Tribunal Adjusts Rent Due to Property Condition

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. LON/OOAG/MNR/2024/0291

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 13 [ADDRESS] [POSTCODE]

[NAME] [NAME]

Landlord [APPELLANT]

Tenant [APPELLANT]

1. The rent is: £ 1650.00 1150.00 Per month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 20 May 2025

*3. The amount included for services is

not applicable n/a Per n/a

*4. Service charges are variable and are not included

5. Date assured tenancy commenced 2014

6. Length of the term or rental period periodic

7. Allocation of liability for repairs landlord

8. Furniture provided by landlord or superior landlord n/a

9. Description of premises 4th floor flat in purpose-built block, no lift , two bedrooms one double one single, living room, kitchen and bathroom WC.

[NAME] of Decision 20 May 2025 Amended 3 June 2025

1

Case Reference

: TR/LON/OOAG/MNR/2024/0291

Property : 13 [ADDRESS] [POSTCODE]

Tenant

: [APPELLANT]

Landlord : [APPELLANT] represented by [COUNSEL] of counsel

Date of Objection : 17 May 2024

Type of Application : Determination of a Market Rent sections 13 & 14 of the Housing Act 1988

Tribunal

: [NAME] [NAME] of Decision : 20 May 2025

Date of Amended Decision : 3 June 2025 © CROWN COPYRIGHT 2025

_______________________________________________

DECISION

The Tribunal determines a rent of £1650.00 £1150.00 per calendar month with effect from date of decision which is 20 May 2025. ____________________________________

FULL REASONS

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 The Tribunal, following a request by the landlord, amends the decision of 20 May 2025 under The Tribunal Procedure (First-tier Tribunal) Property Chamber Rules 2013, Rule 50 “Clerical mistakes and accidental slips or omissions” amends the decision in red below.

Background

1. On 15 May 2024 the Landlord served a notice under Section 13(2) of the Housing Act 1988 which proposed a new rent of £1750.00 per month in place of the existing rent of £ 1124.50 per quarter to take effect from 29 September 2024.

2. On 17 May 2024 under Section 13(4)(a) of the Housing Act 1988, the Tenant referred the Landlord’s notice proposing a new rent to the Tribunal for determination of a market rent.

3. The property is 13 [ADDRESS], [POSTCODE]. The property is laid out as one double bedroom, one single bedroom, living room, kitchen and bathroom. The flat is on the 4th floor and has no lift access.

4. Tenancies of the property have been in the Applicant’s family since 1956.

5. The first tenancy was granted for one year, from 29 September 1956 to the Applicant’s father [APPELLANT] (incorrectly spelt [APPELLANT] in the tenancy). Upon his death the tenancy passed to [NAME] wife [NAME], the first statutory succeeded to the tenancy. Upon her death in 2014 the Applicant succeeded to the tenancy, the second succession.

6. [NAME] had a regulated tenancy whose rent was registered by the Rent Officer. The Rent Officer registered on 20 January 2010 at rent of £86.50 per week.

7. Upon the death of [NAME] in 2014, the Regulated tenancy ceased and was under statute replaced by an assured tenancy.

8. The statutory regime, Housing Act 1988, which governs assured tenancies is different from the Rent Act 1977 which regulates the regulated tenancies. The regulated tenancy was replaced by an assured tenancy held by the Applicant on succession from [APPELLANT] upon her death.

9. [NAME] only have a duty to register fair rents and have no involvement in the setting of rents under assured tenancies.

10. On the 8 December 2020 the Respondent served on the Applicant a section 13 Housing Act 1988 Notice to Increase the Rent.

11. The Applicant challenged the Notice of Increase, and the Tribunal held that they did not have jurisdiction because the Notice may have been invalidly served.

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12. On 15 May 2024 the Respondent served a new section 13 Notice on the Applicant

13. On 17 May 2024, the Applicant filed an application referring the Notice to the First tier- Tribunal.

14. On 16 July 2024, the Tribunal sent a letter to the Applicant requesting that the Tribunal receives as copy of the tenancy agreement and the Notice.

15. On 19 July 2024, the Applicant supplies the copies to the Tribunal.

16. On 14 August 2024 the Tribunal sent Directions to the parties.

17. On 19 August 2024, the Tribunal, Judge N Carr wrote to the parties noting that “if [NAME] wishes to make arguments that the form 4 was not properly served on him, he may do so in accordance with the directions dated 14 August 2024, by his permitted response on 18 September 2024. Any such evidence that he relies on, if he is saying he was not served with form 4, will need to be contained in a witness statement signed with a statement of truth.”

18. On 20 August 2024, the Respondent Landlord sent a letter to the Tribunal responding to the Applicant Tenant’s jurisdiction challenge.

Primary Issue Jurisdiction

19. The Applicant raised the issue of jurisdiction in their witness statement.

20. The Respondent noted the previous jurisdiction case and asserted the current Notice of Increase of Rent was valid. When questioned about the previous rent being expressed in terms of rent payable per quarter, and the proposed being requested per month, the Respondent noted that this was done to be more in line with contemporary market charging.

