First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/29UH/F77/2025/0603

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 2 Orchard Cottages Bicknor Sittingbourne Kent [POSTCODE]

[NAME] [NAME] [NAME] Judge R [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is £805.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 27 March 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 rent allowance is

n/a Per n/a

not applicable

5. The rent is not 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

8. For information only:

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would otherwise have been registered was £820.00 per Calendar Month.

[NAME] [NAME] [NAME] of decision 27 March 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 391.7

PREVIOUS RPI FIGURE Y 356.2

X 391.7 Minus Y 356.2 = (A) 35.5

(A) 35.5 Divided by Y 356.2 = (B) 0.09966

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.14966

Last registered rent* £700.00 Multiplied by (C) = £804.76 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £805.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £805.00 Per Calendar 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 Tribunal’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.

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : HAV/29UH/F77/2025/0603

Property : 2 Orchard Cottages Bicknor Sittingbourne Kent [POSTCODE]

Applicant Landlord : [APPELLANT] : Mrs [COUNSEL], Director, [APPELLANT]

Respondent Tenant : Mrs [COUNSEL] : None

Type of application : Determination of a Fair Rent Section 70, Rent Act 1977

Tribunal member(s) : [NAME] [NAME] [NAME] Judge R Percival

Date of inspection : None, Determination on Papers

Date of decision : 27 March 2025

DECISION

© CROWN COPYRIGHT 2025

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Decision of the Tribunal On 2 7 March 2025 the Tribunal determined a Fair Rent of £805 (Eight Hundred and Five Pounds) Per Month, to take effect from 27 March 2025. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply as the rent of £820 per month that would otherwise have been registered is greater than the maximum prescribed.

Background 1. On 29 October 2024 the l andlord submitted an Application for Registration of Fair Rent (‘RR1’) to the Rent Officer to register a fair rent of £1,200 per month for the property, 2 Orchard Cottages, Bicknor, Sittingbourne, Kent, [POSTCODE] (‘the property’).

2. This was an application to re-register the fair rent from its previous registration of rent for the property of £700 per month, effective from 27 October 2022.

3. A new rent of £770 per month was registered by the Rent Officer, effective from 29 November 2024.

4. In an email dated 7 January 2025 to the Valuation Office Agency (‘[NAME]’) Mrs [RESPONDENT], a Director of [RESPONDENT] (the landlord), gave her objection to the new rent registered and the matter was referred to the First-Tier Tribunal Property Chamber (Residential Property), formerly a Rent Assessment Committee.

5. The Tribunal issued Directions dated 15 January 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 rent 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 Fair Rent Appeal Statement (‘Statement’) to form their statement of case, within specific time limits, paragraphs 8 – 12 inclusive. The Statement provides for photographs to be attached, to assist the Tribunal to understand the case and to help the party to present the issues.

9. Mrs [NAME] submitted her Statement on 21 January 2025, in accordance with the Tribunal’s Directions. Mrs [NAME] submitted her Statement on 6 March 2025; with her application and request for case management form attached and dated 5 March 2025.

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10. Mrs [NAME] requested that her late submissions be accepted by the Tribunal and goes on to explain that she had not received the Tribunal’s Directions dated 15 January 2025.

11. Having carefully considered the tenant’s case management application seeking permission to submit late representations, notwithstanding the landlord had filed its submissions in accordance with the Tribunal’s Directions, having in mind the overriding objective to deal with matters fairly and justly, the Tribunal did not consider that the landlord would be prejudiced by the acceptance of the tenant’s submissions, out of time.

Accordingly, the case management application was granted, and the Tribunal will have regard to both the landlord’s and the tenant’s submissions to reach its determination of the Fair Rent.

12. In broad terms, whereas each Statement includes a description of the property, neither included any photographs, nor a floor plan. The Property 13. The Tribunal did not inspect the property but considered this case on the papers provided by the parties and information freely available on the internet. 14. 2 Orchard Cottages is a two-storey, mid-terrace house of traditional brick construction and pitched tiled roof. In the RR1 dated 29 November 2024 the number and type of room(s) is listed as: ground floor – one room, kitchen, bathroom and WC, and first floor - three rooms. Outside, there is a parking space and a private garden. The Tenancy Agreement 15. Whereas the Tribunal has not been provided with a copy of the tenancy agreement, it is understood to have commenced on 16 May 2002. Neither services nor furniture are provided by the landlord. Council Tax and other rates are borne by the tenant. Section 11 of the Landlord and Tenant Act 1985 applies; the tenant is responsible for internal decorations only. Submissions – Fair Rent Appeal Statements 16. It is not the Tribunal’s intention to give an analysis of all the evidence listed, but to outline the overall valuation approaches of the parties, to show that all aspects have been considered.

