First-tier Tribunal Sets Rent for Shared Room Including Bills

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/00CN/MNR/2021/0037

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 25 [ADDRESS], [POSTCODE]

[NAME] Mr [APPELLANT]

Landlord [NAME] [APPELLANT] 19 [ADDRESS], [POSTCODE]

Tenant [NAME] [RESPONDENT]

1. The rent is: £450.00 Per Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 15 August 2021

3. The amount included for services is included in the Rent £200.00 Per Month

4. Service charges are variable and are not included

5. Date assured tenancy commenced 10 June 2019

6. Length of the term or rental period Six Months

7. Allocation of liability for repairs S. 11

8. Furniture provided by landlord or superior landlord Double bed. Wardrobe

9. Description of premises Double bedroom in shared house.

[NAME] of Decision 12/10/2021

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Case Reference : BIR/00CN/MNR/2021/0037

Property

: 25 [ADDRESS], [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : Appeal against a Notice proposing a new rent under an

Assured Periodic Tenancy under section 13(4) of the Housing

Act 1988

Tribunal Members : Mr [NAME].[NAME]. [NAME] B.Sc.(Est.Man.) FRICS

Mr [NAME]. [NAME] and Venue of : Video Hearing on 12th October 2021. Hearing

Date of Decision : 12th October 2021

Date Decision issued : 26th October 2021

____________________________________________________________

REASONS FOR DECISION

© CROWN COPYRIGHT 2021

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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1 The rent is determined at £450.00 (Four Hundred and Fifty Pounds) per month from 15th August 2021.

REASONS

Introduction

2 The tenant, Miss [RESPONDENT], holds a monthly assured tenancy of a double bedroom at [ADDRESS], [POSTCODE], she has rented since 10th June 2019.

3 On 13th July 2021 the landlord served notice of increase under section 13(2) of The Housing Act 1988 proposing a rent of £650.00 / month to take effect on 15th August 2021. The proposed rent included £80/month for Council Tax, £20/month for water rates and £100/month for fixed service charges.

4 On 26th July 2021 the tenant applied for the rent to be determined by the First-tier Tribunal Property Chamber.

5 On 12th October 2021 the Tribunal inspected the property and determined the rent at £450.00 per month from 15th August 2021.

6 On 18th October 2021 the Tribunal received a request for Reasons from the landlord.

The Law 7 Section 14 of The Housing Act 1988 states:

'(1) Where, under subsection (4)(a) of section 13 above, a tenant refers to a rent assessment committee a notice under subsection (2) of that section, the committee shall determine the rent at which, subject to subsections (2) and (4) below, the committee consider that the dwelling-house concerned might reasonably be expected to be let in the open market by a willing landlord 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;...'

'(2) In making a determination under this section, there shall be disregarded -

(a) any effect on the rent attributable to the granting of a tenancy to a sitting tenant;

(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 the

immediate landlord ...

8 The jurisdiction of the Rent Assessment Committee was transferred to the First-tier Tribunal (Property Chamber) from 1st July 2013.

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Facts Found

9 The Tribunal inspected the property on 12th October 2021.

10 The property comprises the left hand side of a pair of semi-detached houses in a well established residential area of Sheldon, east Birmingham.

11 The property comprises shared accommodation of a hall, breakfast area and kitchen with stairs to a landing and bathroom. The tenant has exclusive possession of a double bedroom at the front of the house.

12 The bedroom furniture provided by the landlord comprises a double bed, two bedside cabinets and a wardrobe.

13 The house has central heating and double glazing and the landlord provides shared use of white goods. There is a shared parking area to the front.

Submissions

14 The Applicant's Submission

The Applicant provided details of four comparable properties offering shared accommodation in the same general area, all with bills included advertised on the internet:

1 House Share near Birmingham Airport, B33

A double room advertised at £430 pcm or double with en-suite for £330 pw.

Described as 'furnished to a high standard' with utility bills included in the rent.

2 Flat Share near Birmingham Airport, B26

A double room advertised at £555 pcm with en-suite.

Described as a 'centrally heated detached house. Very quiet location' with bills

included in the rent.

3 House Share, Sheldon, B26

A double room advertised at £425 pcm in an extended 1960s semi-detached

house. The house has a shared living room, furnished with parking available.

Described in the on-line advert as '3 bedrooms including an en-suite' with bills

included in the rent.

4 House Share, Sheldon, B33

A double room advertised at £450 pcm or single for £330 pw.

The property has a new kitchen, new bathroom, new central heating system and is

fully furnished. The bills are included in the rent.

15 The Applicant also said it was not always possible to park at the front of the property because other vehicles were using the space.

16 The Respondent's Submission

The Respondent requested an increase to cover the increasing cost of providing services and Council Tax. The bills have increased over the previous two years.

17 In respect of the parking, the Respondent pointed out that there was also street parking

generally available.

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Decision

18 The Tribunal took account of the location, accommodation and condition of the property together with the parties' written submissions and video hearing evidence before reaching its decision.

19 Regarding the parking, the Tribunal noted that there was a parking area at the front and street parking in the area, although tight.

20 The crux of the dispute is that the bills had increased since 2019 which was not disputed.

21 The landlord, [APPELLANT], asked for the rent to be increased in line with the cost of services but the Tribunal finds the amount paid by the tenant will not necessarily increase, it depends on the market. The rent of rooms in shared houses is demand led, in other words, there is a maximum figure a tenant will pay for a room in a shared house including bills and the amount depends on the cost of renting alternative comparable property.

22 Miss [RESPONDENT] demonstrated that there were other houses in the same general area where it was possible to rent rooms offering similar accommodation for rents of £425-450 per month including bills, or £555 per month if an en-suite were included.

23 The accommodation at the subject house is well furnished but limited; there is no shared living room, the breakfast area is a walk-through area next to the kitchen and there is no en-suite, so the accommodation to let elsewhere with an en-suite (property no.2 above) is less comparable than the others referred to above.

24 It makes no difference to a tenant how the amount paid is calculated; it may include 70% rent and 30% bills or 30% rent and 70% bills, the result is the same. It is unfortunate for a landlord if the cost of bills increases because the rental element has to decrease to compensate, but if the overall figure were increased to cover the increased cost of utilities the overall rent would be out of line with the market. It would no longer be a market rent.

25 In this case, having considered the evidence, the Tribunal finds the amount payable, i.e. the rental value including bills, to be £450 per month in line with the rents of comparable properties, which, bearing in mind the evidence, happens to be the same achieved on letting in 2019.

26 Accordingly, the Tribunal determines the rent under section 14 of The Housing Act 1988

at £450.00 (Four Hundred and Fifty pounds) per month with effect from 15th August 2021.

[NAME] B.Sc.(Est.Man.) FRICS Chairman

Appeal

If either party is dissatisfied with this decision an application may be made to this Tribunal for permission to appeal to the Upper Tribunal, Property Chamber (Residential Property) on a point of law only. Any such application must be received within 28 days after the decision and accompanying reasons have been sent to the parties (Rule 52 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013).