Market Rent Reduced Due to Severe Disrepair in Property

OUTCOME: Allowed

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL

PROPERTY)

Case Reference : MAN/00BP/MNR/2024/0044

Property : 120 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted]

rent pursuant to s.14 Housing Act 1988

Tribunal Members : Tribunal Judge L. F. McLean

Tribunal Member [NAME] of Decision : 12th July 2024

Date of Reasons : 26th September 2024

DECISION © 2024

Decision

1. The Tribunal determines that the market rent payable for 120

[ADDRESS] [POSTCODE] (“[NAME]”), under the

statutory periodic tenancy arising on 10th April 2019, is £450 per

month.

2. The Tribunal directs that the new rent is effective from 10th March

2024.

Application

3. The Applicant is the tenant of [NAME] and the Respondent is the

landlord.

4. By a notice dated 30th January 2024 (“the Notice”), the Respondent notified

the Applicant that the rent for [NAME] would be increased from £450.00

per month to £900.00 per month with effect from 10th March 2024.

5. By an application dated 8th February 2024, the Applicant referred the Notice

to the Tribunal for a determination of the market rent for [NAME],

pursuant to Section 14 of the Housing Act 1988.

6. An inspection took place on 12th July 2024. Neither party requested a hearing.

The Inspection

7. The members of the Tribunal attended at [NAME] at approximately

12.30pm by prior appointment. The Applicant gave permission for the

Tribunal members to enter [NAME]. Soon afterwards, the Respondent

attended. Despite both parties having legal representation, neither firm of

solicitors attended. The Applicant was not willing to let the Respondent enter

[NAME]. Despite encouragement from the Tribunal members to allow

entry, the Applicant maintained her stance, as was her common law legal

right. The Chair of the Tribunal therefore provided a verbal summary of the

members’ observations to the Respondent after the inspection concluded.

8. [NAME] is a brick-built mid-terraced house, which appears to date from

the late 19th or early 20th Century. It comprises two bedrooms, living room

and kitchen together with a back yard area.

9. [NAME] benefits from a gas hot water and central heating system

provided by the Respondent. A fridge-freezer was provided by a previous

landlord. The tenant had supplied her own washing machine. The kitchen

also included an integrated electric cooker and hob. Carpets throughout [NAME] were also provided by the previous landlord but were worn and in

poor condition. The windows are double glazed with uPVC frames. The

bathroom included an electric shower over a bath.

10. Severe landlord’s neglect was visible throughout the interior of [NAME].

Black mould was present in every single room.

11. This began with the entrance porch, in which the plasterwork was damaged by

damp and there was black mould all over the internal door. There were stains

in the corner from water ingress, and evidence of structural cracking of the

party wall with number 118.

12. In the kitchen, there was significant water damage to the wooden cupboards

and units near to the washbasin, where the base unit had rotted away to the

point of being beyond serviceable repair and needing complete replacement.

The interior walls were damp and there was black mould present on the wall

decorations. There were stains on the ceiling from water ingress. A water leak

appeared to have been repaired recently.

13. The walls of the second bedroom were damp with black mould. Repairs to the

plasterwork and redecoration of the ceiling were both incomplete.

14. In the upstairs landing, the wallpaper was peeling off due to damp moisture.

15. In the upstairs bathroom, there was a lot of black mould on the walls. The

extractor fan was broken or non-existent, which could also lead to draughts

and water ingress.

16. In the main bedroom, the decorative paintwork was peeling off the inside of

the external wall and the party wall with number 122, and there was black

mould underneath the windowsill.

17. Externally, the members of the Tribunal observed that the back yard was not

usable due to the Respondent having commissioned building works to create

an extension to the building. The building works were incomplete, with the

concrete foundation screed having been laid and breeze block walls being

partially constructed with pipes and cables dangling or running over the yard,

in such a hazardous state that the yard could not be used for any storage or

recreational purposes. This also amounted to a fire hazard on account of the

restricted exit through the kitchen door. The Applicant stated that the works

had been undertaken without her consent. The Tribunal members also noted

that the roofline guttering was defective at the back of [NAME] and that

water had been running down the outside of the rear elevation, with green

algae growing on the brickwork below.

Written Submissions

18. The Tribunal received written submissions from [NAME].

These rehearsed in detail (with supporting photographic evidence) the

extensive allegations of at least 7 separate defects within [NAME], which

the Tribunal members had also observed. [NAME] asserted

that the extent of the disrepair was so severe that [NAME] was unfit for

human habitation, within the meaning of s.9A Landlord and Tenant Act 1985.

[NAME] also averred that the Respondent had failed to

conduct repairs within a reasonable timeframe of being given notice of the

defects, or to any reasonable standard, or not at all. The Applicant had

attempted to clean the mould away but it had habitually reappeared. The

submissions also referred to the Council having served an Abatement Notice

upon the Respondent (pursuant to the provisions of the Housing Act 2004) on

25th March 2024, which had not been complied with. [NAME] alleged that the Applicant and members of her household had

suffered physical and mental ill health and stress due to the condition of [NAME].

19. The [NAME] also provided written submissions, but these were

weak and imprecise in comparison to those of [NAME]. There

was a general assertion that all repairs had been undertaken within a

reasonable time of being notified of the disrepair. These assertions were

wholly unsupported by any meaningful evidence, and tended to run contrary

to the Tribunal members’ observations during the inspection of [NAME].

