First-tier Tribunal Adjusts Rent Based on Property Condition

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/31UC/MNR/2019/0002

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 20 [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT]

Landlord Mr [RESPONDENT] [NAME] 155 [ADDRESS], [POSTCODE]

Tenant Mrs [APPELLANT] [NAME]

1. The rent is: £717.00 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 1 February 2019

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 1 March 2018

6. Length of the term or rental period Six Months

7. Allocation of liability for repairs Landlord & Tenant Act

8. Furniture provided by landlord or superior landlord none

9. Description of premises A semi detached house comprising hall, lounge, dining kitchen, one double bedroom, two single bedrooms and bathroom with shower over bath. Gas central heating and garden to front and rear. Timber shed. Car parking.

[NAME] of Decision 25 February 2019

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/31UC/MNR/2019/0002 Property : 20 [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent’s : [COMPANY] (786) [RESPONDENT] : None Type 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] Judge C Goodall Venue and Date of Determination : The matter was dealt with by a paper determination on 25th February 2019 Date Detailed Reasons issued : 25 March 2019

DETAILED REASONS

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BACKGROUND

1. On 11th January 2019, 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 £850.00 per calendar month with effect from 1st February 2019, is dated 20th December 2018.

3. The date the tenancy commenced is stated on the Application Form as being on 1st January 2016 and is an [NAME]. The current rent is stated in the Respondent’s notice as being £800.00 per calendar month. The rent at the commencement of the tenancy was £650.00 per calendar Month.

4. The Tribunal issued its Decision following the inspection on 25th February 2019. The Applicant subsequently requested written reasons and these detailed reasons are provided in response to that request.

INSPECTION

5. The Tribunal inspected the property on Monday 25th February 2019 in the presence of Mrs [RESPONDENT]. The Respondent also attended the inspection but did not arrive until the Tribunal were about to leave the property.

6. The property comprises a semi-detached house of traditional construction situated on a development of predominantly similar type properties.

7. Briefly the accommodation comprises of hallway with stairs off to the first floor, lounge and breakfast kitchen on the ground floor. The kitchen is fitted with a range of base and wall cupboards with an inset sink unit, built in oven and hob and an extractor fan.

8. On the first floor the landing leads to one double bedroom, two single bedrooms and small bathroom being fitted with a three-piece sanitary suite and electric extractor fan. There is an electric shower over the bath.

9. The house has Upvc double glazed windows throughout and gas fired central heating. There is no radiator to the bathroom. The double-glazed windows are in need of some repair and in particular the Tribunal noted that the glazing panes to the lounge and double bedroom were defective having condensation inside them.

10. The gas boiler was located in the kitchen and was noted to be a relatively new unit.

11. Externally there are gardens to the front and rear. There is a detached brick garage which the landlord Respondent has retained for its own use and a timber shed which is used by the Applicant tenant.

12. The property was found to be in generally acceptable condition throughout commensurate with its age and type. However, the Tribunal noted extensive condensation mould throughout which the Tribunal attributes to the Applicant as in the Tribunals experience this is invariably caused by a lack of heating and adequate ventilation which is in the exclusive control of the tenant. There was also evidence of past leaking with damage to ceilings.

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13. The Tribunal also noted that for a modern [NAME] the kitchen and bathroom both required upgrading.

EVIDENCE

14. The Tribunal received written representations from both parties which were copied to the other party.

15. The Applicant submitted:

1) That the W.C. was leaking which had caused damage to ceilings and affected the electrics.

2) That there is damp mould to the lounge, all three bedrooms and the bathroom.

3) That the bathroom was very small and had no heating.

4) That the radiator thermostat to one of the bedrooms did not work and the bedroom was therefore very hot.

5) That the kitchen sink drain pipe leaked externally.

6) That there was an identical property situated in [ADDRESS] currently marketed at £700.00 per calendar month.

16. The Respondents submitted:

1) That there were many maintenance issues which the landlord has had to deal with over the years including a new W.C.

2) That the tenant has lived in the property for a lengthy period of time and it was only sensible for the landlord to increase the rent.

3) That some of the issues the tenant had referred to (the W.C. and thermostat) had already been resolved. (The Applicant tenant confirmed to the Tribunal at the inspection that the radiator thermostat was still faulty).

4) That the Respondent Landlord was not opposed to resolving the issues mentioned by the Applicant providing she agreed to pay the proposed rent.

17. Neither party requested a hearing and the Tribunal therefore made a determination based upon its inspection and the written submissions received.

THE LAW

18. 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.

19. 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

20. The Tribunal noted that the property was not in the best condition. Some defects were determined to be the responsibility of the Applicant but some were clearly the responsibility of the Respondent.

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21. In coming to its decision, the Tribunal had regard to the members' own general knowledge of market rent levels in the area of Leicester. Thurmaston itself is generally considered to be a relatively sought-after residential area.

22. The Tribunal considered the evidence submitted by the Respondent in respect of the identical property currently on the market in [ADDRESS] and although they had regard to it, had not had the opportunity to inspect the house internally. 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 £800.00 per calendar month.

23. However, the property as inspected by the Tribunal was not in the condition that would be expected in the open market and the Tribunal therefore made the following deductions to reflect the condition of the property as follows.

1) Kitchen requires updating 10.00 2) Bathroom requires updating 8.00 3) Defective double glazing 5.00 4) Lack of garage-retained by Respondent landlord 60.00 Total £83.00 per month

24. The Tribunal therefore concluded that an appropriate market rent for the property would be £717.00 per calendar month (£800.00 - £83.00).

25. The Tribunal therefore determined that the rent at which the property might reasonably be expected to be let on the open market would be £717.00 per calendar month.

26. This rent will take effect from 1st February 2019, being the date of the Respondent’s notice.

APPEAL

27. 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)