Rent Determination for Assured Tenancy - First-tier Tribunal Decision

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00AE/MNR/2022/0184

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 2/3 [ADDRESS], [POSTCODE]

[NAME]

Landlord [NAME] 5 [ADDRESS], [POSTCODE]

Tenant [APPELLANT] & [NAME] [APPELLANT]

1. The rent is: £ 1500 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 6th September 2022

*3. The amount included for services is/is

negligible/not applicable n/a Per

*4. Service charges are variable and are not included

5. Date assured tenancy commenced 6th September 2021 succeeding from regulated tenancy

6. Length of the term or rental period Monthly periodic

7. Allocation of liability for repairs Landlord external and internal

8. Furniture provided by landlord or [NAME] n/a

9. Description of premises 2nd and 3rd floor maisonette, comprising one living room, two bedrooms, a bathroom with WC, centrally heated with double glazing.

[NAME] [NAME] of Decision 1st February 2023

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/OOAE/MNR/2022/0184 Property : 2-3 [ADDRESS] [POSTCODE] Applicant: [redacted] : In Person Respondent : [redacted] : [NAME] of [NAME] : Market Rent under s13 & 14 of the Housing Act 1988 Tribunal member(s) : Mr [NAME] [NAME] MA LLM FRICS

Date and venue of hearing : 1st February 2023 on Papers

Date of Decision : 1st February 2023

DECISION

Decision of the tribunal The tribunal determines the rent at £1500 per month. The rent to have effect from the date in the landlords notice of 25th July 2022. Background 1. The tribunal received an [NAME] under section 13 of the Housing Act 1988 dated 22nd August 2023. This included the landlord’s notice dated 25th July 2022 proposing a new rent to commence on 6th September 2022. The previous rent being £1400 per month and the proposed £1540 per month from 6th September 2022.

2. Neither party requested an inspection nor an oral hearing nor did the tribunal considered one proportionate.

3. The property comprises a maisonette on 2nd and 3rd floors above a shop. The maisonette comprises a living room, kitchen/dinner, two bedrooms a bathroom and WC. The Applicants have lived in the property under a regulated tenancy from 1964 and 1966. Succeeding to the current assured tenancy on the 6th September 2021. The tenancy commenced on the 6th September 2021 with rent payable on the 6th of each month. Applicant submissions.

4. The tenants submissions comprised; the [NAME] form dated 22nd August 2022, the tenancy agreement showing commencement date of 6th September 2021, Notice of Increase of Rent, and a completed reply form undated, with photographs of the interior and some comparable property to let marketing.

5. The [NAME] form notes; The landlord is responsible for structural, external and internal repairs. The tenants' responsibilities are to “keep clean and tidy, repair of my appliances”.

6. The tenants reply states; The property has double glazing installed 25 years ago which is of poor insulation, sound insulation and security. In the living room, there are rotten and broken floor boards. The kitchen has damp on the wall by the boiler. The units are 25 years old and in poor condition.

In bedroom 2 the roof is leaking with water affecting the electrics. In the bathroom the window handle is broken, preventing it from closing. It notes that the double glazing and central heating were provided by the landlord with the curtains, carpets and white goods supplied by the tenants.

7. Additional information has been submitted by the tenant in the form of photographs and two comparable properties marketing literature. The photographs show; Damp around window cills and surrounding areas, damp by the boiler, and damaged kitchen units. Comparables of flats in vicinity and are noted. Respondents Submission The Landlords submission is derived from the reply notice and accompanying material. The landlord supplies a considerable number of properties marketing information, the properties are in good condition and range from £1700 to £2000 There is a letter from the Landlord’s representatives, Bird and Lovibond, stating they were not aware of the repairing issues cited by the tenants in their [NAME] and submission and will prioritise the repairs required. The landlord in the Reply confirms the ownership of curtains, carpets and white goods. Additionally recognises condition is below general market and suggests 10% reduction from good condition market value to reflect.

