First-tier Tribunal Determines Reasonable Market Rent for Tenancy

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/37UJ/MNR/2023/0191

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 23 [ADDRESS], [POSTCODE]

Mr [NAME] Mrs [RESPONDENT] [APPELLANT] 28 [ADDRESS], [POSTCODE]

[NAME] [APPELLANT]

1. The rent is: £949 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 09/01/2024

3. The amount included for services is not applicable

Per

4. Date assured tenancy commenced 02/09/1991

5. Length of the term or rental period Assured Periodic

6. Allocation of liability for repairs As per Landlord and Tenant Act

7. Furniture provided by landlord or superior landlord None

8. Description of premises A mid terraced villa style house complrising open porch, hallway, lounge, dining room, kitchen with cellar off. On the first floor are 2 double bedrooms and bathroom. Further bedroom on the second floor. Front forecourt. Small rear garden.

[NAME] of Decision 09/01/2024

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/37UJ/MNR/2023/0191 Property : 23 [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent’s : [RESPONDENT] : Mr [COUNSEL] of application : Application under Section 13(4) of the Housing Act 1988 referring a notice proposing a new rent under an Assured Periodic Tenancy to the Tribunal Tribunal members : Mr [NAME] Mrs [NAME] and Date of Determination : The matter was dealt with by a Video Hearing on 9th January 2024

DETAILED REASONS

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BACKGROUND

1. On 21st August 2023, the Applicant (tenant of the above property) referred to the Tribunal, a notice of increase of rent served by the Respondent (landlord of the above property) under section 13 of the Housing Act 1988.

2. The Respondent’s notice, which proposed a rent of £953.00 per calendar month with effect from 2nd September 2023, is dated 27th July 2023.

3. The date the tenancy commenced is stated on the Application Form as being on 2nd September 1991 and is an Assured Periodic Tenancy. The current rent is stated in the Respondents notice as being £697.00 per calendar month.

4. The Tribunal issued its Decision following the inspection and hearing on 9th January 2024. The Applicant subsequently requested written reasons and these detailed reasons are provided in response to that request.

INSPECTION

5. Prior to the hearing the Tribunal carried out an inspection of the property which comprises a substantial mid terraced villa style house of traditional construction having an original pitched slate roof situated in an area of predominantly similar type properties.

6. Briefly the accommodation comprises of steps up to an open front porch, hallway with stairs off to the first floor and cellar off, front lounge, rear dining room and small kitchen on the ground floor. The kitchen is fitted with a limited range of basic units.

7. On the first floor the landing leads to two double bedrooms and bathroom being fitted with a three-piece sanitary suite and electric shower over the bath.

8. On the second floor is a further double bedroom.

9. The house has gas fired central heating although this was installed with the benefit of a ‘Warmfront’ grant at no cost to either the Applicant or Respondent and the Tribunal has therefore disregarded the benefit of the central heating from the rent assessment. There is no double glazing.

10. Externally there is a small front forecourt and small rear yard/garden with shed/potting shed which, the Tribunal understands, was landscaped by the Applicant.

11. The property was noted to be in a condition throughout which was generally commensurate with its age and type.

EVIDENCE

12. The Tribunal received written representations from both parties which were copied to the other party.

13. Although neither party requested a hearing, the Tribunal determined that a hearing would be of benefit to the Tribunal and a video hearing was therefore arranged following the inspection.

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THE APPLICANT’S SUBMISSIONS

14. In summary both in writing and at the hearing the Applicant submitted:

1) The ceiling to the dining room was cracked.

2) The Applicant had fitted new fireplaces to the lounge and dining room.

3) The Applicant had fitted all the units to the kitchen including the sink, flooring and tiling.

4) The Applicant had fitted sliding wardrobes to bedroom 1 and replaced the ceiling to bedroom 2.

5) The Applicant had completed repairs to the ceiling of bedroom 3 as there was damage caused by holes to the roof which the previous landlord had not repaired.

6) In the bathroom the Applicant had replaced the flooring, W.C., heater and fitted a new electric shower together with some wall tiling.

7) Outside, the Applicant had replaced the entire fence and shed together with works to the garden. Repairs had been carried out to the front path and a porch light fitted.

8) Generally ongoing decoration had been completed throughout both internally and externally as required together with new sash windows to the lounge, bathroom and bedroom 1, vinyl tiles to the hall and radiators to the bathroom and bedroom 3 which were not included in the Warm Front improvements.

9) That during the time the Applicant had lived in the property she had maintained the interior in good order.

