First-tier Tribunal Sets Fair Rent Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. MAM/LON/00BK/F77/2023/0344

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 14b [ADDRESS], [POSTCODE]

Tribunal Judge I [NAME] [NAME] (Econ) MRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £3,971.40 Per quarter (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 16 January 2024

3. The amount for services is £657 Per quarter

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

£54.61 Per quarter

5. The rent 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).

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

Description: to include ‘light only from light well’. (d) £54.61 (e) £657 Remarks: to include ‘The service charge proportion is 0.357%’.

8. For information only:

(a) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the below the maximum fair rent of £ 5,218 per quarter including £ 657 per quarter for services prescribed by the Order.

Chairman Tribunal Judge I [NAME] of decision 16 January 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 377.3

PREVIOUS RPI FIGURE Y 308.6

X 377.3 Minus Y 308.6 = (A) 68.7

(A) 68.7 Divided by Y 308.6 = (B) 0.222618

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.272618

Last registered rent* £4,100 Multiplied by (C) = 5,217.80 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 5,218

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £5,218 Per quarter

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.

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Case Reference:

LON/00BK/F77/2023/0344

Property:

14b [ADDRESS], [POSTCODE]

Tenant: `

Mr [APPELLANT]

Landlord:

[APPELLANT] of Objection:

12 September 2023

Type of Application: Section 70, Rent Act 1977

Tribunal:

Judge I [NAME] [NAME] (Econ) MRICS

Date of Summary Reasons

: 16 January 2024

_______________________________________________

DECISION

The sum of £3,971.40 per calendar month will be registered as the fair rent with effect from 16 January 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023 SUMMARY REASONS FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Background 1. Following an objection from the Tenant to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection 2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence 3. Only written submissions were received from the tenant.

Determination and Valuation 4. Having consideration of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in its current condition would be in the region of £9,600 per calendar quarter.

It should be noted that the Tribunal adopted the Rent Officer’s finding that the correct apportionment for the calculation of the service charge contribution for the tenant is 0.357% and not the 0.5060% apportionment used by the landlord. The Tribunal, therefore, calculated that the service charge contribution payable by the tenant is £656.98 based on 25% of 0.357% of £736,110 per annum. No attempt has been made to apportion for the element of personal heating. This appears as £54.61 on the previous rent register.

From this level of rent we have made global adjustments in relation to:

For the tenant’s improvements, the dated kitchen and bathroom, tenant’s floor coverings, curtains, white goods and decoration obligation under the terms of the tenancy.

5. After deducting the amount for services, the Tribunal has also made an adjustment for scarcity.

6. The full valuation is shown below:

per calendar quarter Market Rent

£9,600

Less

Deductions above

)

) 50% £4,800 )

Less

Services

say, £657

£4,143

Less Scarcity

approx. 20%

£828.60

£3,314.40 Plus Services

657

££3,971.40 7. The Tribunal determines a rent of £3,971.40 per calendar quarter.

3 Decision 8. The rent has not been capped under the provisions of the Rent Acts (Maximum Fair Rents) Order 1999 as it is below MFR of £5218 per quarter.

Tribunal Judge: [NAME]: 16 January 2024

APPEAL PROVISIONS

These summary 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, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any subsequent application for permission to appeal should be made on Form RP PTA