First-tier Tribunal Sets Rent for Assured Tenancy Based on Market Conditions

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/31UG/MNR/2021/0075

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]

[NAME] Mrs [RESPONDENT]

Landlord [NAME] c/o [NAME], 6 [ADDRESS], [POSTCODE]

Tenant Mr [APPELLANT]

1. The rent is: £725.00 Per Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 08 December 2021

3. The amount included for services is not applicable N/A Per N/A

4. Service charges are variable and are not included

5. Date assured tenancy commenced 08 December 2018

6. Length of the term or rental period 12 Months

7. Allocation of liability for repairs Landlord and Tenant Act and Tenancy Agreement

8. Furniture provided by landlord or superior landlord None

9. Description of premises An end terraced cottage in a small [NAME] hamlet. The property comprises hallway, lounge, fitted dining kitchen, two bedrooms and bathroom. Part double-glazing. Central heating. Large garden. Shared parking

[NAME] of Decision 11/02/2022

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/31UG/MNR/2021/0075 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent : [redacted] : Mr [COUNSEL], [NAME] of application : Application under Section 13(4) of the Housing Act 1988 referring a notice proposing a new rent under an Assured Periodic Tenancy to the Tribunal Tribunal members : [NAME] S [NAME] Mrs [NAME] and Date of Determination : 11th February 2022

DETAILED REASONS

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BACKGROUND

1. On 24th November 2021, the Applicant (tenant of the above property) referred to the Tribunal, a notice of increase of rent served by the Respondent (landlord of the above property) under section 13 of the Housing Act 1988.

2. The Respondent’s notice, which proposed a rent of £750.00 per month with effect from 8th December 2021, is dated 20th October 2021.

3. The date the tenancy commenced is stated on the Application Form as being 8th December 2018 and is an Assured Shorthold Tenancy. The current rent is stated as being £625.00 per month.

INSPECTION

4. The Tribunal inspected the property on Friday 11th February 2022 in the presence of the Applicant and the Respondent’s representative. The property comprises of an end terraced cottage in a block of six being of brick construction surmounted by a pitched slate roof. It is located in a small attractive [NAME] hamlet which the Tribunal was informed is wholly owned by the Respondent. There are no nearby shops or facilities, the nearest being in Melton Mowbray some four miles away.

5. The property is approached from [ADDRESS] by a footpath leading to this property and also giving access to the rear of the other properties in the row. There is a communal parking area with some fourteen spaces serving the six cottages at the opposite end of the block. The Applicant accesses this from his cottage across the rear of the other cottages in the row.

6. Briefly the accommodation comprises of entrance hall with store off, lounge with fitted multi fuel stove and fitted kitchen/dining area on the ground floor. The kitchen has a built-in oven/hob and, the Tribunal was informed, a dishwasher. A staircase off the lounge leads to a small landing which in turn leads to a double bedroom, a large single bedroom and bathroom being fitted with a three-piece sanitary suite having a shower over the bath.

7. The property has large gardens to the front, rear and side and enjoys [NAME] views.

8. The Tribunal was informed at the inspection (and in the submissions) that the property was fully modernised by the Respondent immediately prior to the Applicant moving in. The cottage has radiators to all main rooms with the heating and hot water provided by a Kerosene fired wall mounted boiler situated in the hallway. It is understood that the walls were drylined with insulating boarding as part of the re- furbishment. The property has part double glazing only to timber windows.

9. The property was found to be in reasonable general condition throughout and the Tribunal was provided with a copy of the Inventory immediately prior to the commencement of the tenancy. The Tribunal therefore took this into account in arriving at its determination.

EVIDENCE

10. The committee received written representations from both parties which were copied to the other party.

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11. A hearing was arranged by [NAME] on 11th February 2022, following the inspection. This was attended by the Applicant and the Respondent’s representative.

12. At the commencement of the hearing the Tribunal asked the parties to confirm the position regarding the current rental payment as upon reading the submissions it was noted that the present rental was stated as being £625.00 per month whereas the original tenancy agreement stated that in 2018 the rental was actually £650.00 per month.

13. The parties both confirmed that when the tenancy commenced on 8th December 2018 the rent payable was £650.00 per month but this had been reduced in or around December 2019 to £625.00 per month. This was understood to be a concession on the part of the Respondent landlord due to the personal circumstances of the Applicant.

14. In his written submission and at the hearing the Applicant submitted:

1) He had moved into the property in December 2018 and sometime after that his partner had fallen down the stairs. Following the fall legal proceedings were taken against the Respondent and the Applicant was of the opinion that the proposed increase in rent was due to those legal proceedings.

2) There was no hand rail to the staircase and a handrail had not been fitted since the accident.

