Rent Adjustment Based on Property Condition and Tenant Improvements

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/31UC/MNR/2023/0030

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 937, [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT]

Landlord [RESPONDENT] 14, [ADDRESS], [POSTCODE]

Tenant [NAME]

1. The rent is: £193 Per week (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 28/06/2023

3. The amount included for services is not applicable

Per

4. Date assured tenancy commenced 01/10/1995

5. Length of the term or rental period Six months

6. Allocation of liability for repairs As per Landlord and Tenant Act

7. Furniture provided by landlord or superior landlord None

8. Description of premises An established bay-fronted semi-detached house comprising porch, hallway, lounge, dining room, and small kitchen with store off. Two double bedrooms, one single bedroom, bathroom fitted out as a wet room. Covered rear porch, store, and garage. Garden to front and rear. Gas central heating. Part double glazing.

[NAME] of Decision 28/6/23

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/OOFN/MNR/2023/0030 Property : 937 [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent’s : [COUNSEL] : [COUNSEL] of application : Application under Section 13(4) of the Housing Act 1988 referring a notice proposing a new rent under an Assured Periodic Tenancy to the Tribunal Tribunal members : Mr [NAME] Mr [NAME] and Date of Determination : The matter was dealt with by a Paper Determination on 28th June 2023

DETAILED REASONS

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BACKGROUND

1. On 3rd March 2023, the Applicant (tenant of the above property) referred to the Tribunal, a notice of increase of rent served by the Respondent (landlord of the above property) under section 13 of the Housing Act 1988.

2. The Respondent’s notice, which proposed a rent of £225.00 per week with effect from 29th March 2023, is dated 30th January 2023.

3. The date the tenancy commenced is stated on the Application Form as being on 11th September 1995 and is stated by the Applicants as being an Assured Tenancy. The current rent is stated in the Respondents notice as being £162.50 per week.

4. The Tribunal issued its Decision following the inspection and paper determination on 28th June 2023. The Respondent subsequently requested written reasons and these detailed reasons are provided in response to that request.

INSPECTION

5. The Tribunal carried out an inspection of the property which comprises a bay fronted semi-detached house located on a service road off the main [ADDRESS]. It is of traditional brick construction surmounted by a pitched roof.

6. Briefly the accommodation comprises of entrance porch, hallway with stairs off to the first floor, lounge, separate dining room and small kitchen with store off below the stairs. The kitchen is fitted with a limited number of old units in poor condition.

7. On the first floor the landing leads to two double bedrooms, one single bedroom and bathroom which has been converted into a wet room.

8. At the back door is a covered porch area with store and WC off. There is a brick-built garage. This area is in generally poor condition.

9. The house has gas fired central heating provided by the combination boiler located in the wet room. There is limited double glazing.

10. Externally there is a small front garden with driveway to the garage. To the rear is a small garden with patio and lawn. The Tribunal understands that the garden included in the tenancy, extends beyond that area maintained by the Applicants.

11. The property was noted to be in a condition throughout which was generally commensurate with its age and type subject to the comments below.

EVIDENCE

12. The Tribunal received written representations from the Applicant which was copied to the Respondent.

13. Neither party requested a hearing.

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THE APPLICANT’S SUBMISSIONS

14. In summary Applicant submitted:

1) That he had complained to the Local Authority Environmental Health Department regarding repairs required to the property.

2) That the gutters leaked.

3) That the French door to the rear was ill fitting and draughty.

4) That there was a hole to the side passage door allowing water into the passageway.

5) That there was internal mould to some external walls.

6) There is rot to original single glazed windows.

7) There is plaster falling off the pantry walls.

8) The concrete garage roof is cracked with concrete falling off and allowing water ingress.

9) That he had fitted the fire to the lounge.

10) That during their tenancy they had carried out both internal and external decorations.

15. To support his submissions the Applicant provided photographs of some the various defects.

16. During its inspection the Tribunal noted evidence of penetrating damp, probably from a defective gutter, leaking gutters and downpipes, rot to timber window cills and defective porch doors.

THE LAW

17. In accordance with the terms of section 14 Housing Act 1988 the Tribunal proceeded to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy.

18. In so doing the Tribunal, as required by section 14(1), ignored the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act.

THE TRIBUNAL’S DECISION

19. The Tribunal determined that if the property was to be marketed today then considerable improvement and upgrading would be required. All the carpets and floor coverings (except to the kitchen) were understood to have been provided by the Applicant together with curtains and white goods.

20. In coming to its decision, the Tribunal had regard to the members' own general knowledge of market rent levels in the area of Leicestershire. Rothley itself is generally considered to be a relatively sought-after residential area with good access to both Leicester and Loughborough.

21. Having regard to the general level of rents in the area the Tribunal concluded that if the subject property had been in good condition the market rental value would have been £250.00 per week.

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22. The Tribunal then made the following adjustments to reflect the improvements carried out by the Applicant: [redacted]

1) Fire to lounge 1.00 2) Laminate Flooring 3.00 3) Curtains 3.00 Total £7.00 per week

23. However, the property as inspected by the Tribunal was not in the condition that would be expected in the open market and the Tribunal therefore also made the following deductions to reflect the condition of the property as follows:

1) Defective doors to porch and rear 1.00 2) Kitchen refit 10.00 3) Damp to walls/defective gutters 5.00 4) Defective garage roof 2.50 5) Part single glazing 7.50 6) Poor condition of rear stores/lobby 2.00 7) Carpets (except kitchen) 7.00 8) White Goods 5.00 9) Decoration 10.00 Total £50.00 per week

24. The Tribunal therefore concluded that an appropriate market rent for the property would be £193.00 per week (£250.00 - £7.00 - £50.00).

25. The Tribunal therefore determined that the rent at which the property might reasonably be expected to be let on the open market would be £193.00 per week.

26. In his submissions the Applicant submitted that he and his wife were both disabled and the Tribunal therefore exercised its discretion and determined that the rent would take effect from 28th June 2023 being the date of the determination rather than 29th March 2023, being the date on the Respondents notice of increase.

APPEAL

27. Any appeal against this Decision can only be made on a point of law and must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal the party appealing must apply, in writing, to this Tribunal for permission to appeal within 28 days of the date of issue of this Decision, (or, if applicable, within 28 days of any decision on a review or application to set aside) identifying the decision to which the appeal relates, stating the grounds on which that party intends to rely in the appeal, and stating the result sought by the party making the application.

[NAME] First-tier Tribunal Property Chamber (Residential Property)