17. On behalf of the landlord, in her Statement, under ‘Improvements’ and ‘Disrepair/Defects’, Mrs [NAME] says both a new bathroom and a new wood-burner were provided in 2024 and outlines other works too.

18. Mrs [NAME] does not provide an assessment of the rental value of the property but says numbers 1 and 3 Orchard Cottages, both next door and understood by the Tribunal to form the same terrace as the property, let for ‘1,022’ [sic], with no further details given.

19. On the question of whether the Maximum Fair Rent Order should not apply, Mrs [NAME] says, ‘’The work done and the lifestyle of the tennant, repairs will be ongoing therefore some help is needed!!’’ [sic].

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20. Under ‘Whether the demand for such properties exceeds supply’ Mrs [NAME] says, ‘’We have a waiting list for our properties.’’ 21. In her Statement, Mrs [NAME] confirms the outline accommodation and the features of the property given by Mrs [NAME] and goes on to outline the maintenance issues with the bathroom and the wood-burner.

22. Under ‘Disrepair/Defects’ Mrs [RESPONDENT] says the only fittings supplied by the landlord is the kitchen sink. Mrs [RESPONDENT] goes on to say there is no form of public transport for people living in Bicknor and the nearest train station is in Hillingbourne, four miles away. With respect to the rental value, Mrs [NAME] says the fair rent registered by the Rent Officer effective from 29 November 2024 is fair.

23. Mrs [NAME] neither gives submissions on whether the capping legislation should apply, nor whether the demand for such properties exceeds the supply. The Law When determining a fair rent, the Tribunal, in accordance with the Rent Act 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 & Lancashire Rent Assessment Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasised: (a) 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 (b) that for the purposes of determining the market rent, 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).

24. The Tribunal is also to have regard to the Rent Acts (Maximum Fair Rent) Order 1999, where applicable. Most objections and determinations of registered rents are now subject to the Order, which limits the amount of rent 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 rent under section 70 of the Act, but in addition, to calculate the maximum fair rent which can be registered according to the rules of the Order.

25. If that maximum rent is below the fair rent calculated as above, then that (maximum) sum must be registered as the fair rent for the subject property.

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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. The Tribunal first considered whether it felt able to decide this case reasonably and fairly based on the papers submitted only, with no 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 rent per month the landlord could reasonably expect to receive on the valuation date, 27 March 2025, on the assumptions the property was in good condition, with floorings, curtains and white goods provided by the landlord.

29. After reviewing the rental values of the comparable lettings’ properties given by the Rent Officer, the evidence of the parties, and of its own expert, general knowledge of rental values in the area, the Tribunal determines that the market rent for the property in good tenantable condition is £1,250 (One Thousand, Two Hundred and Fifty Pounds) Per Month, before any adjustment(s) which it deemed applicable were to be applied.

30. From the evidence in the parties’ Appeal Statements, the Tribunal has determined that adjustments to the market rent are to be applied to reflect the following: • The property has no Central Heating. • The Tenant’s provision of carpets and curtains. • The Tenant’s provision of the White Goods. • The Tenant’s responsibility for internal decorations. • The unmodernised kitchen.

31. The Tribunal concluded a deduction in aggregate of £430 per month be applied to the market rent, made up of as follows: No Central Heating £150 Tenant’s provision of carpets and curtains £50 Tenant’s provision of White Goods £30 Tenant’s responsibility for internal decorations £50 An unmodernised kitchen £150 TOTAL £ Per Month £430 32. £1,250 per month minus £430 per month to equal £820 per month.

33. Turning to the question of scarcity, whereas Mrs [NAME] says, ‘’We have a waiting list for our properties’’, the Tribunal had regard to the schedule of properties provided by the Rent Officer and of its own expert, general knowledge of the lettings market in the area and concluded there is no adjustment

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required for scarcity.

34. On the question of whether the capping legislation should apply, what Mrs [NAME] says at paragraph 19 above is not evidence from which the Tribunal can deduce to determine to disregard the Order. Decision 35.

Accordingly, having made the adjustments listed above, the Tribunal determined the Fair Rent of the property be re-registered at £805 (Eight Hundred and Five Pounds) Per Month, to take effect from 27 March 2025.

36. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply as the rent of £820 per month that would otherwise have been registered is greater than the maximum prescribed.

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.