First-tier Tribunal Determines Fair Rent for Regulated Tenancy

OUTCOME: Allowed

1

Case Reference

: CAM/38UC/F77/2022/0031

Property

: 27 [ADDRESS] [POSTCODE]

Applicant (Landlord) : [NAME] (Agent): [COUNSEL]

Respondent (Tenant) : Mr [APPELLANT] of [NAME] : Determination of a fair [NAME] under

Section 70 of the [NAME] 1977

Tribunal Members : Judge JR Morris Mrs M Wilcox BSc MRIICS

Date of Decision : 16th January 2023

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2023

DECISION

1. The [NAME] for [NAME] is determined to be £875.00 per calendar month, which is below the capped [NAME] of £917.50 per calendar month under the [NAME] ([NAME]) Order 1999.

2. The effective date is 16th January 2023.

[NAME]

3. [NAME] is a ground floor flat in a two-storey Victorian mid terrace house of brick under a slate roof. There is a small garden to the front and a garden to the rear. Parking in the area is restricted. [NAME] was refurbished in the early 1990s. At the rear of the garden there is door to a two-storey building currently empty. There is an access to this building from the road behind [NAME]. The Tenant has no right of access to the building and the Tenancy gives no right of access across [NAME] to any occupant of that building.

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 Accommodation The front door opens into a common hallway at the end of which are two doors one to the first floor flat and the other to the ground floor Property. [NAME] comprises a hall, off which is a living room (14’ x 11’9’’) and bedroom (11’x 10’). There are three steps down to the kitchen-diner (11’6’’ x 10’) and bathroom (7’ x7’) beyond. There is a door from the kitchen to the rear garden. There is a cellar under the living room which is used as a store and workshop.

Services Space and water heating is by a gas fired central heating system. [NAME] has mains gas, electricity, water and drainage.

[NAME] is let unfurnished. The curtains and floor coverings are provided by the Landlord. White goods are provided by the Tenant.

[NAME] is on the edge of Oxford City centre.

THE TENANCY

4. The Tenancy, which commenced in April 1986, is a statutory monthly periodic regulated tenancy under the [NAME] 1977. No council tax, service or other charges are collected in addition to the [NAME]. It is understood that the Tenant was responsible for repairing the interior and the Landlord the exterior. Section 11 of the Landlord and Tenant Act 1985 applies in respect of Landlord’s repairing obligations.

THE REFERRAL

5. The existing [NAME] registered on 29th November 2017 and effective from that date is £800.00 per calendar month which was below the capped [NAME] under the [NAME] ([NAME]) Order 1999. The Landlord by a notice in the prescribed form received by the [NAME] Office on 12th August 2022 proposed a new [NAME] of £1,200.00 per calendar month. On 6th October 2022, the [NAME] registered a [NAME] effective from that date of £838.00 per calendar month, which was below the capped [NAME] under the [NAME] ([NAME]) Order 1999. The [NAME] was assessed by the [NAME] based on:

a. an open market [NAME] of £1,025.00 per month;

b. a deduction of £143.00 for the tenant’s repair/decoration liability, lack of floor coverings/curtains, no white goods unmodernised kitchen, giving a [NAME] of £882.00; and

c. a deduction of about £44.10 (5% of the adjusted market [NAME]) for scarcity.

6. By a letter received on 26th October 2022 the Landlord objected to this assessment and, pursuant to Schedule 11 to the 1977 Act, the [NAME] officer referred the matter to the Tribunal. The Tribunal issued directions on 8th November 2022, inviting the parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the Tribunal to consider. Reply

3 forms, photographs, further details and submissions were provided by the parties. The parties requested an inspection but not a hearing.

THE INSPECTION

7. The Tribunal inspected [NAME] in the presence of the Tenant.

8. [NAME] is in fair condition. There is a upvc sliding sash bay window to the front and upvc rainwater goods. The windows to the rear are timber and single glazed and are in fair condition.

