First-tier Tribunal Determines Fair Rent for Tenancy Property

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00BJ/F77/2019/0185

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 54A [ADDRESS], [POSTCODE]

Mr [NAME] Mr [APPELLANT]

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is 190.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 14 January 2020

3. The amount for services is N/A Per

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

N/A 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

Part centrally heated

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 £205.00 per Week.

Chairman Mr [NAME] Date of decision 14th January 2020

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X

PREVIOUS RPI FIGURE Y

X

Minus Y

= (A)

(A)

Divided by Y

= (B)

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C)

Last registered rent*

Multiplied by (C) =

*(exclusive of any variable service charge)

Rounded up to nearest 50p =

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

MAXIMUM FAIR RENT = £ Per

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/00BJ/F77/2019/0185 Property : [ADDRESS], London [POSTCODE] Applicant : [redacted] : In person Respondent : [redacted] : [RESPONDENT] of [NAME] : Determination of a fair rent under section 70 of the Rent Act 1977 Tribunal Members : Mr [NAME] (Valuer Chairman) [NAME] of Decision : 14 January 2020 Date of Reasons : 16 March 2020

REASONS

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Background

1. On 11 August 2019 the landlord applied to the Rent Officer for registration of a fair rent of £212 per week for the above property.

2. The rent payable at the time of the [NAME] was £185 per week.

3. On 24 September 2019 the Rent Officer registered a fair rent of £190 per week with effect from 6 November 2019.

4. By letter dated 3 October 2019, the landlord objected to the rent determined by the Rent Officer and the matter was referred to the Tribunal.

5. On 16 October 2019, the Tribunal issued directions setting the matter down for determination by written representations. The landlord was directed to serve any documents or evidence upon which it sought to rely by 11 November and the tenant likewise by 25 November 2019. The landlord was permitted to make a Reply by 2 December 2019. The Directions stated that the Tribunal would inspect the property after 10 am on 19 December 2019. This was subsequently amended to 14 January 2020.

6. The Tribunal made its determination on 14 January 2020 and the landlord subsequently requested Reasons.

Inspection

7. The Tribunal inspected the property on 14 January 2020, in the presence of the tenant. The landlord was not represented. The property comprises a ground floor purpose-built maisonette dating from circa 1900 of brick under a pitched tiled roof. The accommodation comprises a front living room with sliding sash single glazed casement windows, electric fire, a double bedroom without a radiator, and with a non- opening window with a broken sash cord. There was also blown plaster under wallpaper. There is a radiator in the hall. The kitchen which is accessed via three steps down has some fitted units at wall and floor level but is basic. The white goods belong to the tenant. There is a gas fired Worcester boiler in the kitchen. There is also a radiator and larder. The bathroom has fittings which are approximately 60 years old with a mixer tap sink and radiator. To the rear of the property is a small external patio.

8. The property is situated in a quiet, tree-lined street.

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Evidence

The Landlord’s Case

9. The landlord’s case was set out in written representations to the Tribunal. The landlord described the property as a two roomed property with reception in a desirable area. The property was serviced by Earlsfield, Southfields and [ADDRESS] stations and numerous bus services. There are a number of parks nearby and Earlsfield had a great selection of shops and restaurants. The landlord referred to 3 comparables providing agents particulars in respect of each. These were in [ADDRESS], £1,600 per calendar month, [ADDRESS] £1,100 per calendar month and [ADDRESS], Earlsfield, £1,450 per calendar month. The landlord submitted that the fair rent for the property was £190 per week taking into account the available properties.

The Tenant’s Case

10. The tenant made written representations to the Rent Officer which were forwarded to the Tribunal. The tenant submitted that her tenancy began on 1 December 1977; the landlord had not changed her bedroom windows despite several requests over the years and no external decorations had been carried out for over 10 years.

The Law

11. When determining a fair rent the Tribunal, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances (other than personal circumstances) including the age, location and state of repair of the property.

12. In [COMPANY] v Chairman of the Greater Manchester etc. Tribunal (1995) 28 HLR 107 and [NAME] v [NAME] Tribunal [1999] QB 92 the Court of Appeal emphasised that ordinarily a fair rent is the market rent for the property discounted for 'scarcity' (i.e. that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property).

Valuation

4 13. The Tribunal considered that the best comparable was [ADDRESS] at £1,600 per calendar month. The Tribunal found that this rental value required adjustment as follows: partial central heating, 5%, poor kitchen 10%, poor bathroom 10%, plaster damage and broken window to the bedroom, 5%, tenants’ white goods and the awkward internal arrangement with internal steps, 5%. These adjustments therefore totalled 35%, or £560 per calendar month. This left an adjusted amount of £1,040 per calendar month.

14. The Tribunal found that there was substantial scarcity in the locality of Greater London and therefore made a deduction of 20% (£208 per month) from the adjusted market rent to reflect this element.

15. It follows that the Tribunal found that the fair rent was £832 per calendar month. This equated arithmetically to £192.02 per week which the Tribunal rounded to £190 per week.

16. This amount was not limited by the Rent Acts (Maximum Fair Rent) Order 1999, which prescribed a higher maximum fair rent, the calculations for which were supplied with the Notice of the Tribunal’s Decision.

17. Accordingly, the sum of £190 per week was determined as the fair rent with effect from 14 January 2020 being the date of the Tribunal’s decision.

Mr [NAME] 16 March 2020

ANNEX - RIGHTS OF APPEAL

• The Tribunal is required to set out rights of appeal against its decisions by virtue of the rule 36 (2)(c) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013 and these are set out below.

• If a party wishes to appeal against 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.

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• 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.