Tribunal Sets Fair Rent for Regulated Tenancy Property

OUTCOME: Allowed

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Case Reference

: CAM/00MA/F77/2019/0033

Property

: 2 [ADDRESS] [POSTCODE]

Applicant (Landlord) : [APPELLANT]

: [APPELLANT]

Respondent (Tenant) : Mr [APPELLANT] [NAME] of [NAME] : Determination of a fair [NAME] under

Section 70 of the [NAME] 1977

Tribunal Members : Judge JR Morris Mrs [NAME] of Decision : 7th January 2020

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2020

DECISION

1. The [NAME] for the Property payable from 7th January 2020 is determined to be £680.00 per calendar month which is below the capped [NAME] under the [NAME] ([NAME]) Order 1999.

REASONS

THE PROPERTY

2. The Property is a self-contained ground floor maisonette in a two-storey building of brick and render under a pitched slate roof. The building is believed to have originally been a detached 4 bedroomed house built in the 1950s and converted into two maisonettes in the 1970s. There are gardens to the front and rear of the Property. At the rear there is parking space for one vehicle for each of the maisonettes.

Accommodation The Property comprises a living room, kitchen two bedrooms and a bathroom. FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Services The Property has mains electricity, gas, water and drainage. Space and water heating is by a gas fired central heating system.

Furnishing

The Property is let unfurnished.

Location The Property is situated in a residential area off Sandhurst town centre.

THE TENANCY

3. The Tenancy is a statutory regulated weekly tenancy, which commenced on 1st January 1968. Being a tenancy for 7 years or less, section 11 of the Landlord and Tenant Act 1985 applies in respect of Landlord’s repairing obligations. The Tenant is responsible for internal decoration.

THE REFERRAL

4. The current [NAME] is £655.00 per calendar month registered on 11th September 2017 and effective from 3rd November 2017. The [NAME] was below the capped [NAME] under the [NAME] ([NAME]) Order 1999. The Landlord by a notice in the prescribed form received by the Valuation Office Agency on 6th August 2019 proposed a new [NAME] of £786.00 (expressed on the form as £9,432.00 per annum). On 23rd September 2019 the [NAME] registered a [NAME] of £680.00 per calendar month effective from 3rd November 2019. The registered [NAME] was below the capped [NAME] under the [NAME] ([NAME]) Order 1999. On 17th October 2019 the Landlord referred the [NAME]’s assessment to the Tribunal. The referral was by way of written representations and an oral hearing requested by the Tenant. The [NAME] stated that it did not intend to attend a hearing. The tribunal noted that the issues raised by the Tenant related essentially to the condition of the Property and so were dealt with through the Inspection.

THE INSPECTION

5. The Tribunal inspected the Property in the presence of the Tenant.

6. Externally the Property is in fair condition. However, the soffits, fascia and barge boards are in need of redecoration and possibly refurbishment. The cast iron rainwater goods are showing signs of deterioration and there is evidence of the guttering leaking from the marking on the walls and path. The doors are upvc and the windows are double glazed units in upvc frames. There is a crack across the rendered front of the Property. This does not appear to indicate any movement of the building but may be due to some detachment of the render, which is in need of redecoration. The garden path at the rear is roughly done. There is access to the parking spaces shared by the first-floor maisonette at the rear. Vehicular access to these spaces is over the yard of the commercial premises next door, which is currently vacant.

3 7. Internally the kitchen which originally was only fitted with a kitchen sink unit, is basic and dated and there are insufficient electrical sockets by modern standards. The bathroom and w.c. are also basic and dated. Floorcoverings, curtains and white goods are not provided by the Landlord.

THE LAW

8. The law applicable to this [NAME] is contained in the [NAME] 1977.

REPRESENTATIONS

9. The Tenant stated that the Landlord had repaired the boiler, unblocked the kitchen sink pipe, repaired a leaking pipe in the bathroom, replaced the garden fence and made some repair to the garden path. However, these were only carried out after a considerable wait following many calls by the Tenant.

10. The Tenant said that the first-floor maisonette has three bedrooms and is let for £155.00 per week about £670.00 per calendar month. The Tenants have been there for 11 years and have not had an increase in two years. The Tenant felt the discrepancy between rents was unfair

11. The increase asked for by the Landlord was a rise of 16.75% reduced to 11% in their representations but both are more than the 3% rise in pensions.

12. The [NAME] stated in written representations that the property was a self-contained purpose-built ground floor flat comprising two bedrooms, kitchen, lounge and bathroom with central heating, double glazed windows and doors, front and rear gardens and off-road parking.

13. It was submitted that similar properties in the area achieve a [NAME] of between £9,600.00 and £10,740.00 per annum which equates to £800.00 and £895.00 per calendar month. The rental values for the following properties all of which had two bedrooms, a kitchen and a bathroom and were let on assured shorthold tenancies were submitted as being comparable:  [ADDRESS]14 [NAME] of £9,600.00 per annum or £800.00 per calendar month  Shepherds Chase GU19 [NAME] of £9,600.00 per annum or £850.00 per calendar month  [ADDRESS]18 [NAME] of £10,200.00 per annum or £850.00 per calendar month  [ADDRESS]19 [NAME] of £10,500.00 per annum or £875.00 per calendar month  [ADDRESS]15 [NAME] of £10,740.00 per annum or £895.00 per calendar month Details from the [NAME] site were provided.

