First-tier Tribunal Reduces Market Rent Due to Property Issues

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. LON/00AK/MNR/2024/0706

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 148 [ADDRESS] [POSTCODE]

Judge Tildesley OBE Alison Flynn MA MRICS

Landlord [RESPONDENT] c/o [RESPONDENT], Building B [NAME], [ADDRESS], London [POSTCODE]

Tenant Mrs [APPELLANT] [NAME]

1. The rent is: £ £2,070 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 12 March 2025

*3. The amount included for services is/is

negligible/not applicable n/a Per n/a

*4. Service charges are variable and are not included

5. Date assured tenancy commenced 30 May 2024

6. Length of the term or rental period monthly

7. Allocation of liability for repairs Landlord external, tenant internal

8. Furniture provided by landlord or superior landlord none

9. Description of premises Mid terrace house with two reception rooms, dining room, kitchen on ground floor and three bedrooms and bathroom on first floor

Chair Judge Tildesley OBE Date of Decision 12 March 2025

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

LON/00AK/MNR/2024/0706

Property

:

148 [ADDRESS] [POSTCODE]

Tenant

:

Mrs [COUNSEL] [NAME]

:

Respondent: [redacted]

:

[NAME] [COUNSEL] [NAME] of [COMPANY] of Application

:

Determination of Market Rent Sections 13 & 14 Housing Act 1988 (“1988Act”)

Tribunal Member(s)

:

Judge Tildesley OBE Alison Flynn MA MRICS

Date and venue of the Hearing

:

10 [ADDRESS] [POSTCODE] 21 February 2025

Date of Decision

:

12 March 2025

DECISION © CROWN COPYRIGHT

2 Senior President of Tribunals Practice Direction: Reasons for Decisions 4 June 2024

1. This Practice Direction states basic and important principles on the giving of written reasons for decisions in the First-tier Tribunal. It is of general application throughout the First-tier Tribunal. It relates to the whole range of substantive and procedural decision- making in the Tribunal, by both judges and non-legal members.

Accordingly, it must always be read and applied having regard to the particular nature of the decision in question and the particular circumstances in which that decision is made (paragraph 1).

2. Where reasons are given, they must always be adequate, clear, appropriately concise, and focused upon the principal controversial issues on which the outcome of the case has turned. To be adequate, the reasons for a judicial decision must explain to the parties why they have won and lost. The reasons must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the main issues in dispute. They must always enable an appellate body to understand why the decision was reached, so that it is able to assess whether the decision involved the making of an error on a point of law. These fundamental principles apply to the tribunals as well as to the courts (paragraph 5).

3. Providing adequate reasons does not usually require the First-tier Tribunal to identify all of the evidence relied upon in reaching its findings of fact, to elaborate at length its conclusions on any issue of law, or to express every step of its reasoning. The reasons provided for any decision should be proportionate, not only to the resources of the Tribunal, but to the significance and complexity of the issues that have to be decided. Reasons need refer only to the main issues and evidence in dispute and explain how those issues essential to the Tribunal’s conclusion have been resolved (paragraph 6).

4. Stating reasons at any greater length than is necessary in the particular case is not in the interests of justice. To do so is an inefficient use of judicial time, does not assist either the parties or an appellate court or tribunal, and is therefore inconsistent with the overriding objective. Providing concise reasons is to be encouraged. Adequate reasons for a substantive decision may often be short. In some cases a few succinct paragraphs will suffice. For a procedural decision the reasons required will usually be shorter (Paragraph 7).

The Proceedings

5. On 25 September 2024 the Landlord served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £2,500.00 per month in place of the existing rent of £2,000.00 per month to take effect from 30 October 2024.

3

6. On 10 October 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.

7. On 19 December 2024 the Tribunal directed that it would decide the application during the fourteen days from 17 February 2025 based on the written submissions by the parties unless a party requested a hearing.

8. On 8 January 2025 the Landlord indicated that it was content for the Application to be dealt with on the papers. The Landlord supplied written submissions.

9. On 16 January 2025 the Tenant requested a hearing and provided written submissions in support of her application. The Tenant did not request an inspection of the property.

10. On 5 February 2025 the Tenant enquired whether she had to attend the hearing and whether it could be held on TEAMS. The Tenant explained that she was working full time and could not afford to lose a day’s wages.

11. On 6 February 2025 the Tribunal informed that the parties that the hearing would take place by video. The parties did not request an inspection of the property.

12. The Tribunal viewed the property on the internet, and the sales particulars dated April 2022 on “RightMove” which had photographs of the interior and a diagram of the layout.

13. The Tenant and [NAME] [APPELLANT] [NAME] for the Landlord participated in the video hearing held at 10.00am on 21 February 2025.

