First-tier Tribunal Sets Fair Rent for Property Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. JM/LON/00AU/F77/2021/0190

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were Flat 35 [NAME], 20-32 [ADDRESS], [POSTCODE]

[NAME]

Landlord BPT ([NAME] [RESPONDENT]) Ltd

Tenant [APPELLANT]

1. The fair [NAME] is £800 Per Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is

3. The amount for services is £20.94 Per Month

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

8. For information only:

(a) .............................................................................................................. The fair [NAME] to be registered is not limited by the [NAME] ([NAME]) Order 1999, because it is below the maximum fair [NAME] of £864 per month including £20.94 per month for services prescribed by the Order.

[NAME] of decision 13 July 2021

FR27 [NAME] FIGURE X 301.9

PREVIOUS RPI FIGURE Y 283

X 301.9 Minus Y 283 = (A) 18.9

(A) 18.9 Divided by Y 283 = (B) 0.06678

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.11678

Last registered [NAME]* £773.50 Multiplied by (C) = £863.83 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £864

Variable service charge NO If YES add amount for services

[NAME] = £864 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 : LON/00AU/F77/2021/0190

P:PAPERREMOTE

Property : Flat 35 [NAME] 20 – 32 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : 10 March 2021

Type of Application : Determination of the registered [NAME] under Section 70 [NAME] 1977

Tribunal

: Mrs [NAME] and venue of : 13 July 2021 hearing

remote hearing on the papers

_______________________________________________

DECISION ____________________________________

The registered [NAME] with effect from 13 July 2021 is £800 per month.

This has been a hearing on the papers which has been consented to by the parties. The form of remote hearing was P:PAPERREMOTE, a paper determination which is not provisional. A face to face hearing was not held because it was not practicable and all the issues could be determined on the papers. The documents that I was referred to are in an electronic bundle, the contents of which I have recorded.

© CROWN COPYRIGHT FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background

1. On 18 January 2021 the landlord applied to the [NAME] officer for registration of a fair [NAME] of £803.87 inclusive of £252.70 service charge per month for the above property.

2. The registered [NAME] at the date of the application was £773 per month which had been registered by the [NAME] officer on 23 January 2019 with effect from 2 March 2019.

3. On 17 February 2021, the [NAME] officer registered a fair [NAME] of £846.50 inclusive of £20.94 service charge per week with effect from 2 March 2021.

4. On 10 March 2021 the tenant objected to the registered [NAME].

5. Owing to the Covid 19 restrictions the parties were asked if they would consent to the application being dealt with on the papers. Neither party objected. Written representations were received from both the landlord and the tenant.

The Evidence

6. The property is situated close to the Angel with its transport and other local amenities. [NAME] is a six storey purpose built block with commercial premises on the ground floor and flats above. The accommodation, which is on the second floor, comprises three rooms, kitchen and bathroom/wc.

7. The tenant stated that the block was built in 1936, access to the flat is via an open balcony. The windows to the communal walkway had been double glazed, the living room and main bedroom windows overlooking the main road had not been replaced in 2009: they provided poor sound insulation. She had fitted the kitchen in the 1990’s. The flat is not centrally heated. The registered [NAME] was higher than that sought by the landlord.

8. The landlord described the flat as having four rooms, kitchen and bathroom/wc. The bathroom had been replaced in 2016, double glazing was fitted in 2009, rewiring was completed in 2006 and a new front door fitted in 2016.

9. The landlord referred to three lettings in the block at rents ranging from 31300 to £1625 per month to support the landlord’s opinion that the open market rental value was £1400 per month. Deductions of £250 for lack of white goods, carpets and curtains, the dated kitchen and the terms of the tenancy. A further 10% allowance ws made for

scarcity. The landlord stated that the [NAME] registered by the [NAME] officer was reasonable.

Valuation

10. In the first instance the Tribunal determined what [NAME] 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. On the basis of the limited information provided regarding the comparables in the block, the landlord’s description of the flat having four rooms rather than the actual number which is three, the tribunal concluded that the likely market [NAME] for the flat would be £1300 per month.

11. However, it was first necessary to adjust the hypothetical [NAME] of £1300 per month to allow for the differences between the terms and condition considered usual for such a letting and the condition of the actual property at the valuation date, ignoring any tenant’s

improvements, (disregarding the effect of any disrepair or other defect

attributable to the tenant or any predecessor in title). The Tribunal

noted that properties available on the open market were generally

modern or modernised, centrally heated and double glazed with white

goods, floor and window coverings. The Tribunal considered that these

differences and the terms and conditions of the tenancy required a

deduction of £300 per month.

12. This leaves an adjusted market [NAME] for the subject property of £1000 per month. The Tribunal was of the opinion that there was substantial scarcity in London for similar properties and therefore made a deduction of approximately 20% from the market [NAME] to reflect this element. The Tribunal’s uncapped fair [NAME] is £800 per month.

Decision

13. The uncapped fair [NAME] initially determined by the Tribunal, for the purposes of section 70, was accordingly £800 per month.

13. This is below the maximum fair [NAME] that can be registered by virtue of the [NAME] ([NAME]) Order 1999 (Details are provided on the back of the decision form).

14. Accordingly the sum of £800 per month will be registered as the fair [NAME] with effect from 13 July 2021 being the date of the Tribunal's decision.

[NAME]: [NAME]: 13 July 2021

ANNEX - RIGHTS OF APPEAL

i. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the [NAME] which has been dealing with the case.

ii. The application for permission to appeal must arrive at the [NAME] within 28 days after the Tribunal sends written reasons for the decision to the person making the application.

iii. 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.

iv. 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.