21. The Notice is dated 15 May 2024. It proposes an increase with effect from 29 September 2024 from £1124.50 per quarter to £1750.00 per month.

22. By Decision of 4 November 2024 the Tribunal found that the Notice of Increase of Rent refers to an increase from £1124.50 per quarter to £ 1750.oo per month. The assured tenancy which takes on the terms of the 1956 lease provides that the rent is paid quarterly in the usual quarter days. Whilst the commencement date of the new rent is 29 September 2024 is a one of the usual quarter days, the period of the rent is stated as monthly not quarterly.

23. The Tribunal by decision dated 4 November 2024 found the rent stated in the Notice does not accord with the duration of the rental period, that is a quarter, and so the notice is probably invalid, and the Tribunal does not

4 have jurisdiction to determine a rent under section 13, section 14 of the Housing Act 1988.

Substantive issue Determination of the Rent under section 14 at the initial hearing of the 4 November 2024.

24. By Tribunal decision dated 4 November 2024 the Tribunal determined in the alternative that if it was wrong over the validity of the notice, and the Tribunal does have jurisdiction then the Tribunal determines £4125.00 per quarter effective from 4 November 2024.

Inspection of 4 November 2024 25. The Tribunal did inspect the property for the decision of 4 November 2024. The property comprises a top floor, which is fourth floor flat, in a purpose-built block of Art deco style probably built in the 1920s. There is no lift. The flat comprises, one living room, one bedroom, a kitchen, a bathroom with WC and further room used as a dining room. The property has the original metal framed singe glazed windows. The kitchen is in very dated condition; there is on the [NAME] left on entering the kitchen a cast iron pipe. The pipe appears to take some of the rainwater from the roof to the down pipes. This pipe appears rusty and in the [NAME] area there is evidence of water leakage. The living room has a section of plaster missing from the ceiling. This appears to be caused by water penetration from the flat roof above. There is a bedroom which is double in size. Additionally, a single bedroom, further there is a bathroom. The property has central hearing by way of a gas boiler supplied by the Tenant.

Evidence at the initial hearing of 4 November 2024.

26. At the hearing the Tenant stated their existing rent was £87.50 per week and whilst they did not consider improvements in the general area should be taken into consideration. The Tenant considerers a fair rent increase could take the rent to £100 per week.

27. The Landlord in proposing a rent, first considered a range of comparables in the area. Then made a deduction for the difference in specification of the subject property and that of the comparable.

28. The Tribunal is supportive of this methodology.

29. The Tribunal is determining a rent under section 14 of the Housing Act 1988.

Under section 14 (2)

In making a determination under this section, there shall be disregarded-

(a) Any effect on the rent attributed to the granting of a tenancy to a sitting tenant.

5 (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 [NAME], or (ii) was carried out pursuant to an obligation to his [NAME] being an obligation which does 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.

Determination and Valuation at the initial hearing of 4 November 2024.

30. The lease provides that the Tenant is responsible for all internal repairs. The property is in disrepair. The Tenant can only put into repair if the structure is wind and watertight. In this case it appears that several of the rooms are suffering from damp penetration. This appears on going. Therefore, the Tenant is to some extent frustrated in complying with their tenancy covenants for internal repairs.

31. Having considered of the comparable evidence provided by the Respondent, and consideration of the Tribunal’s own expertise, and general knowledge of rental values in the area, the Tribunal consider that the open market rent for the property in good tenantable condition would be in the region of £2750.00 per calendar month. The Tribunal is mindful that the property has two rooms used as bedrooms but one is only capable of use as a second bedroom. The Tribunal is also mindful that the property is on the fourth floor and there is no lift provision.

32. The property is not in a contemporary letting condition. The Tribunal notes the disrepair caused by water penetration, and the lower specification in terms of kitchen, bathroom and flooring and makes a deduction. The Tribunal understands the boiler and central heating was put in by the current Tenant and so makes an adjustment for that also. Finally, the assured tenancy takes the conditions from the 1956 tenancy which gives responsibility for internal repairs to the Tenant.

33. The full valuation is shown below:

Market rent £2750.00 per calendar month

Less 50% for the reason above £1375.00 per calendar month

Undue Hardship submission at the initial hearing of 4 November 2024.

6 34. The Tribunal directions provide that the Applicant can make a representations to have the effective date of any increase in rent put back to a later date if there is evidence of undue hardship.

35. The Applicant set out a case for undue hardship noting that they were on pension credit.

36. The Respondent was concerned that they had not been sighted on the hardship submission made by the Tenant in advance.

37. The Tribunal offered the Respondent the opportunity to comment on the submission that the Applicant was in receipt of pension credit.

Application for Permission to Appeal by the Landlord

38. An Application for Permission to Appeal dated 4 December 2024 was received from the Landlord. Subsequently the Tribunal set aside the decision and issued Directions dated 20 January 2025 to address the preliminary issue of jurisdiction requesting the parties make representations by 14 February 2025.

