Market Rent Determination for a Room in a Licensed HMO

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00AL/MNR/2024/0174

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 8 [ADDRESS], [POSTCODE]

[NAME] [NAME]

Landlord [RESPONDENT] 2 [ADDRESS], [POSTCODE]

Tenant Mr [APPELLANT]

1. The rent is: £ 765.00 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 1 April 2024

*3. The amount included for services is/is

negligible/not applicable n/a Per

*4. Service charges are variable and are not included

5. Date assured tenancy commenced 1 January 2022

6. Length of the term or rental period 6 months

7. Allocation of liability for repairs Landlord

8. Furniture provided by landlord or superior landlord Bed , desk, chair

9. Description of premises Double room , with shared bathroom and kitchen within a Home in [NAME] of Decision 11 October 2024

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : LON/OOAL/MNR/2024/0174

Property : 8 [ADDRESS] [POSTCODE]

Applicant Tenants : [COUNSEL] : In Person

Respondent Landlord : [RESPONDENT] : In Person

Type of [NAME] : Determination of a Market Rent

Sections 13 & 14 Housing Act 1988

Tribunal member(s) : [NAME] [NAME] of determination : 11 October 2024

Date of reasons : 11 October 2024

REASONS

© CROWN COPYRIGHT

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Decision of the Tribunal

On 11 October 2024 the Tribunal determined a Market Rent of £765.00 per month to take effect from 1 April 2024. It should be noted that the amount determined represents the market rent determined under section 13, the Landlord may choose to charge less.

Background

1. The property is Room 1 in a licensed House in Multiple Occupation at 8 [ADDRESS] [POSTCODE]. The Tenant has shared use of a kitchen and a bathroom and garden.

2. The Notice of Increase of Rent dated 31 January 2024 proposed a new rent of £850 per month to take effect on 1 April 2024 in lieu of a passing rent of £645.00 per month.

3. The Tribunal received the tenancy agreement with the [NAME], showing the contractual term commenced on 1 January 2022.

4. On 24 July 2024, the Tribunal issued Directions, later amended 11 September 2024 advising the parties that it considered the matter suitable for determination on the papers unless either party objected, in writing, within 7 days. In accordance with current Tribunal policy the parties were advised that no inspection would be undertaken. No objections were received to determination on papers were received. An inspection was requested by the Tenant.

5. The Directions required the Landlord and Tenant to submit their completed statements to the Tribunal by 4 September 2024 and 18 September 2024 respectively, with copies to be sent to the other party. [NAME] complied.

6. These reasons address the key issues raised by the parties. They do not recite each point referred to in submissions but concentrate on those issues which, in the Tribunal’s view, are fundamental to the determination.

Law

7. In accordance with the terms of Section 14 of the Act, the Tribunal is required to determine the rent at which it considers the subject property might reasonably be expected to let on the open market, by a [NAME], under an assured tenancy, on the same terms as the actual tenancy.

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8. In so doing, and in accordance with the Act, the Tribunal ignores any increase in value attributable to tenants’ improvements and any decrease in value due to the tenants’ failure to comply with any terms of the tenancy.

The Property

9. The tenancy is of Room One within a Victorian red brick terraced house, the house has been converted into two double rooms with access to shared facilities on the ground floor, and 3 ensuites on the first floor within a licensed HMO. The Landlord has provided a desk, double bed and mattress bedside table and wardrobe. The Tenant has added fridge freezer and computer desk.

10. The Tribunal did inspect the property. The accommodation, the subject of the tenancy, is a ground floor room with a large bay window facing the road. The room is accessed from the main hall immediately to the left of the front door. The room itself has one set of double sockets. Immediately above the double sockets there appears to be a damp patch in the plaster. The bay window comprises three sections, the main facing the road and two smaller side windows. The upper right hand one of these as viewed from inside the room appears defective in that it fails to shut leaving a significant gap which causes draughts. The ceiling has a damp patch adjoining the inner wall. The room is heated by a radiator which is run from a central heating system for the house. In the hallway and in the kitchen, there are two additional radiators, neither of which were on at the time of the inspection. The tenancy permits use of a communal shower and WC room, on the ground floor, which is shared with the other ground floor resident of room 2. There is also use of the communal kitchen and a garden at the back of the property.

