First-tier Tribunal Determines Fair Market Rent for Disputed Property

OUTCOME: Allowed

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Case Reference

: BIR/00CS/MNR/2024/0197

Property : 67 [ADDRESS] [POSTCODE]

Tenant

: R [APPELLANT]

Landlord : [NAME]

Landlord’s agent : [NAME] of application : 6 August 2024

Type of Application : Determination of a Market Rent under sections 13 & 14 of the Housing Act 1988

Tribunal Members : [NAME]

Judge David R Salter

Date of Decision : 12 February 2025

_______________________________________________

DECISION

The Tribunal determines a rent of £1,000.00 per calendar month with effect from 1 September 2024. ____________________________________

T I O FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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REASONS FOR THE DECISION Background

1. On 22 July 2024, the Landlord served a notice under Section 13(2) of the Housing Act 1988 (“the Act”) which proposed a new rent of £1,500.00 per calendar month (pcm), in place of the existing rent of £700.00 pcm, to take effect from 1 September 2024. The original tenancy commenced on 1 May 2014 at a rental of £700.00 pcm.

2. On 6 August 2024, under Section 13(4)(a) of the Act, the Tenant referred the Landlord’s notice proposing a new rent to the Tribunal for determination of a market rent.

Inspection

3. The Tribunal carried out an inspection of the Property on 12 February 2025. Present at the inspection were the Tenant, [APPELLANT], and his son, [APPELLANT], together with, on behalf of the Landlord, [RESPONDENT] of [NAME], the Landlord’s agents.

4. The Tribunal found the Property to be a mid-terraced house which offered the following accommodation over three floors:

GF Two living rooms, kitchen; FF Three bedrooms, bathroom; SF Two bedrooms. Externally, the Property has a small forecourt and a small rear yard.

The Property has the benefit of partial double glazing and gas central heating.

The property adjoining the subject property is occupied for the purposes of a general store. The Property fronts onto [ADDRESS] close to its junction with [ADDRESS], approximately 3 ½ miles to the west of Birmingham City Centre.

5. At the time of the time of the Tribunal’s inspection, the Property was in poor condition with evidence of water ingress and damp.

Evidence

6. A hearing was held following the inspection at [ADDRESS] [POSTCODE]. The same parties were present at the hearing as for the inspection with the addition of the Landlord,

3 [RESPONDENT]. The submissions of the parties both at the hearing and in writing can be summarised as follows.

The Tenant

7. The Tenant stated that the following problems existed at the Property and needed to be remedied:

a) Damp. b) Electrical faults. c) The heating was not working. d) The floor needs repairing. e) The Property is very cold. f) Rat infestation.

8. He did not elaborate on what he described as this evidence of ‘multiple disrepair’. Further, the Tenant said that the proposed increase in rent was too much (an increase of more than 100%) and unreasonable, particularly in view of the condition of the Property which was having an adverse impact on the occupiers’ health. He added that his enjoyment of the Property was impaired by nuisances caused by the adjoining general store.

9. The Tenant also commented that the Rent Increase Notice was invalid. However, this was not substantiated by him either in his written submissions or when he was asked, directly, about this at the hearing.

The Landlord

10. On behalf of the Landlord, Ms [RESPONDENT], said that the Landlord had acquired the Property in May 2023. Following her appointment as managing agent, she had carried out an initial visit in July 2024. Subsequent to a report of mould by the Tenant, the Landlord made arrangements for contractors to resolve the problem. However, no other issues have been reported.

11. The Landlord provided rental evidence obtained from the Right Move Property Portal. This gave very brief details of seven 5-bedroom properties at rentals ranging from £2,000.00 to £3,600.00 pcm. The evidence also indicated that some of the properties were no longer advertised. At the hearing, the Tribunal put it to Ms [NAME] that most, if not all, of the comparable properties were Houses in Multiple Occupation (HMOs) for students or house sharers. In addition, most were recently refurbished and some in better areas. Ms [NAME] did not deny this but contended that properties with 5 bedrooms were much sought after and the rental proposed was reasonable.

4 12. The Landlord also stated that the Tenant had indicated that he and his family were due to vacate and that following their vacation, he intended to refurbish the Property.

13. Subsequent to the hearing, the Landlord provided the following additional information:

a) A Gas Safety certificate dated 22 November 2024. b) An Electrical Installation Condition Report dated 22 November 2024. This indicated three elements of the installation denoted “C3” improvement recommended. c) Various emails and messages indicating access was denied or frustrated from November 2024 into early 2025.

14. At the hearing, the Tribunal asked the Tenant if he accepted the Landlord’s comments that access had been prevented or that there had been a lack of cooperation in arranging times for contractors to visit. The Tenant accepted that these comments were justified as it had been difficult to offer convenient times due to the work commitments of various family members.

Determination and Valuation

15. The Tribunal does not accept the rental evidence offered by the Landlord. The properties offered as evidence are not comparable for the following reasons:

a) Most of the properties are HMOs for occupation by students not for occupation by a single household; b) Many of the properties have been refurbished and have more extensive accommodation; c) Some are located in areas where properties command better rentals.

Thus, the Tribunal relies on its own expert, general knowledge of rental values in the area and considers that the open market rental value for the Property in good condition would be in the region of £1,300.00 per calendar month.

16. However, the Property is not in a condition one would normally expect. It requires general but extensive refurbishment which would be expected as the current letting has run since 2014. The absence of such modernisation requires a downward adjustment of that market rent by £300.00 pcm. However, the Tribunal will not reduce the rental further to accommodate the outstanding repair issues noted during the inspection i.e. the damp/water ingress, as it appears that, since his acquisition of the Property, the Landlord has made recurring efforts to attend the Property to carry out repairs but has been frustrated by the Tenant.

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17. The full valuation is shown below:

pcm Market Rent

£1,300.00

Less a) Un-refurbished condition

£300.00

Total £1,000.00

Decision

18. In the absence of an application for hardship under section 14(7) of the Act, the Tribunal determines the market rent at £1,000.00 per calendar month with effect from 1 September 2024

Chairman: [NAME]: 12 February 2025

APPEAL PROVISIONS

If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this statement of reasons (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013) stating the grounds upon which it is intended to rely in the appeal.

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First-tier Tribunal – Property Chamber File Ref No. BIR/00CS/MNR/2024/0197

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 67 [ADDRESS] [POSTCODE]

[NAME] Judge D R Salter

Landlord [NAME]

Tenant R [APPELLANT]

1. The rent is: £1,000 Per Calendar month (excluding water rates and council tax but including any amounts in paras 3)

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

3. The amount included for services is not applicable

Per

4. Date assured tenancy commenced 1 May 2014 5. Length of the term or rental period Monthly 6. Allocation of liability for repairs Landlord and Tenant Act 1985

7. Furniture provided by landlord or superior landlord

8. Description of premises Terraced house with 5 bedrooms

[NAME] of Decision 12 February 2025