PEI Bad Faith Eviction Penalty: Section 65 Remedies and the One-Year Deadline

What Section 65 Says

When a landlord terminates a tenancy for personal use (Section 62), purchaser use (Section 63), or demolition/renovation (Section 64), the Act holds them to a duty of good faith. If the landlord doesn't follow through on the stated purpose — or never genuinely intended to — the former tenant can file a complaint with the Rental Office under Section 65.

If the Director finds bad faith, Section 65 allows one or more of these orders:

• Payment of all or part of the former tenant's increased rent for a one-year period after vacating, plus reasonable out-of-pocket moving, storage, and similar expenses
• A rent abatement
• An administrative monetary penalty of up to $10,000, payable to the Director
• Any other order the Director considers appropriate

The rent remedy is based on the increase between the former and new rent, not a fixed multiple of the former rent; the Director may order all or part of the increase incurred over the one-year period. Section 106 separately provides for a fine of up to $25,000 on summary conviction for a contravention of the Act; that is distinct from Section 65's administrative penalty.

What Triggers Bad Faith

The Act doesn't list every scenario, but the pattern is clear from Rental Office decisions:

Re-listing the unit: You terminate for personal use, the tenant leaves, and you advertise the unit for rent — especially at a higher price. This is the most common bad-faith fact pattern.

Not moving in: You said you or a qualifying family member would occupy the unit, but nobody occupies it for the required one-year period.

Brief occupation: You or a family member moves in for a few weeks, then leaves and the unit goes back on the rental market. A token occupancy doesn't satisfy the good-faith requirement.

Using the wrong ground as a pretext: Terminating for "renovations" when the actual plan is to re-let at market rate, or claiming personal use when you actually want to sell the property vacant.

How Long Does the Risk Last?

The former tenant must apply within one year after vacating. For a Section 62 personal-use notice, the Act presumes bad faith if, from the date of notice through one year after the tenant vacates, the landlord advertises the unit for rent, rents it to someone else, or advertises the property for sale. The one-year application limit also applies to bad-faith applications involving Sections 63 and 64. In practice, the highest risk period is the first 6–12 months after the tenant vacates — that's when a re-listing or failure to occupy becomes most visible.

How to Protect Yourself

Good faith isn't just about intentions — it's about evidence. If you genuinely intend to move into the unit, document it:

• Before the termination: Keep records of your decision-making — when you decided to move in, why, correspondence with family members who will occupy the unit.
• At vacate: Complete the move-in promptly. Update your address with utilities, Canada Post, and relevant government agencies.
• After move-in: Maintain occupancy records. If circumstances change later (you need to move out sooner than expected), document the genuine change and consult a lawyer before re-letting.

For purchaser-use terminations, the buyer's sworn affidavit is your first line of documentation. After closing, the buyer should document their own occupancy.

The Compensation Overlap

The original compensation duty under Sections 70–73 is separate from a Section 65 bad-faith application. The Director decides which Section 65 orders are appropriate; the Act does not set an automatic award equal to 12 months of the former tenant's rent.

The Ending a Tenancy in PEI guide includes a good-faith documentation log designed to create a contemporaneous record of your intentions and follow-through after any Form 4B termination.

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