First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/00ML/F77/2025/0618

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were: Lower Ground Floor Flat 27 [NAME] [POSTCODE]

[NAME] [NAME] Judge Rai

Landlord [APPELLANT]

Tenant Ms [APPELLANT] [NAME]

1. The fair [NAME] is £795.00 Per Calendar Month (To exclude Water Rates and Council Tax but to include any amounts in paragraphs 3 & 4)

2. The effective date is 9 June 2025

3. The amount for services is n/a Per n/a

not applicable

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

n/a Per n/a

not applicable

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

PREMISES Basement: 3 Room(s), 1 Kitchen, 1 Bathroom/WC Outside: Access to the rear Garden and communal front Garden

8. For information only:

(a) The fair [NAME] to be registered is not limited by the [NAME] ([NAME]) Order 1999, because it is below the maximum fair [NAME] of £856.50 per Calendar Month prescribed by the Order.

[NAME] [NAME] of Decision 9 June 2025

FR27 [NAME] FIGURE X 402.2

PREVIOUS RPI FIGURE Y 323.5

X 402.2 Minus Y 323.5 = (A) 78.7

(A) 78.7 Divided by Y 323.5 = (B) O.24328

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) 1.29328

Last registered [NAME]* £662.00 Multiplied by (C) = £856.15 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £856.50

Variable service charge NO If YES add amount for services N/A

[NAME] = £856.50 Per Calendar 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].

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : HAV/00ML/F77/2025/0618

Property : Lower Ground Floor Flat, 27 [NAME], Hove, East Sussex, [POSTCODE]

Applicant landlord : [APPELLANT] : Ms [COUNSEL]

Respondent tenant : Ms [COUNSEL] : None

Type of application : Determination of a [NAME] 70, [NAME] 1977

Tribunal members : [NAME] [NAME] Judge C A Rai

Date of consideration : 9 June 2025

Date of decision : 9 June 2025

DECISION

© CROWN COPYRIGHT 2025

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Decision of the Tribunal On 9 J u n e 2025 the Tribunal determined a [NAME] of £795 (Seven Hundred and Ninety-Five Pounds) Per Calendar Month to take effect from 9 June 2025. Background 1. On 24 January 2025 the landlord’s Agent (Ms [RESPONDENT] of Taylor Michael) submitted an application for registration of [NAME] (‘RR1’) to the [NAME] to register a fair [NAME] of £675 per month for the property, Basement [sic], 27 [NAME], Hove, East Sussex, [POSTCODE] (‘the property’).

2. This was an application to re-register the fair [NAME] from its previous registration of [NAME] for the property of £662 per calendar month, effective from 17 March 2022.

3. A new [NAME] of £835 per calendar month was registered by the [NAME], effective from 19 March 2025. The uncapped [NAME] was £985 per calendar month.

4. In an email dated 16 April 2025 to The Valuation Office Agency (‘[NAME]’) (sent to [NAME] ([NAME])) the tenant gave her objection to the new [NAME] registered and the matter was referred to the First-Tier Tribunal Property Chamber (Residential Property), formerly a [NAME].

5. The Tribunal issued Directions dated 2 May 2025. The Tribunal does not consider it necessary and proportionate in cases of this nature neither to undertake an inspection, nor to hold a Tribunal hearing unless either are specifically requested by either party or a particular point arises which merits such an inspection and/or hearing.

6. The Tribunal in its Directions informed the parties that, unless either party objected, the Tribunal intended to determine the [NAME] on the papers (written representations), (paragraph 5).

7. Similarly, the parties were informed the Tribunal will not inspect the property but will seek to view it on the internet; and goes on to say if it considers it necessary, it may carry out an external inspection, (paragraph 6).

8. The parties were directed to complete and return their [NAME] (‘Statement’) to form their statement of case, within specific time limits, (paragraphs 8 – 12 inclusive). The Statement allows for the provision of photographs to be attached to assist the Tribunal to understand the case and to help the party to present the issues.

