First-tier Tribunal Determines New Fair Rent for Property

OUTCOME: Allowed

© CROWN COPYRIGHT 2013 FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : CAM/42UG/F77/2024/0005 Property : 3 Walton Court High St. Felixstowe Suffolk [POSTCODE] Applicant : [redacted] (Tenants) Representative : None Respondent : [redacted] Representative : None Type of Application : S.70 Rent Act 1977 – Determination of a new fair rent Tribunal Members : Mr [NAME]. [NAME] and venue of Meeting : 18 March 2024 First Tier Tribunal (Eastern) HMCTS Cambridge [POSTCODE] Date of Decision : 18 March 2024

REASONS FOR

DECISION Background 1 By an application dated 19 October 2023, the landlord applied to the Rent Officer for registration of a fair rent of £96.04 per week. The rent stated as payable at the time of the application was said to be £88.19 per week. These were the rents being levied and intended. However the registered rent was actually already £111.56 pw including a £10.86 pw service charge, from 5 February 2018, though this was not the rent charged by the landlord which was significantly lower.

2 2 On 15 December 2023, the Rent Officer registered a fair rent of £130 per week including a service charge of £10.84 per week, with effect from that date. By a letter dated 3 January 2024, the tenant objected to the new fair rent. The First Tier Tribunal was notified of this objection and a request for a fresh determination of the rent. Directions 3 Directions dated 17 January 2024 were issued by [NAME], Legal Officer, for case progression. Neither party requested a hearing. 4 The Tribunal determined the new rent on such written statements from the parties as were received. 5 The Tribunal noted that the landlord was not charging a rent at the registered figure, but significantly below. This was apparently owing to other regulations as apply to public sector landlords of this nature but this approach lies outwith the jurisdiction of this Tribunal. Tenant’s Representations 6 Neither party completed or filed the standard Reply Form. The tenant explained in their letter of 3 January 2024 that if the rent registered by the Rent Officer was charged she would suffer considerable hardship. 7 The Tribunal determined the new rent on such written statements from the parties as were received. 8 The Property is a purpose built flat on the ground floor of a low rise 3 level block of similar flats. It is served by communal yards and staircases. There is no lift. There is a terrace of lock up garages and a communal road to the rear of the block. 9 A ground floor flat of 2 bedrooms, living room, kitchen, bathroom/ WC. There were communal gardens to the front. The Property included landlord’s full gas fired central water and space heating. Carpets and curtains and white goods were provided by the tenants in line with the landlordd’s social lets policy. The tenancy began on 12 August 1986. Landlord’s Representations 10 None were received from the landlord. Inspection 11 The Tribunal did not inspect the Property. The Tribunal was however able to externally view the Property from Google Streetview (@ June 2022). The Property appeared to date from the 1970’s set on a small residential housing block of the same age on Felixstowe High St..

3 12 The Block of which the Property forms part has a double pitched single lap concrete tiled roof and elevations of brick. There appears to be modern double glazed windows. Externally the Property appears to be in fair to good condition on the front and side elevations. Law 13 When determining a fair rent the Committee, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances including the age, location and state of repair of the property. It also disregarded the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property. 14 In [COMPANY] v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasized (a) 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 (b) 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). 15 Where the condition of a property is poorer than that of comparable properties, so that the rents of those comparables are towards twice that proposed rent for the subject property, it calls into question whether or not those transactions are truly comparable. Would prospective tenants of modernized properties in good order consider taking a tenancy of an un-modernised house in poor repair and with only basic facilities or are they in entirely separate lettings markets? The problem for the Tribunal is that the only evidence of value levels available to us is of modernised properties. We therefore have to use this but make appropriate discounts for the differences, rather than ignore it and determine a rent entirely based on our own knowledge and experience, whenever we can. 16 On the evidence of the comparable lettings and our own general knowledge of market rent levels in and around Felixstowe, the Tribunal accepts that the Property would let on normal Assured Shorthold Tenancy (AST) terms, for £200 per week. This then, is the appropriate

4 starting point from which to determine the rent of the property as it falls to be valued. 17 A normal open market letting would include carpets, curtains and “white goods”, but not usually provided in social housing lets and were assumed not provided here by the landlord. The Tribunal assumes the kitchen and bathroom whilst functional are basic. Deduction for these shortcomings amount to £10pw, leaving the adjusted market rent at £190pw. 18 The Tribunal also has to consider the element of scarcity and whether demand exceeded supply. The Tribunal found that there was no scarcity in the locality of Felixstowe for this type of property and makes no further deduction from the adjusted market rent. 19 The fair rent to be registered on this basis alone would be £190 pw, but, the new rent is limited by the statutory Maximum Fair Rent Cap calculation. If this Cap did not apply, the registered Fair rent would be £190 pw. 20 The MFRC limits any increase to the change in RPI (set two months prior at each date), between the date of the last registration of a fair rent and the current, plus 5%. The calculations are shown in the MFR form and this caps the new rent at £152.84 (including £10.84 pw service charge). The fair rent is therefore capped at this figure. 21 The Rent Act makes no allowance for the Tribunal to take account of hardship arising from the new rent payable compared with the existing rent registered. The landlord is entitled but, not compelled, to charge the tenants rent at the registered figure from the effective date. However the landlord may not charge more than the fair rent. [NAME] 18 March 2024 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 either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013).

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