First-tier Tribunal Determines Fair Rent After Tenant Improvements

OUTCOME: Allowed

© CROWN COPYRIGHT

Case Reference

: BIR/00CT/F77/2024/0630

Property : 39 [ADDRESS] [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [APPELLANT] of Application : Section 70 [NAME] 1977

Tribunal Members : [NAME]. [NAME]. [NAME]. [NAME]. FRICS

Date of Decision : 13th February 2025

_______________________________________________

DECISION

The sum of £610.00 per month will be registered as the fair [NAME] with effect from 13th February 2025 being the date the Tribunal made the Decision. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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REASONS FOR THE DECISION

Background

1. On 31st October 2024, the [NAME] registered a [NAME] of £607.00 per calendar month, effective from 8th December 2024. Following an objection from the Landlord to the determination of a fair [NAME] by the [NAME], the Tribunal has made a determination under the provisions of the [NAME] 1977.

Inspection

2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties and having regard to its own knowledge, expertise and online research.

Evidence

3. The Tribunal has considered the written submissions provided by the Tenant and the Landlord. From the information provided it appears that the subject property comprises a semi-detached, 3-bedroom, double-glazed & centrally heated dwelling with single timber frame garage, outside WC, stores, gardens to front and rear together with off-road parking.

4. The Tribunal notes that the heating, white goods and carpets & curtains have been provided by the Tenant.

5. The Tribunal further notes from the Tenant’s submissions that they have carried out extensive improvements including:-

 Installed gas central heating in 2014 together with a gas fire and surround.  Installed uPVC double glazing throughout including a new front door  Replaced the bathroom suite and installed PVC wall panelling.  Installed a fitted kitchen in2017.  Re-slabbed the driveway.  Erected a garden shed.

6. The Tenant has not submitted any comparable evidence. The Landlord has provided extracts of comparable open market lettings ranging from £1,250 to £1,450 per calendar month, Rightmove information, and a confirmation email from [NAME] in respect of the letting of [ADDRESS] on 25th November 2024 for £1,450 per calendar month and Black & Golds agency email

3 in respect of the letting of [ADDRESS] for £1350 per calendar month in August 2024.

Determination and Valuation

7. On consideration of the comparable evidence provided by the Landlords, that

forwarded by the [NAME] and the Tribunal’s own expert knowledge of rental

values in the area, the Tribunal considers that the open market [NAME] for the

property in a satisfactory condition would be in the region of £1,350 per month.

From this level of [NAME], the Tribunal has made adjustments in relation to the

following:

a) The condition of the property b) Improvements made by the Tenant as outlined in Para.5. above c) Curtains, carpets and white goods fitted by the Tenant. d) The Tenant’s liability to redecorate.

8. The Tribunal has also made an adjustment for scarcity using their own general

knowledge and experience. The Tribunal considers that in the wider geographical

area there is an imbalance of supply and demand impacting on rental values and

has, therefore, made a reduction of 15% for scarcity.

9. The full valuation is shown below: Per month

[NAME]

£1350

Less a) Items given under a) above

£50.00

b) Items given under b) above

£345.00 c) Items given under c) above

£80.00 d) Scarcity @ 15% on deducting a) - c) above

£131.25

e) Tenant’s decoration liability @ 5% of market [NAME] £67.50

£673.75

£676.25 Say

£676.50

Maximum uncapped fair [NAME] therefore

£676.50

10. The Tribunal determines an uncapped fair [NAME] of £676.50 per month on adopting scarcity at 15% of the amended [NAME] following consideration of s70 (3) [NAME] 1977.

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Decision

12. The uncapped fair [NAME] determined by the Tribunal, for the purposes of section 70, is therefore £676.50 per month. However, the maximum fair [NAME] permitted by the [NAME] ([NAME]) Order 1999 is £610.00 per month which therefore limits the fair [NAME] to be registered. The calculation of the capped [NAME] is shown on the decision form.

13. The [NAME] to be registered is therefore £610.00 per calendar month with effect from 13th February 2025.

Chairman: [NAME]: 13th 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.

5 First-tier Tribunal – Property Chamber File Ref No.

BIR/00CT/F77/2024/0630

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were 39 [ADDRESS] [POSTCODE]

[NAME]. [RESPONDENT] [NAME]. [NAME]. FRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair [NAME] is £610.00 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 13th February 2025

3. The amount for services is N/A Per -

4. The amount for fuel charges (excluding heating and lighting of common parts) not counting for [NAME] allowance is

N/A Per -

5. The [NAME] is not to be registered as variable.

6. The capping provisions of the [NAME] ([NAME]) Order 1999 apply (please see calculation overleaf).

7. Details (other than [NAME]) where different from [NAME] entry

8. For information only:

The fair [NAME] to be registered is the maximum fair as prescribed by the [NAME] ([NAME]) Order 1999. The [NAME] that would have otherwise been registered was £676.50 per month.

[NAME]. FRICS Date of decision 13th February 2025

6 [NAME] FIGURE X 392.1

PREVIOUS RPI FIGURE Y 358.3

X 392.1 Minus Y 358.3 = (A) 33.80

(A) 33.80 Divided by Y 358.3 = (B) 0.0943

First application for re-registration since 1 February 1999 YES/NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.1443

Last registered [NAME]* £533 Multiplied by (C) = £609.93 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £610.00

Variable service charge NO If YES add amount for services

[NAME] = £610.00 Per month Explanatory Note

1. The calculation of the maximum fair [NAME], in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair [NAME] to be calculated by:

(a) increasing the previous registered [NAME] by the percentage change in the retail price index (the RPI) since the date of that earlier registration and

(b) adding a further 7.5% (if the present application was the first since 1 February 1999) or 5% (if it is a second or subsequent application since that date).

A 7.5% increase is represented, in the calculation set out above, by the addition of 1.075 to (B) and an increase of 5% is represented by the addition of 1.05 to (B).

The result is rounded up to the nearest 50 pence.

3. For the purposes of the calculation the latest RPI figure (x) is that published in the calendar month immediately before the month in which the Tribunal’s fair [NAME] determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the [NAME] is to be registered as variable under section 71(4) of the [NAME] 1977. In such a case the variable service charge is removed before applying the formula. When the amount determined by the application of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair [NAME].