First-tier Tribunal Determines Market Rent for Assured Tenancy

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. HAV/00HG/MNR/2024/0606

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 91 [ADDRESS] [POSTCODE]

[NAME] Mr [RESPONDENT] J [RESPONDENT]

Landlord Miss [RESPONDENT] c/o [NAME], 1 [ADDRESS], [POSTCODE]

Tenant Mr [APPELLANT] & Mrs [APPELLANT]

1. The rent is: £ 1100.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 26 September 2024

3. The amount included for services is not applicable n/a Per n/a

4. Date assured tenancy commenced 26 July 2017

5. Length of the term or rental period 12 months

6. Allocation of liability for repairs Landlord

7. Furniture provided by landlord or superior landlord n/a

8. Description of premises Terraced house, one living room, one dining room, kitchen, two bedrooms bathroom WC and courtyard.

[NAME] of Decision 26 November 2024

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Case Reference

: HAV/00HG/MNR/2024/0606

Property : 91 [ADDRESS], [POSTCODE]

Tenant

: [NAME]

Landlord : [APPELLANT] of Objection : 23 September 2024

Type of [NAME] : Determination of a Market Rent sections 13 & 14 of the Housing Act 1988

Tribunal

: Mr [NAME] MA LLM

FRICS Mr [NAME] of Summary Reasons

: 26 November 2024

© CROWN COPYRIGHT 2024

_______________________________________________

DECISION

The Tribunal determines a rent of £1100.00 per calendar month with effect from 26 September 2024. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

Background

1. On 23 August 2024 the Landlord served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £1100.00 per month in place of the existing rent of £780.00 per month to take effect from 26 September 2024.

2. On 23 September 2024 under Section 13(4)(a) of the Housing Act 1988, the Tenant referred the Landlord’s notice proposing a new rent to the Tribunal for determination of a market rent. The Tenant’s referral was received by the Tribunal on 23 September 2024.

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 considered the written submissions provided by the Tenant and the [NAME]. The [NAME] from the Tenant stated the property is a terraced house comprising one living room, one dining room, kitchen, a bathroom WC, on the ground floor. Two bedrooms on the first floor and an outside courtyard. Photographs of the property prior to the commencement of the tenancy show it in good condition. The tenants report condensation and mould and note that they have been keeping the windows shut in order to keep the heat in and reduce the bills.

Valuation

5. Having considered the comparable evidence provided by the parties and our own expert general knowledge of rental values in the area, we consider that the open market rent for the property would be in the region of £1100.00 per month. The Tribunal notes the presence of mould and considers this to be caused by not opening windows, particularly in cold periods, to let the moist air out, as an attempt to minimise the utility bills.

Decision

6. The Tribunal therefore determined that the rent at which the subject property might reasonably be expected to be let in the open market by a willing Landlord under an assured tenancy was £1100.00 per month.

7. The Tribunal directs the new rent of £1100.00 per month to take effect on 26 September 2024, this being the date as set out in the Landlord’s Notice of Increase.

APPEAL PROVISIONS

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These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any request for full reasons should be made within a month. Any subsequent [NAME] for permission to appeal should be made on Form RP PTA.

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Case Reference

: HAV/00HG/MNR/2024/0606

Property : 91 [ADDRESS], [POSTCODE]

Tenant

: [NAME]

Landlord : [APPELLANT] of Objection : 23 September 2024

Tribunal

: Mr [NAME] MA LLM

FRICS Mr [NAME] of Summary Reasons

: 26 November 2024

Full Reasons : 3 February 2025

© CROWN COPYRIGHT 2025

_______________________________________________

DECISION

2 FULL REASONS

The Tenants, [NAME] and [NAME] [NAME] submitted an [NAME] for Permission to Appeal a decision to the Upper Tribunal (Lands Chamber) dated 10 January 2025. Such an [NAME] is premature given the full reasons for the decision have not been requested or issued. [NAME] has determined that the [NAME] will be treated as a request for Full Reasons. If either party after the consideration of the Full Reasons wishes to appeal, the appeal provisions are recorded at the end of this decision.

Background

1. On 23 August 2024 the [NAME], [NAME], served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £1100.00 per month in place of the existing rent of £780.00 per month to take effect from 26 September 2024.

3. Directions were issued by the Tribunal on 15 October 2024, providing for the Landlord to submit a statement of reasons by the 29 October 2024, the tenant to submit their statement of reasons by 12 November 2024.

Inspection 4. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence 5. The Tribunal has considered the written submissions provided by the Tenant and the [NAME]. The [NAME] from the Tenant stated the property is a terraced house comprising one living room, one dining room, kitchen, a bathroom WC, on the ground floor. Two bedrooms on the first floor and an outside courtyard. Photographs of the property prior to the commencement of the tenancy show it in good condition. The tenants report condensation and mould and note that they have been keeping the windows shut in order to keep the heat in and reduce the bills.

Submission by the Applicant Tenant

6. The tenant submitted a number of documents comprising; (i) [NAME] referring a notice proposing a new rent under an Assured Periodic Tenancy or agricultural tenancy to the Tribunal, (ii) Landlord’s Notice proposing a new rent

3 under an Assured Periodic Tenancy of Premises situated in England. (iii) A copy of the assured Shorthold Tenancy Agreement from 26 July 2017 at £700 per month rent.

