First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00AJ/F77/2024/0036

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were 18 [ADDRESS], [POSTCODE]

[NAME] [NAME] Mr [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair [NAME] is 828.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 08 April 2024

3. The amount for services is 57.63 Per month

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

Per

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

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 £1080.50 per month including £57.63 per month for services prescribed by the Order.

[NAME] of decision 8 April 2024

FR24 [NAME] FIGURE X 381

PREVIOUS RPI FIGURE Y 312

X 381 Minus Y 312 = (A) 69

(A) 69 Divided by Y 312 = (B) 0.22115

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) 1.27115

Last registered [NAME]* 850 Multiplied by (C) = 1080.48 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1080.50

Variable service charge NO If YES add amount for services

[NAME] = £1080.50 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].

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Case Reference

: TR/LON/00AJ/F77/2024/0036

Property : 18 [ADDRESS], [POSTCODE]

Tenant

: Mrs [APPELLANT]

Landlord : [RESPONDENT] of Objection : 18 October 2023

Type of Application : Section 70, [NAME] 1977

Tribunal

: Mr [NAME] [NAME]

Mr [NAME] of Reasons

: 8 April 2024

_______________________________________________

DECISION

The sum of £816.00 per calendar month will be registered as the fair [NAME] with effect from 8 April 2024, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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REASONS

Background

1. The property was previously the subject of a registered [NAME] of £850.00 per month registered on 13 October 2021 and effective from the same date.

2. Following an application by the landlord the [NAME] was registered on and effective from 14 June 2023 at £1008.00 per month which was below the capped [NAME] of £1062.00 per month

3. Following an objection from the Tenant dated 18 October 2023 to the determination of the fair [NAME] by the [NAME], of the Tribunal has made a determination under the provisions of the [NAME] 1977.

Inspection

4. The Tribunal has carried out an inspection of the property on 8 April 2024. The tribunal noted the extensive mould through the flat which is not helped by the poor condition of the internal decorations and the volume of stored goods in the flat. The external walls do not appear to be insulated and while there is double glazing this is poorly fitted and the seals in numerous windows are blown. The kitchen and bathroom are badly dated. The common parts are in good order and the grounds well maintained.

Evidence

5. There were no submissions from the Landlord.

6. The Tenant provided a reply form stating there was extensive and widespread mould covering the walls. Windows are incorrectly fitted and double glazing seals are blown. The extractor fan in the bathroom does not work and some walls to the flats are wet in winter due to insufficient insulation. Even with inflation being higher than in previous years the [NAME] increase awarded has never exceeded 10%. This time it is nearly 19%. Central heating and double glazing are provided by the landlord and carpets curtains and white goods by the tenant.

The Law

7. When determining a fair [NAME] in accordance with section 70 of the [NAME] 1977, the tribunal has regard to all the circumstances (other than personal circumstances) including the age, location and state of repair of the property.

8. In [COMPANY] v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and [NAME] v [NAME]

3 Committee [1999] QB 92 the Court of Appeal emphasized 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 that for the purposes of determining the market [NAME], 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.

9. The [NAME] has been previously registered, and the [NAME] ([NAME]) Order 1999 therefore applies unless there are significant improvements made by the Landlord which increase the [NAME] which would be registered by more than 15%. There are no such improvements in this case. The previous registration is the starting point for assessing the new [NAME] under the Order. The Order sets out the basis for calculating the new [NAME] which is the increase in the Retail Prices Index plus 5% where the [NAME] has previously been registered.

Determination and Valuation

10. In the absence of comparable evidence from the parties the tribunal has relied on its own expert, general knowledge of rental values in the area. We consider that the open market [NAME] for the property in the condition and with the amenities the market would expect would be in the region of £1700.00 per calendar month. From this level of [NAME] we have made adjustments in relation to:

a. The lack of modernisation and dated kitchen and bathroom fittings b. Surface run electrical wiring c. No carpets curtains or white goods d. The Tribunal found that there was substantial scarcity of letting property in the locality of Greater London and using its knowledge and experience made a deduction of 20% from the adjusted market [NAME].

11. The full valuation is shown below:

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12. The Tribunal determines a [NAME] of £828.00 per calendar month for the purposes of s70.

Decision

13. The uncapped fair [NAME] initially determined by the Tribunal, for the purposes of section 70, was £828.00 per calendar month. The capped [NAME] for the property according to the provisions of the [NAME] ([NAME]) Order 1999 is calculated at £1080.50 per calendar month. The calculation of the capped [NAME] is shown on the decision form.

14. The lower figure is to be registered as the fair [NAME] and in this case it is the lower [NAME] of £828.00 per week which is to be registered as the fair [NAME] or this property.

Chairman: [NAME]: 8 April 2024

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have.

If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber

[NAME] [NAME] 1,700.00 £ less condition & terms 40% 680.00 £ less services 57.63 £ adjusted [NAME] 962.37 £ less scarcity off adj [NAME] 20% 192.5 £ Add back services 57.63 £ [NAME] 827.53 £ Round up to nearest 50p 828.00 £

5 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.

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.

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. Please note that if you are seeking permission to appeal against a decision made by the Tribunal under the [NAME] 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law.

If the First-tier Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).