Fair Rent Determination for Residential Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AW/F77/2023/0369

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were [ADDRESS], [POSTCODE]

Judge B MacQueen Tribunal Member [NAME], MRICS

Landlord Northumberland and [COMPANY]

Tenant [APPELLANT]

1. The fair rent is £3 178.82 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 18 January 2024

3. The amount for services is £418.82 Per month

negligible/not applicable

4. The amount for fuel charges (excluding heating and lighting of common parts) not counting for rent allowance is

n/a Per n/a

negligible/not applicable

5. The rent is to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply (please see calculation overleaf).

7. Details (other than rent) where different from Rent Register entry

n/a

Chairman Judge B. MacQueen Date of decision 18 January 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 379

PREVIOUS RPI FIGURE Y 307.4

X 379 Minus Y 307.4 = (A) 71.6

(A) 71.6 Divided by Y 307.4 = (B) 0.232921

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C) n/a

If no (B) plus 1.05 = (C) 1.282921

Last registered rent* £2 634.81 Multiplied by (C) = £3 380.25 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £3 380.50

Variable service charge YES If YES add amount for services £418.82

MAXIMUM FAIR RENT = £ 3 799.32 Per month

Explanatory Note

1. The calculation of the maximum fair rent, in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair rent to be calculated by:

(a) increasing the previous registered rent by the percentage change in the retail price index (the RPI) since the date of that earlier registration and

(b) adding a further 7.5% (if the present application was the first since 1 February 1999) or 5% (if it is a second or subsequent application since that date).

A 7.5% increase is represented, in the calculation set out above, by the addition of 1.075 to (B) and an increase of 5% is represented by the addition of 1.05 to (B).

The result is rounded up to the nearest 50 pence.

3. For the purposes of the calculation the latest RPI figure (x) is that published in the calendar month immediately before the month in which the Tribunal’s fair rent determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the rent is to be registered as variable under section 71(4) of the Rent Act 1977. In such a case the variable service charge is removed before applying the formula. When the amount determined by the application of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

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Case Reference

: LON/00AW/F77/2023/0369

Property : [ADDRESS], [POSTCODE]

Tenant

: [NAME] [APPELLANT]

Landlord : [APPELLANT] of Objection : Landlord Objection (11 October 2023)

Type of Application : Section 70, Rent Act 1977

Tribunal

: Tribunal Judge MacQueen

Tribunal Member [NAME], MRICS

Date of Summary Reasons

: 18 January 2024

_______________________________________________

DECISION

The sum of £3 178.82 per calendar month will be registered as the fair rent with effect from 18 January 2024, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

Background

1. Following an objection from the Landlord to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection

2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence

3. There were no written submissions from the parties. The Tribunal considered the documents that had been sent by the Valuation Office Agency.

Determination and Valuation

4. This is a self-contained flat in a purpose built Victorian mansion block. The accommodation is comprised of 4 rooms, a kitchen, bathroom and a w.c. and central heating. The tenant provided some evidence that two radiators were not working, that two windows were in poor order with rot and gas cooker was not working correctly.

5. Having consideration of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in the condition and with the amenities the market would expect to be in the region of £4700 per calendar month.

6. This hypothetical rent is adjusted as necessary to allow for the differences between the terms and conditions considered usual for such a letting in today’s market and the condition of the actual property at the date of the determination under the Rent Act 1977. Any rental benefit derived from Tenant’s improvements is disregarded.

7. The following deductions were made:

Windows in poor order and no double glazing 5%

Cooker not working properly

5%

Central heating only partially working 5%

Carpets & Curtains 5%

3

No decorating & Internal repairing obligations on the landlord 5%

Total 25%

8. A further deduction for Scarcity of 20% was then made to reach an uncapped Fair Rent for the purposes of s.70. An addition of £418.82 for monthly service charge has been made giving a final uncapped rent of £3,178.82 per calendar month.

Decision

9. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £3799.32. The calculation of the capped rent is shown on the decision form. In this case, the lower rent of £3178.82 per calendar month is to be registered as the fair rent for this property.

10. The Tribunal determines a rent of £3178.82 per calendar month.

Chairman: Judge MacQueen

Date: 18 January 2024

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If [NAME] wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any subsequent application for permission to appeal should be made on Form RP PTA