First-tier Tribunal Determines Fair Market Rent for Assured Shorthold Tenancy

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. CHI/18UB/MNR/2022/0082

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 [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT] Mr [RESPONDENT]

Landlord Mr & Mrs [RESPONDENT] c/o [ADDRESS], [POSTCODE]

Tenant Ms [APPELLANT]

1. The rent is: £ 650.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 16 July 2022

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

4. Date assured tenancy commenced 16 August 2017

5. Length of the term or rental period Monthly periodic

6. Allocation of liability for repairs As per section 11 of the Landlord & Tenant Act 1985

7. Furniture provided by landlord or superior landlord None

8. Description of premises Ground floor flat in a converted Grade II Georgian country house with accommodation comprising reception room, kitchen, bedroom, bathroom. Parking.

[NAME] of Decision 5 September 2022

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : CHI/18UB/MNR/2022/0082

Property : [ADDRESS], [POSTCODE]

Applicant Tenant : Ms [APPELLANT]

Respondent Landlord : Mr [COUNSEL] : [COUNSEL] of application : Determination of a Market Rent

Sections 13 & 14 of the Housing Act 1988

Tribunal member(s) : [NAME] (Chairman)

[NAME]

[NAME] of decision : 5 September 2022

DECISION

© CROWN COPYRIGHT

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Covid-19 pandemic: Description of determination This has been a remote determination on the papers which has been consented to by the parties. A face-to-face hearing was not held because it was not practicable and all issues could be determined in a remote determination on papers. The documents that the Tribunal were referred to are in an electronic bundle, the contents of which have been noted. The order made is described below.

Decision of the Tribunal

On 5 September 2022 the Tribunal determined a Market Rent of £650.00 per calendar month to take effect from 16 July 2022.

Background

1. By way of an application dated 4 July 2022, received by the Tribunal on 13 July 2022, the Applicant tenant of Flat 3 Turlake House, Three Horse Shoes, [APPELLANT], Exeter, Devon, [POSTCODE] (‘the Property’), referred a Notice of Increase in Rent (‘the Notice’) by the Respondent landlord of the property under Section 13 of the Housing Act 1988 (‘the Act’) to the Tribunal.

2. The Notice, dated 1 June 2022, proposed a new rent of £650.00 per calendar month, in lieu of the passing rent of £575.00 per calendar month, to take effect from 16 July 2022.

3. The tenant occupies the property under an Assured Shorthold Periodic Tenancy commencing 16 August 2017. A copy of the tenancy agreement was provided.

4. On 22 July 2022, the Tribunal issued Directions advising the parties that it considered the matter suitable for determination on papers unless either party objected, in writing, within 7 days. The parties were also advised that no inspection would be undertaken. No such objections were received.

5. The Directions required the landlord and tenant to submit their completed statements by 5 August 2022 and 19 August 2022 respectively, with copies also to be sent to the other party. Neither party filed any submissions.

6. In the absence of submissions from either party the matter was determined having regard to the information contained in the tenant’s application and, acting as an expert Tribunal, the Tribunal’s own knowledge and experience.

Law 7. In accordance with the terms of Section 14 of the Act, the Tribunal is required to determine the rent at which it considers the subject property might reasonably be expected to let on the open market, by a willing landlord, under an assured tenancy, on the same terms as the actual tenancy.

8. In so doing, and in accordance with the Act, the Tribunal ignores any increase in value attributable to tenants’ improvements and any decrease in value due to the tenants’ failure to comply with any terms of the tenancy.

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The Property

9. As stated, and in accord with current Tribunal policy, the Tribunal did not inspect the property, instead relying on the tenant’s application form and viewing external images of the property via publicly available online portals.

10. Turlake House is a Grade II Listed Georgian country house dating from 1830, with accommodation over two floors and an attic. The building has rendered elevations beneath a hipped roof clad in slates. The date of conversion from a single dwelling into multiple self-contained accommodation is unknown.

11. Flat 3 Turlake House is situated on the ground floor of the building.

12. Cowley is located approximately three miles north of Exeter in a rural location with limited local amenities.

13. The accommodation comprises a kitchen; reception room; bedroom; and bathroom with WC.

14. A parking space is included within the tenancy.

15. Gardens and grounds are assumed to be communal.

16. No information on heating, glazing, provision of white goods, furniture, carpets or curtains were provided by either party.

17. No information on service charges or charges for utilities were provided by either party.

18. No comparable evidence was provided by either party.

Submissions – Tenant

19. None

Submissions – Landlord

20. None

Determination

21. The Tribunal determines a market rent for a property by reference to rental values generally and to the rental values for comparable properties in the locality in particular. It does not take into account the present rent and the period of time which that rent has been charged, nor does it take into account the percentage increase which the proposed rent represents to the passing rent. In addition, the legislation makes it clear that the Tribunal cannot take into account the personal circumstances of either the landlord or the tenant.

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22. The Tribunal assesses the rent for the property as at the date of the landlord’s Notice and on the terms of the extant tenancy. The Tribunal disregards any improvements made by the tenant, but takes into account the impact on rental value of disrepair which is not due to a failure of the tenant to comply with the terms of the tenancy.

23. In determining the rent, the Tribunal has regard to any evidence supplied by the parties and the Tribunal’s own general knowledge of market rental levels in the wider area. In this instance neither party filed any submissions.

24. Having consulted the National Energy Performance Register online, the Tribunal noted the property to have an Energy Performance Certificate (EPC) Rating of F, and a recorded floor area of 45m2.

25. The EPC record shows the property as having full secondary glazing, rated as ‘Good’, and electric heating, rated as ‘Very Poor’. An EPC includes information on how a property’s energy performance can be improved. In this regard the EPC advises.:

i. Improve internal or external wall insulation; ii. Install floor insulation; iii. Install high heat retention storage heaters.

The Tribunal acknowledges the difficulties an [NAME] would face in implementing the first two recommendations within a Grade II Listed building in multi-ownership.

26. In determining the market rent, the Tribunal has regard to whether the property meets the standard of accommodation, repair and amenity of a typical modern letting. In the absence of any submissions to the contrary, the Tribunal must assume that such standards are met, albeit with the findings of the EPC to mind.

27. Accordingly, the Tribunal, acting as an expert Tribunal, and having regard to its own specialist knowledge, must determine the open market rent, at the pertinent date, of the property with accommodation and parking as listed within the tenant’s application form.

28. As a consequence of the rural location, direct comparable evidence is considered by the Tribunal to be scarce. Widening the area to include Exeter increases the letting stock available however rental prices in Exeter city centre are considered, by the Tribunal, to be higher than a rural location such as this.

Accordingly, the Tribunal considers that rental prices for a comparable size one bedroom flat range between £640.00 and £900.00 dependent on location and facilities.

29. Doing the best it can on the limited information provided, and referring to its own specialist knowledge, the Tribunal determines that the rent which the property could be expected to achieve on the open market, assuming it to be in a condition and state of modernisation considered usual for such a letting, would be £650.00 per month.

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30. The Tenant made no submissions to the Tribunal in regard to delaying the effective date of the revised rent on grounds of hardship. Accordingly, the rent of £650.00 will take effect from 16 July 2022, that being the date stipulated within landlord’s notice.

RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to [EMAIL] to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.