14. At the hearing the Tribunal established that [NAME] [APPELLANT] had not seen the comparables supplied by the Tenant. After hearing from the parties the Tribunal decided that it would adjourn its determination to give [NAME] [APPELLANT] an opportunity to comment on the Tenant’s list of comparables. The Tribunal also took the opportunity to seek further clarification of various other matters raised during the hearing which had been hampered by technical difficulties.

15. On 25 February 2025 the Tribunal issued further directions requiring the Landlord to comment on the Tenant’s list of comparables, to supply the letting particulars of a new comparable of [ADDRESS] which [NAME] [NAME] had mentioned at the hearing, and details of the central heating system at the property including the age of the system and the written record of the service carried out on the 28 November 2022. The Tribunal gave the Tenant an opportunity to comment on the letting particulars of 67

[ADDRESS] and supply evidence of financial hardship which might be relevant to the start date for the new rent but not to the level of rent.

16. The Landlord supplied further information about the property at [ADDRESS] but did not comply with the direction regarding the details of the central heating system. The Tenant provided information about her means and outgoings and details of an additional comparable, [ADDRESS]. The Tribunal considered that the Landlord’s representative should be given an opportunity to comment on this latest comparable which he did on 12 March 2025.

17. The Tribunal informed the parties that it would make its determination without a further hearing in the period of 14 days from the 5 March 2025, and would send its decision in writing to the parties by 26 March 2025.

18. The Tribunal determined the Application on the 12 March 2025.

The Evidence

19. The property is a three-bedroom Victorian mid terraced house constructed of brick with tiled roof. The EPC stated that the total floor area was 93 square metres. The property is located on a major [ADDRESS] A110 and situated in Ponders End close to shops and amenities.

20. The property has two living rooms, dining room, and a kitchen on the ground floor with two double bedrooms, single bedroom and a bathroom on the first floor. There is off street parking at the front and a garden at the rear. The property has gas central heating and double-glazed windows. The Landlord has provided the carpets and cooker. The Tenant has supplied the curtains and the remaining white goods.

21. The Tenant has lived at the property for 14 years. She holds the property under an assured shorthold tenancy. The agreement was extended on 30 May 2024. The agreement takes effect subject to the provisions of sections 11-16 of the Landlord and Tenant Act 1985 which imposes on the Landlord obligations to repair of the structure and exterior (including drains, gutters and pipes) and certain installations for the supply of water, electricity and sanitation (including basins, sinks, baths and sanitary conveniences) and for space heating or heating water.

22. The Tenant states that the property suffered from mould and water ingress, and that tiles have fallen off the wall in the kitchen. The Tenant asserted that the central heating system was not functioning

5 correctly. The Tenant supplied photographs which showed mould in the bedrooms, condensation on the window of the second bedroom, a large damp patch in the ceiling of one of the bedrooms, missing tiles and paint stripping in the kitchen. The Tenant also supplied a video which showed her breath in the kitchen to demonstrate that the kitchen was cold.

23. The Tenant gave details of comparables comprising three three- bedroom terraced houses with postcodes of EN1 and N9 with asking rents of £2,000 per calendar month and one of £2,150 per calendar month, and five 4-bedroom properties of asking rents of £2,500 per calendar month and one of £2,300 per calendar month. The Tenant also supplied rents for a five-bedroom property, a two- bedroom house and a three bedroom flat.

24. In her later submission, the Tenant supplied the letting details for [ADDRESS] which had just come on the market with an asking rent of £2,100 per calendar month. The particulars revealed that it was a three-bedroom mid terrace property with off street parking at the front and a garden, largely paved, at the rear. The property had two reception rooms, kitchen and bathroom on the ground floor with three bedrooms on the first floor. The property was advertised as unfurnished but with white goods. The photographs showed the presence of double glazing, gas boiler, radiators and carpets with laminated flooring in the living rooms but no curtains.

25. At the hearing [NAME] [APPELLANT] accepted the Tenant’s description of the condition of the property but he argued that the Tenant’s living style was the cause of the property experiencing mould and damp. [NAME] [NAME] stated that none of the photographs demonstrated the existence of rising damp, and in his view, the condensation and the mould happened because the Tenant did not heat and ventilate the property adequately.

26. [NAME] [NAME] did not accept that the heating system was faulty. [NAME] [NAME] said that the boiler was serviced on the 28 November 2024, and that the records showed that the Tenant had not understood the controls for the central heating system. [NAME] [NAME] has not supplied details of the service as required by the Tribunal directions dated 25 February 2025. The Tribunal noted that the EPC scored an energy rating of D for the property recording that the main heating was good and the programmer and thermostat as average.

