First-tier Tribunal Sets Fair Rent Under Rent Act 1977

OUTCOME: Allowed

FR27 Ja nFirst-tier Tribunal – Property Chamber File Ref No. TR/LON/00BJ/F77/2024/0034

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 49 [ADDRESS], [POSTCODE]

[NAME] [NAME] [APPELLANT]

Tenant Mr C [APPELLANT]

1. The fair rent is £288.50 Per WEEK (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 25th March 2024

3. The amount for services is

Per

negligible/not applicable

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

Per

negligible/not applicable

5. The rent is/is not to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply (please see calculation overleaf)/ do not apply because 1st registration/15% exemption.

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

8. For information only:

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would otherwise have been registered was £ 384 Per week ).

(b) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the same as/below the maximum fair rent of £ ................... per .................... including £ ......................................... per ................................. for services (variable) prescribed by the Order.

[NAME] of decision 25th March 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 381

PREVIOUS RPI FIGURE Y 317.7

X 381 Minus Y 317.7 = (A) 63.3

(A) 63.3 Divided by Y 317.7 = (B) .19924457

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) 1.24924457

Last registered rent* £231 Multiplied by (C) = 1.24924457 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £288.50

Variable service charge YES / NO If YES add amount for services NO

MAXIMUM FAIR RENT = £288.50 Per WEEK

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 Tribunal’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.

REFERRAL OF A REGISTRATION OF FAIR RENT UNDER THE RENT ACT 1977

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : TR/LON/00BJ/F77/2024/0034

Hearing Type : By way of written representations

Property : 49 [ADDRESS], [POSTCODE]

Applicant: [redacted]

Landlord : [APPELLANT] of Objection : 18th December 2023

Type of Application : Section 70 of the Rent Act 1977

Tribunal Member : [NAME] [NAME] JP

Date of Full Reasons : 25th March 2024

DECISION

The sum of £288.50 per week will be registered as the fair rent with effect from 25 March 2024 being the date the Tribunal made the decision.

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REASONS

Background

1. [ADDRESS] comprises a mid-terraced three bedroom house with two reception rooms, outside WC and a garden. The landlord applied to the Valuation Office on 26th October 2023 to increase the rent to £1201.20 per month (£277.20 per week) from the passing rent of £231 per week previously registered on 25 January 2022. The rent was subsequently determined by the Rent Officer at a figure of £286.80 per week effective from 24 January 2024.

2. Following an objection from the tenant to the determination of a fair rent by the Rent Officer, the matter was referred to the First-Tier Tribunal. The Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection 3. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence

4. In the reply form submitted by the parties, the respondents confirmed that there were in fact no tenants improvements and submitted that the property was in a sought after area. No specific comparable evidence nor submissions in respect of the condition of the property were received.

Determination and Valuation

5. Having consideration of our own expert general knowledge of rental values in the area, we consider that the open market rent for the property would be £800.00 per week. From this level of rent we have made adjustments in relation to: the lack of white goods provided by the landlord.

• The lack of white goods provided by the landlord. • The tenant’s liability for floor coverings. • The tenant’s decorating liability. • The lack of central heating • An unmodernised bathroom • An unmodernised kitchen .

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6. The Tribunal has also made adjustments for scarcity.

7. The full valuation is shown below:

Market Rent: £800.00 per week

Less adjustments for: • The lack of white goods provided by the landlord. • The tenant’s liability for floor coverings. • The tenant’s decorating liability. • The lack of central heating • An unmodernised bathroom • An unmodernised kitchen

Approximately 40% £320.00 per week

Adjusted rent £480.00 per week

Less

Scarcity approximately 20% £ 96.00

The Tribunal determines that the uncapped rent for the property would be £384.00 per week.

Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of Section 70, was £384.00 per week. The capped rent for the property according to the provisions of the Rent Act (Maximum Fair Rent) Order 1999 is calculated at £288.50 per week. The calculation of the capped rent is shown on the decision form.

