First-tier Tribunal Sets Fair Rent Under Rent Act Formula

OUTCOME: Allowed in Part

FR24 First-tier Tribunal – Property Chamber File Ref No. MAN/36UC/F77/2023/0048

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 2 The Cottage, [ADDRESS], Carlton in Cleveland, [POSTCODE]

[NAME], FIRPM Mr [RESPONDENT]

Landlord The Trustees of the [COMPANY]

Tenant Mr [APPELLANT]

1. The fair rent is £168.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 18 September 2023

3. The amount for services is not applicable

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

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

None

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 below the maximum fair rent of £178.00 per Week prescribed by the Order. (b) The rent registered on 11th April 2016 was exempt from the Rent Acts (Maximum Fair Rent) Order 1999 because it was the first registration.

[NAME], FIRPM Date of decision 18 September 2023

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 374.2

PREVIOUS RPI FIGURE Y 261.4

X 374.2 Minus Y 261.4 = (A) 112.8

(A) 112.8 Divided by Y 261.4 = (B) 0.4315

First application for re-registration since 1 February 1999: NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.4815

Last registered rent* £120 Multiplied by (C) = 177.78 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £178.00

Variable service charge No If YES add amount for services N/A

MAXIMUM FAIR RENT = £178.00 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.