First-tier Tribunal Sets Fair Rent at £125 Weekly

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. CHI/23UC/F77/2020/0002

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were [NAME], Culkerton, Tetbury, Gloucestershire, [POSTCODE]

[NAME] Mrs [APPELLANT]

Landlord [RESPONDENT]

Tenant [NAME] [APPELLANT]

1. The fair rent is £125.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 16 March 2020

3. The amount for services is n/a Per n/a

not applicable

4. The amount for fuel charges (excluding heating and lighting of common parts) not counting for rent allowance is

n/a Per n/a

not applicable

5. The rent is not to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 do not apply because 1st registration.

7. Details (other than rent) where different from Rent Register entry

[NAME] of decision 16 March 2020

Case Reference : CHI/23UC/F77/2020/0002

Property : [NAME]

[POSTCODE]

Applicant: [redacted] : None

Respondent: [redacted] : [COUNSEL] and Innocent

Type of Application : Rent Act 1977 (“the Act”) Determination by the First-Tier Tribunal of the fair rent of a property following an objection to the rent registered by the Rent Officer.

Tribunal Members : Mr [NAME] R [NAME]

[NAME] and Venue of Inspection : 16th March 2020

Date of Decision : 16th March 2020

___________________________________________

REASONS FOR DECISION ____________________________________

© CROWN COPYRIGHT 2020

FIRST - TIER TRIBUNAL PROPERTY CHAMBER RESIDENTIAL PROPERTY)

RPTS – Case Ref CHI/23UC/F77/2020/0002

2 Summary of Decision

On 16th March 2020 the Tribunal determined a fair rent of £125 per week with effect from 16th March 2020.

Background

1. On 23rd October 2019 the Landlord’s Agent applied to the Rent Officer for registration of a fair rent of £185 per week for the above property. This would equate to £801.66 per month.

2. The rent was not previously registered.

3. The rent was registered by the Rent Officer on the 19th December 2019 at a figure of £130 per week with effect from the same date. This equates to £563.33 per month.

4. By a letter dated 30th December 2019 the Tenant objected to the rent determined by the Rent Officer and the matter was referred to the First Tier Tribunal Property Chamber (Residential Property) formerly a [NAME].

Inspection 5. The Tribunal inspected the property on the 16th March 2020. Mr [APPELLANT] and his supporter Mrs [APPELLANT] were present. The Landlord was also present but did not wish to inspect the inside of the property with the Tribunal.

6. The property is a semi-detached house built of solid Cotswold Stone walls beneath a pitched tiled roof.

7. Internally a hall gives access to a living room and a kitchen/dining room at ground level. Stairs rise to a first-floor landing leading to two double bedrooms, a small single bedroom and a dated bathroom with WC.

8. Outside there is a small front garden, good sized rear garden, off-road parking and a large timber store. The store was provided by Mr [APPELLANT] and is not included within the valuation.

9. The front and rear doors together with the windows to the front elevation are relatively new double-glazed units. There is no central heating or gas supply and drainage is to a septic tank. There is an open fire with broken fireplace in the living room and a [NAME] stove in the kitchen.

10. Culkerton is a small hamlet some several miles from main shopping and educational facilities at Tetbury.

11. Internally the property had been maintained in reasonable order by the Tenant who had installed a shower above the Bath. The Tribunal noted dampness throughout at ground level and old damp stains on most first

RPTS – Case Ref CHI/23UC/F77/2020/0002

3 floor ceilings from past leaks. Mr [APPELLANT] had not noted any rain ingress during recent extreme storms.

12. Mr [APPELLANT] had also made the opening in a garden wall for rear pedestrian access and all carpets curtains and white goods were provided by him. He had also installed the present kitchen units, replacing an original basic kitchen which included a Belfast sink.Mr [APPELLANT] also drew the Tribunals attention to the rear courtyard which floods during heavy rain, possibly due to a blocked soakaway drain.

Evidence and representations

13. A hearing had been arranged to be held later in the day on 16th March 2020 at which oral representations were to be made by or on behalf of the Landlord and Tenant.

14. Both parties had made written representations to the Tribunal which had been copied to both parties.

15. During the inspection the Tribunal explained to Mr [APPELLANT] the procedure for any hearing and confirmed that they would be assessing the rental value of the property as seen on the day of inspection.

16. Mr [APPELLANT] consulted with his support and decided that he no longer needed to attend a hearing. Mrs [RESPONDENT] also confirmed that neither she nor her Agent would be attending. Accordingly, the hearing to be held later that day was dispensed with.

17. The Tribunal had regard to the observations and comments by the parties and also relied on its own knowledge and experience of local rental values in determining the rent.

The Law

18. When determining a fair rent the Tribunal, 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.

19. 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 emphasised

(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

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4 (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).

20. The Tribunal also has to have regard to the Rent Acts (Maximum Fair Rent) Order 1999 where applicable. Most objections and determinations of registered rents are now subject to the Order, which limits the amount of rent that can be charged by linking increases to the Retail Price Index. It is the duty of the Property Tribunal to arrive at a fair rent under section 70 of the Act but in addition to calculate the maximum fair rent which can be registered according to the rules of the Order. If that maximum rent is below the fair rent calculated as above, then that (maximum) sum must be registered as the fair rent for the subject property.

Valuation

21. In the first instance the Tribunal determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition that is considered usual for such an open market letting. It did this by having regard to the evidence supplied by the parties and the Tribunal's own general knowledge of market rent levels in the area of South Gloucestershire Having done so it concluded that such a likely market rent would be £200 per week equating to £866.66 per calendar month. Open market rentals are usually expressed as a monthly figure.

22. However, the property was not let in a condition considered usual for a modern letting at a market rent. Therefore it was first necessary to adjust that hypothetical rent of £866.66 per calendar month particularly to reflect the Tenants’ improvements and the fact that the carpets, curtains and white goods were all provided by the Tenants which would not be the case for an open market assured shorthold tenancy.

23. Further adjustments were needed to reflect the lack of any central heating system, the dated nature of the bathroom and the condition of the property, especially dampness.

24. The Tribunal therefore considered that this required a total deduction of £325 per month made up as follows:

Lack of central heating £100 Provision of electric shower £10 Provision of Carpets, curtains and white goods £20 Provision of kitchen units £40 Provision of rear access £20 Dampness at ground level £75 Dated bathroom £60

____ TOTAL £325

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5

25. The Tribunal did not consider that there was any substantial scarcity element in the area of South Gloucestershire.

Decision

26. Having made the adjustments indicated above the fair rent initially determined by the Tribunal for the purpose of section 70 of the Rent Act 1977 was accordingly £541.66 per calendar month, rounded to £125 per week.

27. The fair rent to be registered is not limited on this occasion by the Rent Acts (Maximum Fair Rent) Order 1999 because this is a first registration of rent for the property.

Accordingly, the sum of £125 per week will be registered as the fair rent with effect from the 16th March 2020 this being the date of the Tribunal’s decision.

Chairman: [NAME]: 16 March 2020

Appeals

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

29. 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.

30. 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 the time limit, or not to allow the application for permission to appeal to proceed.

31. 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.

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6 If the First-tier Tribunal refuses permission to appeal in accordance with section 11 of the Tribunals, Courts and Enforcement Act 2007, and Rule 21 of the Tribunal Procedure (Upper Tribunal) ([NAME]) Rules 2010, the [NAME] may take a further application for permission to appeal to the Upper Tribunal ([NAME]). Such application must be made in writing and received by the Upper Tribunal ([NAME]) no later than 14 days after the date on which the First- tier Tribunal sent notice of this refusal to the party applying for the permission.