9. Neither party has submitted a Statement, although the tenant has given submissions in her emails dated 6 February 2025, 16 April 2025 and 12 May 2025. The Property 10. 27 [NAME] (‘the building’) is an early Victorian semi-detached

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town house with pitched tiled roof now converted into flats. The property is the lower ground floor flat which is described in the [NAME] as self-contained with the accommodation as follows: three rooms, one kitchen and one bathroom. 11. [NAME] is in that part of Hove to the south of [ADDRESS] with Hove railway station being the nearest, to its north. The road runs in an east/westerly direction between [ADDRESS] and the A2023, [ADDRESS]. The Tenancy Agreement 12. The Tribunal has not been provided with a copy of the tenancy agreement, although from the RR1 it is understood to have commenced in 1989.

13. The tenant is responsible for the payment of Council Tax and Water Rates. Section 11 of the Landlord and Tenant Act 1985 applies. The tenant is responsible for internal decorations. The landlord has not provided any furniture. [NAME]

14. Neither party has submitted a Statement, although the tenant has made submissions in her emails (paragraph 9 above).

15. The Tribunal has considered the case de novo (from anew) and has limited its considerations to reach its decision to those points in the papers relevant to the determination of the fair [NAME].

16. In her email dated 16 April 2025 to [NAME], Ms [NAME] submitted her appeal (to object) to the [NAME]’s re-registration of the fair [NAME] of the property.

17. Confirmation of the tenant’s objection to the fair [NAME] registered by the [NAME] was sent to the parties in [NAME]’s letters dated 24 April 2025, including reference to the matter to be reconsidered by the First- tier Tribunal (Property Chamber).

18. In outline, in her emails, Ms [NAME] says the building was converted into flats in 1945 and that the property is an ‘appalling conversion’. Ms [NAME] says her flat is a basement flat, not a lower ground floor flat. The bathroom is narrow, and the kitchen is small. All the flats in the building have two bedrooms and whereas all those ‘upstairs are all a fair & reasonable size – however my second bedroom is not.’ There is no double glazing in the building.

19. Ms [NAME] goes on to say the floorboards have not been fitted securely. In her email dated 6 February 2025, Ms [NAME] outlines various works she has carried out, at her expense, these include: the installation of a shower, removal of a window and the installation of a door, the installation of a handrail to the back garden, the installation of a side gate and a garden tap. The items listed are not exhaustive.

20. Ms [NAME] does not give her opinion of the fair [NAME] but says the re- registration of £835 per calendar month is higher than the [NAME] sought by

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the landlord.

21. Neither the landlord nor their Agent has submitted a Statement. In their RR1 the property is outlined as: two bedrooms, one kitchen, one bathroom, and one living room.

22. The tenancy neither includes any other property, nor any furniture, nor does the tenant share any accommodation. The Law When determining a fair [NAME], the Tribunal, in accordance with the [NAME] 1977, section 70, had regard to all the circumstances including the age, location and state of repair of the property. It also disregarded the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or any other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property. [COMPANY] v [NAME] of the Greater Manchester & [NAME] (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasised: (a) that ordinarily a fair [NAME] is the market [NAME] for the property discounted for 'scarcity' (i.e. that element, if any, of the market [NAME], 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 [NAME] - to that of the regulated tenancy) and (b) that for the purposes of determining the market [NAME], assured tenancy (market) rents are usually appropriate comparable lettings. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparable lettings and the subject property).

23. The Tribunal is also to have regard to the [NAME] ([NAME]) Order 1999 (‘the Order’), where applicable. Most objections and determinations of registered rents are now subject to the Order, which limits the amount of [NAME] that can be charged by linking increases to the Retail Price Index (‘RPI’). It is the duty of the Property Tribunal to arrive at a fair [NAME] under section 70 of the Act but, in addition, to calculate the maximum fair [NAME] which can be registered according to the rules of the Order.