14. In view of the above the [NAME] submitted that the market [NAME] to be £10,248.00 per annum equating to £854.00 per calendar month with carpets and white goods.

4 15. The following calculation of the annual [NAME] was provided: [NAME]

£10,248.00 (£854.00) Plus Carpets/white goods £1,025.00 (£85.40) Plus Updated kitchen/bathroom £2000.00 (£166.00) Uncapped fair [NAME]

£13,273.00 (£1,106.00 per calendar month)

The capped [NAME] being £727.50 per calendar month.

16. It would appear that the [NAME] is submitting that the [NAME] for the Property in its current state is £854.00 per calendar month and that if carpets and white goods were provided together with an updated kitchen and bathroom the [NAME] would be £1,106.00 per calendar month.

[NAME]

17. The Tribunal assessed the [NAME] for the Property as at the day of the inspection pursuant to section 70(1) [NAME] 1977 (having regard in particular to the age, character, locality, state of repair of the property and all the circumstances other than personal circumstances). The Tribunal took account of the relevant cases and legislation including [COMPANY] v [NAME] (1996) 28 HLR 107, [NAME] v [NAME] [1997] 4 All ER 842 and [COMPANY] v Merseyside and [NAME] 24th May 1991.

18. The Tribunal is required under the legislation and case law to assess a [NAME] for the Property by reference to comparable properties in the open market taking into account the matters referred to above. It then considers whether or not a deduction for scarcity should be made, which varies depending on the market within a locality from time to time.

19. The Tribunal is not able to take the personal circumstances of either party, such as, in this case, that the Tenant receives a pension. It also cannot take into account the length of time repairs have remained outstanding.

20. The Tribunal cannot take into account the Tenant’s submission as to the [NAME] for the first-floor maisonette as it is not on the open market and there are no details available regarding the letting.

21. The Tribunal considered the rental values of the properties submitted by the [NAME] as being comparable. The Tribunal found that they were of more recent construction with more modern facilities. In addition, floor coverings and white goods were provided. Nevertheless, the submission provided a guide to the rental values in the general area.

22. The Tribunal found the calculation provided by the [NAME] confusing, as the properties with rents of £800.00 to £850.00 per calendar month, which were submitted as being comparable, had updated kitchens and bathrooms and carpets and white goods provided. On the basis of this evidence, the Agent submitted that the market [NAME] of the Property with the same facilities and in similar condition would be £854.00 per calendar month. However, the Agent then takes the figure of £854.00 per calendar month and

5 adds an allowance for the provision of these facilities. The Tribunal therefore noted the rental value of the properties that were said to be comparable but did not accept the calculation provided.

23. The Tribunal used the knowledge and experience of its members and determined that the [NAME] for the Property, taking into account the location, in good condition with central heating, double-glazing, modern kitchen and bathroom, and let with carpets and white goods on an Assured Shorthold Tenancy at the time of inspection would be £850.00 per calendar month. The Tribunal found that a deduction of £170.00 per calendar month should be made to take account of the dated and basic kitchen and bathroom and the lack of carpets and white goods which are provided in comparable properties. It also takes account of the general external condition of the Property. It should be noted that this figure cannot be a simple arithmetical calculation and is not based specifically upon capital cost but is the Tribunal’s estimate of the amount by which the [NAME] would have to be reduced to attract a tenant.

SCARCITY

24. Assessing a scarcity percentage cannot be a precise arithmetical calculation because there is no way of knowing either the exact number of people looking for properties similar to the subject property in the private sector or the exact number of such properties available. It can only be a judgement based on the years of experience of members of the Tribunal together with a consideration of the properties advertised as being to let as at the time of the assessment.

25. That experience and consideration leads the Tribunal to the view that there is no substantial scarcity of “... similar dwelling houses in the locality...”, in this case Berkshire as at the day of the inspection, that are available for letting, and so no deduction is made to reflect this.

TRIBUNAL’S CALCULATIONS

26. [NAME]:

£850.00 per calendar month Less global deduction

£170.00

£680.00 per calendar month

27. The Tribunal therefore confirms the [NAME]’s assessment of the [NAME].

28. The provisions of the [NAME] ([NAME]) Order 1999 require that the registered [NAME] is either the capped [NAME] or the [NAME] decided by the Tribunal whichever is the lower. The capped [NAME] is calculated in accordance with a statutory formula using the existing [NAME] as a base. The capped [NAME] in this case is £726.00 per calendar month, which is less than the [NAME] assessed by the Tribunal and therefore the uncapped [NAME] of £680 per calendar month is to be registered.

[NAME] = £680.00 per calendar month

Judge JR Morris

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Caution: The Tribunal inspected the subject property for the purposes of reaching this decision. The inspection was not a structural survey and any comments about the condition of the property in this statement must not be relied upon as a guide to the structural or other condition of the property.

APPENDIX - RIGHTS OF APPEAL

1. If a party wishes to appeal the decision to the Upper Tribunal (Lands Chamber) then a written [NAME] for permission must be made to the First-tier Tribunal at the [NAME] which has been dealing with the case.

2. The [NAME] for permission to appeal must arrive at the [NAME] within 28 days after the Tribunal sends written reasons for the decision to the [NAME].

3. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed despite not being within the time limit.

4. The [NAME] 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 [NAME] the [NAME] is seeking.