First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. MAN/00BN/F77/2024/0617 Notice of the Tribunal Decision Rent Act 1977 Schedule 11 Address of Premises The Tribunal members were Flat C [NAME], 50 [ADDRESS], [POSTCODE] J [NAME] and K [COMPANY] Tenant Ms [APPELLANT]

1. The fair rent is £ £731.65 Per Cal. Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 2 April 2025 3. The amount for services is £ 11.65 Per Cal. Month 4. The amount for fuel charges (excluding heating and lighting of common parts) not counting for rent allowance is £ NIL Per 5. The rent is to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply (please see calculation overleaf).

7. Details (other than rent) where different from Rent Register entry Ground floor flat, 2 beds and 2 living rooms. Signs of dampness, defective windows, structural cracking. Tenants kitchen, furniture, carpet, curtains, electrical fittings 8. For information only: The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent of £797.65 per Cal. Month including £11.65 per Cal. Month for services (variable) prescribed by the Order. Judge J [NAME] of Decision 2 April 2025

FR24 MAXIMUM FAIR RENT CALCULATION LATEST RPI FIGURE x 394 PREVIOUS RPI FIGURE y 308.6 X 394 Minus y 308.6 = (A) 85.4 (A) 85.4 divided by y 308.6 = (B) 0.2767 First application for re-registration since 1 February 1999: NO If yes (B) plus 1.075 = (C) If no (B) plus 1.05 = (C) 1.3267 Last registered rent* 592.0 Multiplied by (C) = 785.41 *(exclusive of any variable service charge) Rounded up to nearest 50 pence = £ 786.00 Variable service charge: YES If YES add amount for services MAXIMUM FAIR RENT = £797.65 Per Cal. Month Explanatory Note 1. The calculation of the maximum fair rent, in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair rent to be calculated by: (a) increasing the previous registered rent 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 Committee's fair rent determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the rent is to be registered as variable under section 71(4) of the Rent Act 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 rent. £ 11.65

1 FIRST – TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : MAN/00BN/F77/2024/0617 Property : Apt C [NAME], Sale, [POSTCODE] Tenant : [NAME] Landlord : [COMPANY] : Type of Application : Rent Act 1977 – Section 70 Tribunal Members : Judge J [NAME] [NAME]: Northern residential Property First-tier Tribunal, 1 floor, Piccadilly Exchange, 2Piccadilly Plaza, Manchester, [POSTCODE] Determination : 2 April 2025 Date of Reasons : 27 May 2025 _______________________________________________

DECISION ________________________________________________ Order The Tribunal determines that the fair rent payable is £731.65 inclusive of £11.65 for services per month with effect from 2 April 2025. Background 1. Since 1 September 1973, the Tenant holds under a monthly tenancy of Apt C [NAME], Sale, [POSTCODE] (the Property). The tenancy is governed by Part VI of the Rent Act 1977 (“the Act”). The last registered rent was £627.83 inclusive of £35.83 for services per month with effect from 6 September 2022. This was determined by a Tribunal. © CROWN COPYRIGHT 2025

2 2. On 30 July 2024, the Landlord applied to the Rent officer for registration of a fair rent of £751.65 (inclusive of services of £11.65) per month.

3. On 13 September 2024, the Rent Officer registered a rent of £755 per month (inclusive of services of £11.65), effective from the same date. They had assessed the open market rent as £950, then deducted £195 for decoration, [NAME] goods, floor covering, curtains and an unmodernised bathroom. The capped rent was assessed as £755.

4. The Tenant objected to the rent as registered and requested the Rent Officer to refer the matter to the First Tier Tribunal (Property Chamber) (“the Tribunal”), and so the fair rent to be registered in respect of the Property fell to be determined by the Tribunal. Neither party requested an oral hearing.

5. We determined we were able to reach a fair decision without a hearing, as we had the benefit of submissions from both parties. The Landlord did not specifically state that they disagreed with the tenants submissions on the condition of the Property. The Inspection 6. On 2 April 2025 the Tribunal inspected the Property. The Tenant was in attendance.

7. The Property is a good size four roomed ground floor flat in a Gothic mansion house circa 1870. The tenant chose to furnish the flat as a large and smaller living room, 2 bedrooms, a small kitchen and bathroom. The rooms are grand, with high ceilings, and original features. It has double glazing and central heating.

8. The Property is set back from the road down a long drive in substantial communal grounds with car parking. The Property was off a wide tree lined street, with detached houses set back from the road. It is reasonably close to local amenities and transport links.