There was adduced a copy of an email – dated 16th May 2023 – from the

Respondent’s contractors stating (in rather vague terms) that they had been

unable to gain entry to [NAME] to carry out works. The only other

purported explanation for failure to carry out repairs was a single alleged

incident on 17th May 2024, in which the Respondent had claimed that her

contractors were threatened by the Applicant and had been required to leave

the premises. This latter allegation was not substantiated by any direct

evidence and was only supported through extremely brief hearsay evidence,

consisting of a single short email from her solicitors to the Council the

following week.

20.The Respondent’s submissions appeared to be much more focused on the

comparable market rents than upon the appalling condition of [NAME].

The comparables referred to (discussed in more detail below) were broadly

helpful, but somewhat on the high side when taking the features of [NAME] into account.

The Law

21. When determining the market rent under Section 14 of the Act, the Tribunal

shall determine the rent at which it considers 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; and

d. in respect of which the same notices, if any, have been given under any

of Grounds 1 to 5 of Schedule 2 to the Act, as have been given (or have

effect as if given) in relation to the tenancy to which the notice relates.

22.The Tribunal must also disregard:-

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 relevant

tenant’s improvements; and

c. any reduction in the value of the dwelling-house attributable to a

failure by the tenant to comply with any terms of the tenancy.

23. Accordingly, the Tribunal must consider the rental value of [NAME] in its

current condition insofar as landlord’s neglect is concerned, but disregarding

any reductions attributable to the tenant’s breach of tenancy.

24.The calculation is carried out taking into consideration the condition of [NAME] as at the date of the inspection, even if some time has passed since

the effective date of the Notice and even if repairs or improvements have been

undertaken by the landlord since then.

Market rent

25. The Applicant did not provide any evidence of comparable market rents.

26.The Tribunal considered that the Respondent’s comparables of [ADDRESS] in

Oldham OL4 (£900 pcm), [ADDRESS] in Oldham OL2 (£895 pcm) and

[ADDRESS] in Oldham OL8 (£1050 pcm) were not unreasonable, albeit

that the photographs of those properties suggested that they had been

refurbished internally to a considerably higher standard than [NAME].

27. The members of the Tribunal also relied on their own expertise and general

knowledge and awareness of the lettings market in order to reach a view on

the type of rental value that a dwelling like [NAME] might achieve in that

locality. Other similar comparables which were publicly available included:-

 2 bedroomed terraced house – [ADDRESS], Chadderton - £900pcm

 2 bedroomed terraced house – [ADDRESS], Chadderton - £925pcm

 2 bedroomed terraced house – [ADDRESS]2 - £900pcm

Tenant’s Improvements

28.The Applicant had not undertaken any notable improvements to [NAME].

White goods and Furnishings

29.Most of the white goods were supplied by the landlord except for the washing

machine. All furnishings belong to the tenant.

Landlord’s Neglect

30.The members of the Tribunal found that [NAME] was in a truly shocking

state of dilapidation throughout, as referred to above. The Tribunal concluded

that there was a prima facie case of the Respondent having been guilty of

severe landlord’s neglect. If any repairs were undertaken by the landlord, they

were incomplete or ineffective.

31. The Tribunal did not consider that the evidence led by the Respondent proved

that the tenant was in breach of the tenancy agreement in relation to granting

access for repairs. Any evidence of access being refused was weak, sporadic

and indirect. There was no evidence or even any suggestion that the

Respondent had taken any further steps to secure access for repairs, such as

seeking injunctive relief from the County Court. This stands in stark contrast

to her apparent willingness to commission an extension to the rear of [NAME] without her tenant’s consent. [NAME], however,

had asserted that their client was left distressed by the appalling condition of

[NAME]. The Tribunal found that assertion to be highly credible in light

of its very poor condition, and it was not challenged in the Respondent’s

written submissions in any event (nor had she requested a hearing at which

the Applicant’s evidence could be so challenged). The Tribunal cannot think

why it would be in the Applicant’s interests willingly to fail to allow access, in

these circumstances.

Service Charge

32. There is no service charge applicable to the tenancy of [NAME].

Calculation of market rent

33. In determining the open market rent for [NAME], and taking into account

the evidence offered by the parties, the Tribunal determined that the open

market rent for [NAME] in good condition and with modern facilities

would be £780.00 per month. The Tribunal took into account the age,

character and location of [NAME], when reaching its decision as to the

likely market rent. In particular, the starting point had been £900.00 pcm,

but from that figure the Tribunal made a deduction of £75.00 for the absence

of a usable back yard space, and a further £45.00 for additional white goods

and furnishings that a landlord would be expected to provide in order to

achieve the optimal rent.

34.In accordance with Section 14 of the Act there has to be deducted from the

market rent an amount for tenant’s improvements and disrepair.

35. The Tribunal considered that the appropriate deduction for disrepair was

£330.00 per month. The members of the Tribunal concluded that this

significantly high deduction was appropriate, in line with the principles of

assessing quantum of damages under [NAME] v Manchester City Council

(1998) 30 HLR 1111 (and subsequent case law e.g. [NAME] v [COMPANY] (Central London County Court, 7th November 2023)), to

reflect the fact that every single room inside [NAME] was affected by

varying degrees of significant damp and mould, in addition to other notable

defects, to the extent that it is almost unfit for human habitation.

36.There was no deduction for tenant’s own improvements.

37. Normally, the effective date when the new rent shall take effect is the date

specified in the Notice. Under Section 14(7) of the Act, if it appears to the

Tribunal that that would cause undue hardship to the tenant, then the

Tribunal may instead direct that the new rent shall take effect from a later

date (not being later than the date the rent is determined). There was no

specific evidence that the Applicant would suffer undue hardship in this

instance.

38.The market rent for [NAME] is £450.00 per month, effective from 10th

March 2024.