Market Rent Set at £820 Per Month by First-tier Tribunal

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/42UG/MNR/2024/0011 HMCTS code : P:PAPERREMOTE

Property : 229 [ADDRESS], [POSTCODE] Applicant (Tenant) : [APPELLANT] Respondent (Landlord) : [APPELLANT] C/O [RESPONDENT] of application : Determination of a Market Rent: Sections 13 and 14 Housing Act 1988 Tribunal members : Mr [NAME] [NAME] of Determination : 17 May 2024

This has been a remote determination on the papers which the parties are taken to have consented to, as explained below. The form of determination was a paper determination described above as P:PAPERREMOTE The documents that the Tribunal was referred to are in bundles from the Applicant and the Respondent. The Tribunal has noted the contents and the decision is below.

2 Decision The Tribunal determined a market rent of £820 per month effective from 4 February 2024.

Reasons Background

1. The Landlord served a notice dated 6 December 2023 pursuant to section 13 (2) of the Housing Act 1988 which stated an increase in the passing rent from £700 per month to £820 per month with effect from 4 February 2023.

2. This rent is stated to be exclusive of Council Tax, Water Charges, and fixed service charges.

3. The Tenant made an application on 15 January 2024 to the Tribunal in reliance on section 13 (4) of the Housing Act 1988.

4. The Tribunal issued directions on 8 February 2024 inviting the Parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the Tribunal to consider.

The Property 5. The Tribunal has relied upon the Parties’ representations and Google Images.

6. The Property comprises a terraced house of brick and tile construction providing lounge and kitchen at ground floor level and three bedrooms together with a bathroom at first floor level. The Tenancy 7. The Tenant took occupation pursuant to an Assured Shorthold Tenancy dated 23 January 2023 commencing 4 February 2023 for a term of 12 months at an initial rent of £700 per month.

8. Clause 5.3 of the Tenancy requires the Tenant “To keep the interior of the Property and the Contents in at least as good and clean condition and repair as they were at the commencement of the tenancy, with fair wear and tear excepted.” 9. Clause 10 of the Tenancy requires the Landlord “…to carry out any repairing obligations as required by section 11 of the Landlord and Tenant Act 1985 and to comply with the obligations under section 9A of the Landlord and Tenant Act 1985”

3 10. Section 11 of the Landlord and Tenant Act 1985 is set out below at paragraph 15. The Law 11. Section 5 (3) of the Act provides that the periodic tenancy arising on expiry of the Assured Shorthold Tenancy is one: “(a) taking effect in possession immediately on the coming to an end of the fixed term tenancy; (b) deemed to have been granted by the [NAME] under the fixed term tenancy immediately before it came to an end to the [NAME] under that tenancy; (c) under which the premises which are let are the same dwelling- house as was let under the fixed term tenancy; (d) under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and (e) under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy” 12. Section 14 of the 1988 Act provides that the Tribunal is required to determine the rent at which the Property might reasonably be expected to let in the open market by a willing landlord under an assured tenancy: • “having the same periods as those of the tenancy to which the notice relates; • which begins at the beginning of the new period specified in the notice; • the terms of which (other than relating to the amount of rent) are the same as those of the existing tenancy.” 13. Section 14 (2) of the 1988 Act requires the Tribunal to disregard: • “Any effect on the rent attributable to the granting of a tenancy to a sitting tenant; • Any increase in the value of the dwelling-house attributable to a relevant improvement (as defined by section 14 (3) of the Act) otherwise than as an obligation; • Any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy.”

4 14. Examples of a tenant’s failure to comply with the terms of the lease may include, for example, a lack of redecoration.

15. Section 11 of the Landlord and Tenant Act 1985 (the 1985 Act), provides that the Tribunal is to imply a covenant by the Landlord: a. “to keep in repair the structure and exterior of the dwelling- house (including drains, gutters and external pipes), b. to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and c. to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.” 16. Section 14 (7) of the 1988 Act states: “Where a notice under section 13(2) above has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the rent under the tenancy with effect from the beginning of the new period specified in the notice or, if it appears to the appropriate tribunal that that would cause undue hardship to the tenant, with effect from such later date (not being later than the date the rent is determined) as the appropriate tribunal may direct.” Representations – The Tenant 17. The Tenant referred to various improvements at paragraph 7 (b) of their Application.

18. Further representations were made under “Any Other Comments” within the Reply Form. These related to improvements carried out by the Tenant over the last 23 years. Representations – The Landlord 19. Mr [RESPONDENT] of [NAME] completed the Reply Form but did not provide any transactional evidence or commentary in support of the proposed rent. Determination 20. In determining the market rent in respect of the Property, the Tribunal has regard to prevailing levels of rent in the general locality and achieved rental values in respect of other properties of comparable accommodation and provision that would be likely to be considered by

5 a prospective tenant. The current rent and the period that has passed since that rent was agreed or determined is not relevant.

21. The legislation requires the Tribunal to have regard to market demand assuming that the landlord is willing. The Tribunal is therefore unable to have any regard to the personal circumstances or identities of the actual landlord and tenant in assessing the level of rent. Similarly, the Tribunal is also unable to take into account the Tenant’s ability to pay the rent in assessing the amount to be paid or the Landlord’s need to achieve a certain income in order to, for example, cover their mortgage payments.

22. In addition, historic matters between the actual landlord and tenant are not relevant to the rent likely to be offered by a prospective tenant. The Tribunal can therefore only have regard to the Property as it exists on the relevant date of the proposed rent review having regard to the statutory assumptions.

23. The Tribunal notes that the Tenant has carried out various works at the Property over an extended period of time. However, the current occupation has arisen due to the expiry of the Tenancy dated 23 January 2023. In the absence of any argument to indicate otherwise, the Tribunal is therefore required to assume that this Tenancy related to the Property as it existed on the 4 February 2023 such that the Landlord was entitled to the benefit of previous works undertaken by the Tenant in setting the rent.

24. It is therefore the case that the Tribunal can only disregard Tenant’s improvements that have been carried out since 4 February 2023.

25. As set out above, section 14 of the 1988 Act requires the Tribunal to determine the rent at which the Property might reasonably be expected to let with effect from the date specified for commencement of the new rent as set out in the section 13(2) Notice.

26. In the absence of either the Landlord or the Tenant presenting any evidence for consideration, the Tribunal has relied upon its own knowledge of the market and expertise.

27. The Tribunal therefore directs that the rent shall be increased from £700 per month to the lower of £820 per month or such other rent as the Landlord may decide, with effect from 4 February 2024.

Name: [NAME] [NAME]: 17 May 2024

Rights of appeal

6 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 either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013). If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed, despite not being within the time limit. The application 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 making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).