Pre – Hearing Submission – Tenant

11. The Tenant provided a copy of a section 21 Notice dated 31 January 2024. A tenancy agreement for period 1 January 2022 at initially £590 per month, a witness statement dated 28 June 2024, which showed rent payable from 21 March 2022 was £ 605 per month, with an additional £13.25 per month for services, and from 1 January 2023 a rent of £645.00 per month, with an additional £13.25 per month payable.

12. The tenant completed a Reply Form noting that double glazing, central heating, carpets, curtains and white goods were supplied by the landlord.

13. The Tenant noted that the window was defective, cracked walls, the ground floor radiator not working, the ground floor kitchen had defective electrics, and the ground floor bathroom ceiling was damaged.

Pre- Hearing Submissions- Landlord

14. The Landlord completed and submitted a Reply Form noting the size of the subject room, and the shared bathroom and shared kitchen.

15. The Landlord says the Tenant is paying £640.00 per month including all bills. The Landlord notes the Notice of Increase is asking for £850.00 per month.

16. The Landlord also supplied to the Tribunal a statement dated 24 June 2024

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detailing the specification of the property and a plan.

17. The Landlord also supplied a set of comparable for a room in a shared houses in Abbey Wood area these ranged from £800.00 to £1000.00 per month with some bills included. The most frequently occurring figure within the comparable was £850.00 per month.

The Hearing

Preliminary Issues

18. [NAME] submitted further information in the day before the Tribunal. The information had been shared with the other party. [NAME] on discussion in the Tribunal agreed to accept the admittance of the other parties information to the Tribunal. The Tribunal accepted the late submissions and considered them in the context of the previous submissions and the hearing.

The Main Hearing

19. The decision was carried out on the papers supplied to the Tribunal, the hearing and the inspection.

There was a conflict in evidence as to what the Tenant is currently paying. The Landlord saying £640.00 per month including all bills, the Tenant saying from the Tenants witness statement, £645.00 per month plus £13.25 per month for services. Evidence in the hearing from the landlord and tenant confirmed that the passing rent was £645.00 per month , and no further payments for services where paid.

20. The Tenant cited the neighbouring room, Room 2 as a source of rental evidence. The Landlord stated that the Room 2 was around 10m2 in comparison with the subject room 1 which the Landlord indicated was around 15m2. Additionally, the Landlord noted the Room 2 had a smaller window which looked at the neighboring property. The Tenant confirmed they had not accessed the comparable room 2. In terms of Rent of the neighboring room 2, the landlord stated that the rent per month had grown from £550.00 in June 2021, to £650.00 in 2022, to £700.00 in 2023 and now was £730.00 from August 2024. The Landlord noted that the level of rent had been agreed not only taking into account general market levels but the specific personal circumstances of the tenant in room 2.

21. The Applicant tenant also cites a rent per month in a neighboring road [ADDRESS] which was said to be £700.00, no further details were provided. The Applicant felt the rent for Room 1 should be £700.00. The Landlord felt the Rent for the Room 1 would be in the range £875.00 to £925.00 today.

22. The Tribunal first considered what the rent should be if the property was in a condition normally associated with a contemporary let. The Tribunal had reference to the wider market, noting that rooms with ensuite tended to be around £900.00 to £1000.00 per month. The lack of an ensuite reduces the expected price to around £875.00 per month for a double room with shared

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use of a bathroom.

23. The Tribunal, taking into account the wider market, determines the room in good contemporary letting condition would attract a rent of £850.00 per month, given the general condition of the house.

24. The room itself has a number of defects, the damp and the damaged window and limited sockets. These the Tribunal determines would lower the rental level to £765.00 per month.

25. The Tenants made no substantive submissions to the Tribunal about delaying the effective date of the revised rent due to undue hardship under section 14(7) of the Act. Accordingly, the rent of £765.00 per month will take effect from 1 April 2024.

[NAME]: 11 October 2024

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.

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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).