9. Internally, there is a modern fitted kitchen and a bathroom, although there is no shower over the bath. White goods are provided by the Tenant.

10. Works that have been undertaken since the last [NAME] registration included the relaying of the floor in the kitchen and bathroom over a damp proof membrane and a chemical injection damp proof course in the kitchen and bathroom walls. Unfortunately, the section of the damp proof course between the back door and the kitchen window appears to have failed or been applied unsuccessfully and a fresh [NAME] seems to be needed.

THE LAW

11. The Law relating to these reasons is contained in section 70 [NAME] 1977. It provides that, when determining a fair [NAME], the Tribunal should: • Have regard to all the circumstances (other than personal circumstances of the landlord or tenant) including the age, location and state of repair of [NAME]. • Disregard the effect on the rental value of [NAME] of any relevant tenant improvements, and of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy • Assume that, whatever might be the case, the demand for similar rents properties in the locality does not significantly exceed the supply of such properties for [NAME], in other words the effect of any such scarcity on rental values is not to be reflected in the fair [NAME] of the subject property.

REPRESENTATIONS

12. The Landlord’s Agent made no written representations

13. The Tenant made written representations as follows:

a) By 2017 the injected damp proof course in the kitchen and bathroom extension had failed causing rising damp on all three sides. The plaster on the extension walls was stripped back to bare brick and the floor dug up in February 2018. A new concrete floor with waterproof membrane was laid and waterproof render applied to the walls. New kitchen units and bathroom appliances were installed. The work was commissioned by the Landlord.

b) Since the last review the single glazed French windows but not the frame was replaced by the Landlord due to the timber rotting.

4 c) In the last 18 months evidence of rising damp in a section of wall between the kitchen windows and the rear door has begun to appear. This has grown markedly in the last couple of months. The Landlord’s Agent has been informed (Photograph provided).

14. The notes from a consultation held between the [NAME] and the Tenant at which the Landlord did not attend stated that the flat above the bathroom of [NAME] had flooded and the water had come through the ceiling light in the kitchen of [NAME]. The Tenant had informed the Landlord.

DETERMINATION

15. The Tribunal assessed the [NAME] for the Subject Property as at the day of the inspection pursuant to section 70(1) [NAME] 1977 (having regard in particular to the age, character, locality, state of repair of [NAME] and all the circumstances other than personal circumstances). The Tribunal then considers whether or not a deduction for scarcity should be made, which varies depending on the market within a locality from time to time.

16. The Tribunal took account of the relevant cases and legislation including [COMPANY] v [NAME] (1996) 28 HLR 107, [NAME] v [NAME] [1997] 4 All ER 842 and [COMPANY] v [NAME] and [NAME] 24th May 1991. These cases confirm that for the purposes of determining the market [NAME] (before [NAME] any necessary adjustments), open market assured tenancy rents are usually rental values of comparable properties. Registered rents of comparable properties are not considered to be appropriate because it is not known what open market [NAME] was adopted, what deductions were made for condition or any improvements and what the effect of the [NAME] of [NAME] ([NAME]) Order 1999 had. The Tribunal determines a market [NAME] for a property by reference to rental values generally and to the rental values for comparable properties in the locality in particular. The Tribunal does not take into account the present [NAME] and the period of time for which that [NAME] has been charged nor does it take into account the percentage increase which the proposed [NAME] represents to the existing [NAME].

17. Having determined a market [NAME] the Tribunal then makes an adjustment, if necessary, for the condition of [NAME] at the time of the determination. It cannot take into account the period of time which a property might have been in disrepair prior to work being carried out by the Landlord. Equally it cannot take into account work that is said to be intended or scheduled to take place in the future.

18. By section 72 of the 1977 Act, if the [NAME] is determined by the Tribunal, the registration of the [NAME] takes effect from the date the decision is made.