24. If that maximum [NAME] is below the fair [NAME] calculated as above, then that (maximum) sum must be registered as the fair [NAME] for the subject property.

25. Section 2(7) of the Order is as follows, ‘This article does not apply in respect of a dwelling-house if because of a change in the condition of the dwelling-house or the common parts as a result of repairs or improvements (including the replacement of any fixture or fitting) carried out by the landlord or a superior landlord, the [NAME] that is determined in response to an application for registration of a new [NAME] under Part IV exceeds by at least 15% the previous [NAME] registered or confirmed.’

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26. The tenancy is a statutory (protected) periodic tenancy and as such (not being for a fixed tenancy of 7 years or more) is subject to section 11 of the Landlord and Tenant Act 1985, which sets out the landlord’s statutory repairing obligations; the tenant is responsible for internal decorations. Considerations and Valuation 27. Having reviewed the papers, the Tribunal first considered whether it felt able to decide this case reasonably and fairly based on the papers submitted only, with neither an inspection, nor an oral hearing. Having read and considered the papers, the Tribunal decided it could do so.

28. In the first instance the Tribunal determined the market [NAME] per month the landlord could reasonably expect to receive on the valuation date, 9 June 2025, on the assumptions the property was in good condition, with carpets (flooring coverings), curtains and white goods provided by the landlord.

29. The [NAME] does not include a garden as a part of the outside space. From Ms [NAME] email dated 12 May 2025, the Tribunal understands there is both a front and a rear garden at the building. Whereas the front garden is communal, the rear garden was [sic] ‘communal’. Ms [NAME] has installed a side gate and replaced a window with a back door, to give direct access to the rear garden. Following the information provided, the Tribunal has determined that the property gives sole access to the rear garden, although the same was not a part of the demise when the tenancy was granted.

30. To determine the market [NAME], the Tribunal has considered the evidence given by the [NAME], coupled with its own general knowledge of market rents in Brighton and Hove.

31. Taking the above into consideration and of its own general knowledge of market rents in the area, at the valuation date, the Tribunal determined the market [NAME] of the property to be £1,200 per calendar month, before any adjustment(s) which it deemed appropriate to be applied.

32. From the submissions given by Ms [NAME] in her emails and the information provided by the [NAME], the Tribunal has determined adjustments are required to be applied to the market [NAME] to reflect: (1) no double-glazing, (2) the tenant’s provision of carpets (floor coverings) and curtains, (3) the tenant’s provision of the White Goods, (4) the tenant’s internal decorations’ obligation, (5) the unmodernised kitchen, (6) the unmodernised bathroom/WC and (7) a poor conversion of the building into flats (typically, the property has a narrow bathroom and a small kitchen) with various items of disrepair.

33. The Tribunal concluded a deduction in aggregate of £405 per calendar month be applied to the market [NAME], made up of as follows: No double-glazing £50 No Carpets (floor coverings) and Curtains £75 White Goods £30 Internal decorations’ obligation £50

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An unmodernised kitchen £50 An unmodernised bathroom/WC £50 A poor conversion with various items of disrepair £100 £ Per Calendar Month £405 34. £1,200 per calendar month minus £405 per calendar month to equal £795 per calendar month.

35. Turning to the question of scarcity, that is whether the demand for such properties exceeds the supply, neither party has addressed the point. Applying its general knowledge of the lettings market in the area, the Tribunal has concluded there is no adjustment required for scarcity in this registration of fair [NAME]. Decision 36.

Accordingly, having made the adjustments listed above, The Tribunal determined the [NAME] of the property be re-registered at £795 (Seven Hundred and Ninety-Five Pounds) Per Calendar Month, to take effect from 9 June 2025.

37. The capping provisions of the [NAME] ([NAME]) Order 1999 do not apply because the [NAME] determined is less than that prescribed by the Order which the Tribunal calculated to be £856.50p (Eight Hundred and Fifty-Six Pounds and Fifty Pence) Per Calendar Month.

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 a 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 days’ 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 days’ 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.