10) That the Applicant paid for a hatch to be fitted to the loft so that insulation could be provided and for a TV aerial to be fitted.

11) That the Applicant has provided all the carpets and floor coverings throughout.

12) That the cellar ceiling was in poor condition with areas of the ceiling falling off.

13) That despite the Respondents submissions to the contrary, the Applicant was under the impression that the Respondent wanted to evict her.

14) That when the Respondent purchased the property it was not aware of the exact nature of the Applicant’s tenancy. This was negligent on their part.

15) That as submitted at previous hearings the proposed rental was too high and unaffordable. The Applicant had tried to find alternative accommodation but had been unable to do so and was not a priority on the local authority housing list.

THE RESPONDENT’S SUBMISSIONS

15. In summary both in writing and at the hearing the Respondent submitted:

1) That it had no intention of trying to evict the Applicant. His company owned several residential properties and it was in his interest to keep the property occupied, particularly with increasing interest charges.

2) That the property had been purchased to let and that having the Applicant in occupation was very much in the Respondent’s interest.

3) That there was evidence of other lettings in the area at between £1,235.00 (for a three-bedroom flat) - £1,900.00 per calendar month for a three-bedroom house.

4) That it had offered to install double glazing and to do other works.

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5) That it did not consider it to be fair that allowances for repairs/improvements were given over many years which would already have more than paid for any works had they been completed.

16. To support its opinion of the rental value the Respondent provided copies of various adverts and letting details of similar properties in the immediate area.

17. In response, the Applicant provided details of various properties within West Bridgford at rentals in the region of £1,000.00 - £1,300.00 per month for three- bedroom houses.

THE LAW

18. In accordance with the terms of section 14 Housing Act 1988 the Tribunal proceeded to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy.

19. In so doing the Tribunal, as required by section 14(1), ignored the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act.

THE TRIBUNAL’S DECISION

20. In the first instance the Tribunal considered the various comparables provided by the parties and preferred the evidence of the Respondent as the property details submitted were of similar type and style houses in the immediate area of the subject property. The comparables provided by the Applicant were for more modern detached and semi-detached properties further away.

21. The Tribunal determined that if the property was to be marketed today then considerable improvement and upgrading would be required. In coming to its decision, the Tribunal had regard to the members' own general knowledge of market rent levels in the area of Nottingham. West Bridgford itself is generally considered to be a relatively sought-after residential area with good access to the city centre.

22. Having regard to the general level of rents in the area the Tribunal concluded that if the subject property had been in good condition the market rental value would have been £1,350.00 per calendar month.

23. The Tribunal then made the following adjustments to reflect the improvements carried out by the Applicant: [redacted]

1) Front path repairs 1.00 2) Improvements to kitchen 15.00 3) New Fireplaces 14.00 4) Shower over bath & tiling 12.00 5) Radiators to Bathroom and Attic 8.00 6) Sliding wardrobe door 4.00 7) Repairs to ceiling 5.00 8) Landscape garden 12.00 9) Repairs/replacement of windows 35.00 10) Loft Hatch 5.00 Total £111.00 per month

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24. However, the property as inspected by the Tribunal was not in the condition that would be expected in the open market and the Tribunal therefore also made the following deductions to reflect the condition of the property as follows:

1) Lack of double glazing 70.00 2) Carpets and curtains 45.00 3) White goods 40.00 4) Decorating liability 135.00 Total £290.00 per month

25. The Tribunal therefore concluded that an appropriate market rent for the property would be £949.00 per calendar month (£1,350.00 - £111.00 - £290.00).

26. The Tribunal therefore determined that the rent at which the property might reasonably be expected to be let on the open market would be £949.00 per calendar month.

27. During the hearing the Applicant submitted that she had been a tenant in the property for some 32 years and wanted to remain in the house. However, she was unable to afford the ever-increasing rental requested by the landlord. The Tribunal therefore exercised its discretion and determined that the new rent it determined would take effect from 9th January 2024 being the date of the determination rather than 2nd September 2023, being the date on the Respondents notice of increase.

APPEAL

28. Any appeal against this Decision can only be made on a point of law and must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal the party appealing must apply, in writing, to this Tribunal for permission to appeal within 28 days of the date of issue of this Decision, (or, if applicable, within 28 days of any decision on a review or application to set aside) identifying the decision to which the appeal relates, stating the grounds on which that party intends to rely in the appeal, and stating the result sought by the party making the application.

[NAME] First-tier Tribunal Property Chamber (Residential Property)