Tribunal Sets Fair Rent for Property Considering Condition and Services

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HAV/00HQ/F77/2025/0615

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

[NAME] Mr [APPELLANT]

Landlord Ms [APPELLANT]

Tenant Mr [APPELLANT]

1. The fair rent is £596.50 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 16 May 2025

3. The amount for services is n/a Per n/a

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

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

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 £650.00 per Calendar Month.

[NAME] of decision 16 May 2025

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 395.30

PREVIOUS RPI FIGURE Y 360.40

X 395.30 Minus Y 360.40 = (A) 34.90

(A) 34.90 Divided by Y 360.40 = (B) 0.0968

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

If yes (B) plus 1.075 = (C) n/a

If no (B) plus 1.05 = (C) 1.1468

Last registered rent* £520 Multiplied by (C) = £596.34 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £596.50

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

MAXIMUM FAIR RENT = £596.50 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.

© CROWN COPYRIGHT 2025

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : HAV/00HQ/F77/2025/0615 Property : [ADDRESS] [POSTCODE] Applicant Landlord : Ms [COUNSEL] : None Respondent Tenant : Mr [COUNSEL] : None Type of Application :

Section 70 Rent Act 1977 (“the Act”) Determination by the First-Tier Tribunal of the fair rent of a property following an objection to the rent registered by the Rent Officer.

Tribunal Members :

Mr [NAME] [NAME] [NAME] of Inspection : 16th May 2025

Date of Decision

:

16th May 2025

DECISION

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2

Summary of Decision

On 16th May 2025 the Tribunal determined a Fair Rent of £596.50 per month with effect from 16th May 2025.

Background

1. On 18th February 2025 the Landlord applied to the Rent Officer for registration of a Fair Rent for the property.

2. The rent was previously registered on 21st December 2022 at a figure of £520 per month following a determination by a First-Tier Property Tribunal. This rent was effective from 21st December 2022 and included an estimate of £14 per month for services.

3. A new rent was registered by the Rent Officer on 4th March 2025 at a figure of £587.50 per month. This new rent was effective from 4th March 2025.

4. On 11th March 2025 the Tenant objected to the new rent and the matter was referred to the First-tier Tribunal Property Chamber (Residential Property), formerly a Rent Assessment Committee.

5. The Tribunal does not routinely consider it necessary and proportionate in cases of this nature to undertake inspections or hold Tribunal hearings unless either are specifically requested by either party or a particular point arises which merits such an inspection and/or hearing.

6. The Tribunal office issued directions on 25th March 2025 which informed the parties that the Tribunal intended to determine the rent on the basis of written representations subject to the parties requesting an inspection or oral hearing. In his statement to the Tribunal the Tenant requested that the Tribunal inspect the property and an inspection was arranged for 16th May 2025. No request was made by the parties for a hearing.

7. Both parties were invited to include photographs and video within their representations if they so wished and were informed that the Tribunal might also consider information about the property available on the internet.

8. Both Landlord and Tenant made submissions to the Tribunal, and both were present at the inspection. The Landlord had not sent a copy of her submission to the Tenant.

9. These reasons address the key issues raised by the parties. They do not recite each and every point referred to either in submissions or during any hearing. However, this does not imply that any points raised, or documents not specifically mentioned were disregarded. If a point or document was referred to in the evidence or submissions that was relevant to a specific issue, then it was considered by the Tribunal. The Tribunal

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3 concentrates on those issues which, in its opinion, are fundamental to the application.

The Law

10. When determining a fair rent the Tribunal, in accordance with the Rent Act 1977, section 70, had regard to all the circumstances including the age, location and state of repair of the property. It also disregarded the effect of (a) any relevant tenant's improvements and (b) the effect of any disrepair or other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property.

11. 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 emphasised

(a) that ordinarily 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

(b) 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).

12. The Tribunal also has to have regard to the Rent Acts (Maximum Fair Rent) Order 1999 where applicable. Most objections and determinations of registered rents are now subject to the Order, which limits the amount of rent that can be charged by linking increases to the Retail Price Index. It is the duty of the Property Tribunal to arrive at a fair rent under section 70 of the Act but in addition to calculate the maximum fair rent which can be registered according to the rules of the Order. If that maximum rent is below the fair rent calculated as above, then that (maximum) sum must be registered as the fair rent for the subject property.

13. The tenancy is a statutory (protected) periodic tenancy and as such (not being for a fixed tenancy of 7 years or more) is subject to section 11 of the Landlord and Tenant Act 1985 which sets out the landlords statutory repairing obligations; the tenant is responsible for internal decorations.

The Property

14. The property comprises a ground floor studio flat within a Victorian building converted some years ago to provide 5 flats in total. The building is situated close to a busy shopping area, Parkstone Railway Station and there are regular buses passing nearby to Poole and Bournemouth.

