First-tier Tribunal Adjusts Rent Based on Property Condition

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/17UF/MNR/2021/0041

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 1 [ADDRESS], [POSTCODE]

[NAME] Mrs [RESPONDENT]

Landlord [NAME] [RESPONDENT] [NAME] 27 [ADDRESS], [POSTCODE]

Tenant Ms [APPELLANT]

1. The rent is: £925.00 Per Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 17 August 2021

3. The amount included for services is not applicable N/A Per N/A

4. Service charges are variable and are not included

5. Date assured tenancy commenced 17 October 2018

6. Length of the term or rental period Six months

7. Allocation of liability for repairs As per Landlord and Tenant Act

8. Furniture provided by landlord or superior landlord None

9. Description of premises A detached bungalow comprising 2 living rooms, 3 bedrooms, kitchen, bathroom and garage. Gas central hearting. Garden. Double glazing.

[NAME] of Decision 06/10/2021

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/17UF/MNR/2021/0041 Property : 1 [ADDRESS] [POSTCODE] Applicant : [redacted] : [COMPANY] Respondent : [redacted] :

[NAME] [COUNSEL] [NAME] of application : Application under Section 13(4) of the Housing Act 1988 referring a notice proposing a new rent under an Assured Periodic Tenancy to the Tribunal Tribunal members : [NAME] Mrs [NAME] and Date of Determination : The matter was dealt with by a paper determination on 6th October 2021

DETAILED REASONS

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BACKGROUND

1. On 6th August 2021, the Applicant (tenant of the above property) referred to the Tribunal, a notice of increase of rent served by the Respondent (landlord of the above property) under section 13 of the Housing Act 1988.

2. The Respondent’s notice, which proposed a rent of £950.00 per month with effect from 17th August 2021, is dated 14th July 2021.

3. The date the tenancy commenced is stated in the Application as being on 17th October 2018 and is stated by the Respondent to be an Assured Shorthold Tenancy. The current rent is understood to be £750.00 per month.

4. The Tribunal issued its Decision following a paper determination on 6th October 2021. The Applicant subsequently requested written reasons and these detailed reasons are provided in response to that request.

INSPECTION

5. Due to the COVID-19 pandemic and to comply with the revised Tribunal Regulations the Tribunal was unable to carry out an inspection of the property. The Tribunal considered whether an external ‘drive by’ inspection was necessary but considered that it had enough information to proceed with the determination without such an inspection.

ACCOMMODATION

6. The Tribunal has the benefit of the submissions and infers from the application that the property comprises a detached bungalow of traditional construction situated in an area of predominantly residential properties.

7. Briefly the accommodation comprises of entrance porch, hallway, two living rooms, inner lobby, fitted kitchen, conservatory, storeage cupboard, three bedrooms and family bathroom with four-piece sanitary suite comprising bath, wash hand basin, separate shower and W.C.

8. There are gardens to the front, rear and side. The driveway gives vehicle parking and there is a single garage.

9. The bungalow is understood to be double glazed and has gas fired central heating.

SUBMISSIONS

10. The Tribunal received written representations from both parties which were copied to the other party. Neither party requested a hearing.

11. The parties written and verbal representations are summarised as follows:

THE APPLICANT’S SUBMISSIONS

12. The Applicant submitted that the Respondents comparables were more modern than the subject property. In particular the carpets, built in furniture, light fittings, kitchen units, and wallpaper in the subject property were older than those in the comparables provided by the Respondent.

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13. The Applicant further submitted that the property had suffered from damp since the commencement of the tenancy. It was submitted that a damp specialist inspected the property in November 2018 and a copy of the brief report was provided to the Tribunal. Following receipt of this letter the Applicant had run a dehumidifier for four weeks but no further action had been taken by the Respondent.

14. The Applicant submitted that there was an electric fire in the lounge but this had been condemned by an electrician and had not been repaired or replaced. There was also a problem with the garage door which required replacement.

THE RESPONDENT’S SUBMISSIONS

15. The Respondent submitted that the damp in the property was, according to the letter from ‘[NAME]’ due to condensation and cold spots.

16. Both parties provided photographs and details of comparable properties which appeared to range from a one-bedroom bungalow at £750.00 per month, two- bedroom bungalows at £900.00-£950.00 per month and three-bedroom bungalows at £800.00-£900.00 per month.

THE LAW

17. In accordance with the terms of section 14 Housing Act 1988 the Tribunal proceeded to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy.

18. In so doing the Tribunal, as required by section 14(1), ignored the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act.

THE TRIBUNAL’S DECISION

19. The Tribunal initially considered the specific submissions and determined that based on the letter from ‘[NAME]’, a damp proofing company the property did not suffer from rising damp which would have had a major impact on the rent but predominantly from condensation. This is evidenced by the photographs submitted to the Tribunal.

20. There is no doubt that this is an attractively situated property. In the opinion of the Tribunal, the rental levels of bungalows are, due to an imbalance between supply and demand relatively more expensive than houses offering similar accommodation.

21. The subject property provides a lounge, separate dining room, conservatory, fitted kitchen, three bedrooms and bathroom with a separate shower as well as a bath. As such it effectively has three reception rooms as well as three bedrooms.

22. The Tribunal does however accept that the property is slightly dated and that repairs/ replacement of the electric fire to the lounge and the garage door are required.

23. In coming to its decision, the Tribunal had regard to the members' own general knowledge of market rent levels in the area of Derbyshire.

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24. Having regard to the general level of rents in the area the Tribunal concluded that if the subject property had been in good condition the market rental value would have been £950.00 per month.

25. However, the Tribunal has adjusted the market rent of £950.00 per month to reflect the matters referred to in paragraph 22. The Tribunal determined that an allowance of £25.00 per month was appropriate as follows:

1) Damaged garage door 6.00 2) Replacement electric fire 5.00 3) Dated fittings/decoration 14.00 Total £25.00 per month

26. The Tribunal therefore concluded that an appropriate market rent for the property would be £925.00 per month (£950.00 - £25.00 = £925.00).

27. In its Notice of Decision dated 6th October 2021, the Tribunal made a clerical error in that it incorrectly noted the date the increase in rent was to commence as being 17th October 2021. The Landlords Notice proposed the rent increase from 17th August 2021 and this is the correct effective date of the revised rent.

28. The Tribunal therefore determined that the rent at which the property might reasonably be expected to be let on the open market would be £925.00 per month from 17th August 2021 being the date of the Landlords Notice. A revised Notice of Decision is attached to reflect the correct effective date.

APPEAL

29. Any appeal against this Decision can only be made on a point of law and must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal the party appealing must apply, in writing, to this Tribunal for permission to appeal within 28 days of the date of issue of this Decision, (or, if applicable, within 28 days of any decision on a review or application to set aside) identifying the decision to which the appeal relates, stating the grounds on which that party intends to rely in the appeal, and stating the result sought by the party making the application.

[NAME] First-tier Tribunal Property Chamber (Residential Property)