First-tier Tribunal Determines Fair Rent for Residential Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AW/F77/2024/0107

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[NAME] Mr [RESPONDENT]

Landlord [APPELLANT]

Tenant Miss [APPELLANT]

1. The fair rent is £1232 Per Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 3rd May 2024

3. The amount for services is

Per

not applicable

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

Per

not applicable

5. The rent is/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

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 £1,364 per month.

[NAME] of decision 3rd May 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 383

PREVIOUS RPI FIGURE Y 314.3

X 383 Minus Y 314.3 = (A) 68.7

(A) 68.7 Divided by Y 314.3 = (B) 0.219

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.269

Last registered rent* 1074.67 Multiplied by (C) = 1363.76 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1364

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1364 Per 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.

1

Case Reference

: LON/00AW/F77/2024/0107

Property : [ADDRESS] [POSTCODE]

Tenant

: Miss [APPELLANT]

Landlord : [APPELLANT] of Objection : 23rd January 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] Mr [NAME] of Summary Reasons

: 3rd May 2024

_______________________________________________

DECISION

The sum of £1,232 per calendar month will be registered as the fair rent with effect from 3 May 2024, being the date, the Tribunal made the Decision. ____________________________________ © CROWN COPYRIGHT 2023 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 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 and Hearing

2. A hearing took place on the 3 May 2024, and this was attended by the Tenant and Mr [APPELLANT]. The Landlord did not attend. Following the hearing the Tribunal inspected the property.

Evidence

3. The Tribunal had copies of the Valuation Office Agency correspondence including the rent registers effective 29th November 2021 and 16th January 2024 together with the calculations for the most recent registration.

The parties provided limited information in connection with the property in the form of completed Reply forms. No comparable evidence was provided by the parties.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the Chelsea area, we consider that the open market rent for the property in its current condition would be in the region of £2,200 per calendar month. From this level of rent we have made adjustments in relation to:

Terms of tenancy, no white goods, no carpets or curtains, dated fittings, poor access arrangements, and some rotten widow units which equates to approximately 30%

5. The Tribunal has also made an adjustment for scarcity at 20%

6. The full valuation is shown below:

Market Rent

£2,200 pm

Less

approx. 30% £660 Terms and Condition

Leaves £1,540

Less Scarcity

approx. 20%

£308

Leaves: £1,232 pm

3

Decision

7. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £1,232 per calendar month. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £1,364 per calendar month. The calculation of the capped rent is shown on the decision form.

8. In this case therefore the lower rent of £1,232 per calendar month is to be registered as the fair rent or this property.

Chairman: [NAME]: 3 May 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