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4 15. A common Entrance Hall gives access to the property which comprises a small Hall, Living/Kitchen/Bedroom and a Shower room with WC. The Tenant has use of the small front garden, a single car park space to the rear of the building and a shared bicycle store.

16. The property is heated from an electric feature fire and a Dimplex electric wall heater. Windows are double glazed. The Landlord provides a cooker, fridge and fold down bed. There is no current EPC for the property.

Evidence and Representations

17. The Landlord believed that the tenancy began in October 1987 but at the inspection the Tenant stated that he has lived there for longer.

18. In her submission, which the Tenant had not seen, the Landlord states that carpets and curtains are included but at the inspection the Tenant stated that he had provided the wooden flooring and curtains to the two large windows. This was not disputed by the Landlord.

19. The Landlord also states that £17 of the rent is for services which include cleaning the common areas and gardening.

20. The Landlord provided details of 3 other Studio properties advertised at £750 to £850 per month.

21. The Tenant had sent a copy of his submission to the Landlord. He states that the Tenants in the building each clean some of the common areas and the Landlord cleans the floors once per year. He also maintains the decoration within his property. These points were not disputed by the Landlord.

22. In his submission the Tenant refers to rusty handles to kitchen and bathroom fittings, some defective repointing on the front elevation and inadequate guttering which overflows during heavy rain.

23. At the inspection the Tenant explained that he had a current rat infestation which he states is common in the area as it is close to the railway line. He showed the Tribunal where he had blocked a kickboard in the kitchen area to keep rats out.

24. The Tenant also referred the Tribunal to some damp stains on his ceiling from previous leaks from the flat above, areas where he cleans and treats walls for black mould growth, areas above the windows where some damp penetrates during heavy rainfall. He also referred to a historic matter whereby an owner of an adjoining property had charged him a monthly fee to allow vehicular access across the adjoining property to the parking space and to noise at night from nearby social outlets

25. The Tribunal had regard to the observations and comments by the parties and also relied on its own knowledge and experience of local rental values in determining the rent.

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Determination and Valuation

26. The Tribunal found the property to be a well-situated Studio with reasonable kitchen and bathroom fittings, adequate heating and double gazed windows. Internally it is well maintained by the Tenant, and it has the advantage of an off-road parking space.

27. The Landlord and Tenant appeared to be on good terms, and it was accepted at the inspection that the Tenant provided the wooden flooring and curtains. The Tenant had also provided a more modern fire surround.

28. The Landlord did not dispute that there is an issue with rats gaining access to the property, nor did she dispute that there is some noise disturbance.

29. The Tribunal noted the rather obvious repointing that had been carried out to the front elevation and where original cast iron guttering has been replaced with PVC which overflows during heavy rain.

30. The Tribunal also noted evidence of previous leaks from the flat above and where there is some penetrating dampness through the solid walls above the windows.

31. In determining an ‘open market rent’ the Tribunal had regard to the evidence supplied by the parties and the Tribunal's own general knowledge of market rent levels in the area of Poole. Having done so it concluded that such a likely market rent would be £700 per calendar month.

32. However, the property was not let in a condition considered usual for a modern letting at a market rent. Therefore, it was first necessary to adjust that hypothetical rent of £700 per calendar month particularly to reflect the fact that the flooring and curtains were all provided by the Tenant and there is no washing machine which would not be the case for an open market assured shorthold tenancy.

33. Further adjustments were necessary to reflect the Tenant’s improvement of the fireplace and general condition, including an issue with rats.

34. The Tribunal therefore considered that this required a total deduction of £50 per month made up as follows:

Tenant’s provision of flooring and fireplace £15 No Landlord’s provision of washing machine £10 Tenant’s provision of curtains £5 Tenant’s liability for internal decoration £10 Condition including rat infestation £10

TOTAL per month £50

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6 35. The Tribunal noted the number of properties available to rent in the area as advertised on [NAME] and [NAME], and concluded that there should be no deduction for scarcity as it is considered demand does not outweigh supply of rented properties in the area.

Decision

36. Having made the adjustments indicated above the Fair Rent determined by the Tribunal for the purpose of section 70 of the Rent Act 1977 was accordingly £650 per calendar month.

37. The Section 70 Fair Rent determined by the Tribunal is above the maximum fair rent of £596.50 permitted by the Rent Acts (Maximum Fair Rent) Order 1999 details of which are shown on the rear of the Decision Notice and accordingly we determine that the lower sum of £596.50 per month is registered as the Fair Rent with effect from 16th May 2025.

Accordingly the sum of £596.50 per month will be registered as the Fair Rent with effect from the 16th May 2025 this being the date of the Tribunal’s decision.

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.