First-tier Tribunal Sets Market Rent at £1,050 Per Month

OUTCOME: Allowed

© CROWN COPYRIGHT FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : CAM/22UG/MNR/2024/0019 HMCTS code : P:[NAME] : Wellhouse Farm, Mount Bures, [POSTCODE] Applicant (Tenant) : Mr [APPELLANT] and [NAME] Respondent (Landlord) : Mr [APPELLANT] C/O [RESPONDENT] of application : Determination of a Market Rent: Sections 13 and 14 Housing Act 1988 Tribunal members : Mr [NAME] [NAME] of Determination : 27 April 2024 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 £1,050 per month effective from 28 February 2024. Reasons Background 1. The Landlord served a notice dated 16 January 2024 pursuant to section 13 (2) of the Housing Act 1988 which states an increase in the passing rent from £850 per month to £1,100 per month with effect from 28 February 2024.

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

3. The Tenant made an application on 25 January 2024 to the Tribunal in reliance on section 13 (4) of the Housing Act 1988.

4. The Tribunal issued directions on 31 January 2024 inviting the Parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the Tribunal to consider. The [NAME]

5. The Tribunal inspected the [NAME] on 25 March 2024.

6. The [NAME] comprises a detached house in a countryside location accessed by means of a farm track. It provides an entrance hall, sitting room, kitchen/dining room, rear lobby and WC at ground floor with three bedrooms, bathroom and WC at first floor level.

7. There are various outbuildings and extensive gardens with parking areas.

8. The [NAME] is fitted out to a basic standard and would benefit from internal modernisation and refurbishment together with some repair and decoration to the external elevations and guttering. The Tenancy 9. The Tenant took occupation pursuant to an Assured Shorthold Tenancy commencing 24 December 2009 albeit the Inventory and Record of Condition is dated 24 December 2010. Unfortunately, the copy provided to the Tribunal is incomplete and missing Section B which, it is assumed, sets out the term of the lease, the definition of the demise

3 and the initial rent. However, it appears from the letting particulars that the initial rent was £700 pcm.

10. The Tenant’s repair liabilities appear to be constricted to “…keeping the decorations of the [NAME] and Contents clean” and to “…maintain the internal decorations to the condition described in Schedule II of the Condition of the [NAME] listed under Section A” as set out at clause 7 of the Tenancy.

11. The Landlord’s repair obligations are set out at clause 3 (3) of the Tenancy as set out below: (a) “To keep in reasonable repair the Contents… (b) To keep in repair the structure and exterior of the [NAME] and keep in repair and proper working order the installations in the [NAME] for the supply of water, electricity, gas and sanitation and the installations in the [NAME] for space heating and heating water, in addition to the maintenance of all mechanical and electrical appliances which form part of the Contents of the [NAME]. (Section 11 of the Landlord and Tenant Act 1985 imposes repairing obligations on the Landlord which he must comply with. The Tenant should also know that to “keep in repair” means that the Landlord must carry out repairs even if the disrepair existed at the date the Tenancy was granted…” 12. Clause 4 of Schedule 1 of the Tenancy requires the Tenant:  “4.1 – To take reasonable steps to keep the interior of the [NAME] and the Fixtures and Fittings in the same decorative order and condition through the Term as at the start of the Tenancy as noted in the Inventory and Schedule of Condition…  4.3 – To keep the [NAME] and Fixtures and Fittings in a clean and tidy condition.” 13. Clause 4 of Schedule 2 of the Tenancy requires the Landlord to comply with sections 11 to 16 of the Landlord and Tenant Act 1985 with impose obligations on the Landlord to repair and keep in good order the structure of the [NAME] and exterior, installations for the supply of services and heating. 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;

4 (b) deemed to have been granted by the person who was the landlord under the fixed term tenancy immediately before it came to an end to the person who was then the tenant 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 the [NAME] might reasonably be expected to let in the open market by a willing landlord under an assured tenancy:  “having the same periods as those of the tenancy to which the notice relates;  which begins at the beginning of the new period specified in the notice;  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:  “Any effect on the rent attributable to the granting of a tenancy to a sitting tenant;  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;  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),

5 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.” Representations – The Tenant 20. The Tenant advised in the Application Form that: “I supplied and fitted roof insulation… …repaired kitchen sink drain as it was attracting vermin, replaced failed electric shower, replaced faulty immersion water heater. Due to the lack of insulation I paid to have a multifuel burner fitted to help heat the house and with that a smoke detector in the master bedroom. (No other locations in the house and none supplied by Landlord.)” 21. The Tenant also provided a response to the Landlord’s letter dated 28 November 2023 raising a number of issues including the identification of outstanding repairs.

22. In addition, the Tenant also completed a Reply Form in which the Tribunal’s attention was drawn to issues concerning the septic tank and external decoration.

23. The Tribunal also understands that the Tenant has decorated throughout including the fitting of curtains, has washed the carpets and installed drainage pipes. Representations – The Landlord 24. The Landlord’s agents completed the Reply Form from which the Tribunal notes the following points.  The central heating, double glazing, carpets and curtains are provided by the Landlord

6  Replacement UPVC double glazing was fitted in 2023  The Landlord rejects the Tenant’s assertion that the cesspit and EPC issues are detrimental factors  The proposed rent of £1,100 per month was first proposed to the Tenant on 23 November 2023 since when the Landlord considers rents to have increased  Three examples of other houses at rents ranging from £1,100 per month to £1,500 per month are proposed as being comparable – Particulars were attached to the Reply Form Determination 25. In determining the market rent in respect of the [NAME], the Tribunal has 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 prospective tenant. The current rent and the period that has passed since that rent was agreed or determined is not relevant.

26. 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 actual landlord and tenant in assessing the level of rent. The Tribunal is therefore unable to take into account the Tenant’s ability to pay the rent or the Landlord’s need to achieve a certain income.

27. In addition, historic matters between the actual landlord and tenant are not relevant to the rent likely to be offered by a prospective tenant. The Tribunal can therefore only have regard to the [NAME] as it exists on the relevant date of the proposed rent review having regard to the statutory assumptions.

28. As set out above, section 14 of the 1988 Act requires the Tribunal to determine the rent at which the [NAME] might reasonably be expected to let with effect from the date specified for commencement of the new rent as set out in the section 13(2) Notice.

29. The Tribunal has reviewed the evidence provided by the Landlord and considers that, if the [NAME] was brought up to a commensurate standard of repair and decoration, it would achieve a rent in the region of £1,200 per month. However, whilst the Tribunal do not consider that the EPC and septic issues raised by the Tenant would deter prospective tenants it does consider that the [NAME] requires internal and external redecoration and repair.

30. The Tribunal therefore determines the market rental of the [NAME] as at the effective date to be £1,050 pcm.

7 31. The rent payable may not exceed £1,050 per month. However, this does not prevent the Landlord from charging a lower rent. Name: [RESPONDENT] [NAME]: 27 April 2024 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. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e., give the date, the [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).