First-tier Tribunal Determines Fair Rent for Property

OUTCOME: Allowed

First-tier Tribunal – [NAME] Chamber File Ref No. LON/00AQ/F77/2019/0180

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 30 [ADDRESS], [POSTCODE]

Mr [NAME] Miss [RESPONDENT] [APPELLANT]

Landlord [NAME] ([COMPANY]) [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is 1824.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 13 December 2019

3. The amount for services is NA Per

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

N/A Per

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

None.

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 the same as/below the maximum fair rent of £1993.00 per Calendar Month.

Chairman Mr [NAME] Date of decision 13th December 2019

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 290.4

PREVIOUS RPI FIGURE Y 274.7

X 290.4 Minus Y 274.7 = (A) 15.7

(A) 15.7 Divided by Y 274.7 = (B) 0.0571533

First application for re-registration since 1 February 1999 - NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.1071533

Last registered rent* 1800.00 Multiplied by (C) = 1992.88 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1993.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1993.00 Per Monthly Perodic

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.

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case Reference : KA/LON/00AQ/F77/2019/0180 [NAME] : [ADDRESS], Harrow on the [ADDRESS] [POSTCODE] Applicant : [redacted] : In person Respondent : [redacted] : Ms [COUNSEL] [NAME] Management Assistant, [COMPANY] of Application : Determination of a fair rent under section 70 of the Rent Act 1977 Tribunal Members : Mr [NAME] (Valuer Chairman) [NAME] of Decision : 13 December 2019 Date of Reasons : 26 January 2020

REASONS

2

Background

1. On 7 August 2019 the landlord applied to the Rent Officer for registration of a fair rent of £2,070 per month for the above [NAME].

2. The rent payable at the time of the application was £1,800 per month.

3. On 12 September 2019 the Rent Officer registered a fair rent of £1,800 per annum with effect from 11 October 2019.

4. By letter dated 23 September 2019, the landlord objected to the rent determined by the Rent Officer and the matter was referred to the Tribunal.

5. On 8 October 2019, the Tribunal issued directions setting the matter down for determination by written representations. The landlord was directed to serve any documents or evidence upon which it sought to rely by 1 November and the tenant likewise by 15 November 2019. The landlord was permitted to make a Reply by 29 November 2019. The Directions stated that the Tribunal would inspect the [NAME] after 10 am on 13 December 2019.

6. The Tribunal made its determination on 13 December 2019 and the landlord subsequently requested Reasons.

Inspection

7. The Tribunal inspected the [NAME] on 13 December 2019, in the presence of Ms [APPELLANT], the tenant’s daughter. The landlord was not represented. The [NAME] comprises a 3 storey end of terrace townhouse approximately 40 years old. The [NAME] comprises 3 double bedrooms (2 with ensuite bathrooms) a single bedroom, a kitchen/diner, a main bathroom, separate WC, integral garage and small rear garden. There is also a small patio on the 3rd floor. There is central heating and double glazing. The kitchen is fitted and was installed by the landlord about 7 years ago, but the tenant supplied white goods. The tenant has carried out some improvements to the bathrooms. [ADDRESS] is a quiet, attractive location between Harrow on the Hill and [ADDRESS].

Evidence

The Landlord’s Case

8. The landlord’s case was set out in written representations to the Tribunal. The landlord described the [NAME] as a four room [NAME] with large reception in a desirable area. The [NAME] was served by local underground stations and was within close proximity of local

3 schools and parks. There were nearby shops, restaurants, cafés and bars. The landlord referred to 3 comparables, with agents’ particulars, as follows. A [NAME] at [ADDRESS], Harrow on the Hill had been recently let at £2,250 per month. This is four bedroomed with one bathroom and driveway. [ADDRESS], Harrow, HA2, a four- bedroom one bathroom [NAME] was recently let at £2,200 per calendar month. [ADDRESS], Sudbury, Wembley HA0, a four- bedroom, one bathroom [NAME] had been let at £2,200 per calendar month. The landlord submitted that a fair rent for the [NAME] was £2,070 per calendar month.

The Tenant’s Case

9. The tenant indicated that she wished to make written representations, but none were received.

The Law

10. When determining a fair rent the Tribunal, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances (other than personal circumstances) including the age, location and state of repair of the [NAME].

11. In [COMPANY] v Chairman of the Greater Manchester etc. Tribunal (1995) 28 HLR 107 and [NAME] v [NAME] Tribunal [1999] QB 92 the Court of Appeal emphasised that ordinarily a fair rent is the market rent for the [NAME] 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 [NAME]).

Valuation

12. The Tribunal considered that the house at [ADDRESS] was the best comparable in terms of [NAME] type and location. This [NAME] had one ensuite shower and one family bathroom, a conservatory but no garage. The Tribunal considered that had [ADDRESS] had an additional ensuite bathroom and WC this would add £150 per month giving an adjusted rental value of £2,400 per month. The Tribunal considered that the garage at the subject [NAME] was counterbalanced by the conservatory at [ADDRESS]. The Tribunal also considered that adjustments were required to [ADDRESS] to reflect the tenants’ white goods and curtains and the tenants’ improvements to the bathrooms and ensuite facilities. The Tribunal considered that these

4 factors required a 5% adjustment or £120 per month, leaving an adjusted rent of £2,280 per month.

13. The Tribunal found that there was substantial scarcity in the locality of Greater London and therefore made a deduction of 20% (£456 per month) from the adjusted market rent to reflect this element.

14. It follows that the Tribunal found that the fair rent was £1,824 per month.

15. This amount was not limited by the Rent Acts (Maximum Fair Rent) Order 1999, which prescribed a higher maximum fair rent, the calculations for which were supplied with the Notice of the Tribunal’s Decision.

16. Accordingly, the sum of £1,824 per month was determined as the fair rent with effect from 13 December 2019 being the date of the Tribunal’s decision.

Mr [NAME] 26 January 2020

ANNEX - RIGHTS OF APPEAL

• The Tribunal is required to set out rights of appeal against its decisions by virtue of the rule 36 (2)(c) of the Tribunal Procedure (First-tier Tribunal)([NAME] Chamber) Rules 2013 and these are set out below.

• If a party wishes to appeal against 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 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 [NAME] and the case number), state the grounds of appeal, and state the result the party making the application is seeking.

5