Tribunal Sets Fair Market Rent of £600 for Shared Property

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. CHI/00HB/MNR/2023/0269

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 [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT] [NAME] Mr [RESPONDENT]

Landlord Mr [RESPONDENT] [NAME] 184 [ADDRESS], [POSTCODE]

Tenant Mr [APPELLANT] [NAME]

1. The rent is: £ 600.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 07 December 2023

3. The amount included for services is not applicable n/a Per n/a

4. Date assured tenancy commenced 07 December 2021

5. Length of the term or rental period Periodic

6. Allocation of liability for repairs Landlord

7. Furniture provided by landlord or superior landlord Two wardrobes, bedframe.

8. Description of premises First-floor room in a 5-tenant shared house. Communal kitchen and bathroom. Rent inclusive of utilities and cleaning.

[NAME] of Decision 11 January 2024

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : CHI/00HB/MNR/2023/0269

Property : [ADDRESS], [POSTCODE]

Applicant Tenant : [COUNSEL] [NAME] : None

Respondent Landlord : [COUNSEL] [NAME] : None

Type of application : Determination of a Market Rent

Sections 13 & 14 Housing Act 1988

Tribunal member(s) : [NAME]

[NAME]

Mr [NAME] J [NAME] of decision : 11 January 2024

REASONS

© CROWN COPYRIGHT

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Decision of the Tribunal

On 11 January 2024 the Tribunal determined a Market Rent of £600.00 per month to take effect from 7 December 2023.

Background

1. By way of an application received by the Tribunal on 10 November 2023 the Applicant tenant of [ADDRESS], [POSTCODE] (hereinafter referred to as “the property”) referred a Notice of Increase in Rent (“the Notice”) by the Respondent landlord of the property under Section 13 of the Housing Act 1988 (“the Act”) to the Tribunal.

2. The Notice, dated 12 October 2023, proposed a new rent of £1,000.00 per month in lieu of a passing rent of £600.00 per month, to take effect from 7 December 2023.

3. By an agreement in writing the property was let to the tenant under a Non- Assured Tenancy Agreement commencing on 7 December 2021. A copy of the tenancy agreement was provided.

4. On 24 November 2023 the Tribunal issued Directions advising the parties that it considered the matter suitable for determination on the papers unless either party objected, in writing, within 7 days. The parties were also advised that no inspection would be undertaken. No objections were received.

5. The Directions required the landlord and tenant to submit their completed statements to the Tribunal by 8 December 2023 and 22 December 2023 respectively, with copies to be sent to the other party. Submissions were received from the tenant. No submissions were received from the landlord.

6. Having reviewed the submissions the Tribunal concluded that the matter remained capable of being determined fairly, justly and efficiently on the papers, consistent with the overriding objective of the Tribunal.

7. These reasons address in summary form the key issues raised by the parties. They do not recite every point referred to in submissions but, instead, concentrate on those issues which, in the Tribunal’s view, it considers fundamental to the application.

Law

8. In accordance with the terms of Section 14 of the Act, the Tribunal is required to determine the rent at which it considers the subject property might reasonably be expected to let on the open market, by a willing landlord, under an assured tenancy, on the same terms as the actual tenancy.

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9. In so doing, and in accordance with the Act, the Tribunal ignores any increase in value attributable to tenants’ improvements and any decrease in value due to the tenants’ failure to comply with any terms of the tenancy.

The Property

10. In accordance with current Tribunal policy, the Tribunal did not inspect the property, but did view it externally via information obtained from publicly available online platforms.

11. The property is a first-floor room in a 5-person shared house with communal facilities. The property is located in an established residential area, convenient for local facilities and public transport.

12. Private accommodation extends to one room with two wardrobes and a bedframe provided. Kitchen and bathroom facilities are shared with fellow tenants. There is a communal garden to the rear.

13. The property is heated by a gas fired central heating system. Windows are double glazed. Carpets, curtains and white goods are supplied by the landlord.

14. Rent is inclusive of utility and cleaning costs.

Submissions – Tenant (summarised)

15. Submissions include a series of undated photographs of the entrance hall, stairs and landing, kitchen, bathroom, bedroom and garden.

16. The tenant refers to various issues with the property, some evidenced by dated photographs, including:

i. Overcrowding ii. Small kitchen iii. Single bathroom serving 5 tenants iv. Inadequate bathroom ventilation resulting in spot mould v. General disrepair vi. Intermittent heating faults vii. Poor cleanliness viii. Lack of communal lounge ix. Poor sound insulation x. One double electrical socket within the tenant’s room xi. Lack of fire safety equipment and smoke detectors xii. Unkempt garden with no rain shelter

17. The tenant did not rely on any comparable rental evidence.

Submissions – Landlord (summarised)

18. None provided.

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Determination

19. The Tribunal has carefully considered all the submissions before it.

20. The Tribunal determines a market rent for a property by reference to rental values generally and, in particular, to the rental values for comparable properties in the locality. The Tribunal has no regard to the current rent and the period of time which that rent has been charged, nor does it take into account the percentage increase which the proposed rent represents to the passing rent. In addition, the legislation makes it clear that the Tribunal is unable to account for the personal circumstances of either the landlord or the tenant.

21. The Tribunal assesses the rent for the property as at the date of the landlord’s Notice. The Tribunal disregards any improvements made by the tenant but has regard to the impact on rental value of disrepair which is not due to a failure of the tenant to comply with the terms of the tenancy.

22. In the first instance, the Tribunal determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition that is considered usual for such a market letting.

23. Neither party submitted any comparable evidence. The Tribunal therefore relied upon its own expert knowledge as a specialist Tribunal and determined that the open market rent of the property, in good tenantable condition, was £700.00 per month.

24. Once the hypothetical rent was established it was necessary for the Tribunal to determine whether the property meets the standard of accommodation, repair and amenity of a typical modern letting.

25. In the absence of any submissions from the Respondent the Tribunal found the tenant’s photographs useful. The Tribunal finds it evident that the shared facilities are limited and, in part, poor, particularly as the facilities serve multiple tenants. Furthermore, the Tribunal considers both the bathroom and kitchen small for the number of occupiers, and the white goods to be in poor condition.

26. The Tribunal also has regard to the undisputed evidence of intermittent heating faults, some general disrepair, a lack of power points within the bedroom and the alleged lack of fire protection measures within the property.

27. Having regard to the submissions before it the Tribunal finds that the property falls short of the standard required by the market.

28. In reflection of such differences, the Tribunal makes a deduction of £100.00 per month from the hypothetical rent to arrive at an adjusted open market rent of £600.00 per month.

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29. The rent of £600.00 per month, inclusive of utility and cleaning charges, will take effect from 7 December 2023, that being the date stipulated within the landlord’s notice.

30. The tenant applied for any increase in rent to commence from the date of determination. However, as the Tribunal has determined the rent at £600.00 per month there is no increase. Accordingly, the point falls away.

RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to [EMAIL] to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for 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.

4. The application for permission to appeal must 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.