Tribunal Determines Fair Rent for Property Under Rent Act 1977

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. TR/LON/00AC/F77/2024/0052

Notice of the Tribunal [NAME] 1977 Schedule 11

Address of Premises The Tribunal members were 134A [ADDRESS], [POSTCODE]

Tribunal Judge Aileen Hamilton-Farey FRICS

Landlord [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair [NAME] is £2,439.00 Per Quarter (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 12 April 2024

3. The amount for services is N/a Per

negligible/not applicable

4. The amount for fuel charges (excluding heating and lighting of common parts) not counting for [NAME] allowance is

N/a Per

negligible/not applicable

5. The [NAME] is not to be registered as variable.

6. The capping provisions of the [NAME] ([NAME]) Order 1999 apply (please see calculation overleaf).

7. Details (other than [NAME]) where different from [NAME] entry

None

8. For information only:

(a) The fair [NAME] to be registered is the maximum fair [NAME] as prescribed by the [NAME] ([NAME]) Order 1999. The [NAME] that would otherwise have been registered was £3,682.20 per quarter.

Chairman Aileen Hamilton- Farey Date of decision 12th April 2024

FR24 [NAME] FIGURE X 381.0

PREVIOUS RPI FIGURE Y 307.4

X 381.0 Minus Y 307.4 = (A) 73.6

(A) 73.6 Divided by Y 307.4 = (B) 0.2394

First application for re-registration since 1 February 1999 YES/NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.2894

Last registered [NAME]* £1891.50 Multiplied by (C) = £2438.90 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £2,439.00

Variable service charge NO If YES add amount for services N/a

[NAME] = £2438.90 Per Quarter

Explanatory Note

1. The calculation of the maximum fair [NAME], in accordance with the formula contained in the Order, is set out above.

2. In summary, the formula provides for the maximum fair [NAME] to be calculated by:

(a) increasing the previous registered [NAME] by the percentage change in the retail price index (the RPI) since the date of that earlier registration and

(b) adding a further 7.5% (if the present application was the first since 1 February 1999) or 5% (if it is a second or subsequent application since that date).

A 7.5% increase is represented, in the calculation set out above, by the addition of 1.075 to (B) and an increase of 5% is represented by the addition of 1.05 to (B).

The result is rounded up to the nearest 50 pence.

3. For the purposes of the calculation the latest RPI figure (x) is that published in the calendar month immediately before the month in which the Tribunal’s fair [NAME] determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the [NAME] is to be registered as variable under section 71(4) of the [NAME] 1977. In such a case the variable service charge is removed before applying the formula. When the amount determined by the application of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair [NAME].

1

Case Reference

: LON/00AC/F77/2024/0052.

Property : 134A [ADDRESS] [POSTCODE].

Tenant

: Mr. [APPELLANT]. [APPELLANT].

Landlord : [APPELLANT].

Date of Objection : 29 December 2023.

Type of Application : Section 70, [NAME] 1977

Tribunal

: [NAME].

Date of Summary Reasons

: 12 April 2024.

_______________________________________________

DECISION

The sum of £2,439.00 will be registered as the maximum fair [NAME] with effect from 12 April 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

REASONS FOR THE DECISION

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 Background 1. Following an objection from the Tenant to the determination of a fair [NAME] by the [NAME], the Tribunal has determined the [NAME] under the provisions of the [NAME] 1977.

Inspection 2. Tribunal did not inspect the property but considered this case based on the papers provided by the parties. This was agreed to by the parties.

Evidence 3. The Tribunal has considered the written submissions provided by the Tenant in that the [NAME] registered by the [NAME] was too high, and that the was seeking advice on the matter. The landlord has remarked that they agree property was unmodernised, did not have central heating or double glazing and was very cold in the winter. The landlords supplied a copy of a tenancy agreement dated 1 April 2022 for an identical property in the same street with an agreed [NAME] of £1,400.00 per calendar month, equivalent to £4,200.00 per quarter.

The Application

4. By an RR1 dated 16 June 2023 the landlord sought an increase in the [NAME]. At the time of the application the registered [NAME] was £1,891.50 per quarter, having previously been registered on 18 August 2021. On the RR1 application the landlord sought an increase to £3,000.00 per calendar quarter.

5. On 14 December 2023, the [NAME] registered a [NAME] of £2,419.50 per quarter, and it is this figure that is objected to by the tenant.

6. The tribunal issued directions on 14 February 2024 that requested the parties provide details of any comparable properties that they wished the tribunal to consider, and any other details of the property that should be taken into consideration. The tenant did not provide any evidence and relied on their statement to the [NAME]. The landlord produced the evidence of an open market letting for a similar property in the same street where the [NAME] had been agreed at £1,400.00 per calendar month, equivalent to £4,200.00 per quarter. The landlord also said that, historically the [NAME] for the subject property had never reached market levels and therefore they sought £3,000.00 per month, which was below market levels.

Determination:

7. The starting point for the tribunal is the market [NAME] for comparable properties in the vicinity. Although the landlord provided evidence of an agreed rental for a similar property, this was two years old at the date of the determination, and in this tribunal’s, view was therefore too low. Using the tribunal’s wide general knowledge of rentals in Greater London, the tribunal considers the subject property, modernised, with white goods, central heating and double glazing would [NAME] for £1,900.00 per month (£5700.00 per quarter).

3 However the subject property is not in the condition of that to be expected from an open market [NAME], and adjustments must be made to reflect those differences. In addition the tribunal is required to make any deductions considered necessary to reflect the level of scarcity of properties in the locality, in accordance with the [NAME] 1977. The tribunal’s valuation is detailed below.

Determination and Valuation

8.

Per quarter: [NAME]

£5,700.00

Less

Differences between the tenancy terms: 5%

( £285.00)

£5,415.00

Less deductions for lack of white goods, carpets Curtains, double glazing and central heating 15%

(£ 812.25)

£4,602.75)

Total:

Less 20% scarcity

(£ 920.55)

Total:

£3,682.20.

9. The Tribunal determines that the fair [NAME] for the property would be £3,682.50 per quarter.

10. The tribunal must then carry out the calculation of the [NAME], as shown on the reverse of the decision form. This produced a [NAME] of £2,439.00 per calendar quarter.

11. The registered [NAME] is the lower of either the fair [NAME] (£3,682.20) or the maximum fair [NAME] (£2,439.00), in this instance the lower is the [NAME] and this is therefore registered as the fair [NAME] with effect from 12 April 2024.

Decision 12. The tribunal registers the [NAME] for the subject property at £2,439.00 per quarter with effect from 12 April 2024.

Chairman: Aileen Hamilton-Farey Date: 12 April 2024.