First-tier Tribunal Sets Market Rent for Assured Tenancy

OUTCOME: Allowed

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Case Reference

: LON/00AB/MNR/2022/0109

Property : 10 [ADDRESS], [POSTCODE]

Tenant

: Mrs [APPELLANT]

Landlord : [COMPANY] of Objection : 29/06/2022 2/11/2022 (received on 01/07/2022 7/11/2022)

Type of [NAME] : Market Rent under s13 & s14 of the Housing Act 1988

Tribunal

: Tribunal Judge [NAME] of Consideration : 18/10/2022

Date of written reasons: 14/11/2022

Date of corrected decision: 22/12/2022

_______________________________________________

Decision of the Tribunal (1) The Tribunal determines that the market rent is £128.00 per week. (2) The Tribunal makes the determinations as set out under the various headings in this decision. The [NAME]

1. The Applicant seeks a determination pursuant to section 13 & 14 of the Housing Act 1988 following the service of a notice dated 27/05/2022 by the landlord proposing a rent increase to £113.20 per week from 04/07/2022. The previous rent paid was £108.74 per week.

2. The Tribunal received an [NAME] on 01/07/2022 under section 13 of the Housing Act 1988. The landlord’s notice of rent increase was included with the [NAME].

3. On 24/08/2022 the Tribunal issued directions. FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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4. Neither party requested an oral hearing.

5. The Applicant tenant made written submissions. The Landlord made none. Background 6. The Applicant has lived at 10 [ADDRESS], [POSTCODE] (“The property”) since 27/08/2001 under an assigned tenancy agreement of that date.

7. The Tribunal did not physically inspect the property but had the benefit of the submissions from the tenant who described the property as a two-storey house in which the windows need replacing. The tenant reported that she had replaced the kitchen and was planning to replace the bathroom herself. The house has a private garden.

8. Neither party requested a hearing of the matter. The [NAME] was considered on the papers without a hearing. No inspection took place because of the current COVID-19 restrictions. The submissions The tenant’s submissions 9. In the [NAME] form the tenant described the property as a 3-bedroom house with separate living room, dining room, kitchen, bathroom with a WC room downstairs. The property benefits from front and rear gardens.

10. The tenant’s reply states that she is content for a determination to be carried out on the papers without an inspection. She reported that the windows in the property need replacing and are in poor condition, that she has updated the kitchen herself and has bought a new bathroom suite which she intends to install herself. The Landlord’s submissions 11. None were made The Law 12. We must first determine that the landlord’s notice under section 13(2) satisfied the requirements of that section and was validly served.

13. The Housing Act 1988, section 14 requires us to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a [NAME] under an assured tenancy.

14. In so doing we are required by section 14(1), to ignore the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act. Valuation 15. In coming to its decision, the tribunal had regard to the representations made by the tenant applicant. We are not entitled to have regard to the financial position of the landlord or of the

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tenant. The matters we are required to take into account are set out in section 14 of the Act which we have summarised above.

16. In assessing the valuation, the tribunal considered the property on the internet and found that it appears to be a system-built ex Local Authority property.

17. The Tribunal determined a starting market rent of £377 per week for a 3-bedroom house in the locality in the open market in fully modernised condition. However, the Tribunal considered that the following deductions be made from that starting point: - 15% because the house is a system-built ex Local Authority Property - 17% for the poor windows throughout - 17% for the tenant’s own improvements to the kitchen and bathroom - 17% for the terms and conditions, the tenant’s own carpets, curtains, white goods and the reduced market rent was determined to be £128.00 per week.

18. The Tribunal can only set a market rent. This is the maximum rent that is payable for the property which may be more than the amount than the amount that the Housing Association Landlord is actually charging or proposing to charge.

19. The tenant may wish to discuss this matter with her landlord. Effective date 20. Under s14 (7) of the Housing Act 1988 the effective date of the decision would normally be the date shown on the [NAME] unless there is hardship to the tenant.

