Tribunal Sets Fair Rent for Property with Variable Service Charges

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. MAN/00EM/F77/2024/0099

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 18 Easter Wynd Berwick upon Tweed [POSTCODE]

I Jefferson K Usher

Landlord [APPELLANT]

Tenant Ms [APPELLANT]

1. The fair rent is £330.05 Per Calendar month (excluding water rates but including any council tax payable by the tenant to the landlord and any amounts in paras 3&4)

2. The effective date is The date of the decision (see below)

3. The amount for services is £209.32 Per month

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

N/A Per N/A

5. The rent is 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

Registered Rent is £330.05pcm inc. of £209.32 service charge pcm is variable. Gross Rent £241.46 pcm. (50% ownership.)

8. For information only:

The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the below the maximum fair rent prescribed by the Order of £374.82 per pcm including £209.32 per pcm for services variable

Chairman I Jefferson Date of decision 17.10.2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 389.9

PREVIOUS RPI FIGURE Y 345.2

X 389.9 Minus Y 345.2 = (A) 44.7

(A) 44.7 Divided by Y 345.2 = (B) 0.1295

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.1795

Last registered rent* 140.0 Multiplied by (C) = 165.13 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 165.50

Variable service charge Yes If YES add amount for services £209.32

MAXIMUM FAIR RENT = £374.82 Per Calendar 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.