First-tier Tribunal Sets New Market Rent for Assured Tenancy

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00AW/MNR/2024/0204

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 [ADDRESS], [POSTCODE]

Judge Dutton Mrs S Phillips MRICS

Landlord [NAME] [ADDRESS], [POSTCODE]

Tenant Mr [APPELLANT]

1. The rent is: £ 427.50 Per Week (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 20 August 2024

3. The amount included for services is 16.82 Per week

4. Date assured tenancy commenced 6 November 2000

5. Length of the term or rental period Annual

6. Allocation of liability for repairs As per the agreement

7. Furniture provided by landlord or superior landlord None

8. Description of premises Second floor flat in a converted block of 17, comprising a living room, bedroom, kitchen and bathroom

Chairman Judge Dutton Date of Decision 20 August 2024

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Case Reference

: LON/00AW/MNR/2024/0204

Property : [ADDRESS] [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [NAME] of Objection : 26 March 2024

Type of [NAME] : Determination of a Market Rent sections 13 & 14 of the Housing Act 1988

Tribunal

: Judge Dutton Mrs S Phillips MRICS

Date of Summary Reasons

: 20 August 2024

_______________________________________________

DECISION

The Tribunal determines a rent of £427.50 per week with effect from 20 August 2024. ____________________________________

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

Background 1. On 20 February 2024 the Landlord served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £159.48 to include fixed services of £16.82 in place of the existing rent of £132.46 per week with fixed service charges of £13.74, to take effect from 1 April 2024

2. On 26 March 2024 under Section 13(4)(a) of the Housing Act 1988, the Tenant referred the Landlord’s notice proposing a new rent to the Tribunal for determination of a market rent. The Tenant’s referral was received by the Tribunal on 26 March 2024.

Inspection 3. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence 4. The Tribunal has consideration of the written submissions provided by the Tenant and the Landlord, the latter being set out in the document headed ‘Your new rent, service and other charges’.

We have noted also the tenant’s complaints made before the referral to us, which appeared to centre on the services charged levied at a fixed rate. The tenancy agreement produced includes provisions for a charge in respect of fixed service charges shown as being £9.91 at the time of the agreement but now said to be £16.82 per week in respect of the matters set out the Landlord’s document referred to above. Our requirement is to determine the appropriate market rent not to determine the level of services, which being fixed would not fall within the Landlord and Tenant Act 1985 (s18)

Determination and Valuation

5. Having consideration of our own [NAME], general knowledge of rental values in the area, we consider that the open market rent for the property in good tenantable condition would be in the region of £450 per week. From this level of rent we have made adjustments in relation to:

The tenant’s liability for repair and decoration of 5%

6. The full valuation is shown below:

Market Rent

£450.00 per week

Less Repairing and decorating obligations approx. 5%

£22.50

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Rent assessed at £427.50

7. The Tribunal determines a rent of £427.50 per week inclusive of services of £16.82 per week.

Decision 8. The Tribunal therefore determined that the rent at which the subject property might reasonably be expected to be let in the open market by a willing Landlord under an assured tenancy was £427.50 inclusive per week

9. The Tribunal directs the new rent of £427.50 inclusive to take effect on 20 August 2024. The Tribunal was satisfied that a starting date of that specified in the Landlord’s notice would cause the tenant undue hardship.

10. It is often the case that rents determined by the Tribunal are in excess of those that may be charged by social landlords as it is a significant part of their remit to provide affordable housing. As such depending on the type of tenancy agreement their calculation of rent is either at a percentage of market rent or by way of index. Comparison is made with the open market rather than limited to other properties which are offered by social housing providers. It is assumed that the landlord will, by usual convention of social landlords, not seek to increase the rent proposed in its original notice as a result of this determination.

Chairman: Judge Dutton

Date: 20 August 2024

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any request for full reasons should be made within a month. Any subsequent [NAME] for permission to appeal should be made on Form RP PTA.

