs awarded to the respondents as prescribed by the Small Claims Court regulations.