First-tier Tribunal Sets Fair Rent for Property

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00AT/F77/2019/0123

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were 263a [ADDRESS], [POSTCODE]

Ms [RESPONDENT] [NAME] Mr [APPELLANT]

Landlord WX [APPELLANT]

Tenant Ms [APPELLANT]

1. The fair [NAME] is 1058.50 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 29 November 2019

3. The amount for services is - Per

not applicable

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

4 rooms, kitchen, bath, wc +attic storage, without C.H.

8. For information only:

The fair [NAME] to be registered is the maximum fair [NAME] as prescribed by the [NAME] ([NAME]) Order 1999. The [NAME] that would otherwise have been registered was £1440.00 per month.

[NAME] of decision 29.11.19

FR24 [NAME] FIGURE X 291

PREVIOUS RPI FIGURE Y 272.3

X 291 Minus Y 272.3 = (A) 18.7

(A) 18.7 Divided by Y 272.3 = (B) 0.068671

First application for re-registration since 1 February 1999 YES/NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.118674

Last registered [NAME]* 946.00 Multiplied by (C) = 1058.27 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 1058.50

Variable service charge NO If YES add amount for services -

[NAME] = £1058.50 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].

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AT/F77/2019/0123 Property : 263a [ADDRESS] [POSTCODE]. Type of Application : Decision following an objection to a registered [NAME], under the [NAME] 1977. Date of Decision : 29 November 2019 Tenant : Ms. [APPELLANT]. [APPELLANT]. Landlord : [APPELLANT]. Represented by [NAME]. Tribunal : Ms. [NAME]. [NAME]. Mr. [NAME]. [NAME].

Reasons for the decision

Background

1. By an RR1 dated 15 April 2019, the landlord made an application to register the [NAME] of the property at £1,135.20 per calendar month, in place of the existing [NAME] of £946.00 per calendar month.

2. On 24 May 2019 the [NAME] registered the [NAME] at £1,038.00 per calendar month, effective from 3 July 2019. A late referral was made to the tribunal and the admission of the tenant’s objection to the registered [NAME] was dealt with by the tribunal in a decision of 23 July 2019.

3. The matter came before this tribunal at a hearing on 29 November at which the tenant appeared and was represented by Ms. [COUNSEL] of Counsel. The landlord did not attend and was not represented. Both parties had produced evidence on which they wished to rely.

4. Ms. [NAME] said that the primary case was the [NAME] set by the [NAME] officer was too high when the condition of the property was taken into consideration. It was alleged that the property suffered from external pollution of cooking smells, from the Subway food outlet immediately underneath the property. Ms. [NAME] also said, and produced

2 photographs, of the accumulation of rubbish at the base of the metal access steps to the flat.

5. An environmental health officer had been contacted and had said that they would contact Subway regarding the pollution, but it appears that no environmental notices were served in relation to the premises.

6. Ms. [NAME] also informed the tribunal that the policy had been called at least six times regarding either disputes at Subway, or noise nuisance.

7. The tribunal was also told that the property suffered from old wiring and the flat had not been inspected by the landlord for at least five years, and that due to a lack of electricity to the top floor, the room at that level was unusable.

8. Ms. [NAME] considered that the market [NAME] for the property would be in the region of £1,650.00 per month, as demonstrated by Rightmove evidence supplied to the tribunal.

9. The landlord’s evidence was that the market [NAME] for the property was in the region of £2,900.00 to £3,000.00 per calendar month. In their view, the registered [NAME] set buy the [NAME] officer was less than that that could be achieved, when taking the statutory deductions from the market [NAME]. They were satisfied that the amount registered was fair and reasonable in the circumstances.

The Inspection:

10. The tribunal inspected the property after the hearing. We f ound the property to be located on the first and second floors above a Subway food outlet, situated on Chiswick High Road. The property is located within all of the usual amenities including transport and shopping facilities. The property is accessed from a metal staircase from the rear. The tenant says that originally there was a wooden staircase which rotted and was replaced at her expense. At the base of the staircase is the fire exit door from the Subway shop.

