First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00BF/F77/2023/0311

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 75 [ADDRESS], [POSTCODE]

Judge [NAME]

[COMPANY] (Exempt Charity)

Tenant Mr [APPELLANT]

1. The fair rent is £216.00 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 11 December 2023

3. The amount for services is £9.63 Per week

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

N/A Per N/A

negligible/not applicable

5. The rent is to be registered as variable.

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

7. Details (other than rent) where different from Rent Register entry

8. For information only:

(a) 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 £236.13 per week including £9.63 per week for services (variable) prescribed by the Order.

Chairman Judge D Brandler Date of decision 11 December 2023

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 377.8

PREVIOUS RPI FIGURE Y 307.4

X 377.8 Minus Y 307.4 = (A) 70.4

(A) 70.4 Divided by Y 307.4 = (B) 0.229

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.279

Last registered rent* 176.98 Multiplied by (C) = 226.36 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 226.50

Variable service charge YES If YES add amount for services 9.63

MAXIMUM FAIR RENT = £236.13 Per week

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.

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Case Reference

: LON/00BF/F77/2023/0311

Property : 75 [ADDRESS] [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [COMPANY] of Objection : 31 August 2023

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge D [NAME] of Summary Reasons

: 11 December 2023

_______________________________________________

DECISION

The sum of £216.00 per week will be registered as the fair rent with effect from 11 December 2023, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

SUMMARY REASONS FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Background 1. Following an objection from the Landlord to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977. The Landlord’s objection relates solely to the registered service charge. The ground of appeal is that the registered service charge is significantly lower than the amount applied for. They have provided the service charge budget and actual costs for the latest available financial year to support their application. The Landlord has not provided a copy of the tenancy agreement.

Inspection 2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence 3. The Landlord provided a response which has been considered. There were no written submissions from the Tenant.

Determination and Valuation 4. In the absence of the tenancy agreement, and therefore the absence of the tenant’s obligation to pay an increased service charge, and in the absence of any submissions from the Tenant, the Tribunal adopted the Rent Officer’s assessment of service charges. It is of note that in the response from the Landlord in relation to communal gardens they write “Unknown”, which may suggest that the Tenant does not have access to communal spaces. There is no explanation from the Landlord why they are charging him “Grounds Contract”. In the absence of any comparable evidence provided by the parties and having consideration for our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in its current condition would be in the region of £320 per week. From this level of rent we have made adjustments in relation to:

The tenants own furnishings, flooring, carpets and white goods

5. The Tribunal has also made an adjustment for scarcity.

6. The full valuation is shown below:

per week Market Rent

£320.00

Less To reflect the tenants own furnishings, flooring, carpets and white goods Approx. 15.5%

£50.00

£270.00

Less Scarcity

approx. 20%

£54.00

£216.00

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7. The Tribunal determines a rent of £216.00 per week.

Decision 8. The uncapped fair rent determined by the Tribunal was £216.00 per week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £236.13 per week. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £216 per week is to be registered as the fair rent or this property.

Chairman: Judge Brandler Date: 11 December 2023

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any subsequent application for permission to appeal should be made on Form RP PTA