Tribunal Sets Fair Rent for Protected Tenancy Under Rent Act 1977

OUTCOME: Allowed

FR24 First-tier Tribunal – [NAME] No. LON/00BG/F77/2023/0305

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 27a [ADDRESS], [POSTCODE]

[NAME] Mr [APPELLANT] JP CQSW

Landlord [NAME]

Tenant Ms [APPELLANT] & Mr [APPELLANT]

1. The fair rent is 179.50 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 04 December 2023

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

negligible/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

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 [NAME] 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 £302.40 per week.

[NAME] of decision 4th December 2023

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 377.8

PREVIOUS RPI FIGURE Y 292.0

X 377.8 Minus Y 292.0 = (A) 85.80

(A) 85.80 Divided by Y 292.0 = (B) 0.2938

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) 1.3438

Last registered rent* £133.50 Multiplied by (C) = £179.40 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £179.50

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

MAXIMUM FAIR RENT = £179.50 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.

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Case Reference

: TR/LON/OOBG/F77/2023/0305 Property : 27A [ADDRESS] [POSTCODE] Tenant

: Ms [APPELLANT] & Mr [APPELLANT] [NAME] Landlord : [NAME] of Application : Determination of a Fair Rent under section 70 of the Rent Act 1977 Tribunal

: Mr [NAME] (Hons) MA LLM

FRICS Mr [NAME] JP CQSW HMCTS Code : Hearing on papers no inspection (paper, video, audio) Date of Decision : 4th December 2023 Date of Statement of Reasons: 4th December 2023

_______________________________________________ FIRST - TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY)

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Statement of Reasons

____________________________________

© CROWN COPYRIGHT 2023

Decision 1.The decision of the Tribunal is that the Fair Rent of £179.50 per week is determined with effect from 4th December 2023. Background 2.The Rent Officer, received an application from the landlord dated 6th June 2023 to re-register a fair rent, at £184.75 per week. 3.Prior to the application, the Rent Officer had registered a rent of £133.50 per week with effect from 24th February 2020. Following the application, the Rent Officer registered a fair rent of £179.00 per week, with effect from 25th August 2023. 4.In a letter undated on or around 4th September 2023 the tenant Mr [APPELLANT] objected to the rent registered and the matter was referred to the First tier Tribunal ([NAME]) (Residential Property). 5.Directions were issued by the Tribunal on the 10th October 2023. The Directions made provision for the filing with the Tribunal of the parties’ respective written submissions and, in particular, for the completion of a reply form giving details of the Property and including any further comments the parties wished the Tribunal to take into account in making its determination. The tenancy is a statutory (protected) periodic tenancy. The tenancy (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. Relevant Law

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6. Provisions in respect of the jurisdiction of the Tribunal and the determination of a fair rent are found in Schedule 11, Part 1, paragraph 9(1) to the Rent Act 1977, as amended by paragraph 34 of the Transfer of Tribunal Functions Order 2013, and section 70 of the Rent Act 1977. Rent Act 1977 Schedule 11, Part 1, paragraph 9 (as amended) “Outcome of determination of fair rent by appropriate tribunal 9.-(1) The appropriate tribunal shall- (a) if it appears to them that the rent registered or confirmed by the rent officer is a fair rent, confirm that rent; (b) if it does not appear to them that that rent is a fair rent, determine a fair rent for the dwelling house.” Section 70: Determination of fair rent (as amended) “(1) In determining, for the purposes of the Part of this Act, what rent is or would be a fair rent under a regulated tenancy of a dwelling house, regard shall be had to all the circumstances (other than personal circumstances) and in particular to- (a) the age, character, locality and state of repair of the dwelling-house, … (b) if any furniture is provided for the use under the tenancy, the quantity, quality and condition of the furniture [, and (c) any premium, or sum in the nature of a premium, which has been or may be lawfully required or received on the grant, renewal, continuance or assignment of the tenancy.] (2) For the purposes of the determination it shall be assumed that the number of persons seeking to become tenants of similar dwelling-houses in locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling-houses in the locality which are available for letting on such terms.

