First-tier Tribunal Determines Fair Rent for Property Under Full Repairing Lease

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00AW/F77/2023/0313

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 28 [ADDRESS], [POSTCODE]

Judge B MacQueen Tribunal Member [NAME], MRICS

Landlord [APPELLANT]

Tenant [NAME] [APPELLANT]

1. The fair rent is 6300.00 Per Quarter (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 18 January 2024

3. The amount for services is Not applicable Per

negligible/not applicable

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

n/a Per

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 (please see calculation overleaf)/ do not apply because 1st registration/15% exemption.

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

n/a

Chairman Judge B MacQueen Date of decision 18 January 2024

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 379.0

PREVIOUS RPI FIGURE Y 304.0

X 379 Minus Y 304 = (A) 75

(A) 75 Divided by Y 304 = (B) 0.246711

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

If yes (B) plus 1.075 = (C) n/a

If no (B) plus 1.05 = (C) 1.296711

Last registered rent* £5 890.00 Multiplied by (C) = £7 637.63 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £7 638.00

Variable service charge NO If YES add amount for services £0.00

MAXIMUM FAIR RENT = £7 638.00 Per Quarter

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/00AW/F77/2023/0313

Property : 28 [ADDRESS], [POSTCODE]

Tenant

: [APPELLANT]

Landlord : [NAME] of Objection : Landlord Objection (12.09.23)

Type of Application : Section 70, Rent Act 1977

Tribunal

: Tribunal Judge MacQueen

Tribunal Member [NAME], MRICS

Date of Summary Reasons

: 18 January 2024

_______________________________________________

DECISION

The sum of £6 300.00 per quarter will be registered as the fair rent with effect from 18 January 2024, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

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.

Inspection

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

Evidence

3. There were no written submissions from the parties. The Tribunal considered the documents that had been sent by the Valuation Office Agency.

Determination and Valuation

4. This is a terraced house with full central heating, which was installed by the Tenant. The accommodation is comprised of:

Basement: a kitchen – diner and a shower room / w.c. (made open plan by the tenant)

Ground : 2 rooms

1st Floor: 1 room and a bathroom / w.c.

2nd Floor: Loft storage.

The property is let under a Full Repairing Lease, and the tenant is responsible for all repairs and decoration.

5. Having consideration of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in the condition and with the amenities the market would expected to be in the region of £11,700 per quarter.

6. This hypothetical rent is adjusted as necessary to allow for the differences between the terms and conditions considered usual for such a letting in today’s market and the condition of the actual property at the date of the determination under the Rent Act 1977. Any rental benefit derived from Tenant’s improvements is disregarded. A deduction of 50% was made to reflect the nature of the lease.

3 7. A further deduction for Scarcity of 20% was then made to reach a uncapped Fair Rent for the purposes of section 70 giving a final uncapped rent of £6,300 per quarter.

Decision

8. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £7,638 per quarter. The calculation of the capped rent is shown on the decision form. In this case, the lower rent of £6,300 per quarter is to be registered as the fair rent for this property.

Chairman: Tribunal Judge MacQueen

Date: 18 January 2024

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