First-tier Tribunal Determines Fair Rent for Tenants

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00AE/F77/2023/0237

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 35B [ADDRESS], [POSTCODE]

[NAME] [APPELLANT]

Tenant Ms [APPELLANT]

1. The fair rent is £1,054.00 Per month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 3 April 2024.

3. The amount for services is N/a 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 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

None

8. For information only:

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would otherwise have been registered was £ 1,197.00 per month.

[NAME]- [NAME] of decision 3 April 2024

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 381

PREVIOUS RPI FIGURE Y 301.1

X 381 Minus Y 301.1 = (A) 79.9

(A) 79.9 Divided by Y 301.1 = (B) 0.2653

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) 1.3153

Last registered rent* £801.00 Multiplied by (C) = £1,053.55 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £1,054.00

Variable service charge No If YES add amount for services -

MAXIMUM FAIR RENT = £1,054.00 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.

Case Reference

: LON/00AE/F77/2024/0237.

Property : 35b [ADDRESS] [POSTCODE].

Tenant

: Ms. [APPELLANT]. [APPELLANT].

Landlord : [APPELLANT].

Date of Objection : 27 April 2023 (Late Objection

accepted 9 August 2023).

Type of Application : Section 70, Rent Act 1977

Tribunal

: Valuer Chair, [NAME].

Date of Summary Reasons

: 3 April 2024.

_______________________________________________

DECISION

The sum of £1,054.00 per calendar month will be registered as the maximum fair rent with effect from 3 April 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

REASONS FOR THE DECISION

Background FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

1. Following an objection from the Tenant to the determination of a fair rent by the Rent Officer, the Tribunal has determined the rent under the provisions of the Rent Act 1977.

Inspection 2. Tribunal did not inspect the property but considered this case based on the papers provided by the parties.

Evidence 3. The Tribunal has considered the written submissions provided by the Tenant in that the rent registered by the Rent Officer was too high, and that she was seeking advice on the matter. The landlord has remarked that they agree with the Rent Officer’s decision.

The Application

4. By an RR1 dated 27 January 2023 the landlord sought an increase in the rent. At the time of the application the registered rent was £801.00 per calendar month, having previously been registered on 16 March 2021 (effective from 25 April 2021). On the RR1 application the landlord sought an increase to £1,335.00 per calendar month.

5. On 25 April 2023, the Rent Officer registered a rent of £1012.50 per calendar month, and it is this figure that is objected to by the tenant. The tenant finally contacted the Rent Officer to object to the registered rent, this was after the 28-day objection period had expired and the matter was referred to the tribunal who would decide whether to accept the late objection. The tribunal’s decision accepting the late objection was issued to the parties.

6. The tribunal issued directions on 9 March 2024 that requested the parties provide details of any comparable properties that they wished the tribunal to consider, and any other details of the property that should be taken into consideration. Neither party provided any evidence of other properties they wished the tribunal to consider.

Determination:

7. The starting point for the tribunal is the market rent for comparable properties in the vicinity. The parties did not provide any evidence and therefore using the tribunal’s wide general knowledge of rentals in the area, the rent for the property has been assessed at £1750.00 per calendar month. From this figure, the tribunal must make deductions so that the market rent is comparable to the subject tenancy. The tribunal must also determine what the level of scarcity deduction should be in accordance with the Rent Act 1977. In this instance the tribunal determines that 20% would be a relevant deduction. The valuation is detailed below:

Determination and Valuation

8.

Per month Market Rent

£1,750.00

Less

Differences between the tenancy terms: 5%

( £ 87.50) Less lack of white goods, carpets, curtain and recent Modernisation 10%.

£1,662.50

(£ 166.25) Total:

£1,496.25 Less 20% scarcity

(£299.25)

Total:

£1,197.00.

9. The Tribunal determines that the fair rent for the property would be £1,197.00 per calendar month.

10. The tribunal must then carry out the calculation of the Maximum Fair Rent, as shown on the reverse of the decision form. This produced a rent of £1,054.00 per calendar month.

11. The registered rent is the lower of either the fair rent (£1,197.00) or the maximum fair rent (£1,054.00), in this instance the lower is the Maximum Fair Rent and this is therefore registered as the fair rent with effect from 3 April 2024.

Decision 12. The tribunal registers the Fair Rent for the subject property at £1,054.00 per calendar month with effect from 3 April 2024.

Chairman: [NAME]: 3 April 2024.