11. The property comprises three bedrooms, one of which is located in a dormer mansard roof, and does not have a working electrical supply. There is a small kitchen immediately accessed from the front door with a dining room and living room. Two bedrooms are provided. Windows throughout are a mixture of wooden double-hung sliding sash units and wooden casements, and although they were in a poor condition internally in the third bedroom, were in a reasonable condition to the remainder of the property.

12. The internal decorations o the property are the responsibility of the tenant and were in a reasonable condition. The wiring was surface mounted and some of the socket outlets had been installed by the tenant, who had also converted the access area into a kitchen. In addition to the external staircase there is an internal staircase accessed

3 from a door adjacent to the Subway shop, this is unused by the tenant due, she said, to the smells coming from Subway.

13. At the time of our inspection there was no significant smell from Subway, and although the tenant had produced photographs of rubbish accumulation at the base of the external metal staircase, there was none present during out inspection.

14. Overall, we consider the property to be in a reasonable condition, although externally would benefit from some redecoration, especially to the front elevation.

Valuation and Determination:

15. The tribunal has been provided with several photocopies of agents’ details from Rightmove. Those relied on by the tenant suggest a [NAME] of £1,650.00 related to a two-bedroom flat in the area. The landlord produced a range of property details, from which we are persuaded by the evidence supplied of a two bedroom flat, virtually opposite the subject property offered at a rental of £2,700.00 per calendar month. We are not persuaded by the tenant’s evidence, which we consider to represent a low rental and not in line with those that would be expected for a three-bedroom flat off Chiswick High Road.

16. We have therefore started our valuation at £2,700.00 for a two- bedroom flat and uplifted that rental by £300.00 to allow for the third loft room, which even though it does not have lighting, still provides good storage for the flat. This would be a habitable room if the landlord attended to the lighting circuit. We therefore consider the market [NAME] for the subject property in its present condition to be £3,000.00 per calendar month.

The law

17. When determining a fair [NAME] the Tribunal, in accordance with the [NAME] 1977, section 70, must have regard to all the circumstances including the age, location and state of repair of the property. It must also disregard 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.

18. Case law informs the Tribunal;

a. That ordinarily a fair [NAME] is the market [NAME] for the property discounted for 'scarcity' (i.e. that element, if any, of the market [NAME], 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 [NAME] - to that of the regulated tenancy) and

4

b. That for the purposes of determining the market [NAME], 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). Valuation

19. Thus, in the first instance the Tribunal as noted above the tribunal determined the market [NAME] for the subject property at £3000.00 per month.

20. However, the [NAME] referred to above is based on a modern open market letting, where the tenant has no liability to carry out repairs or decorations, has a modern kitchen and bathroom and the landlord supplies white goods, carpets and curtains. In this case the Tenant supplies white goods, carpets and curtains and although the bathroom and kitchen fittings are in good order, they would not be to the standard of a modern letting and would require modernisation. We must also take into consideration the fact that the tenant has carried out improvements, in the kitchen and dining room, and electrical installatio9n.

21. In making its own adjustments to reflect the lower bid a prospective tenant would make to reflect the differences between the property in a modern lettable state and that as provided by the landlord, together with an adjustment for the additional repair and maintenance obligations of the tenant we make a global deduction of 40% arriving at a [NAME] of £1,800.00 per calendar month..

22. We then considered the question of scarcity as referred to in paragraph 12a above and determined that taking into the very wide area required by case law for scarcity, and taking into consideration the whole of the Greater London area, we determine that there remains an imbalance in the supply and demand for property, and make a deduction of 20% to reflect that imbalance.

23. We therefore determined that the uncapped [NAME] is £1,440.00 per month.

24. The tribunal is then required to carry out the calculation in accordance with the [NAME] details of which are shown on the rear of the Decision Notice. We calculate the maximum fair [NAME] at £1,058.50 per month.

25. As this figure is below the uncapped fair [NAME], we find the [NAME] has the effect of limiting the [NAME] to the lower figure and we determine that the sum of £1,058.50 per month.

5 26. The new registered [NAME] takes effect from 29 November 2019.

Tribunal: [NAME], FRICS. Mr. [NAME]. [NAME].

15 January 2020.

6 RIGHTS OF APPEAL

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

2. 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.

3. 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.