Tribunal Sets Fair Rent for Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. JM/LON/00AW/F77/2023/0225

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 53 [ADDRESS], [POSTCODE]

[NAME] [NAME]

Landlord Northumberland and [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £6720.00 Per quarter (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 7 November 2023

3. The amount for services is

Per

negligible/not applicable

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

Per

negligible/not applicable

5. The rent is/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)/ do not apply because 1st registration/15% exemption.

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

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 £ ............................ per ................................... including £ ...................... per ................................. for services (variable).

(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 £ 7807.50 ...... per quarter ....... including £ ......................................... per ................................. for services (variable) prescribed by the Order.

[NAME] of decision 7 November 2023

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 378.4

PREVIOUS RPI FIGURE Y 304

X 378.4 Minus Y 304 = (A) 74.4

(A) 74.4 Divided by Y 304 = (B) 0.244737

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) 1.294768

Last registered rent* 6030 Multiplied by (C) = 7807.26 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 7807.50

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

MAXIMUM FAIR RENT = £7807.50 Per quarter

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.

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Case Reference

: JM/LON/00AW/F77/2023/0225

Property : 53 [ADDRESS], [POSTCODE]

Tenant

: Mr [APPELLANT]

Landlord : [APPELLANT] of Objection : 13 July 2023

Type of Application : Section 70, Rent Act 1977

Tribunal

: Mr [NAME] [NAME] of Summary Reasons

: 7 November 2023

_______________________________________________

DECISION

The sum of £6720.00 per quarter will be registered as the fair rent with effect from 7 November 2023, being the date the Tribunal made the Decision. ____________________________________

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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SUMMARY REASONS

Background

1. Following an objection from the Tenant 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. The Tribunal has consideration of the written submissions provided by the Tenant. There were no written submissions from the Landlord

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the area, we consider that the open market rent for the property in the condition and with the amenities the market would expect would be in the region of £21000.00 per quarter (£7000.00 per month). From this level of rent we have made adjustments in relation to:

The full repairing lease The unimproved nature of the house and subsequent tenants improvements

5. The Tribunal has also made an adjustment for scarcity.

6. The full valuation is shown below:

Fair rent PQTR Market rent 21,000.00 £ less condition & terms 60% 12,600.00 -£ adjusted rent 8,400.00 £ - £ less scarcity off adj rent 20% 1,680.00 -£ Fair rent 6,720.00 £

7. The Tribunal determines a rent of £6720.00 per quarter.

3 Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £6720.00 per quarter. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £7807.50 per quarter. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £6720.00 per quarter is to be registered as the fair rent for this property.

Chairman: [NAME]: 7 November 2023

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 subsequent application for permission to appeal should be made on Form RP PTA