39. The Respondent’s submission dated 14 February 2025 comprised three elements. (i) That the Court of Appeal authority [NAME] [NAME] [2023] 1 WLR 1813 entailed a tenancy that was located in Wales and where the Rent Assessment Committees exist and that in England the Rent Assessment Committees ended on 1 July 2013, as such the Court of Appeal decision applies to the Tribunal as it does to the Rent Assessment Committee. (ii) That nothing in the legislation prevents or prohibits the Landlord from proposing a new rent under section 13 of the Act to be payable for a duration that is different from the tenancy. (iii) That the Rent Officer determined rent on a per week basis which is different from the contractual period, and so the proposal of rent paid on a monthly basis is equally valid.

40. The first ground, the Tribunal agrees it does not have jurisdiction to determine whether a Notice is actually invalid, it may however foor the purposes of considering jurisdiction, it may consider that a Notice of Increase is probably invalid.

41. In respect of the second ground. The Tribunal had reference to Manni Investment Company [COMPANY] v Eagle Star Assurance [1997] UKHL where it was determined that if a reasonable person on a reasonable reading of the Notice could have understood what was intended by it, then it should be considered valid. The tribunal considers that in this situation, the Tenant ought to have known what was intended and so the Notice was probably valid.

42. Third, on a reasonable reading of the Notice under [APPELLANT] above, the intention is known.

7 43. The Tenant submitted an email on the 21 January 2025, the contents of which were noted.

44. By Tribunal decision dated 1 April 2025 the Tribunal found that it does have jurisdiction to determine a rent under section 14 of the Housing Act 1988.

45. The Tenant made an Application for Permission to appeal a decision to the Upper Tribunal (Lands Chamber) dated 16 April 2025. The Tribunal by decision dated 28 April 2025 refused the application.

46. The Tribunal issued Directions within the decision of 1 April 2025 for how the remaining substantive matter was to be addressed.

45. The Tribunal requested that if any party had any further submissions, they wished the Tribunal to take into account in addition to those already submitted the additional submissions should be provided to the Tribunal by 15 April 2025.

Supplementary submissions received in accordance with Decision and Directions of 1 April 2025.

Landlords Submissions

46. The Landlord submitted a second witness statement of 56 pages by [NAME] dated 7 April 2025. The witness statement includes a detailed table of analysis of properties in the locality that are available to let. The nine comparable range in size from 527 square feet to 1076 square feet. With the analysis per square foot showing between £2400 per month and £3358 per month with the table showing an average of £3047 per month on an average size of 670 square feet. Mr [NAME] concludes that application of the analysis to the actual size of the flat, which is said to be 504 square feet suggests a rental figure of £2293 per month. The witness statement contains a number of exhibits which show the condition of the comparable properties. The properties are in a good tenantable condition; they also relate to around the time of the witness statement.

Tenants' submissions.

47. The Tenant made no further submissions.

Decision

47. The Tribunal notes the supplementary submission in the form of Mr [NAME] statement. The Tribunal notes the difference in date of the Notice of Increase, that of 29 September 2024 and the contemporary dates of the exhibits in the second witness statement. The Tribunal also notes the difference in quality of property to which the comparable refer.

The Tribunal has reviewed its earlier decision of 4 November 2024 where in the alternative it determined a figure of £ 4125 per quarter. This being derived from a rental level of £2750 per month for the property in good

8 tenantable condition. The Tribunal in its decision of the 4 November 2024 made adjustments for condition, a discount of 50% , taking the rental level to £4125 per quarter, which was equivalent to £1375 per month.

The Tribunal is in receipt of additional information in respect of the market rent of properties in the area. The Tribunal is not in receipt of any submissions which challenge or add to the discussion on the discount for the condition. The Tribunal previously adopted on the 4 November 2024 of 50%.

The Tribunal considering the new rental information provided by Mr [NAME] , determines that should the property be in good tenantable condition, similar to that of the comparables shown in the exhibits then the market rent of the subject premises would be £2300.00 per calendar month.

The Tribunal has no evidence to depart from its previous decision of applying a 50% discount for the condition.

The Tribunal therefore determines a figure of £1650 £1150 per calendar month.

In terms of the effective date of the rent.

Additionally, the undue hardship application was made, and the Tribunal was satisfied so the effective date of the increase would be date of decision 20 May 2025.

The Tribunal therefore determines £1650 £1150 per month from 20 May 2025 for the property.

Chairman: [NAME]:

20 May 2025.

Appeal to the Upper Tribunal A person wishing to appeal this decision to the Upper Tribunal (Property Chamber) on a point of law must seek permission to do so by making a written application to the First-tier Tribunal at the Regional Office which has been dealing with the case which application must: a. be received by the said office within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

9 b. identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking. If the application is not received within the 28 –day time limit, it must include a request for an extension of time and the reason for it not complying with the 28- day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.