19. Firstly, the Tribunal considered the open market [NAME]. Neither party provided evidence of rental values for comparable properties therefore the Tribunal used its own knowledge and experience to determine a market [NAME]. The Tribunal found that a market [NAME] for a similar property with sole use of a garden, offered in good condition with central heating, double glazing, modern kitchen and bathroom and with white goods, floor coverings and curtains or blinds would be £1,000.00 per calendar month. The Tribunal notes that this is the same as that determined in 2017. It would appear that the 2017 [NAME] was assessed at a high point in the market.

5 As stated above the present assessment is based upon market rents for similar properties, i.e., one-bedroom flats with gardens, in the locality, either recently let or currently on the market.

20. Secondly, the Tribunal considered whether any adjustments needed to be made to the market [NAME] considering [NAME]. As mentioned above the Tribunal noted from its inspection and the Tenant’s representations that the Landlord had sought to remedy the damp referred to in its previous decision dated 29th November 2017. The works had been successful with regard to the damp rising from the floor and much of the wall but is re-emerging on the wall between the back door and kitchen window and it appeared a fresh chemical injection was required. Unlike the comparable properties, [NAME] was not let with white goods, carpets or curtains or blinds and the French doors are single glazed. An adjustment was therefore made for these matters of £125.00 per calendar month.

21. It should be noted that this amount cannot be a simple arithmetical calculation and is not based specifically upon capital cost but is the Tribunal’s estimate of the amount by which the [NAME] would have to be reduced to attract a tenant.

SCARCITY

22. The Tribunal is required (by s.70(2)) to assume that the demand for similar rented properties in the locality does not significantly exceed the supply of such properties for [NAME]; in effect, if such scarcity exists, an adjustment is to be made to the rental figure so that the fair [NAME] is not affected by it. Neither party submitted evidence of scarcity. It appears that the [NAME] officer made a deduction of 10% for scarcity, but no evidence has been produced to justify this.

23. Assessing a scarcity percentage cannot be a precise arithmetical calculation because there is no way of knowing either the exact number of people looking for properties similar to the subject property in the private sector or the exact number of such properties available. It can only be a judgement based on the years of experience of members of the Tribunal together with a consideration of the properties advertised as being to let as at the time of the assessment.

24. In the absence of any representations from the parties, the Tribunal relied upon its own knowledge and experience of the market for rented properties. It found at the time of the determination demand for similar dwelling houses did not substantially exceed supply in the locality. The locality in this case is Oxfordshire, which is a sufficiently large area to eliminate the effect of any localised amenity which would, in itself, tend to increase or decrease [NAME]. Therefore, no deduction is made to reflect scarcity.

TRIBUNAL’S CALCULATIONS

25. [NAME]:

£1,000.00 per calendar month Less global deduction

£125.00

[NAME]

£875.00

[NAME] is £875.00 per calendar month

26. The provisions of the [NAME] ([NAME]) Order 1999 require that the registered [NAME] is either the capped [NAME] or the [NAME] decided by the

[NAME] whichever is the lower. The capped [NAME] is calculated in accordance with a statutory formula using the existing [NAME] as a base and specified data from the Retail Price Index.

27. The capped [NAME] is £1,079.50 per calendar month, as set out in the calculation which accompanies this decision, which is higher than the [NAME] assessed by the Tribunal. As the assessed [NAME] is below the capped [NAME], the Tribunal did not apply the exemption under paragraph 2(7) of the Order which provides that capping does not apply if as a result of repairs or improvements a new [NAME] exceeds the previous [NAME] registered by at least 15%. Therefore, the [NAME] assessed by the Tribunal is to be registered.

[NAME] = £875.00 per calendar month

Judge JR Morris

Caution: The Tribunal inspected the subject property for the purposes of reaching this decision. The inspection was not a structural survey and any comments about the condition of [NAME] in this statement must not be relied upon as a guide to the structural or other condition of [NAME].

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. 1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the [NAME] which has been dealing with the case.

2. The [NAME] for permission to appeal must arrive at the [NAME] within 28 days after the tribunal sends written reasons for the decision to the [NAME].

3. If the [NAME] is not made within the 28-day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit.

4. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, [NAME] and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking.

5. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).