First-tier Tribunal Determines Fair Rent Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. LON/00AM/F77/2024/0647

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were [ADDRESS] [POSTCODE] Judge S [NAME] [NAME]

[APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £203 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 14 January 2025

3. The amount for services is £9.43 Per week

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 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:

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 £289.88 per week including £ 9.43 per week for services.

[NAME] of decision

14 January 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 390.9

PREVIOUS RPI FIGURE Y 343.2

X 390.9 Minus Y 343.2 = (A) 47.7

(A) 47.7 Divided by Y 343.2 = (B) 0.138986

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.188986

Last registered rent* 170.50 Multiplied by (C) = 202.72 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 203.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £203 Per week

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/00AM/F77/2024/0647

Property : [ADDRESS], [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [APPELLANT] of Objection : 06 September 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge S [NAME] [NAME]

: 14 January 2025

_______________________________________________

DECISION

The sum of £203.00 per week will be registered as the fair rent with effect from 14 January 2025, being the date the Tribunal made the Decision. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

© CROWN COPYRIGHT 2023

SUMMARY OF REASONS

Background 1. Following an objection from the Tenant 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.

2. The lease was granted on 25 October 1982. The property is a self-contained flat in a Victorian/Edwardian building. It has partial central heating, and comprises three rooms, a kitchen and bathroom/WC.

Inspection 3. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence 4. The Tribunal has consideration of the written submissions provided by the Tenant.

Determination and Valuation 5. Having consideration of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in good tenantable condition would be in the region of £450.00 per week.

6. We would make a deduction from the open market rent to allow for:

(a) the difference between the condition of the flat and a property in good tenantable condition; and

(b) the decorating provisions in the lease; and

(c) the provision of white goods; and

(d) improved, but not fully refurbished, a kitchen and bathroom/WC.

7. The amount we allow for reductions is 20% (£90.00), giving an adjusted figure of £360.00 per week.

8. From this figure we deduct the service charge of £9.43 per week. This produces a figure of £350.57.

9. We allow a reduction of 20% for scarcity, which is £70.11. This produces a figure of £280.46.

10. It is then necessary to add back on the service charge of £9.43 per week.

11. This produces a fair rent of £289.89 per week.

Improvements 12. The Landlord has given an allowance of £2,887.00 to the Tenant to refurbish the Kitchen and a new bathtub was installed. And this is reflected in the calculation of fair rent above.

13. MFR Order 1999 Article 2(7) provides that “This article does not apply in respect of a dwelling house if because of a change in the condition of the dwelling house or the common parts as a result of repairs or improvements (including the replacement of any fixture or fitting) carried out by the landlord...the rent that is determined in response to an application for registration of a new rent under Part IV exceeds by at least 15% the previous rent registered or confirmed”.

14. We adjust the figure of £90.00 in paragraph 7 above to £112.50 (about 25%) to reflect the unmodernised kitchen and old bath tub, giving an adjusted figure of £337.50.00 per week.

15. From this figure we deduct the service charge of £9.43 per week. This produces a figure of £328.07.

16. We allow a reduction of 20% for scarcity, which is £65.61. This produces a figure of £262.46.

17. It is then necessary to add back on the service charge of £9.43 per week.

18. This produces a fair rent of £271.89 per week.

19. The difference in rent because of the Landlord’s improvements is £289.89 per week less £271.89 per week, which amounts to £18.00 per week.

20. 15% of the previous rent registered of £170.50 is £25.785 which is more than the difference in rent resulting from the works carried out at the Landlord’s expense. Therefore, the rent is not exempt from the MFR Order.

Decision

21. The maximum fair rent calculation produces an MFR of £203 per week. The Tribunal therefore determines a rent of £203 per week for the purposes of section 70 Rent Act 1077.

Chairman: [NAME]: 14 January 2025

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 application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta- application-for-permission-toappeal-a-decision-to-the-upper-tribunal-lands-chamber.

The application for permission to appeal must arrive at the Regional Office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.

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

The application 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 making the application is seeking. Please note that if you are seeking permission to appeal against a decision made by the Tribunal under the Rent Act 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law.

If the First-tier Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).