First-tier Tribunal Adjusts Rent Based on Property Condition

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. CHI/29UG/MNR/2024/0067

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 41 [ADDRESS], [POSTCODE]

[NAME] Miss [RESPONDENT] [NAME] Mr [RESPONDENT]

Landlord [RESPONDENT] [ADDRESS], Gravesend, Kent, DA11

Tenant Ms [APPELLANT] [NAME]

1. The rent is: £ 1500.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 27 March 2024

3. The amount included for services is not applicable n/a Per n/a

4. Date assured tenancy commenced 27 January 2021

5. Length of the term or rental period Monthly periodic

6. Allocation of liability for repairs In accordance with agreement

7. Furniture provided by landlord or superior landlord None

8. Description of premises A Victorian two storey mid terrace house comprising three bedrooms, living room, kitchen, ground floor bathroom, rear garden.

[NAME] of Decision 10 May 2024

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CHI/29UG/MNR/2024/0067 Property : 41 [ADDRESS], [POSTCODE] Applicant : [redacted] : [COUNSEL], Citizens Advice Respondent : [redacted] : None Type of application : Section 13(4) Housing Act 1988 Tribunal members : Mr [NAME] Mr [NAME] Miss [NAME] : Paper determination Date of decision : 10th May 2024

DECISION

2 Decision of the tribunal (1) The Tribunal determines that the rent that the property in its current condition as at the 27th March 2024 might reasonably be expected to achieve in the open market under an assured tenancy is £1,500 per month Background 1. The Tenant has lived in the property as assured periodic tenant since 27th January 2021 with an agreement of which date at a commencing rent of £1,150 per month.

2. On the 25th January 2024 the Landlord served a notice pursuant to section 13(2) of the Housing Act 1988 seeking to increase the rent from £1,200 per month to £1,500 per month, being an increase of £300 effective from 27th March 2024.

3. By an application dated 14th March 2024, the Tenant referred that notice to the Tribunal for a determination of the market rent. The Tribunal issued Directions for the conduct of the matter on 28th March 2024.

4. On 8th May 2024 the Landlord submitted a Case Management Application for the admission of evidence stated in an email dated 7th May 2024. The Tribunal has considered this late request and following careful consideration duly grants the inclusion of this evidence. It is apparent to the Tribunal that the ground floor configuration has been altered. Insomuch, that the partition wall between the original two reception rooms has been removed to form a large living room. Otherwise, the comparable evidence was included in the Landlord’s Rent Appeal Statement.

5. The Tribunal considered the matter suitable for a determination on the papers and therefore a hearing was not necessary. The parties did not disagree with this arrangement. The Evidence 6. The Tribunal has before it a bundle of evidence which includes a background to the case, the application, the directions, the tenancy agreement, completed rent appeal statement on behalf of the Landlord and the Tenant. These statements included photographic evidence showing the condition of the house. In addition, both the Landlord and Tenant submitted details of comparable rental evidence and more about this is stated below. Inspection

3 7. The Tribunal did not inspect the property and relied on the information provided by the parties, [NAME], [ADDRESS] and its expert knowledge. The property is a Victorian mid terrace house located in an established road opposite a large garage/commercial premises.

8. The accommodation comprises: 3 bedrooms, living room (which was formerly two rooms) kitchen, ground floor bathroom. There is double glazing and gas central heating. The property has a rear garden and road side parking. Carpets and curtains were provided by the Landlord but no white goods. The property was evidently refurbished by the Landlord in 2021. The Law 9. The rules governing a determination are set out in section 14 of the Housing Act 1988. In particular, the Tribunal is to determine the rent at which the property might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy, subject to disregards in relation to the nature of the tenancy (i.e. it being granted to a “sitting tenant”) and any increase or reduction in the value due to the tenant’s improvements or failure to comply with the terms of the tenancy. In the absence of any evidence to the contrary, the Tribunal has proceeded on the basis that the landlord is responsible for repairs to the structure, exterior and any installations pursuant to section 11 of the Landlord and Tenant Act 1985 and the tenant for interior decoration. The Valuation 10. Having carefully considered all the evidence from the Landlord and the Tenant the Tribunal considers that the rent that would be achieved in a good marketable condition with reasonably modern kitchen and bathroom fittings, modern services, carpets, curtains and white goods supplied by the Landlord would be £1,700 per month. This figure is based upon the comparable evidence provided by the parties and the Tribunal’s professional judgement and experience. 11 The Tribunal now needs to adjust this figure to allow for the internal condition with evidence of mould to the property, no white goods and defective double-glazed windows which require replacement. The Tribunal has considered very carefully the tenant’s submissions and using its own expertise, concluded that a deduction of £200 should be applied. This reduces the rental figure to £1,500 per month. It should be noted that this figure cannot be a simple arithmetical calculation and is not based upon capital costs but is the Tribunal’s estimate of the amount by which the rent would need to be reduced to attract a tenant. 12 The average rent for rental properties in the Gravesend area has increased every quarter since the end of 2019, according to the online property

4 portal [NAME]. The rent increases are due to not enough properties coming to the market to meet demand and the number of homes for rent is 46 per cent below 2019 levels. This puts this decision in context with the current rental market.

13. The Tribunal has been provided with a copy of the tenancy agreement, which incorporates the usual repair obligations.

14. The Tribunal received no evidence of hardship from the Tenant and, therefore, the rent determined by the Tribunal is to take effect from 27th March 2024.

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).