First-tier Tribunal Determines Fair Rent for Property in Fulham

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00AN/F77/2021/0151

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 31 [ADDRESS], [POSTCODE]

Mrs [RESPONDENT] [NAME]

Landlord BPT ([NAME] [RESPONDENT]) Ltd

Tenant [APPELLANT]

1. The fair rent is 800.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 24 May 2021

3. The amount for services is

Per

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

0.00 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

In poor repair

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 £946.00 per Week prescribed by the Order.

[NAME] of decision Tuesday 25th May 2021

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 296.9

PREVIOUS RPI FIGURE Y 284.6

X 296.9 Minus Y 284.6 = (A) 12.3

(A) 12.3 Divided by Y 284.6 = (B) 0.04322

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

If yes (B) plus 1.075 = (C) No

If no (B) plus 1.05 = (C) 1.09322

Last registered rent* £865.00 Multiplied by (C) = £945.63 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £946.00

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

MAXIMUM FAIR RENT = £946.00 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.

Case Reference : LON/00AN/F77/2021/0151

P:PAPERREMOTE

Property : 31 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : 7 January 2021

Type of Application : Determination of the registered rent under Section 70 Rent Act 1977

Tribunal

: Mrs [NAME] [NAME] and venue of : 25 May 2021 hearing

remote hearing on the papers

_______________________________________________

DECISION ____________________________________

The registered rent with effect from 25 May 2021 is £800 per month.

This has been a hearing on the papers which has been consented to by the parties. The form of remote hearing was P:PAPERREMOTE, a paper determination which is not provisional. A face to face hearing was not held because it was not practicable and all the issues could be determined on the papers. The documents that I was referred to are in a bundle, the contents of which I have recorded.

© CROWN COPYRIGHT

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background

1. On 12 August 2020 the landlord applied to the rent officer for registration of a fair rent of £994.75 per month for the above property.

2. The rent payable at the date of the application was £865 per month which had been registered by the rent officer on 27 November 2018 with effect from the same date.

3. On 8 December 2020, the rent officer registered a fair rent of £938 per month with effect from the same date.

4. On 7 January 2021 the tenant objected to the registered rent.

5. Owing to the Covid 19 restrictions the parties were asked if they would consent to the application being dealt with on the papers. Neither party objected. Written representations were received from both the landlord and the tenant, the tenant provided a number of photographs to illustrate the condition of the flat.

The Evidence

6. The property which is situated in Fulham, is convenient for local facilities and transport. It comprises a ground floor flat in a converted three storey terraced house. The accommodation has three rooms, kitchen and bathroom/wc, and is centrally heated.

7. The tenant stated that the property is in poor repair. The flat roof over one of the bedrooms requires replacement: a large area of ceiling, approximately 6 feet wide, has collapsed and been temporarily patched with a piece of plasterboard. The bedroom is damp and mouldy.

8. The flat was let without double glazing, central heating, carpets, curtains or white goods.

9. The landlord confirmed that the flat roof at the rear of the property requires renewal: it is the subject of an insurance claim.

Valuation

10. In the first instance the Tribunal determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition that is considered usual for such an open market letting. As neither party provided any comparable open market rental evidence the Tribunal relied on its own general knowledge of market rent levels in Fulham and surrounding areas. Having done so, it concluded that the likely market rent for the house would be £1500 per month.

11. However, it was first necessary to adjust the hypothetical rent of £1500 per month to allow for the differences between the terms and condition considered usual for such a letting and the condition of the actual property at the valuation date, ignoring any tenant’s

improvements, (disregarding the effect of any disrepair or other defect

attributable to the tenant or any predecessor in title). The Tribunal

noted that properties available on the open market were generally

modern or modernised, with white goods, floor and window coverings.

The Tribunal considered that these differences and the terms and

conditions of the tenancy required a deduction of £300 per month plus

poor standard of repair a further £200 per month.

12. This leaves an adjusted market rent for the subject property of £1000 per month. The Tribunal was of the opinion that there was substantial scarcity in London for similar properties and therefore made a deduction of approximately 20% from the market rent to reflect this element. The Tribunal’s uncapped fair rent is £800 per month.

Decision

13. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was accordingly £800 per month.

13. This is below the maximum fair rent that can be registered by virtue of the Rent Acts (Maximum Fair Rent) Order 1999 (Details are provided on the back of the decision form).

14. Accordingly the sum of £800 per month will be registered as the fair rent with effect from 25 May 2021 being the date of the Tribunal's decision.

Chairman: [NAME]: 27 May 2021

ANNEX - RIGHTS OF APPEAL

i. 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.

ii. 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.

iii. 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.

iv. 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.

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Mrs [RESPONDENT] [NAME]

Landlord BPT ([NAME] [RESPONDENT]) Ltd

Tenant [APPELLANT]

2. The effective date is 24 May 2021

3. The amount for services is

Per

0.00 Per

5. The rent is not to be registered as variable.

In poor repair

8. For information only:

[NAME] of decision Tuesday 25th May 2021 Monday 24 May 2021

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 296.9

PREVIOUS RPI FIGURE Y 284.6

X 296.9 Minus Y 284.6 = (A) 12.3

(A) 12.3 Divided by Y 284.6 = (B) 0.04322

If yes (B) plus 1.075 = (C) No

If no (B) plus 1.05 = (C) 1.09322

Rounded up to nearest 50p = £946.00

MAXIMUM FAIR RENT = £946.00 Per Calendar Month

Explanatory Note

The result is rounded up to the nearest 50 pence.