First-tier Tribunal Sets New Fair Rent for Regulated Tenancy

OUTCOME: Dismissed

© CROWN COPYRIGHT 2013

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case Reference : CAM/00JA/F77/2024/0027 [NAME] : 78 Hanbury Ortan Goldhay Peterborough Cambridgeshire [POSTCODE] Applicant: [redacted]

[COMPANY] (Landlord) Representative : None Respondent : [redacted] (Tenants) Representative : None Type of Application : S.70 Rent Act 1977 – Determination of a new fair rent Tribunal Members : Mr [NAME]. [NAME] and venue of Meeting : 21 October 2024 First Tier Tribunal (Eastern) [ADDRESS] [POSTCODE] Date of Decision : 21 October 2024

REASONS FOR DECISION

Background

1 By an application of 28 June 2024 the landlord applied to the Rent Officer for registration of a fair rent. The rent stated as payable at the time of the application was said to be £490.00 per calendar month. This figure included £44.70 per calendar month service charge.

2 With effect from 28 September 2024 but registered on 12 August 2024, the Rent Officer registered a fair rent of £513.00 pcm including £55.84

2 pcm service charge. There was an objection to the new fair rent. The First Tier Tribunal was notified of this objection and a request for a fresh determination of the rent.

Directions

3 Directions dated 27 August 2024 were issued by the Tribunal, for case progression. Neither party requested a hearing.

Representations

4 Standard Reply Forms were issued by the Tribunal prior and both parties invited to complete and return them. The Tribunal determined the new rent with the assistance of such written statements from the parties as were received for which it is grateful.

Inspection

5 The Tribunal did not inspect the [NAME]. The Tribunal was however able to externally view the [NAME] from Google Streetview (@ June 2022). The [NAME] appeared to be part of small 3 storey block of flats dating from the 1980’ss forming an established residential estate consisting of small blocks of flats and small houses of a similar age. There was unrestricted parking on and off road communal areas.

6 Externally the building of which the [NAME] forms part, appears to be in good condition, with fair faced brick walls, a low double pitched single lap filed main roof. The building of which the [NAME] forms part appears to extend to 3 levels with flats on each. The [NAME] is on the second floor. The [NAME] had 3 rooms, bathroom/wc and kitchen. There were no additional private outside areas or stores.

7 There was double glazing and full central heating. There is no mention of carpets curtains or white goods, though housing associations tend to provide the latter but not the former to tenants. The tenancy started on 15 March 1984.

Law

8 When determining a fair rent the Committee, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances including the age, location and state of repair of the [NAME]. It also disregarded the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the [NAME].

9 In [COMPANY] v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasized

3 (a) that ordinarily a fair rent is the market rent for the [NAME] discounted for 'scarcity' (i.e. that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and

(b) that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject [NAME]).

10 Where the condition of a [NAME] is poorer than that of comparable properties, so that the rents of those comparables are towards twice that proposed rent for the subject [NAME], it calls into question whether or not those transactions are truly comparable. Would prospective tenants of modernized properties in good order consider taking a tenancy of an un-modernised house in poor repair and with only basic facilities or are they in entirely separate lettings markets? The problem for the Tribunal is that the only evidence of value levels available to us is of modernised properties. We therefore have to use this but make appropriate discounts for the differences, rather than ignore it and determine a rent entirely based on our own knowledge and experience, whenever we can.

11 On the evidence of the comparable lettings and our own general knowledge of market rent levels in and around Peterborough, the Tribunal accepts that the [NAME] would let on normal Assured Shorthold Tenancy (AST) terms, for £900 per week. This then, is the appropriate starting point from which to determine the rent of the [NAME] as it falls to be valued.

12 A normal open market letting would include carpets, curtains and “white goods”, but after grant in the later 1980’s it is assumed that these are in effect provided by the tenant. The Tribunal assumes that the kitchen and bathroom whilst functional, are both basic. There is no double glazing reported. Deduction for these shortcomings amounts to £90 pw, leaving the adjusted market rent at £800 pcm.

13 The Tribunal also has to consider the element of scarcity and whether demand exceeded supply. The Tribunal found that there was no scarcity in the locality of Peterborough for this type of [NAME] and makes no further deduction from the adjusted market rent of £800.

14 The fair rent to be registered on this basis alone would be £800 but, the new rent is limited by the statutory Maximum Fair Rent Cap calculation. The MFRC limits any increase to the change in RPI (set two months prior at each date), between the date of the last registration of a fair rent and the current, plus 5%. The calculations are shown in

4 the MFR form and this caps the new fair rent at £569.68 per calendar month. The fair rent is therefore capped and registered at this figure.

15 The Rent Act makes no allowance for the Tribunal to take account of hardship arising from the new rent payable compared with the existing rent registered. The landlord is entitled but, not compelled, to charge the tenants rent at the registered figure from the effective date. However the landlord may not charge more than the fair rent.

[NAME] 21 October 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).