First-tier Tribunal Determines Fair Rent for Tenancy Agreement

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00AT/F77/2023/0327

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 2nd [ADDRESS], [POSTCODE]

Tribunal Judge H [NAME]

Landlord [APPELLANT]

Tenant Mr [APPELLANT] [NAME]

1. The fair rent is £456.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 21 February 2024

3. The amount for services is NIL INCLUDED Per

negligible/not applicable

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

NIL Per

negligible/not applicable

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

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply do not apply because 1st registration.

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 the same as/below the maximum fair rent of £1075.50 per calendar month including £0 services (variable) prescribed by the Order.

Chairman Tribunal Judge H Lumby Date of decision 21 February 2024

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 378

PREVIOUS RPI FIGURE Y 96.73

X 378 Minus Y 96.73 = (A) 281.27

(A) 281.27 Divided by Y 96.73 = (B) 2.90778455

First [NAME] for re-registration since 1 February 1999 YES/NO

If yes (B) plus 1.075 = (C) 2.98278455

If no (B) plus 1.05 = (C)

Last registered rent* 270 Multiplied by (C) = 2.98278455 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1075.5

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £1075.50 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 [NAME] was the first since 1 February 1999) or 5% (if it is a second or subsequent [NAME] 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 [NAME] 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 PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AT/F77/2023/0327 Property : [ADDRESS], [POSTCODE] Tenant : Mr [APPELLANT] [NAME] Landlord : [APPELLANT] of objection :

Type of [NAME] : Determination of Fair Rent under Schedule 11 of the Rent Act 1977 Tribunal members : Judge H. [NAME] : 10 [ADDRESS] [POSTCODE] Date of decision : 21 February 2024

WRITTEN REASONS

2 Decisions of the Tribunal The Tribunal determines that the fair rent of the Property is £456 per calendar month with effect from 21 February 2024. Written reasons Background 1. The Property is subject to a lease protected by Schedule 11 of the Rent Act 1977. The effect of this Act is that there is a maximum rent set for the Property, calculated by reference to a formula. If the fair rent calculated by reference to open market rents is in excess of that maximum rent, then the maximum rent will apply. If it is below the maximum, then the lower fair rent will apply. It is however open to landlords to charge a lower rent than the maximum rent and indeed they may have to as a result of separate caps on increases.

2. The lease of the Property dates from 9 March 1985 with a current rent of £270 per month. The rent does not include any element for services.

3. The maximum fair rent has not previously been assessed in relation to the Property. The Landlord applied to register a new fair rent of £600 per month on 27 June 2023. This was passed to the Valuation Office Agency who on 23 August 2023 registered a fair rent of £533 per month.

4. The Tenant objected to this assessment on 20 September 2023 which was as a result referred to the Tribunal for determination.

5. The Tribunal did not inspect the Property as neither party requested an inspection and the Tribunal considered that it could make its determination without seeing the Property, based on the parties’ submissions.

6. The Tribunal has issued its notice of determination today. That determination contains the calculation of the maximum fair rent, using the prescribed formula. These are the reasons for its determination. Property 7. The Property comprises a second floor flat, comprising a reception room, bedroom, kitchen and a bathroom/WC. The Tenant states that central heating was provided by him as well as the WC in the Property. Some carpets and white goods are provided by the Landlord but not double glazing (the Landlord states that this is to be installed). The Property does not come with parking or any external space.

3 8. The Tenant has raised some general issues with the condition of the Property. He has cited as evidence a report by the London Borough of Hounslow who were at that point satisfied that the Property was unfit for human habitation. He refers to items of disrepair that he has addressed himself, including damp walls, ceilings falling apart and leaking, old piping causing leakages, rotten carpet, an old boiler and old windows. All of these bar the windows have been addressed by the Tenant. The Landlord has stated that the windows will be replaced by it. The Tribunal has taken the Property’s condition and the works carried out by the Tenant into account in reaching its determination.

9. The Landlord does not provide any services as part of the rent. Its responsibility for repair reflects the duties imposed on landlords by section 11 of the Landlord and Tenant Act 1985. In practice, the Tenant has repaired the Property and its amenities. Comparables and market rent assessment 10. The Landlord has provided a number of comparables which have been considered by the Tribunal. In addition, the Tribunal considered a number of comparables in the close vicinity of the Property. These had all been let with the information relied upon all freely available on the internet. The Tribunal had no private knowledge which it took into account in reaching its determination.

11. Based on these comparables, the Tribunal has assessed that the open market rent of the Property in full repair is £1,900 per calendar month. The Tribunal has deducted 70% from this figure to reflect the Tenant’s repair liability, the general improvements carried 0ut by the Tenant including the installation of central heating and power points, the Tenant’s improvements to the kitchen and bathroom/WC, the lack of floor coverings, carpets and white goods and the windows disrepair. It has then deducted a further 20% from the resultant figure for scarcity. This gives a market rent of £456 per calendar month.

12. In reaching this figure, the Tribunal is cognisant of the comment by the Rent Officer that without the work undertaken by the Tenant, the flat would not be habitable, a statement backed up by the earlier assessment by the London Borough of Hounslow. Maximum Rent 13. The Tribunal next considered the maximum rent pursuant to the Rent Acts (Maximum Fair Rent) Order 1999. This requires the Tribunal to follow a prescribed formula to generate an uplift to the last registered fair rent. In this case, this is the first registration so the rental figure taken into account is the original rent of £270 per calendar month. That

4 formula is set out in the Notice of Determination issued by the Tribunal today.

14. Applying that formula gave a maximum rent figure as at today’s date of £1,075.50 per calendar month. Decision 15. As the maximum rent figure of £1,075.50 is higher than the calculated rent figure of £456 per month, the Tribunal determines that the fair rent is £456 per calendar month. Name: Tribunal Judge Lumby Date: 21 February 2024

5

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. 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 regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. 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. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).