(3) There shall be disregarded-

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(a) any disrepair or other defect attributable to a failure by the tenant under the regulated tenancy or any predecessor in title of his to comply with any terms thereof; (b) any improvement carried out, otherwise than in pursuance of the terms of the tenancy, by the tenant under the regulated tenancy or any predecessor in title of his; (c), (d) …[repealed] (e) if any furniture is provided for use under the regulated tenancy, any improvement to the furniture by the tenant under the regulated tenancy or any predecessor of his or, as the case may be, any deterioration in the condition of the furniture due to any ill-treatment by the tenant, any person residing or lodging with him, or any sub-tenant of his.”

Consequently, when determining a fair rent the Tribunal, in accordance with the Rent Act 1977, section 70, has regard to all the circumstances including the age, location and state of repair of the Property. It also disregards the effect of (a) any relevant Tenant’s improvements and (b) the effect of any disrepair or defect attributed to the Tenant of any predecessor in title under the regulated tenancy, on the rental value of the Property. 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 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. (The rents may have to be

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adjusted where necessary to reflect any differences between the comparables and the subject property).

In considering scarcity under section 70 (2), the Tribunal recognises that: (a) there are considerable variations in the level of a scarcity in different parts of the country and that there is no general guidance or “rule of thumb” to indicate what adjustments should be made; the Tribunal, therefore, considers the case on its merits; (b) terms relating to rents are to be excluded. A lack of demand at a particular rent is not necessarily evidence of scarcity; it may be evidence that the prospective tenants are not prepared to pay that particular rent. Fair rents are subject to a capping procedure under the Rent Acts (Maximum Fair Rent) Order 1999 which limits increases by a formula based on the proportional increase in the Retail Price Index since last registration. The only exception to this restriction on a fair rent is provided under paragraph 7 of the Order where a landlord carries out repairs or improvements which increase the rent by 15% or more of the previous registered rent. Submissions Landlord 7. Submissions from the landlord comprised; 8.An application form dated 6th June 2023 9.A completed Reply Form, noting that an inspection nor hearing was not required, the property comprises a ground floor flat, with one living room, one kitchen, three bedrooms and a bathroom, that there is central heating provided by the landlord, permit parking is available and access to private gardens.

Tenant 10.Submissions from the tenant comprised;

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11.A completed reply form noting that neither an inspection nor a hearing was required, the reply form noted the condition of the rooms within the flat, that double glazing was present and installed by the landlord, as was the central heating, additionally, carpets, curtains and white goods also present but supplied by the tenant. It was noted that no improvements had occurred since 2008, and the exterior of the house requires decorating. 12.Additionally noted was a note from Mr [NAME] in response to the Rent Officers letter of 6th July 2023, in which Mr [NAME] comments on condition and capping of rent increases. 13.There is a further email dated 4th September 2023 objecting to the [NAME] and commenting on rental increases of the registered rent. Determination Reasons for Decision 14.The rental value of property determined under section 70 was calculated as follows;

Market rent - derived from comparable properties in contemporary letting condition

£600.00 per week Deduction for condition 30% £180.00 per week -------------------------- £420.00 per week Deduction for terms and conditions of the tenancy compared with assured shorthold comparables 10% £42.00 per week ------------------------------- £378.00 per week Deduction for scarcity under Act 20%

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£75.60 per week ------------------------------ £ 302.40 per week. Rent Acts (Maximum Fair Rent) Order 1999 15. The rent to be registered is limited by the Rent Acts (Maximum Fair Rent Order) 1999. The rent calculated in accordance with section 70 of the Act is £302.40 per week. 16.Accordingly, the sum of £179.50 per week will be registered as the fair rent with effect from 4th December 2023 being the date of the Tribunal’s decision. Valuer Chair: [NAME]: 4th December 2023 Extended reasons: 4th December 2023

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal 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 should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber 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

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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. Please note that if you are seeking permission to appeal against a decision made by the Tribunal under the Rent Act 1977, the Housing Act 1988 or the Local Government and Housing Act 1989, this can only be on a point of law. If the First-tier Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber). _____________________________________________________