27. The Landlord provided three comparables in his written submissions:

• 10 [ADDRESS], [POSTCODE] – A 3- bedroom house with a garden let for £2,600 per month.

6 • 18 [ADDRESS], [POSTCODE] – A 3-bedroom house with a garden let for £2,600 per month.

• 80 [ADDRESS], [POSTCODE] – A 3-bedroom half-house without a garden, let for £2,200 per month.

28. [NAME] [NAME] disagreed with the Tribunal’s observation that the properties at [ADDRESS] and [ADDRESS] were located in residential areas and would have commanded a higher rent than a similar property fronting a busy road. The Tribunal said that it had viewed [ADDRESS] on the internet, and it appeared to be a semi-detached house. [NAME] [NAME] disagreed with the Tribunal’s observation stating that its square area of 59 square metres was considerably less than the subject property.

29. [NAME] [RESPONDENT] said that [NAME] had recently let a three- bedroom property at [ADDRESS] at a rent of £2,500 per calendar month. [NAME] [NAME] stated that the property was very similar to the subject property, having double reception rooms, kitchen and toilet on the ground floor with three bedrooms and a bathroom/toilet on the first floor. [NAME] [NAME] said that the size of the house was 1,039 square feet which was equivalent to 96.53 square metres. The Tribunal notes that the property was described as semi-detached on the internet.

30. [NAME] [NAME] commented that [ADDRESS] had been advertised on an online portal for [NAME] which in his view explained the lower rent of £2,100 per month. In support of his submission that [NAME] were not aware of current market conditions he referred to another property (address not given) which had been advertised at a rent of £2,150 per month on [NAME], another online portal for [NAME]. Finally, he referred to a letting of a three-bedroom property (no address given) on “[COMPANY]” which had been advertised at a rent of £2,300 per month stating that the [NAME] agent had limited the rent to £2,300 because of the current availability of two properties at rents of £2,100 and £2,150 per month.

Consideration

31. The Tribunal is required to determine 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. The personal circumstances of the Tenant are not relevant to this issue.

32. The Tribunal’s starting point is to decide the market rent for the subject property if let on 30 October 2024 in a good condition and on the usual terms for an assured shorthold tenancy.

33. The Tribunal has examined the parties’ evidence of rents for comparable properties and decides that the rents for the two

7 properties on [ADDRESS] provide the best evidence of the open market rent for the subject property. The Tribunal considers that a location on a busy trunk road would be influential in assessing the market rent. Also the two properties on [ADDRESS] bore many similarities to the subject property.

34. The Tribunal finds that the layout of the subject property was better than that for [ADDRESS]. The latter has a bathroom on the ground floor and did not have the benefit of a dining room next to the kitchen. In contrast the Tribunal considers the property at [ADDRESS] to be superior to that of the subject property. 67 Nags Head was semi-detached slightly larger than the subject property with an additional toilet on the ground floor. The Tribunal, therefore, determines that the market rent for the subject property if let on 30 October 2024 in a condition that was usual for such an open market letting would be £2,300 per calendar month.

35. The Tribunal, however, finds that the rent of £2,300 per calendar month is the rent that would be achieved if the property was let in good condition with all modern amenities. The Tribunal does not accept [NAME] [NAME] assertion that the poor condition of the property was entirely due to the Tenant’s lifestyle. The evidence of the water ingress in the ceiling and tiles coming off the walls suggest that the property was in disrepair. The Tribunal expresses caution about attributing all incidences of mould to the Tenant’s lifestyle. No firm conclusions can be reached until an investigation is carried out by an appropriate expert. The Tribunal notes that the EPC recorded that the heating controls were average which suggest that the heating system may not be operating to optimum efficiency. Finally, the Landlord accepted that it did not supply all the necessary white goods and curtains which usually form part of the agreement for an assured shorthold tenancy. The Tribunal, therefore, decides that a 10 per cent reduction in the provisional market rent of £2,300 is justified to reflect the deficiencies in the subject property which produces a market rent of £2,070 per calendar month.

36. The Tenant’s financial position is not relevant to the determination of the amount of the rent, however, it may affect the start date of the new rent. The Tenant explained that she was a single parent working full time with a monthly wage of £1,500 which was topped up by universal credit of £1,000. The Tenant was supporting her daughter and grandchild. The Tribunal is satisfied that the Tenant would suffer undue hardship if the new rent was backdated to 30 October 2024.

Decision

37. The Tribunal, therefore, determines a market rent of £2,070 per calendar month to take effect from 12 March 2025.

RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office which has been dealing with the case.

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

3. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.