First-tier Tribunal Sets Market Rent at £1,000 Per Month

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : CAM/00MC/MNR/2023/0130

HMCTS code : P:[NAME] : [ADDRESS], [POSTCODE] Applicant (Tenant) : Mr [APPELLANT] Respondent (Landlord) : [APPELLANT] of application : Determination of a Market Rent: Sections 13 and 14 Housing Act 1988 Tribunal members : Mr [NAME] [NAME] of Determination : 21 December 2023

This has been a remote determination on the papers which the parties are taken to have consented to, as explained below. The form of determination was a paper determination described above as P:PAPERREMOTE The documents that the Tribunal was referred to are in bundles from the Applicant and the Respondent. The Tribunal has noted the contents and the decision is below.

2

Decision The Tribunal determined a market rent of £1,000 per month effective from 1 October 2023.

Reasons Background

1. The Landlord served a notice dated 15 August 2023 pursuant to section 13 (2) of the Housing Act 1988 to increase the passing rent from £725 per month to £1,350 per month with effect from 1 October 2023.

2. This rent is stated to be exclusive of Council Tax, Water Charges and fixed service charges.

3. The Tenant made an application on 18 September 2023 to the Tribunal in reliance on section 13 (4) of the Housing Act 1988.

4. The Tribunal issued directions on 22 September 2023 inviting the Parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the Tribunal to consider.

[NAME]

5. The Tribunal inspected [NAME] on 13 November 2023 accompanied by the Tenant. The Landlord did not attend. 6. [NAME] comprises a two-storey maisonette located over a parade of neighbourhood shops and accessed by means of an external stairway.

7. The accommodation comprises a hall, kitchen and lounge at the first- floor level with an open staircase leading to two bedrooms and a bathroom at upper floor level.

8. The standard of fitout is poor with delaminating kitchen cupboards, rusty radiators, obsolete double glazing and evidence of damage from soil pipe leakage and condensation. In this regard, [NAME] would benefit from a full refurbishment and redecoration including new carpets.

9. There is no garage or designated carparking included within the lease demise.

10. The Tribunal understands that an inspection has been carried out on behalf of the Landlord but is unaware as to whether the Landlord has

3 fully appreciated the current condition of [NAME] in making its rent proposal. The Tenancy 11. The Tenant took occupation pursuant to an Assured Shorthold Tenancy commencing 1 October 2008 for a period of 12 months at an initial rent of £560 per month payable on the 1st of each month.

12. Clause 5.1 (c) of the Lease requires the Tenant to: “…keep the interior of the Flat and all additions thereto and all internal doors, internal parts of door frames, windows, internal parts of window frames, door and window locks and fastenings and all other Landlords’ fixtures and fittings…” 13. The Lease provided to the Tribunal is silent in respect of the Landlord’s obligations. However, at the very least, section 11 of the Landlord and Tenant Act 1985, as set out below, would have applied. The Law 14. Section 5 (3) of the Act provides that the periodic tenancy arising on expiry of the Assured Shorthold Tenancy is one: “(a) taking effect in possession immediately on the coming to an end of the fixed term tenancy; (b) deemed to have been granted by the [NAME] under the fixed term tenancy immediately before it came to an end to the [NAME] under that tenancy; (c) under which the premises which are let are the same dwelling- house as was let under the fixed term tenancy; (d) under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and (e) under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy” 15. Section 14 of the 1988 Act provides that the Tribunal is required to determine the rent at which [NAME] might reasonably be expected to let in the open market by a willing landlord under an assured tenancy: a. “having the same periods as those of the tenancy to which the notice relates;

4 b. which begins at the beginning of the new period specified in the notice; c. the terms of which (other than relating to the amount of rent) are the same as those of the existing tenancy.” 16. Section 14 (2) of the 1988 Act requires the Tribunal to disregard: a. “Any effect on the rent attributable to the granting of a tenancy to a sitting tenant; b. Any increase in the value of the dwelling-house attributable to a relevant improvement (as defined by section 14 (3) of the Act) otherwise than as an obligation; c. Any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy.” 17. Examples of a tenant’s failure to comply with the terms of the lease may include, for example, a lack of redecoration.

18. Section 11 of the Landlord and Tenant Act 1985 (the 1985 Act), provides that the Tribunal is to imply a covenant by the Landlord: a. “to keep in repair the structure and exterior of the dwelling- house (including drains, gutters and external pipes), b. to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and c. to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.” 19. Section 14 (7) of the 1988 Act states: “Where a notice under section 13(2) above has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the rent under the tenancy with effect from the beginning of the new period specified in the notice or, if it appears to the appropriate tribunal that that would cause undue hardship to the tenant, with effect from such later date (not being later than the date the rent is determined) as the appropriate tribunal may direct.”

5 Representations – The Tenant 20. The Tenant advised the Tribunal as follows: a. Double glazing units are 26+ years old and no longer work properly b. The kitchen units are peeling c. Bathroom in a very poor state of repair d. No garage included within the tenancy e. Neighbours are paying circa £1,200 to £1,250 per month for modern and superior premises f. Little or no work carried out by the Landlord 21. The Tenant emailed the Landlord on 24 August 2023 raising these and additional matters but the Landlord had yet to address these issues as at the date of the Tribunal’s inspection. Representations – The Landlord 22. The Landlord advised that they believed that the rent is £1,350 per month but provided no evidence in support of this contention.

23. The Landlord did not comment in respect of the outstanding work. Determination 24. In determining the market rent, the Tribunal has had regard to prevailing levels of rent in the general locality and achieved rental values in respect of other properties of comparable accommodation and provision that would be likely to be considered by a [NAME]. The current rent and the period that has passed since that rent was agreed or determined is not relevant.

25. The legislation requires the Tribunal to have regard to market demand assuming that the landlord is willing. The Tribunal is therefore unable to have any regard to the personal circumstances or identities of the [NAME] and tenant in assessing the level of rent.

26. In addition, historic matters between the [NAME] and tenant are not relevant to the rent likely to be offered by a [NAME]. The Tribunal can therefore only have regard to [NAME] as it actually exists on the relevant date of the proposed rent review having regard to the statutory assumptions. Historic repairs and issues have therefore been disregarded.

27. As set out above, section 14 of the 1988 Act requires the Tribunal to determine the rent at which [NAME] might reasonably be expected

6 to let with effect from the date specified for commencement of the new rent as set out in the section 13(2) Notice.

28. In effect, [NAME] is assumed to have been vacated, fully redecorated and be available on the market for occupation by an incoming tenant.

29. It is apparent that [NAME] needs significant upgrading and refurbishment to bring it into line with modern standards and a discount relative to prevailing market rents is therefore appropriate.

30. The Tenant has asserted that their neighbours are paying £1,200 to £1,250 per month. This has not been challenged by the Landlord and no alternative evidence has been provided.

31. The Tribunal has had regard to all the available evidence and has applied its own expertise and knowledge. In this regard, the Tribunal has taken into account the current state of [NAME] and determines the market rental of [NAME] as at the effective date to be £1,000 per month. The rent payable may not, therefore, exceed this figure.

32. However, this does not prevent the Landlord from charging a reduced amount.

Name: [RESPONDENT] [NAME]: 21 December 2023

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME] Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) ([NAME] Chamber) Rule 2013). 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.

7 The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e., give the date, [NAME], and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).