Tribunal Sets Fair Rent for London Property

OUTCOME: Dismissed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00AM/F77/2019/0207

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 85 [ADDRESS], [POSTCODE]

Ms [NAME] QC QC Mr [COUNSEL]

Landlord [APPELLANT]

Tenant [NAME] [APPELLANT]

1. The fair rent is 350.00 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 28 February 2020

3. The amount for services is N/A Per

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

N/A Per

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

None.

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 £448.00 per Week.

(b) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the same as/below the maximum fair rent of £350.00 per Week including £0.00 per for services (variable) prescribed by the Order.

Chairman Ms [NAME] QC QC Date of decision Friday 28th February 2020

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 291.9

PREVIOUS RPI FIGURE Y 274.7

X 291.9 Minus Y 274.7 = (A) 17.2

(A) 17.2 Divided by Y 274.7 = (B)

First [NAME] for re-registration since 1 February 1999 - NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.112614

Last registered rent* 314.50 Multiplied by (C) = 349.92 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 350.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £350.00 Per Week

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 [NAME] was the first since 1 February 1999) or 5% (if it is a second or subsequent [NAME] 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 [NAME] of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

© CROWN COPYRIGHT 2013

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AM/F77/2020/0207 Property : 85 [ADDRESS] [POSTCODE] Applicant : [redacted] : N/A Respondent : [redacted] : N/A Type of [NAME] : Determination of a fair rent under section 70 of the Rent Act 1977 Tribunal Members :

Tribunal Judge Brandler Mr Shaw FICS

Date of Decision : 28th February 2020 Date of Reasons :

1st March 2020

DECISION

The sum of £350.00 per week will be registered as the fair rent with effect from 28th February 2020 being the date of the Tribunal’s decision.

2

FULL REASONS Background

1. On 14th August 2019, the landlord applied for registration of a fair rent of £420.00 per week. The rent was previously registered on 13th August 2017 at £314.50 per week effective from 2nd October 2017. On 9th October 2019 the Rent Officer registered a rent of £352.00 per week effective from 13th November 2019.

2. The Rent Officer visited the applicant on 25th September 2019 and made summary notes of the consultation. The applicant had made representations to the rent officer in a letter dated 1st September 2019 setting out problems in the property including windows requiring replacement, rotting timber, remedial works to the kitchen carried out by the tenant, damp and moisture ingress to the bathroom and WC and no facility to wash hands after using the WC on the top floor.

3. The applicant objected to the registered rent by letter dated 30th October 2019 and the matter was referred to the Tribunal.

4. On 6th December 2019 the Tribunal wrote to the parties advising that an inspection was arranged for 28th February 2020 on which date the case would be decided.

5. No further representations were received from the tenant. None were made by the landlord.

Inspection

6. The Tribunal inspected the property on 28th February 2020 in the presence of the tenants, Mr and Mrs [RESPONDENT]. The landlord was not represented.

7. The property comprises a terraced house, circa 1800-1918 with full central heating, 2 rooms, kitchen and wc on the ground floor, 4 rooms a bathroom and 1 wc on the first floor. Neither wc has a handbasin. There is also a basement used for storage, with some dampness noted, and a backyard.

8. On the ground floor there is a large living room with a radiator and windows to the front of the house. Some internal cracks in the walls were noted. The radiators had all been installed by the tenants. They originally installed a boiler, but in 2002 this was replaced by the landlord. They now have a boiler downstairs and a separate boiler upstairs.

9. Also on the ground floor is another large living room. Leading from the hallway on the ground floor are a few stairs down to the kitchen, which leads out to the back yard. The kitchen contains the tenants own white

3 goods and kitchen that cupboards that the tenant installed, although we were told that the landlord broke a cupboard and replaced this.

10. A WC room without handbasin is situated just before you enter the kitchen area.

11. Access to the basement is through a door on the landing outside the kitchen opening up to a steep and difficult staircase. The ceilings are very low in the basement. The basement space includes three rooms and is used for storage although we were told that there had been some flooding in this area.

12. Access to the upper floor is via a staircase from inside the front door. At the first landing is a small double bedroom. A further flight of stairs to the next landing gives access to a large double bedroom with a built-in cupboard. There is a further double bedroom, a large bathroom with a hand basin and an old bath tub and a heated towel rail. There is some mould on the ceiling. The bathroom contains a boiler. The WC is separate, but with no handbasin. There is a radiator on that landing. A further few stairs up provides access to another double bedroom with a radiator under the window. There is a rather large crack in the corner of the room. On the same landing is a store cupboard with cracks in the ceiling.

13. Internal decorations are of a reasonable standard and are the responsibility of the tenant. White goods in the kitchen belong to the tenant.

Evidence

The Landlord’s Case

14. No written representations were received from the landlord.

The Tenant’s case

15. The Tribunal had the benefit of the tenant’s letter dated 1st September 2019 addressed to the rent officer.

The Law

16. When determining a fair rent, the Tribunal, in accordance with section 70 of the Rent Act 1977, has regard to all the circumstances (other than personal circumstances) including the age, location and state of repair of the property.

17. In [COMPANY] v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and [NAME] v [NAME] [1999] QB 92 the Court of Appeal emphasized that ordinarily

4 a fair rent is the market rent for the property discounted for 'scarcity' (i.e. that element, if any, of the market rent, that is attributable to there being a significant shortage of similar properties in the wider locality available for letting on similar terms - other than as to rent - to that of the regulated tenancy) and that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property.

18. The additional factor in this case is whether the rent should be capped under the Maximum Fair Rent Order.

19. The rent to be registered is the lower of the rent under s70 and the capped rent.

Discussion and Valuation

20. The subject property is a large house in a good location with large rooms.

21. The Tribunal relied on its knowledge and experience and considers that this supports a market rent for the subject property of £700.00 per week if let on normal terms in the open market in the condition that the market would expect. The Tribunal then adjusted for the condition, tenant’s own carpets, curtains and white goods and the terms of the tenancy by [NAME] a deduction of 20%.

22. The Tribunal found that there was substantial scarcity of letting property in the locality of Greater London and using its knowledge and experience made a deduction of 20% from the adjusted market rent. The calculation of the s70 rent is set out below.

Market rent per month

£700.00

Less condition 20%

£ 140.00

£560.00

Less scarcity 20%

£112.00

Fair rent

£ 448.00

Decision

23. The section 70 fair rent to be registered is the maximum fair rent as prescribed by the Rent Acts (Maximum Fair Rent) Order 1999. The rent

5 that would otherwise have been registered was £448.00 per week. Details are provided on the back of the decision form.

24. The effective date is the date of the decision.

Accordingly, the sum of £350.00 per week will be registered as the fair rent with effect from 28th February 2020 being the date of the Tribunal’s decision.

D. Brandler

Tribunal Judge Brandler

1st March 2020

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ANNEX - RIGHTS OF APPEAL

• The Tribunal is required to set out rights of appeal against its decisions by virtue of the rule 36 (2)(c) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013 and these are set out below.

• If a party wishes to appeal against 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.