Tribunal Sets Fair Rent for Property Under Rent Act 1977

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00AE/F77/2019/0206

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

Ms [NAME] QC QC Mr [COUNSEL] [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is 151.00 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 £331.00 per Week.

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 275.3

X 291.9 Minus Y 275.3 = (A) 16.6

(A) 16.6 Divided by Y 275.3 = (B) 0.060298

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.110298

Last registered rent* 136.00 Multiplied by (C) = 151.00 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 151.00

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £151.00 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 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 2013

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AE/F77/2020/0206 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] : N/A Respondent : [redacted] : N/A Type of Application : 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 £151.00 per week will be registered as the fair rent with effect from 28th February 2020.

© CROWN COPYRIGHT 2018

2

FULL REASONS

Background 1. In an application dated 23rd September 2019 the landlord applied to the Rent Officer for a registration of the fair rent to £133.86 per week for the above property. The rent had previously been registered on 30th October 2017 by the Rent Officer at £136.00 per week but the Landlord charged only £125.34 per week. Mrs [RESPONDENT] tenancy began on 8th August 1977. No tenancy agreement was available.

1.2 On 31st October 2019 the Rent Officer registered a fair rent of £151.00 per week with effect from the same day.

1.3 By a letter dated 17th November 2019 Mrs [NAME] objected to the rent determined by the Rent Officer and the objection was referred to the Tribunal.

Inspection 2.1 The Tribunal inspected the property on 28th February 2020 in the presence of Mrs [NAME] and her daughter and another person.

2.2 The property is a flat within a converted house. The flat is on the ground and first floors of the house. There is a communal entrance shared with one other property. The front door to the subject property leads into a large hallway. From there is access to a large living room a large kitchen and a bathroom recently decorated by the landlord.

2.3 The living room has a radiator at the front of the room under a UPVC window. The décor is well maintained and the property is very neat and tidy. Carpets and curtains are the tenant’s own. The Tribunal was told that the tenant originally installed the boiler and radiators, but that these have since been renewed by the landlord.

2.4 The kitchen has recently had new cupboards installed by the landlord. All the white goods are the tenant’s own. There is no radiator in the kitchen. There is a UPVC window.

2.5 From the vestibule inside the front door, a corridor leads through to the back of the house and another a large vestibule area with a UPVC back door to the garden. Further on, there is a double bedroom with a radiator and UPVC window. This looks out over a garden of approximately 40 foot. The tenant has sole use of this garden.

3 2.6 Leading back along the corridor is a staircase up to the rooms on the first floor. Upstairs the property has a double bedroom and a box room. That floor also benefits from a WC with a handbasin.

Evidence 3.1 Neither party requested a hearing. Therefore, this matter was considered on the papers and the Tribunal’s own inspection.

3.2 Tenant’s Representations: These were made in a letter dated 17th November 2019 by Mrs [RESPONDENT]. We carefully noted all that was said.

3.3 Landlord’s Representations: The Landlord made no representations other than to say that they did not request a hearing.

The law 4.1 A summary of the law in respect of this case is attached to this decision.

Determination and Valuation 5.1 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 an open market letting. The Tribunal considered the market in and around the area where the property is situated from its own general knowledge, rather than any specific knowledge of market rent levels in the area. No comparables were provided by the landlord. The Tribunal relied upon their expert knowledge and experience. The Tribunal concluded that an open market rent for a three bedroomed flat in the vicinity would be in the region of £460.00 per week. This level of rent assumes a property in a refurbished condition.

5.2 We need to consider any deduction to reflect terms and conditions, lack of radiator in the kitchen, tenant’s own carpets, curtains and white goods, which we consider would have an adverse effect on the open market rent level. Taking these matters into account we consider that a reduction in the open market rent of 10%, fairly reflects these issues. This therefore reduces the open market rent to £414.00 per week.

5.3 Next we need to consider the issue of scarcity. We were not provided with any specific evidence on this issue. However, the issue of scarcity is considered on the basis of the number of properties available to let and also considering the demand for such properties and over a really large area. Therefore, using our general, rather than any specific

4 knowledge and experience, we consider that in the wide geographical area being the area around Greater London, there is an imbalance between supply and demand and this impacts upon rental values. Accordingly, we make a deduction of approximately 20% for scarcity. The full valuation is shown below.

£/week Market Rent

460.00 Less 10%

46.00 To reflect: tenant’s own carpets curtains and white goods, lack of radiator in kitchen and terms and conditions

414.00

Scarcity 20%

82.80

Fair rent

£331.20

Rounded down £331.00

Decision 6.1 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 that would otherwise have been registered was £331.00 per week. Details are provided on the back of the decision form.

Accordingly, the sum of £151.00 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 Date: 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 application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case.

• The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.

• If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed despite not being within the time limit.

• The application 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 making the application is seeking.