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Case Reference

: LON/00AW/MNR/2024/0204

Property : [ADDRESS] [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [NAME] of Objection : 26 March 2024

Tribunal

: Judge Dutton Mrs S Phillips MRICS

Date of determination : 20 August 2024

Date of Full Reasons

: 28 August 2024

_______________________________________________

DECISION

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FULL REASONS

Decisions of the tribunal (1) The Tribunal determines a rent of £427.50 per week inclusive of services of £16.82 per week. The [NAME]

1. On 20 February 2024 the Landlord served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £159.48 to include fixed services of £16.82 in place of the existing rent of £132.46 per week with fixed service charges of £13.74, to take effect from 1 April 2024.

2. On 26 March 2024 under Section 13(4)(a) of the Housing Act 1988, the Tenant referred the Landlord’s notice proposing a new rent to the Tribunal for determination of a market rent. The Tenant’s referral was received by the Tribunal on 26 March 2024 Background 3. The [NAME] indicated that Mr [APPELLANT] had been the tenant since 20 November 2000 of a second floor flat comprising 2 rooms, a kitchen and bathroom. The flat is in a building of 17 flats above museum premises. The repairing obligations are as contained in an agreement dated 17 November 2000 (the Agreement). The tenancy agreement which is an Assured Tenancy provides for fixed service charge costs, the details of the services provided are set out in the Agreement.

4. The Landlords notice seeking the increase in rent is dated 20 February 2024 is a detailed document and confirms the fixed service charges to be sought at £16.82 per week. A breakdown of the service charge costs is given.

5. Mr [RESPONDENT] has made a complaint to the Landlord on it would seem 23 and 24 April 2024 concerning the charges.

6. The landlord has not responded. Neither party provided us with any comparable property details to assist us in our determination Inspection

3 7. We did not inspect the property but relied on the documents supplied by the parties. The Law 8. We must first determine that the landlord’s notice under section 13(2) satisfied the requirements of that section and was validly served.

9. 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 willing landlord under an assured tenancy.

10. 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 decision 11. The Tribunal has consideration of the written submissions provided by the Tenant and the Landlord, the latter being set out in the document headed ‘Your new rent, service and other charges’. We have noted also the tenant’s complaints made before the referral to us, which appeared to centre on the services charged levied at a fixed rate. The tenancy agreement produced includes provisions for a charge in respect of fixed service charges shown as being £9.91 at the time of the agreement but now said to be £16.82 per week in respect of the matters set out the Landlord’s document referred to above. Our requirement is to determine the appropriate market rent not to determine the level of services, which being fixed would not seem to fall within the Landlord and Tenant Act 1985 (s18)

Determination and Valuation

12. Using our own [NAME] and general knowledge of rental values in the area, in the absence of any evidence from the parties, we consider that the open market rent for the property in good tenantable condition would be in the region of £450 per calendar week. From this level of rent we have made adjustments in relation to the tenant’s limited liability for repair and decoration which we assess at 5%. Thus, taking a full market rent for a property in the tenantable condition and deducting £22.50 per week for the repairing obligations leaves an open market rent of £427.50.

13. The Tribunal directs the new rent of £427.50 inclusive to take effect on 20 August 2024. The Tribunal was satisfied that a starting date of that specified in the Landlord’s notice would cause the tenant undue hardship.

4 14. We should comment that the rent fixed by the Tribunal is the maximum rent and the Landlord may not charge a rent above that figure. However, in many cases when the Landlord is a Registered Social Landlord, the rent charged may be significantly less than the rent fixed by the Tribunal. Indeed, the Landlord seems to be seeking a rent of £159.48

15. We should also comment that the [NAME] received by the Tribunal was for the determination of the rent and although documents were provided to show some exchanges about the service charges, it was not clear that was in dispute. The service charges in this case were fixed. The Tribunal’s jurisdiction to consider the reasonableness of service charges under the Landlord and Tenant Act 1985 arises when there is a ‘variable’ service charge. If the tenant considers he has a variable service charge and wishes to make an [NAME] under the 1985 Act, then he should contact the Tribunal for the appropriate [NAME] form.

Chairman: Judge Dutton

Date: 28 August 2024

APPEAL PROVISIONS

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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