9. In this case the lower rent of £288.50 per calendar week is to be registered as the fair rent for this property.

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10. In applying the capping provisions, the Tribunal applies the calculation taking into account the most recent published retail price index indexation figure at the date of the Tribunal’s determination.

11. Often, as in this case, this leads to a slight increase in the capped rent over the capped rent determined by the Valuation Officer which was at an earlier date when a different indexation figure applied.

12. Additionally, the date for the new rent to take effect is also the date of the Tribunal’s decision and thus any increase in rent is now to take place from the date in the Decision Notice as opposed to the earlier date of 24 January 2024 determined by the Valuation Officer.

Chairman: [NAME]: 25 March 2024

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ANNEX – 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 might have.

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 regional office which has been dealing with this 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. Any appeal in respect of the Housing Act 1988 should be on a point of law.

If the Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

– RIGHTS OF APPEAL

The Tribunal is required to set out rights of appeal against its Decision by virtue of the Rule 36(2)(c) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 and these are set out below:

If a party wishes to appeal against this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case

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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.

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APPENDIX

Rent Act 1977

Section 70 Determination of Fair Rent

(1) In determining, for the purpose of this part of this Act, what rent is or would be a fair rent under a regulated tenancy of a dwellinghouse, regard shall be had to all the circumstances (other than personal circumstances) and, in particular, to –

(a) the age, character, locality and state of repair of the dwellinghouse…F1

(b) if any furniture is provided for use under the tenancy, the quantity, quality and condition of the furniture (F2 and)

(c) (F2(c)) any premium, or sum in the nature of a premium, which has been or may be lawfully required or received on the grant, renewal, continuance or assignment of the tenancy)

(2) For the purpose of the determination, it shall be assumed that the number of persons seeking to become tenants of similar dwelling-houses in the locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling-houses in the locality which are available for letting on such terms.

(3) There shall be disregarded:

(a) any disrepair or other defect attributable to a failure by the tenant under the regulated tenancy or any [NAME] in [NAME] of his to comply with any terms thereof;

(b) any improvement carried out, otherwise than in pursuance of the terms of the tenancy; by the tenant under the regulated tenancy or any [NAME] in [NAME] of his;

(c) (d)………………………………………………………………………F3

(d) If any furniture is provided for use under the regulated tenancy, any improvement to the furniture by the tenant under the regulated tenancy or any [NAME] or, as the case may be, any deterioration

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in the condition of the furniture due to any ill-treatment by the tenant, any person residing or lodging with them, or any sub-tenant of [NAME].

(e) F4 [(3a) in any case where under Part 1 of the Local Government Finance Act 1992 the landlord or a superior landlord is liable to pay Council Tax in respect of a hereditament (“the relevant hereditament”) of which the dwelling-house forms part, regard shall also be had to the amount of Council Tax which, as at the date on which the application to the rent officer was made, was set by the billing authority –

(a) for the financial year in which that application was made, and

(b) for the category of dwelling within which the relevant hereditament fell on that date,

but any discount or other reduction affecting the amount of Council Tax payable shall be disregarded.

(3b) In subsection (3a) above –

“hereditament” means a dwelling within the meaning of Part 1 of the Local Government Finance Act 1992.

“billing authority” has the same meaning as in that part of the Act, and

“category of dwellings” has the same meaning as in Section 30(1) and (2) of that Act.]

(4) In this section “improvement” includes the replacement of any fixture or fitting.

[F5 (4a) in this section “premium” has the same meaning as in part IX of this Act and “sum in the nature of a premium” means –

(a) any such loan as is mentioned in Section 119 or 120 of this Act,

(b) any such excess over the reasonable price of furniture as is mentioned in Section 123 of this Act, and

(c) Any such advance payment or rent as is mentioned in Section 126 of this Act.]

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(5) ………………………………………………………………………………….