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

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. CHI/00HY/F77/2023/0035

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 110 [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT] Mr [APPELLANT]

Landlord Mr [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is £900.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 14 August 2023

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 15% exemption.

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

[NAME] of decision 14 August 2023

© CROWN COPYRIGHT 2023

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : CHI/00HY/F77/2023/0035 Property : 110 [ADDRESS] [POSTCODE]

Applicant Landlord : Mr [COUNSEL] : None Respondent Tenant : Mrs [COUNSEL] : None 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] Mr [NAME] Mr [NAME] of Inspection : None. Determined on the papers

Date of Decision

: 14th August 2023

DECISION

CHI/00HY/F77/2023/0035

2

Summary of Decision

On 14th August 2023 the Tribunal determined a fair rent of £900 per month with effect from 14th August 2023.

Background

1. On 14th April 2023 the Landlord applied to the Rent Officer for registration of a fair rent of £1,200 per month.

2. The rent was previously registered on the 24th August 2001 at £358 per month following a determination by the Rent Officer.

3. The rent was registered by the Rent Officer on the 19th May 2023 at a figure of £773.50 per month with effect from the 19th May 2023. The uncapped rent would have been £825 per month.

4. By a letter dated received by the Rent Officer on 8th June 2023 the Landlord Agent 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 Rent Assessment Committee.

5. The Tribunal does not consider it necessary and proportionate in cases of this nature to undertake inspections or hold Tribunal hearings unless either are specifically requested by either party or a particular point arises which merits such an inspection and/or hearing.

6. The Tribunal office issued directions on 4th July 2023 which informed the parties that the Tribunal intended to determine the rent on the basis of written representations subject to the parties requesting an oral hearing. No request was made by the parties for a hearing.

7. Both parties were invited to include photographs and video within their representations if they so wished and were informed that the Tribunal might also consider information about the property available on the internet.

8. Representations were made by the Landlord which were copied to the Tenant but no representation was made by the Tenant.

The Property 9. The property is described as a semi-detached house with full central heating, built after 1945. The accommodation is described as 2 Rooms, Kitchen, WC and utility Room at ground level with 3 Rooms and a Bathroom at first floor level. There is an outside Store and Garden.

10. The property is situated in a small private cul-de-sac of similar properties which overlook a playing field, about 1 mile northeast of the centre of

CHI/00HY/F77/2023/0035

3 Pewsey. There is a railway station and shops supplying day-to-day requirements in Pewsey.

Evidence and Representations

11. The Rent Officer had inspected the property on 19th May 2023 and states that the property is built of brick with a tiled roof, that the Kitchen and Bathroom are unmodernised and that rainwater goods are ill-fitted and cause water to penetrate the walls.

12. The Rent Officer’s calculation of rent makes deductions for the Tenant’s responsibility for internal decoration, carpets, curtains and white goods.

13. The Landlord states that he has been advised by an Estate Agent that the condition of the inside of the property has been neglected by the Tenant.

14. The Landlord provided the Tribunal with a copy of an Assured Shorthold Tenancy Agreement under Part 1 of the Housing Act 1968 dated 12th July 2022 but it is accepted that the Tenancy commenced many years ago and is regulated by the Rent Act 1977. The Landlord made his application under the Rent Act 1977 provisions.

15. The Landlord has carried out many improvements to the property since the date that the rent was last registered including the provision of full central heating and hot water system, replacement double glazed windows and doors, modernising electrical wiring, refitting new rainwater goods and the provision of insulation.

16. 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

17. 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.

18. 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

CHI/00HY/F77/2023/0035

4 properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and

(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).

19. 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

20. The Tribunal first considered whether it felt able to reasonably and fairly decide this case based on the papers submitted only, with no oral hearing. Having read and considered the papers it decided that it could do so.

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 good 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 north Wiltshire. Having done so it concluded that such a likely market rent would be £1,100 per calendar month.

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 £1,100 per calendar month particularly to reflect the Tenant’s improvements and the fact that the carpets, curtains and white goods were all provided by the Tenant which would not be the case for an open market assured shorthold tenancy.

23. The Tribunal therefore considered that this required a total deduction of £200 per month made up as follows:

Tenant’s provision of carpets £30 Tenant’s provision of white goods £30 Tenant’s provision of curtains £10 Tenant’s liability for internal decoration £30 Unmodernised bathroom £50 Unmodernised kitchen £50

____ TOTAL per month £200

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5 24. The Tribunal also considered the improvements carried out by the Landlord since the rent was last registered in 2001 and concluded that they would be responsible for an increase in rent of more than 15% of the previous rent.

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

Decision

26. Having made the adjustments indicated above the fair rent determined by the Tribunal for the purpose of section 70 of the Rent Act 1977 was accordingly £900 per calendar month.

27. The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999 because by virtue of the Landlord’s repairs and /or improvements since the previous registration the rent determined by the Tribunal exceeds by at least 15% the previous registered rent.

Accordingly, the sum of £900 per month will be registered as the fair rent with effect from the 14th August 2023 this being the date of the Tribunal’s decision.

RIGHTS OF APPEAL

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

2. 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.

3. 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.

4. 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.