Tribunal Sets Capped Fair Rent for Shared Ownership Property

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00BC/F77/2024/0129

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 17 [ADDRESS], [POSTCODE]

Judge O’[NAME] [NAME]

Landlord [COMPANY]

Tenant Miss A [APPELLANT]

1. The fair rent is 567.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 08 July 2024

3. The amount for services is 47.88 Per Calendar Month

negligible/not applicable

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

n/a Per n/a

negligible/not applicable

5. The rent is not to be registered as variable.

6. The capping provisions of the Rent Acts (Maximum Fair Rent) Order 1999 apply (please see calculation overleaf).

7. Details (other than rent) where different from Rent Register entry

n/a

8. For information only:

(a) The fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent that would otherwise have been registered was £ 589.44 per including £ 47.88 per for services.

Chairman Judge O’[NAME] [NAME] of decision 8 July 2024

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 385

PREVIOUS RPI FIGURE Y 320.2

X 385 Minus Y 320.23 = (A) 64.8

(A) 64.8 Divided by Y 320.2 = (B) .202373517.

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) .252373517

Last registered rent* 452.5 Multiplied by (C) = 566.69 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 567

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £567.00 Per Month

Explanatory Note

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

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

(a) increasing the previous registered rent 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 rent determination was made.

4. The process differs where the tenancy agreement contains a variable service charge and the rent is to be registered as variable under section 71(4) of the Rent Act 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 rent.

1

Case Reference

: LON/00BC/F77/2024/0129

Property : 17 [APPELLANT], Chigwell, Essex [POSTCODE]

Tenant

: [NAME]

Landlord : [COMPANY] of Objection : 2 February 2024

Type of Application : Section 70, Rent Act 1977

Tribunal

: Judge O’[NAME], [NAME] of Summary Reasons

: 8 July 2024

_______________________________________________

DECISION

The sum of £567 will be registered as the fair rent with effect from 8 July 2024 being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2

SUMMARY REASONS

Background 1. Following an objection from the landlord to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection 2. The Tribunal did not inspect the property but considered this case on the basis of the papers provided by the parties.

Evidence 3. There were no written submissions from the parties.

Determination and Valuation 4. Having consideration of the comparable evidence proved by the landlord and our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in good tenantable condition would be in the region of £1650 per calendar month. From this level of rent we have made adjustments.

6. The full valuation is shown below:

per calendar month Market Rent

£1650

Less No white goods

-5%

£8.25

No Curtain or floor cover

-5%

£8.25

Less Scarcity

approx. -20% £279

7. The Tribunal determines a fair rent of £1188 per calendar month, or £274 per week.

8. The tenant owns a 50% share in the property and the rent is subject to the following deductions;

Fair rent

£1188 Deduct service charge

(£36.39) Deduct fees

(£11.49)

3 Gross rent

£1140.12

Deduct 5% for repairing obligation (£57.01) Adjust for tenants’ equity

(£541.56)

Add service charges

£36.39 Add fees etc

£11.49

Fair shared ownership rent

£589.44

Decision 9. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £594 per calendar month. The shared ownership fair rent is calculated at £589.44. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £567 . The calculation of the, fair rent, the shared ownership rent and the capped rent is shown on the attached decision form. In this case the capped rent of £567 per calendar month is to be registered.

Chairman: Judge O’[NAME]: 8 July 2024

APPEAL PROVISIONS

These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any request for full reasons should be made within a month. Any subsequent application for permission to appeal should be made on Form RP PTA