First-tier Tribunal Determines Market Rent Considering Tenant Improvements

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AN/MNR/2022/0133 HMCTS code (paper, video, audio) : V: CVP Video Property :

[ADDRESS], [POSTCODE]

Applicant: [redacted] Respondent: [redacted] at the hearing and inspection by Ms [NAME]) Type of [NAME] : Determination under section 14 of the Housing Act 1988 Tribunal members : Judge N [NAME] : 10 [ADDRESS] [POSTCODE] (Remote Hearing) Date of decision : 9 January 2023

DECISION

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Covid-19 pandemic: description of determination This has been a remote determination which has not been objected to by the parties. The form of remote hearing was V: CVP Video. A face-to-face hearing was not held because it was not practicable and all issues could be determined following a remote hearing and inspection. The Tribunal has considered the documents on the remote Tribunal file, the contents of which we have noted. The order made is described below. The Tribunal’s determination Decision

The Tribunal determines that the market rent for the subject property is £1,140, with effect from 1 October 2022.

Background

1. By a notice dated 9 August 2022, the landlord sought an increase in rent under section 13 of the Housing Act 1988. The landlord proposed that the rent should increase from £1,200.00 to £1,320.00 per month, with effect from 1 October 2022.

2. By an [NAME] dated 25 August 2022 the tenant, Mrs. [APPELLANT], sought a determination of the rent payable under her tenancy.

3. This matter has been before the Tribunal twice before, and the parties are aware that the jurisdiction of the Tribunal is to set a market rent for the property taking into consideration the terms of the tenancy, the condition of the property, its location and the market rent for similar properties in the locality.

4. The tenant occupied the subject property under the terms of an agreement dated 8 January 1991, following which she has remained in occupation as a statutory periodic tenant.

The inspection

5. The Tribunal inspected the property on 9 January 2023. We found it to be situated within a purpose-built block built in 1898, constructed of brickwork with parapets and wooden, double hung, sliding sash windows. The block comprises a basement, a ground floor and two upper floors and it is situated on a quiet residential street with restricted parking. There is a lightwell to the front but no front garden. The common parts are in fair condition.

6. The flat itself is situated on the second floor of the block and comprises three rooms, a kitchen/diner, and a bathroom/W.C. originally unmodernised and with many improvements and works of

3 modernisation carried out by the tenant since the start of her tenancy. Further improvements have also been carried out by the tenant since the last Tribunal hearing.

7. It is not in dispute that the tenant has carried out the following improvements to the property since 1991:

- Installed central heating system: boiler, radiators, new gas pipe to the gas meter

- Rewired entire flat

- Installed new bathroom

- Installed new kitchen

- Installed 2 fireplaces (living room and dining room)

- Replaced ceilings

- Replaced floorboards and flooring

- Replaced skirtings and doors

- Installed ceiling covings

- Fitted security bars to the bedroom window and the front door

- Installed light fittings

- Installed curtain rails/curtains

8. The Tribunal noted, from its internal inspection, that the sash windows to living room are not in good condition. The kitchen is not currently in good condition but the Tribunal has, in any event, carried out its valuation on the basis that the kitchen needed to be installed by the tenant.

The law and the Tribunal’s valuation

9. Sections 13 and 14 of the Housing Act 1988 (“the 1988 Act”) make provision for the increase of rent under an assured periodic tenancy.

10. It was noted in the 2019 Tribunal decision concerning this property that London District Properties Management [COMPANY] v Goolamy [2009] WHC 1367 (Admin) 2009 WL 1657136 provides that the rent review provisions of the assured tenancy preceding the statutory period tenancy are of no effect (in this case, the previous tenancy agreement contained a rent review clause). This Tribunal therefore has jurisdiction to determine the rent.

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11. Section 14 of the 1988 Act requires the Tribunal to set the rent by reference to the market rent for comparable properties, ignoring the effect of tenant’s improvements.

12. In coming to its decision, the Tribunal considered all of the evidence presented to it at a remote hearing, in writing, and at the inspection.

13. The most relevant comparable property is Flat 6 in the same building which has an identical footprint to the subject property. Ms [NAME] stated that flat 6 has been let for £1,900 per month, following redecoration.

14. Accordingly, the Tribunal finds that, if the property were in the condition to be expected of a current market letting, that the rent would be in the region of £1,900.

15. However, the property must be valued on the basis that the tenant’s improvements have not been carried out and that no white goods, carpets or curtains have been supplied by the landlord. A tenant would seek a substantial reduction from that asking rent to reflect the unmodernised condition of the property.

16. It is the Tribunal’s view that a tenant would seek a reduction of at least the 40% of the market value to take account of all of these matters (including work undertaken by the tenant since the last Tribunal hearing).

17. The Tribunal therefore determines the market rent for the subject property, taking into consideration the matters referred to at paragraph 15, above is £1,140.00 per calendar month. The Tribunal’s decision takes effect from 1 October 2022, the date in the landlord’s notice.

Name:

Judge N Hawkes

Date: 9 January 2022

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.

5 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).