First-tier Tribunal Sets Fair Rent at £900 Per Month

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HS/LON/00AU/F77/2024/0020

Notice of the Tribunal [NAME] 1977 Schedule 11

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

Judge Ian Mohabir Mrs Alison Flynn MA MRICS

Landlord Dr [APPELLANT] [NAME]

Tenant [NAME]

1. The fair [NAME] is 900 Per Cal month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 30 June 2024

3. The amount for services is £189.18 Per monthcal

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

Per

not applicable

5. The [NAME] is not to be registered as variable.

6. The capping provisions of the [NAME] ([NAME]) Order 1999 apply (please see calculation overleaf)

7. Details (other than [NAME]) where different from [NAME] entry

None

8. For information only:

The fair [NAME] to be registered is not limited by the [NAME] ([NAME]) Order 1999, because it is below the maximum fair [NAME] of £ 1000 per calendar moth including£ 189.18 per calendar month for services prescribed by the Order.

Chairman Tribunal Judge Mohabir Date of decision 27 June 2024

FR27 [NAME], [ADDRESS] RPI FIGURE X 386.4

PREVIOUS RPI FIGURE Y 284.5

X 386.4 Minus Y 284.5 = (A) 101.9

(A) 101.9 Divided by Y

= (B) 0.358172

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.408172

Last registered [NAME]* 710 Multiplied by (C) = 999.80 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1000

Variable service charge NO If YES add amount for services

[NAME] = £1000 Per month

Explanatory Note

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

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

(a) increasing the previous registered [NAME] 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 Tribunal’s fair [NAME] determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the [NAME] is to be registered as variable under section 71(4) of the [NAME] 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 [NAME].

Case Reference

: HS/LON/00AU/F77/2024/0020

Property : [ADDRESS] [POSTCODE]

Tenant

: [NAME]

Landlord : Dr [APPELLANT] [NAME] of Objection : 6 January 2024

Type of Application : Determination of a [NAME] under

[NAME] 1977

Tribunal

: Tribunal Judge Ian Mohair

Alison Flynn, MA, MRICS

Date of Decision : 27 June 2024

Date of Extended Reasons

: 4 July 2024

_______________________________________________ DECISION The Tribunal determines a [NAME] of £900 per calendar month with effect from 27 June 2024 ___________________________________

© CROWN COPYRIGHT 2024

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

EXTENDED REASONS

Background

1. Following an objection from the tenant to the determination of a [NAME] by, the [NAME], the Tribunal has made a determination under the provisions of the [NAME] 1977, section 70.

2. The [NAME] had proposed a [NAME] £980 per calendar month inclusive of services of £189.15 per calendar month with effect from 3 November 2023. The previous [NAME] was £780 per calendar month inclusive of services of £40 per calendar month with effect from 18 October 2018.

Hearing

3. The Tribunal held a short remote video hearing on 27 June 2024, where Ms [NAME] and Dr [NAME] appeared in person. Both made oral submissions that largely concerned the shared supply of electricity to both the subject flat and the landlord’s adjacent dental practice.

4. The Tribunal also carried out an inspection of the Property on the same day.

Representations

5. At the hearing Ms [NAME] told the Tribunal that she believed that the [NAME] was too expensive but found comparable properties difficult to obtain because of the condition of the property. Her main objection was to the significant increase in electricity cost the landlord was seeking. Dr [RESPONDENT] had provided rents of properties, which she said were smaller than the subject property. The evidence from both parties centred to a large extent on the electricity costs, which had increased from £40 per calendar month to £189.15 per calendar month. Evidence was presented by both parties in the form of bills, invoices and photographs. Apparently the dentist surgery is now operating from a new tariff. Dr [NAME] also added that Ms [NAME] had not paid any increased [NAME] but was told the Tribunal was solely concerned with assessing the current [NAME] and not any alleged [NAME] arrears owed.

Inspection

6. The property is situated on a main commercial road which is easily accessible to local amenities and public transport. It is a private flat in a three-storey building over commercial premises. It is accessed via an open quarry-tiled porch up a flat of stairs to its own self-contained front door .

7. The accommodation comprises a hallway with a spacious in-built cupboard and no natural light. The kitchen is unmodernised and with

limited working sockets. The reception room is L-shaped leading from the kitchen but also with a separate door. The main bedroom has a fitted cupboard and secondary glazing installed by tenant, the cost of which had been reimbursed to her. The second bedroom is a good-sized single with a cupboard. The bathroom has a three-piece suite with no natural light and defective air extractor.

8. Externally, a door leads to a balcony from the kitchen, via an uneven step. There is an overflow drain onto the balcony.

9. In general, the property is dated and unmodernised. The wiring is insufficient for today’s standards. There is no central heating and the windows are of UPVC. The decorative condition is adequate and there are ceiling tiles.

Determination and Valuation

10. It should be noted that the Tribunal found the evidence relating to the electricity consumption to be inconclusive from both parties and the Tribunal could not safely make a finding about the actual consumption of the tenant. Therefore, felt that there was no basis to depart from [NAME]’s estimate of usage.

11. Having consideration of the further written submissions of the landlord and tenant and their oral evidences, the visual evidence of the property and the tribunal’s own expert knowledge of rental values in the N4 and Finsbury area of London, we consider that the [NAME] for the property in its current condition would be £900 per calendar month which takes into account a reduction for scarcity.

12. The full valuation is shown below:

[NAME]

£1750 per calendar

month

Less approximately 35% globally £ 615

for:

No Central heating

Dated Kitchen and bathroom

Electricity not up to modern standards

[NAME]

£1135

Less scarcity at 20% say £900

13. The Tribunal determines a [NAME] of £900 per calendar month inclusive

of services of £189.15 per calendar month. The fair [NAME] to be

registered is not limited by the [NAME] ([NAME]) Order

1999, because it is below the maximum fair [NAME] of £ 1000 per calendar

moth including£ 189.18 per calendar month for services prescribed by

the Order.

APPEAL PROVISIONS

These extended reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, any application for permission to appeal should be made on Form RP PTA.