First-tier Tribunal Sets Fair Rent at £212 Per Week

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/33UE/F77/2024/0023 Property : [ADDRESS] [POSTCODE]

Applicants (Landlord)

:

[RESPONDENT] c/o [NAME])[COMPANY], [ADDRESS] [POSTCODE]

Respondent (Tenant ) : Mr [APPELLANT] of application : Determination of a fair rent under section 70 of the Rent Act 1977 Tribunal members :

[NAME] (Hons), DipHI, MRICS

Date of decision : 26 September 2024

DECISION

Description of hearing This has been a remote determination on the papers which the parties are taken to have consented to, as explained below. The documents that I was referred to are as submitted by the Applicant and the Respondent. I have noted the contents and my decision is below.

2

Decision The tribunal determined a fair rent of £212 per week with effect from 26 September 2024

Reasons Background

1. On 25th April 2024 an application was received from the landlord to register the rent of the property at £930 per month (£214.62 week).

2. On 21 June 2024 the Rent Officer registered a Fair Rent of £212.00 per week, with effect from the same date. This was in lieu of the previous registered rent of £200 per week from 1 June 2022.

3. The Landlord objected, and the matter was referred to the First Tier Tribunal, Property Chamber.

4. The Tribunal issued directions on 30 July 2024, inviting the parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the tribunal to consider. No such submissions were provided by the parties.

The property

5. The tribunal inspected the property on 24 September 2024. The tenant was present at the inspection accompanied by his wife.

6. The property is a detached house, approximately 100 years old, with brick walls under a mainly tiled, part flat-felt, roof.

7. The accommodation comprises; hall, two living rooms, kitchen, bathroom with wc to the ground floor and 4 bedrooms, shower with wc and landing to the first floor. The property has double glazing and oil-fired central heating. The carpets, curtains and white goods were provided by the tenant.

8. The kitchen is of modest size and the units are dated as are the fittings in the bathroom and shower room. The tenant has provided a number of items including; kitchen units, attached conservatory, shower, bathroom fittings and internal doors.

9. Much of the electric installation is surface mounted with wiring covered by plastic trunking.

3 10. There is parking to the side of the property and on road parking is also available outside the property. The asbestos cement sheeting garage is in a dilapidated condition and only useable as rough storage.

11. There are garden areas to the front and rear of the house which is located in a village setting with an open rural aspect to the rear.

12. The property appeared to be in mainly reasonable condition for its age.

The law

13. The relevant law is set out in section 70 of the 1977 Act and the MFR Order. We are to have regard to all the circumstances (other than personal circumstances) and in particular to the age, character, locality and state of repair of the Property. We are to disregard the effect on the rental value of any improvements carried out by the tenant (other than in pursuance of the terms of the tenancy). We are also required (by s.70(2)) to assume that the demand for similar rented properties in the locality does not significantly exceed the supply of such properties for rent; in effect, if such scarcity exists, we are to adjust the rental figure so that the fair rent is not affected by it.

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 confirmed that for the purposes of determining the market rent (before making any necessary adjustments), open market assured tenancy rents are usually appropriate comparables.

15. By section 72 of the 1977 Act, if the rent is determined by the tribunal, the registration of the rent takes effect from the date we make our decision.

Representations – landlord

16. In their written representations the landlords said that they wished to appeal the increase in rent as it is “currently under 6% and we aim for an increase of over 7%”. No rental comparables were provided, or other representations made.

Representations – tenant

17. The tenant did not make a written submission.

4 Determination

18. Neither party supplied any rental comparables however, the tribunal must determine 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 Tribunal's own general knowledge of market rent levels in the area and, having done so, it concluded that the likely market rent for the property would be £290 per week.

19. The open market rent in good condition then needs to be adjusted to reflect all of the tenant’s improvements carried out over the years including kitchen units, conservatory, shower, bathroom fittings and internal doors. In addition, the tenant has provided the floor coverings, curtains and white goods and the dilapidated garage is only suitable for rough storage.

20. To reflect this, the tribunal has made an adjustment of £54 per week to arrive at a fair rent of £236 per week.

21. The tribunal then considered whether there should be an adjustment for “scarcity” as referred to in paragraph 13 and decided that there should be an adjustment of 10%. This results in a rent of £212 per week.

22. On this basis the Tribunal has accepted the rent set by the Rent Officer of £212 per week.

23. The provisions of the Rent Acts (Maximum Fair Rent) Order 1999 require that the registered rent is either the capped Fair Rent, details of which are attached to the decision notice, or the Fair Rent decided by the Tribunal whichever is the lower.

24. The capped rent is £238 per week. This is higher than the rent assessed by the Tribunal as set out above and therefore, the rent determined by the tribunal of £212 per week is to be registered.

Name:

[NAME] (Hons), DipHI, MRICS Date: 26 September 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 a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), which must be on a point of law, then a written application for

5 permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. 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).

FR27 First-tier Tribunal – Property Chamber File Ref No. CAM/33UE/F77/2024/0023

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[RESPONDENT] (Hons) Dip HI MRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £212 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 25 September 2024

3. The amount for services included in the rent is £ Per week

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

N/A Per

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 apply

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

8. For information only:

(a) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent of £238 per week prescribed by the Order.

[NAME] of decision 25 September 2024

FR27 MAXIMUM FAIR RENT CALCULATION

Address of premises [ADDRESS] [POSTCODE]

LATEST RPI FIGURE

x

PREVIOUS RPI FIGURE

y

x

minus y

= (A)

(A)

divided by y

= (B)

First application for re-registration since 1 February 1999

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C)

Last registered rent*

Multiplied by (C) = *(exclusive of any variable service charge)

Rounded up to the nearest 50 pence =

Variable service charge (Yes/No)

If YES add amount for services =

MAXIMUM FAIR RENT =

per

Explanatory Note

1. The calculation of the maximum fair rent, in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair rent to be calculated by:

a) increasing the previous registered rent by the percentage change in the retail price index (the RPI) since the date of that earlier registration and

b) adding a further 7.5% (if the present application was the first since 1 February 1999) or 5% (if it is a second or subsequent application since that date).

A 7.5% increase is represented, in the calculation set out above, by the addition of 1.075 to (B) and an increase of 5% is represented by the addition of 1.05 to (B)

The result is rounded up to the nearest 50 pence

3. For the purposes of the calculation the latest RPI figure (x) is that published in the calendar month immediately before the month in which the Committee’s fair rent determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the rent is to be registered as variable under section 71(4) of the Rent Act 1977. In such a case the variable service charge is removed before applying the formula. When the amount determined by the application of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

£238.00 week 200 237.94117 1.189705

340 387.5 340 340 0.139705 47.5 387.5 47.5 No 238 no

FR27