21. The tenant made no submission in relation to hardship. The effective date is therefore the date shown on the [NAME], that is 4/7/2022.

D. Brandler

Name: Tribunal Judge Brandler Date: 14th November 2022 Corrected on 22 December 2022

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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 may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

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THE LEGISLATION Housing Act 1988 s.13.— Increases of rent under assured periodic tenancies. (1) This section applies to— (a) a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part I of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and (b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period. (2) For the purpose of securing an increase in the rent under a tenancy to which this section applies, the landlord may serve on the tenant a notice in the prescribed form proposing a new rent to take effect at the beginning of a new period of the tenancy specified in the notice, being a period beginning not earlier than— (a) the minimum period after the date of the service of the notice; and (b) except in the case of a statutory periodic [tenancy—] [ (i) in the case of an assured agricultural occupancy, the first anniversary of the date on which the first period of the tenancy began; (ii) in any other case, on the date that falls 52 weeks after the date on which the first period of the tenancy began; and ] (c) if the rent under the tenancy has previously been increased by virtue of a notice under this subsection or a determination under section 14[below—] [ (i) in the case of an assured agricultural occupancy, the first anniversary of the date on which the increased rent took effect; (ii) in any other case, the appropriate date. ] (3) The minimum period referred to in subsection (2) above is— (a) in the case of a yearly tenancy, six months; (b) in the case of a tenancy where the period is less than a month, one month; and (c) in any other case, a period equal to the period of the tenancy. [ (3A) The appropriate date referred to in subsection (2)(c)(ii) above is— (a) in a case to which subsection (3B) below applies, the date that falls 53 weeks after the date on which the increased rent took effect; (b) in any other case, the date that falls 52 weeks after the date on which the increased rent took effect. (3B) This subsection applies where— (a) the rent under the tenancy has been increased by virtue of a notice under this section or a determination under section 14 below on at least one occasion after the coming into force of the Regulatory Reform (Assured Periodic Tenancies) (Rent Increases) Order 2003; and (b) the fifty-third week after the date on which the last such increase took effect begins more than six days before the anniversary of the date on which the first such increase took effect. ] (4) Where a notice is served under subsection (2) above, a new rent specified in the notice shall take effect as mentioned in the notice unless, before the beginning of the new period specified in the notice,— (a) the tenant by an [NAME] in the prescribed form refers the notice to [the appropriate tribunal] ; or (b) the landlord and the tenant agree on a variation of the rent which is different from that proposed in the notice or agree that the rent should not be varied. (5) Nothing in this section (or in section 14 below) affects the right of the landlord and the tenant under an assured tenancy to vary by agreement any term of the tenancy (including a term relating to rent).

s.14.— Determination of rent by [tribunal] . (1) Where, under subsection (4)(a) of section 13 above, a tenant refers to [the appropriate tribunal] a notice under subsection (2) of that section, the [appropriate tribunal]3 shall determine the rent at which,