7. The [NAME] from the tenants dated 23 September 2024 noted;

8. The property the subject of the tenancy is a terraced house comprising a living room two bedrooms and a bathroom, externally there is a courtyard.

9. The tenancy started on the 26 July 2007

10 They expressed concern that “in most rooms we have a problem with mould, so we repainted the whole house last year except bathroom”.

11. In terms of responsibility for repairs the landlord is noted as having responsibility.

12. A copy of the Landlords Notice dated 23 August 2024 proposing a new rent increasing from £780 per month to £1100 per month with effect from 26 September 2024.

13. A copy of the tenancy agreement granting a 12-month tenancy from 26 July 2007 at a rent of £700 per month with rent payable on the 26th of the month.

14 The tenant completed a Reply Form. The form confirmed the property was terraced and comprised on the ground floor open plan living room and dining room, kitchen and bathroom, and on the first floor two bedrooms.

15. The Reply Form notes that the property has double glazing, gas central heating, and carpets, curtains or blinds. White goods comprising a cooker, fridge freezer and washing machine were provided by the Landlord

16. The Reply Form gave details of the problem of mould within the property. The tenant supplied seven photographs of areas affected by mould and noted the property had been painted internally by the tenants in order to try and rectify. Additionally, dehumidifiers are used to further attempt to mitigate the problem.

17. At the end of the Reply Form the tenant included a list of properties said to be comparable and the level of rents payable.

[ADDRESS] this is a three-bedroom terrace, rent passing £775 per month with the tenants in occupation 8 years.

[ADDRESS] a three-bedroom terraced house with a rent of £800 per month where the tenant has been in occupation for two years.

[ADDRESS] a two-bedroom terrace house with a rent of £750 per month. The tenant has been in occupation for 3.5 years and the rent increase last year was £50 per month.

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[ADDRESS] a two-bedroom house with a passing rent of £800 to £900 per month. Tenant in occupation two years.

[ADDRESS] a two-bedroom house with a passing rent of £800 -900 per month, the tenant being in occupation for one year.

Submission by the Respondent Landlord

18. The Respondent [NAME] [NAME] submitted on 23 October 2024 a “Best Price Guide” for [POSTCODE], photographs and a completed landlord form. The guide describes itself as finding comparable properties. There are five properties with asking rents of three at £1100 two at £1200 and one at £130o per month. Three were specifically noted as being let and the other two no longer available. The length of time the properties were said to be available was around 5 days to 45 days.

19. The best guide shows properties within 1 mile of the [POSTCODE] postcode to let. The time frame is 16 July 2023 and 16 October 2024.

20. The [NAME] supplied a number of photographs of the property showing the exterior and interor. The property in the photographs is empty and newly refurbished.

21 The Reply form completed by [RESPONDENT] [NAME] for the landlord noted the property is terraced comprising on the ground floor on open plan living room and dining room, kitchen and bathroom/ WC on the first floor there are two bedrooms. The Form noted that the property has gas central heating, double glazing and carpets/curtains or blinds provided by the landlord.

22. White goods namely cooker, fridge freezer and washing machine are provided by the landlord.

23. Under the section relating to condition of the property it was noted that the bathroom and kitchen was refitted in 2017, and that the boiler is awaiting a service.

Discussion and Valuation

24 Firstly, the Tribunal considered the level of rent the property should achieve if let in the open market at the effective date of the Landlords Notice of Increase, on the assumption the property is in good condition.

25 The tenants comparables are taken from the vicinity and show a rental spectrum of £700 to £ 900 per month. The date of the rents achieved is not known but number [ADDRESS] appears the most recent and the level of rent here is said to be £800 to £900 per month. The specification and quality of [ADDRESS] is not known.

5 26. The Landlords comparables are in the range of £1100 to £1300 but are drawn from a larger area a one-mile radius. However, two are drawn from the same road, [ADDRESS]. These are shown as being available at £1100 per month and the specification shows them as newly refurbished. Additionally, they were shown as being both let one at 45 days the other details not given.

27. The Tribunal has photographs of the subject property when empty and the assumption is the pictures of the newly refurbished property were taken immediately before the current occupants took occupation.

28 So, in summary the Tribunal considers the two [ADDRESS] landlord comparables carry the most weight as they are in the same road, let relatively close to the relevant date and are refurbished.

29. So the Tribunal concludes that the rent determined for the subject property in a good tenantable condition at the effective date of the notice is £1100 per month

30. The Tribunal then needs to consider whether the condition of the property detracts from a property in good tenantable condition.

31. Within the Reply Form photographs 1-5 show superficial mould. Photographs 6 and 7 do not appear to be rising damp but mould caused by lack of air circulation.

32. The Tribunal is sympathetic over the issues of mould, and notes the mitigation undertaken, and recognises the cost of the mitigation approaches. However, the main two comparable are at £1100 per month; same road, both refurbished, age and nature of property the same. The issue of mould does not emanate from disrepair, so no adjustment is made to the rent.

Decision

33. The Tribunal therefore determined that the rent at which the subject property might reasonably be expected to be let in the open market by a willing Landlord under an assured tenancy was £1100.00 per month.

34 The Tribunal directs the new rent of £1100.00 per month to take effect on 26 September 2024, this being the date as set out in the Landlord’s Notice of Increase.

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.

6 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).