6. The Notice of Increase of Rent states the rent is to rise from £1400 per month to £ 1540 per month effective from 6th September 2022. The Notice was issued dated 25th July 2023. The Hearing The matter was decided on papers. The Law Validity

7. The tribunal first had to determine that the Tribunal had jurisdiction to hear the [NAME] in order to determine a rent under S14 of the Housing Act 1988. In short, the tribunal must determine that the Landlord’s notice under Section 13(2) satisfied the requirements of that section and was validly served.

8. The Act provides in section 13 (2) as amended by the Regulatory Reform (Assured Periodic Tenancies) (Rent Increases) Order 2003 that the date in paragraph 4 of the Landlord’s notice (the date the new rent becomes payable) must comply with three requirements.

9. The first requirement is that a minimum period of notice must be given before the proposed new rent can take effect.

10. The second requirement is that the starting date must not be less than 52 weeks after the date on which the rent was last increased using this procedure although there are exceptions to this.

11. The third requirement is that the proposed new rent must start at the beginning of a period of the tenancy. Valuation 13. Section 14 of the Housing Act 1988 requires the tribunal to determine the rent at which it considered the subject property might reasonably be expected to be let on the open market by a [NAME] under an assured tenancy.

14. Only if a landlord’s notice complies with each of the requirements referred to above does a tribunal have jurisdiction to determine a rent under section 14 of the Act. The Decision 15.The tribunal determined that these three requirements for validity were met.

16. In coming to its determination under section 14, the tribunal relied on its own general knowledge of rental levels in the area and evidence supplied by the parties.

17. Given the size and nature of the accommodation, given the evidence of similar rental properties supplied by the tenant and the landlord, using its own knowledge of the area, the tribunal determines the rent at £1500 per month effective from the date of Notice of Increase.

Name: [NAME]: 1st February 2023.

8

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 [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

THE LEGISLATION Housing Act 1988 s.13.— Increases of rent under assured periodic tenancies. (1) This section applies to— (a) a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part I of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and (b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period. (2) For the purpose of securing an increase in the rent under a tenancy to which this section applies, the landlord may serve on the tenant a notice in the prescribed form proposing a new rent to take effect at the beginning of a new period of the tenancy specified in the notice, being a period beginning not earlier than— (a) the minimum period after the date of the service of the notice; and (b) except in the case of a statutory periodic [tenancy—] [ (i) in the case of an assured agricultural occupancy, the first anniversary of the date on which the first period of the tenancy began; (ii) in any other case, on the date that falls 52 weeks after the date on which the first period of the tenancy began; and ] (c) if the rent under the tenancy has previously been increased by virtue of a notice under this subsection or a determination under section 14[below—] [ (i) in the case of an assured agricultural occupancy, the first anniversary of the date on which the increased rent took effect; (ii) in any other case, the appropriate date. ] (3) The minimum period referred to in subsection (2) above is— (a) in the case of a yearly tenancy, six months; (b) in the case of a tenancy where the period is less than a month, one month; and (c) in any other case, a period equal to the period of the tenancy. [ (3A) The appropriate date referred to in subsection (2)(c)(ii) above is— (a) in a case to which subsection (3B) below applies, the date that falls 53 weeks after the date on which the increased rent took effect; (b) in any other case, the date that falls 52 weeks after the date on which the increased rent took effect. (3B) This subsection applies where— (a) the rent under the tenancy has been increased by virtue of a notice under this section or a determination under section 14 below on at least one occasion after the coming into force of the Regulatory Reform (Assured Periodic Tenancies) (Rent Increases) Order 2003; and (b) the fifty-third week after the date on which the last such increase took effect begins more than six days before the anniversary of the date on which the first such increase took effect. ]

(4) Where a notice is served under subsection (2) above, a new rent specified in the notice shall take effect as mentioned in the notice unless, before the beginning of the new period specified in the notice,— (a) the tenant by an [NAME] in the prescribed form refers the notice to [the appropriate tribunal] ; or (b) the landlord and the tenant agree on a variation of the rent which is different from that proposed in the notice or agree that the rent should not be varied. (5) Nothing in this section (or in section 14 below) affects the right of the landlord and the tenant under an assured tenancy to vary by agreement any term of the tenancy (including a term relating to rent).