9. The kitchen was dated and there was dampness in the bathroom and small built in cupboard off the kitchen. The floor was uneven.

3 10. The bathroom showed signs of dampness rising though the concrete floor.

11. Many of the double glazing panels were blown.

12. There were signs of dampness and cracking on the bedroom ceiling. The Law 13. When determining a fair rent the Tribunal, in accordance with the Rent Act 1977 (“The Act”), section 70, has regard to all the circumstances, save for personal circumstances, including the age, location and state of repair of the property. Section 70 of the Act requires the tribunal to disregards the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property. In this way a landlord does not benefit by way of increased rent from any tenant’s improvements and the tenant does not benefit from any defaults on his or her part that would otherwise have lowered the rental value of the property.

14. In [COMPANY] v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasised that ordinarily a fair rent is the market rent for the property discounted for 'scarcity' (i.e. that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property). A market rent is the rent of a similar property in a similar locality, age character and repair. Tenants submissions 15. Other flats in the building are rented for £800 and have modern amenities.

16. All electric fittings, flooring, fireplaces, and kitchen are the tenants. A number of window cills have been replaced, and she was told the windows had been fitted upside down, the trickle vents are not effective. There is a

4 cracked window in the bedroom. Blown double glaze, draughts through windows 17. The bathroom floor has a leak underneath, and this has ruined a number of floor covering over the last few years. Landlords Submissions 18. The Landlord has provided a number of two bedroom comparables: This includes £1200 on [ADDRESS] and Beech Groove, £1350 on Etchals road Timperley, £1,100 Altrincham, £[ADDRESS], £1295 Washway road, two at £1150 in Bridgewater House. £850 was the lowest. They provided no more information relating to the type, quality of fixtures and fittings and condition of the properties. They also provided three comparables of two bedroom flats within [NAME], one on the ground floor for £1,090, one on the first floor for £1300, and one on the second floor for £1,265. They have not provided details of size, layout or condition.

19. They had requested a rent of £751.65 and agree the rent officers assessment of £755. They consider the following adjustments should be made:  Landlord installed bathroom (£10.00pw / £43.33pcm).  Landlord installed kitchen (£10.00pw / £43.33pcm).  Landlord supplied floor coverings and curtains (£10.00pw / £43.33pcm). Landlord supplied appliances/[NAME] goods (£10.00pw / £43.33pcm)  tenant improvements/obligations valued at £20.00pw / £86.67pcm 20. The total adjustment equal £60.00pw / £260.00pcm, and the rent of £755.00 determined by the Rent Officer is significantly cheaper than the market tenancies demonstrated above. Reasons 21. The Tribunal determined what rent the Landlord could reasonably be expected to obtain for the Property in the open market if it were let today in the condition that was considered usual for such an open market letting. Due to the unique nature of the property, assessing this was not straightforward. We took account of the attractive building and setting and balancing it with hard to heat rooms. It had high ceilings, draughty fireplaces, with outside uninsulated walls on 2 sides. The Property smelt

5 musty, and the Tenant had dehumidifiers and heaters in use. We took account of the Landlords comparables. There was a wide range from £1200 to £850. They also include three in [NAME], the ground floor flat being £1090, though they have provided no more information. The Tenants again provides no detail for her comparator of £800 Due to the unusual nature of the Property and the comparators we determined that the open market rent in good condition was £1000 per month. It would have risen since the last Tribunal in 2022, though the very small kitchen and hard to heat nature of the Property effects the amount. 22.The Tribunal considered that the following adjustments should be made. No [NAME] goods carpets and curtains and furnisher (£100), landlords neglect and necessary improvements set out above (£100), Tenants improvements (£80). This provided for £280 adjustments and the open market rent as £720. Adding in variable service charges of £11.65 provides a rent of £731.65. 23.The Tribunal does not consider that in the present-day market, there is any substantial scarcity element in the larger locality and accordingly no further deduction is made for scarcity. 24.The capped rent as set out in the Rent Acts (Maximum Fair Rent) Order 1999 is £784.50 per month, as calculated by the statutory formula set out in the Determination. This calculation is made on the date of the Tribunal determination and consequently is above the capped rent calculated by the Rent Officer. Currently the RPI is high. Adding in the variable service charges provides a capped rent of £796.15. 25.As the capped rent is above the market rent of £731.65, these provisions do not apply. The fair rent, then is determined at £731.65 per month (inclusive of service charges). Signed: Judge J [NAME]: 27 May 2025 RIGHTS OF APPEAL 1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to

6 the First-tier Tribunal at the Regional office which has been dealing with the case.

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

3. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party making the application is seeking.