First-tier Tribunal Sets New Fair Rent Under Rent Act 1977

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00BE/F77/2019/0074

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 115 [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT]

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is 151.50 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 31 May 2019

3. The amount for services is N/A Per

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

N/A Per

5. The rent is not to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 do not apply because 15% exemption.

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

No [NAME] of decision 31st May 2019

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 285.1

PREVIOUS RPI FIGURE Y 275.1

X 285.1 Minus Y 275.1 = (A) 16.0

(A) 16.0 Divided by Y 275.1 = (B) 0.03635

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.086350

Last registered rent* 160.0 Multiplied by (C) = 173.82 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 174.0

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £174.00 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.