s.14.— Determination of rent by [tribunal] . (1) Where, under subsection (4)(a) of section 13 above, a tenant refers to [the appropriate tribunal] a notice under subsection (2) of that section, the [appropriate tribunal]3 shall determine the rent at which, subject to subsections (2) and (4) below, the [appropriate tribunal]3 consider that the dwelling-house concerned might reasonably be expected to be let in the open market by a [NAME] 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 this Act, as have been given (or have effect as if given) in relation to the tenancy to which the notice relates. (2) In [NAME] a determination under this section, there shall be disregarded— (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 a relevant improvement carried out by a person who at the time it was carried out was the tenant, if the improvement— (i) was carried out otherwise than in pursuance of an obligation to his immediate landlord, or (ii) was carried out pursuant to an obligation to his immediate landlord being an obligation which did not relate to the specific improvement concerned but arose by reference to consent given to the carrying out of that improvement; 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. (3) For the purposes of subsection (2)(b) above, in relation to a notice which is referred by a tenant as mentioned in subsection (1) above, an improvement is a relevant improvement if either it was carried out during the tenancy to which the notice relates or the following conditions are satisfied, namely— (a) that it was carried out not more than twenty-one years before the date of service of the notice; and (b) that, at all times during the period beginning when the improvement was carried out and ending on the date of service of the notice, the dwelling-house has been let under an assured tenancy; and (c) that, on the coming to an end of an assured tenancy at any time during that period, the tenant (or, in the case of [NAME], at least one of them) did not quit. [

(3A) In [NAME] a determination under this section in any case where under Part I of the [NAME] 1992 the landlord or a [NAME] is liable to pay council tax in respect of a hereditament (“the relevant hereditament”) of which the dwelling-house forms part, the [appropriate tribunal] shall have regard to the amount of council tax which, as at the date on which the notice under section 13(2) above was served, was set by the billing authority— (a) for the financial year in which that notice was served, and (b) for the category of dwellings within which the relevant hereditament fell on that date, but any discount or other reduction affecting the amount of council tax payable shall be disregarded. (3B) In subsection (3A) above— (a) “hereditament” means a dwelling within the meaning of Part I of the [NAME] 1992, (b) “billing authority” has the same meaning as in that Part of that Act, and (c) “category of dwellings” has the same meaning as in section 30(1) and (2) of that Act. (4) In this section “rent” does not include any service charge, within the meaning of section 18 of the Landlord and Tenant Act 1985 , but, subject to that, includes any sums payable by the tenant to the landlord on account of the use of furniture [, in respect of council tax] or for any of the matters referred to in subsection (1)(a) of that section, whether or not those sums are separate from the sums payable for the occupation of the dwelling-house concerned or are payable under separate agreements. (5) Where any rates in respect of the dwelling-house concerned are borne by the landlord or a [NAME], the [appropriate tribunal] shall make their determination under this section as if the rates were not so borne. (6) In any case where— (a) [the appropriate tribunal] have before them at the same time the reference of a notice under section 6(2) above relating to a tenancy (in this subsection referred to as “the section 6 reference”) and the reference of a notice under section 13(2) above relating to the same tenancy (in this subsection referred to as “the section 13 reference”), and (b) the date specified in the notice under section 6(2) above is not later than the first day of the new period specified in the notice under section 13(2) above, and (c) the [appropriate tribunal]9 propose to hear the two references together, the [appropriate tribunal] shall make a determination in relation to the section 6 reference before [NAME] their determination in relation to the section 13 reference and, accordingly, in such a case the reference in subsection (1)(c) above to the terms of the tenancy to which the notice relates shall be construed as a reference to those terms as varied by virtue of the determination made in relation to the section 6 reference. (7) 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, 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 committee may direct.

(8) Nothing in this section requires [the appropriate tribunal] to continue with their determination of a rent for a dwelling-house if the landlord and tenant give notice in writing that they no longer require such a determination or if the tenancy has come to an end. (9) This section shall apply in relation to an assured shorthold tenancy as if in subsection (1) the reference to an assured tenancy were a reference to an assured shorthold tenancy.