Market Rent Set at £900 pcm by First-tier Tribunal

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/00MX/MNR/2024/0074 HMCTS code : P:PAPERREMOTE

Property : [ADDRESS], [POSTCODE] Applicant (Tenant) : [APPELLANT] [NAME] Respondent (Landlord) : [RESPONDENT] of application : Determination of a Market Rent: Sections 13 and 14 Housing Act 1988 Tribunal members : Mr [NAME] [NAME] of Determination : 2 August 2024

DECISION

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.

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Decision The Tribunal determined a market rent of £900 per calendar month effective from 1 May 2024.

Reasons Background

1. On 11 March 2024 the Landlord served notice under section 13 (2) of the Housing Act 1988 to increase the passing rent from £750 per calendar month (pcm) to £900 per month with effect from 1 May 2024.

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

3. The Tenant made an application dated 1 April 2024 to the Tribunal in reliance on section 13 (4) of the Housing Act 1988.

4. The Tribunal issued directions on 1 May 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.

[NAME]

5. The Tribunal has not inspected [NAME] but has relied on the documents provided by the Parties together with information in the public domain including Google Images and Planning records. 6. [NAME] comprises a first floor flat within a detached two and half storey building which has accommodation over three floors inclusive of the roof space located on the [ADDRESS]. The building formerly comprised an office building but was converted following the grant of various planning permissions in the 2020s. 7. [ADDRESS] comprises a range of commercial businesses including offices and light industrial which abuts open countryside on the western and southern boundaries. There is a waste transfer station and a garden nursery to the northeast and a main-line railway to the west. 8. [NAME] is located on the first floor and provides a kitchen with open plan living room and a single bedroom. There is double glazing and white goods. There is parking available at [NAME] but no garage or garden.

3 The Tenancy 9. The Tenant occupied [NAME] by virtue of an Assured Shorthold Tenancy that commenced 20 December 2021 and expired on 19 December 2022.

10. The initial rent under this Tenancy was £750 pcm. 11. [NAME] is defined as: “[ADDRESS], [POSTCODE].” 12. There is no reference within the lease to any rights of parking.

13. The Tenant’s repair obligations are set out at clause 10.7 which states: “Tenant shall be responsible for the repair, replacement and maintenance in good order and condition of all parts and components of the Premises (other than those specified for repair, preplacement and maintenance by [the] Landlord above), including without limitation the plumbing, wiring, electrical systems, HVAC system, glass and plate glass, equipment and machinery constituting fixtures, unless such repairs or replacements are required as a result of the negligence or willful (sic) conduct of [the] Landlord, its agents or employees and are not otherwise covered by any insurance maintained by [the] Tenant in which event [the] Landlord shall be responsible for such repairs.” 14. However, clause 2.22 also provides that the Tenant is: “not [to] spend money and repairs without our written permission, if you do not get our permission, we do not have to pay for any of the repair costs.” 15. The Landlord covenants at clause 6 to: “Keep the structure and outside parts of [NAME] in repair, including drains, gutters, outside pipes and windows. Keep in proper working order, the installations in the house for supplying water, gas, electricity and sanitation (including basins, sinks, baths and toilets) Keep the heating and hot water systems in proper working order” 16. In the absence of a new Tenancy being entered into, an Assured Periodic Tenancy pursuant to Section 5 (2) of the Housing Act 1988 (the 1988 Act) has arisen such that Sections 13 and 14 of the Act now apply.

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The Law 17. 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 person who was the landlord under the fixed term tenancy immediately before it came to an end to the person who was then the tenant 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” 18. Section 14 of the 1988 Act provides that the Tribunal is required to determine the rent at which [NAME] might reasonably be expected to let in the open market by a willing landlord under an assured tenancy: a. “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 rent) are the same as those of the existing tenancy.” 19. Section 14 (2) of the 1988 Act requires the Tribunal to disregard: a. “Any effect on the rent attributable to the granting of a tenancy to a [NAME]; b. 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; 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.”

5 20. 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.” 21. 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 22. The Tenant completed the Reply Form and advised that: “There are containers and a mobile home parked all across [NAME], limiting parking spaces availability. For this reason many tenants park out of their spaces at the front of the building, making access really difficult. The bins don’t get emptied regularly creating bad smell and attracting rates and foxes. The grass in the small green patches doesn’t get cut often and looks untidy and messy. The building doesn’t get cleaned so we are not sure why we are asked to pay more rent without getting any services in return. The building is located next to the London trainline and therefore really noisy. The building is also located in the middle of a business park, where workers can utilise the available parking spaces at all time[s], making it more difficult for tenants to find a space. The area is also noisy at times as surrounded by businesses who work from early in the morning until late at night. The flats are not soundproofed and therefore its near to impossible to have some privacy. (all pictures attached to email)” 23. The Tribunal has reviewed the photographs provided by the Tenant 24. In addition, the Tenant advised that:

6 “We firmly believe that the proposed rent increase of £150 per month is unjustified given the current offerings and the location of [NAME].” 25. No evidence was provided in respect of rental values. Representations – The Landlord 26. The Landlord did not provide any representations and has not engaged with these proceedings Determination 27. In determining the market rent, 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 a prospective tenant. The current rent, and the period that has passed since that rent was agreed or determined is not relevant.

28. 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.

29. However, as set out above, the Tribunal is required to have regard to the obligations of the Landlord and Tenant in respect of the repair, maintenance and upkeep of [NAME].

30. As set out above, section 14 (2) (c) of the 1988 Act requires the Tribunal to disregard any failure by the Tenant to comply with their lease obligations. However, the Tribunal is to have regard to matters that are not a result of the Tenants’ failure to comply.

31. It is important to stress that the value of services provided by the Landlord is not relevant to the assessment of rent. In this regard, the rent reflects what the market would pay to lease [NAME] as at the relevant date. The rent does not rise or fall proportionately to the value of services provided by the Landlord save to the extent that the market may consider [NAME] to be worth less in the absence of the Landlord fully complying with their obligations.

32. The Tribunal notes the points raised by the Tenant in respect of parking and the surrounding locality and accepts that these are matters that are to be reflected in the value of [NAME] when comparing to market rental evidence.

33. In this regard, neither the Landlord not the Tenant have provided any evidence of value to assist the Tribunal. It has therefore been necessary for the Tribunal to rely upon its own expertise and knowledge of the market.

7 34. The Tribunal therefore determines the market rental of [NAME] to be £900 pcm. The rent payable may not, therefore, exceed this figure. However, this does not prevent the Landlord from charging a lower figure.

35. This rent is to be effective from 1 May 2024.

36. Whilst this may appear to be a relatively large increase when compared to the current passing rent of £750 per month, the Parties should bear in mind that the rent has not been increased since 20 December 2021 (i.e., 2.4 years ago) since when rents have increased significantly.

Name: [NAME] [NAME]: 2 August 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 application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. 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, [NAME], 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).