Rent Adjustment Based on Property Condition and Tenant Improvements

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/37UJ/MNR/2019/0005

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 23 [ADDRESS], [POSTCODE]

[NAME] Mrs [RESPONDENT]

Landlord Mrs [RESPONDENT] & Mr [RESPONDENT] [ADDRESS], [POSTCODE]

Tenant [NAME]

1. The rent is: £683.00 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 2 April 2019

3. The amount included for services is not applicable

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4. Service charges are variable and are not included

5. Date assured tenancy commenced 2 September 1991

6. Length of the term or rental period Periodic

7. Allocation of liability for repairs Landlord & Tenant Act 8. Furniture provided by landlord or superior landlord none 9. Description of premises A mid terraced house comprising hallway, lounge, dining room and kitchen. On the ground floor are two bedrooms and bathroom and the third bedroom on the second floor. Gas central heating. Cellar. Small rear garden.

[NAME] of Decision 2 April 2019

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/37UJ/MNR/2019/0005 Property : 23 [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent’s : Mrs [COUNSEL] & Mr [COUNSEL] : [NAME] [POSTCODE] Type 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 : [NAME] S [NAME] Mrs [NAME] and Date of Determination : The matter was dealt with by a paper determination on 2nd April 2019 Date Detailed Reasons issued : 11 April 2019

DETAILED REASONS

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BACKGROUND

1. On 8th February 2019, 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 £800.00 per calendar month with effect from 2nd April 2019, is dated 5th February 2019.

3. The date the tenancy commenced is stated on the Application Form as being on 2nd September 1991 and is an Assured Shorthold Tenancy. The current rent is stated in the Respondents notice as being £433.58 per calendar month. The rent at the commencement of the tenancy was £117.00 per calendar Month.

4. The Tribunal issued its Decision following the inspection on 2nd April 2019. The Applicant subsequently requested written reasons and these detailed reasons are provided in response to that request.

INSPECTION

5. The Tribunal inspected the property on Tuesday 2nd April 2019 in the presence of the Applicant and the Respondents.

6. The property comprises a substantial mid terraced villa style house of traditional construction having an original pitched slate roof situated in an area of predominantly similar type properties.

7. Briefly the accommodation comprises of steps up to an open front porch, hallway with stairs off to the first floor and cellar off, front lounge, rear dining room and small kitchen on the ground floor. The kitchen is fitted with a limited range of basic units and the Tribunal understands that the worktops and inset stainless steel sink unit have been fitted by the Applicant.

8. On the first floor the landing leads to two double bedroom and bathroom being fitted with a three-piece sanitary suite. The Tribunal understand that the Applicant fitted a sliding door to provide a wardrobe to bedroom 1, the shower over the bath and replaced the W.C.

9. On the second floor is a further double attic bedroom.

10. The house has gas fired central heating although this was installed with the benefit of a ‘Warmfront’ grant at no cost to either the Applicant or Respondents and the Tribunal has therefore disregarded the benefit of the central heating from the rent assessment. There is no double glazing.

11. The Tribunal also understands that the Applicant fitted the [APPELLANT] surround to the lounge and the electric fires to the lounge and dining room. The carpets, curtains and white goods were confirmed to be the Applicants’ and the Applicant had repaired the floor to the dining room.

12. Externally there is a small front forecourt and small rear yard/garden which, the Tribunal understands, was landscaped by the Applicant.

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13. The property was found to be in a condition throughout which is commensurate with its age and type. However, the Tribunal noted numerous cracks to ceilings (although this is not unusual in a property of this age and type) and slipped slates to the roof.

14. The Applicant also referred the Tribunal to damp to the bathroom wall, damp to part of the rear landing ceiling and longstanding damp to the wall of attic bedroom 3.

EVIDENCE

15. The Tribunal received written representations from both parties which were copied to the other party.

16. Neither party requested a hearing and the Tribunal therefore made a determination based upon its inspection and the written submissions received.

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 noted that the property was not in the best condition and if the property was to be marketed today then improvements would be required.

20. In coming to its decision, the Tribunal had regard to the members' own general knowledge of market rent levels in the area of Nottingham. West Bridgford itself is generally considered to be a relatively sought-after residential area.

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 £820.00 per calendar month.

22. The Tribunal then made the following adjustments to reflect the improvements carried out by the Applicant: [redacted] 2) Improvements to kitchen 5.00 3) Repairs to dining room floor 8.00 4) Shower over bath 4.00 5) Sliding wardrobe door 2.00 6) Landscape garden 4.00 7) Carpets and curtains 32.00 8) White goods 20.00 Total £85.00 per month

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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) Lack of double glazing 40.00 2) Repairs to roof 12.00 Total £52.00 per month

24. The Tribunal therefore concluded that an appropriate market rent for the property would be £683.00 per calendar month (£820.00 - £85.00 - £52.00).

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 £683.00 per calendar month.

26. This rent will take effect from 2nd April 2019, being the date of the Respondent’s notice.

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)