3) That two of the houses in the row of six were currently empty and had been so for over two years. As such, the Applicant could not understand why the Respondent was seeking to increase the rent on the property.

4) That he was aware of a property on the ‘nearby Buckminster Estate’ which had three bedrooms, a large garden and parking. This was let at £675.00 per month.

15. In its written submission and at the hearing the Respondent submitted:

1) That it was the policy of the Respondent to review rents on a regular basis. The rent had not been reviewed since 2019 since which time market rents had moved considerably. Others in the hamlet had been reviewed and there was a demand for [NAME] properties. In the submission of the Respondent there was no link between the legal proceedings and the proposal to increase the rent.

2) That as a comparable ‘Spring Villa’, also in the hamlet, was let in May 2021 at £775.00 per month. This had two/three bedrooms, a ground floor bathroom and was in need of modernisation. 3) ‘Primrose Cottage’ which had three double bedrooms and a separate shower was let in July 2020 at £1128.00 per month. This had been fully refurbished to the same standard as the subject property.

4) A further similar cottage to the subject property had been recently let at £800.00 per month.

5) That there were two vacant cottages in the row but these had not been modernised and as such could not be let at the present time.

THE LAW

16. In accordance with the terms of section 14 Housing Act 1988 the Tribunal proceeded 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.

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17. In so doing the Tribunal, as required by section 14(1), ignored the effect on the rental value of the property of any [NAME]'s improvements as defined in section 14(2) of that Act.

THE TRIBUNAL’S DECISION

18. The Tribunal determined that the cottage was an attractive [NAME] property although its slightly isolated location would not suit all tenants.

19. The Tribunal noted that although the property was extensively modernised it was not fully double glazed and original external doors would also have an adverse impact on the EPC rating. It was noted that cast iron gutters and downpipes were rusting and in need of at least redecoration.

20. The Tribunal noted that the property did not include curtains, a washing machine or refrigerator as would normally be expected in lettings of this type.

21. The Tribunal also considered the stairs to be very steep and was surprised to note (particularly in view of the fall by the Applicant’s partner) that there was still no hand rail fitted to the staircase. The Tribunal accepts that there is nothing the Respondent can do about the steepness of the staircase but is of the opinion that it is remiss of the Respondent not to fit at least one handrail to the side of the staircase.

22. During the inspection the Tribunal noted that the smoke/fire detector in the kitchen had been removed. The Applicant stated that this was due to a leak from the bathroom above although it was acknowledged that this had been repaired and the Tribunal therefore considers that the detector should be immediately reinstated.

23. The Tribunal does not consider that the vacant cottages in the row have any [NAME] effect on the rental value. It is evident from the Respondent’s submissions that these properties require modernisation and it is not for the Tribunal to speculate or comment on the Respondents reasons for not doing so at the present time. The properties are not currently marketed so are unhelpful in giving any guidance to the Tribunal as to the desirability of properties being let in the hamlet.

24. For the same reason, the Tribunal attaches limited weight to the comparable provided by the Applicant. No details (other than those referred to in these reasons) were provided in respect of the accommodation, address, fittings or condition of the house on the Buckminster Estate and the Tribunal is therefore unable to draw any inference from it.

25. The Tribunal noted the comparables provided by the Respondent. These are of course all located in the hamlet itself.

26. The Respondent is now proposing a rent of £750.00 per month. The property includes carpets and floor coverings throughout. The Tribunal determined that an open market rent of £765.00 per month would be appropriate for the property if it was offered with the benefit of curtains and other white goods but these are the property of the [NAME] and therefore excluded from the Tribunal’s assessment.

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27. The Tribunal therefore considered the various monthly deductions to reflect the items referred to above as follows:

Part single glazing 17.00 Fridge and washing machine 10.00 Lack of stair rail 10.00 Curtains 3.00 Total £40.00

28. In coming to its decision, the Tribunal had regard to the comparables provided by the parties and the members' own general knowledge of market rent levels in the area of Leicestershire. The Tribunal concluded that an appropriate market rent for the property would be £725.00 per month (£765.00 - £40.00)

29. The Tribunal therefore determined that the rent at which the property might reasonably be expected to be let on the open market would be £725.00 per month.

30. This rent will take effect from 8th December 2021, being the date of the Respondent’s notice.

APPEAL

31. Any appeal against this Decision can only be made on a point of law and must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal the party appealing must apply, in writing, to this Tribunal for permission to appeal within 28 days of the date of issue of this Decision, (or, if applicable, within 28 days of any decision on a review or application to set aside) identifying the decision to which the appeal relates, stating the grounds on which that party intends to rely in the appeal, and stating the result sought by the party making the application.

[NAME] First-tier Tribunal Property Chamber (Residential Property)