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subject to subsections (2) and (4) below, the [appropriate tribunal]3 consider that the dwelling-house concerned might reasonably be expected to be let in the open market by a [NAME] under an assured tenancy— (a) which is a periodic tenancy having the same periods as those of the tenancy to which the notice relates; (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 the rent) are the same as those of the tenancy to which the notice relates; and (d) in respect of which the same notices, if any, have been given under any of Grounds 1 to 5 of Schedule 2 to this Act, as have been given (or have effect as if given) in relation to the tenancy to which the notice relates. (2) In [NAME] a determination under this section, there shall be disregarded— (a) any effect on the rent attributable to the granting of a tenancy to a [NAME]; (b) any increase in the value of the dwelling-house attributable to a relevant improvement carried out by a person who at the time it was carried out was the tenant, if the improvement— (i) was carried out otherwise than in pursuance of an obligation to his immediate landlord, or (ii) was carried out pursuant to an obligation to his immediate landlord being an obligation which did not relate to the specific improvement concerned but arose by reference to consent given to the carrying out of that improvement; and (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. (3) For the purposes of subsection (2)(b) above, in relation to a notice which is referred by a tenant as mentioned in subsection (1) above, an improvement is a relevant improvement if either it was carried out during the tenancy to which the notice relates or the following conditions are satisfied, namely— (a) that it was carried out not more than twenty-one years before the date of service of the notice; and (b) that, at all times during the period beginning when the improvement was carried out and ending on the date of service of the notice, the dwelling-house has been let under an assured tenancy; and (c) that, on the coming to an end of an assured tenancy at any time during that period, the tenant (or, in the case of joint tenants, at least one of them) did not quit. [ (3A) In [NAME] a determination under this section in any case where under Part I of the Local Government Finance Act 1992 the landlord or a [NAME] is liable to pay council tax in respect of a hereditament (“the relevant hereditament”) of which the dwelling- house forms part, the [appropriate tribunal] shall have regard to the amount of council tax which, as at the date on which the notice under section 13(2) above was served, was set by the billing authority— (a) for the financial year in which that notice was served, and (b) for the category of dwellings 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— (a) “hereditament” means a dwelling within the meaning of Part I of the Local Government Finance Act 1992, (b) “billing authority” has the same meaning as in that Part of that Act, and (c) “category of dwellings” has the same meaning as in section 30(1) and (2) of that Act. (4) In this section “rent” does not include any service charge, within the meaning of section 18 of the Landlord and Tenant Act 1985 , but, subject to that, includes any sums payable by the tenant to the landlord on account of the use of furniture [, in respect of council tax] or for any of the matters referred to in subsection (1)(a) of that section, whether or not those sums are separate from the sums payable for the occupation of the dwelling-house concerned or are payable under separate agreements. (5) Where any rates in respect of the dwelling-house concerned are borne by the landlord or a [NAME], the [appropriate tribunal] shall make their determination under this section as if the rates were not so borne. (6) In any case where— (a) [the appropriate tribunal] have before them at the same time the reference of a notice under section 6(2) above relating to a tenancy (in this subsection referred to as “the section 6 reference”) and the reference of a notice under section 13(2) above relating to the same tenancy (in this subsection referred to as “the section 13 reference”), and (b) the date specified in the notice under section 6(2) above is not later than the first day of the new period specified in the notice under section 13(2) above, and (c) the [appropriate tribunal]9 propose to hear the two references together,

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the [appropriate tribunal] shall make a determination in relation to the section 6 reference before [NAME] their determination in relation to the section 13 reference and, accordingly, in such a case the reference in subsection (1)(c) above to the terms of the tenancy to which the notice relates shall be construed as a reference to those terms as varied by virtue of the determination made in relation to the section 6 reference. (7) 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, 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 committee may direct. (8) Nothing in this section requires [the appropriate tribunal] to continue with their determination of a rent for a dwelling-house if the landlord and tenant give notice in writing that they no longer require such a determination or if the tenancy has come to an end. (9) This section shall apply in relation to an assured shorthold tenancy as if in subsection (1) the reference to an assured tenancy were a reference to an assured shorthold tenancy.

MR22 First-tier Tribunal – Property Chamber File Ref No. LON/00AB/MNR/2022/0109

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 10 [ADDRESS] [POSTCODE]

Judge D [NAME]

Landlord [COMPANY] PO Box 643 Horsham West Sussex [POSTCODE]

Tenant Mrs [APPELLANT]

1. The rent is: £ 128.00 Per week (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 4th July 2022

*3. The amount included for services is/is

negligible/not applicable n/a Per

*4. Service charges are variable and are not included

5. Date assured tenancy commenced 27/08/2001

6. Length of the term or rental period Monthly

7. Allocation of liability for repairs s.11

8. Furniture provided by landlord or [NAME]

9. Description of premises Three-bedroom house containing: a kitchen, bathroom, living room, dining room, and WC room downstairs, with front and rear gardens

Chairman Judge D Brandler Date of Decision 18th October 2022