First-tier Tribunal Adjusts Rent Due to Disrepair and Improvements

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/00CW/MNR/2024/0014

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 34 [ADDRESS], [POSTCODE]

[NAME] Mrs [RESPONDENT] Mr [RESPONDENT]

Landlord Mr [RESPONDENT] [NAME] C/[APPELLANT], 52 [ADDRESS], [POSTCODE]

Tenant Mr [APPELLANT]

1. The rent is: £890.00 Per Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 1st March 2024

3. The amount included for services is not applicable

Per

4. Date assured tenancy commenced 1st October 2010 5. Length of the term or rental period Assured Periodic 6. Allocation of liability for repairs As Per Landlord and Tenant Act 7. Furniture provided by landlord or superior landlord None 8. Description of premises A detached house comprising of porch, hallway, lounge/ dining room, kitchen. On the first floor are three bedrooms and bathroom. Central heating. Double glazing outside. Garage. Gardens.

[NAME] of Decision 25/04/2024

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/OOCW/MNR/2024/0014 Property : 34 [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent : [redacted] :

[NAME] (Managing Agents)

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 : Mr [NAME] Mrs [NAME] Mr [NAME] and Date of Determination : The matter was dealt with by a Video Hearing on 25th April 2024

DETAILED REASONS

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BACKGROUND

1. On 25th January 2024, 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 £1,100.00 per calendar month with effect from 1st March 2024, is dated 4th January 2024.

3. The date the tenancy commenced is stated on the Application Form as being on 1st November 2010 although there is a copy agreement in the bundle submitted to the Tribunal for an initial period of 12 months from 1st July 2022.

4. There had been two previous Notices of Increase served on the Applicant but it was agreed by the parties at the hearing that these were not valid and it was therefore the Notice of Increase dated 4th January 2024, which was accepted by them as being valid and which was the subject of this hearing.

5. The Tribunal had issued various Directions in respect of previous applications by the Applicant in respect of the invalid Notices but the Directions in respect of the valid Notice were issued on 2nd February 2024.

THE PROPERTY

6. Neither party requested an inspection and the Tribunal has therefore determined the matter based on the papers provided to it and submissions made at the hearing.

7. At the hearing the Tribunal asked the Applicant to describe the property which is understood to be a detached house with an entrance porch, hallway, lounge/dining room and kitchen on the ground floor.

8. On the first floor the landing leads to three bedrooms and a bathroom.

9. Outside there are gardens to the front and rear and a single garage. There is an outside WC which is broken.

10. There is understood to be central heating and double glazing. It was confirmed to the Tribunal that the Applicant provided all the white goods, all the curtains and the carpets to the lounge/dining room, hall and staircase. The Respondent provided all carpets to the first floor and vinyl covering to the kitchen and bathroom.

EVIDENCE

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

THE APPLICANT’S SUBMISSIONS

12. In summary, in writing and at the hearing the Applicant submitted that the numerous repairs required to the property had not been completed. These had been the subject of an inspection by the local authority and can briefly be summarised: -

a) Damp to the kitchen and areas of bedrooms 1 and 3. b) Brittle glass to the serving hatch, porch and side glazing.

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c) Outside WC and sink broken. d) Bathroom upgrade and ventilation not completed. e) The WC in the bathroom leaks with condensation from the cistern. f) There is damp (both mould and damp penetration) to the lounge widow area. g) The kitchen requires modernisation and adequate mechanical ventilation. h) General roof/gutter repairs required. i) No kitchen radiator. j) External slab and drain cover repairs are required. k) There is no kitchen door.

13. Photographs were submitted by the Applicant in support of his case.

14. The Applicant further submitted that in 2022 the rent had increased to £650.00 per month and this proposed increase of some 70% was excessive. In the opinion of the Applicant rental levels had increased by some 30% over the whole of the UK and 10% for local authority properties. The landlord had spent nothing on this property to justify such an increase.

15. The Applicant referred to a similar three-bedroom house in a nearby street, marketed at £895.00 per month in January 2024.

THE RESPONDENT’S SUBMISSIONS

16. In summary, in writing and at the hearing the Respondent (through its Representative) submitted that all the works requested had been carried out or were intended to be carried out, and although the managing agents only took over management of the property in August 2023, they had endeavoured to complete the necessary works which were ongoing. They had received a quotation for £2,600.00 to carry out works but there had been difficulties with access to carry them out. This was disputed by the Applicant.

17. It was submitted that mortgage rates had increased which meant that the Respondent needed to raise the rental charged. With regard to comparable evidence the Respondent submitted that rental levels for three-bedroom properties ranged between £950.00 - £1,200.00 per month. It was accepted that at a rental of £1,200.00 per month the property would need to be in excellent condition. The Applicant had been in occupation for 14 years so the decoration would be his responsibility. All other repairs were the responsibility of the Respondent.

18. The Respondent referred to the letting of the adjacent property, [ADDRESS] which was let in June 2023 for £1,050.00 per month. In this property the landlord had provided all carpets and curtains and the cooker.

THE LAW

19. 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.

20. 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.

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THE TRIBUNAL’S DECISION

21. In the first instance the Tribunal considered the comparable evidence provided by the parties and having regard to the general level of rents in the area the Tribunal concluded that the rental value of the subject property is £1,050.00 per calendar month.

22. The Tribunal then considered the improvements carried out by the Applicant comprising of the provision of white goods and some carpets and concluded that these would have an effect on the valuation as follows:

White Goods 20.00 Carpets and Curtains 15.00 Total £35.00

23. The Tribunal proceeded to consider the question of disrepair. It is evident from the evidence of the Applicant and the photographs provided that the defects referred to in paragraph 11 above will have a material effect on the rental value of the property.

24. The Tribunal assessed the various items as detailed in paragraph 11 as follows:

Damp to kitchen & bedrooms 10.00 Outside WC 5.00 Bathroom upgrade/WC 20.00 Damp to lounge 25.00 Kitchen upgrade 40.00 Roof/gutter repairs 15.00 General items 10.00 Total £125.00

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 £890.00 per calendar month (£1,050.00 - £35.00 - £125.00) which is effective from 1st March 2024, being the date specified on the Respondent’s Notice of Increase.

APPEAL

26. 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)