Tribunal Sets Fair Rent for Tenancy

OUTCOME: Allowed

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 6 [ADDRESS], [POSTCODE]

[NAME] [NAME]

[NAME] and [APPELLANT]

Tenant Miss [APPELLANT]

1. The fair rent is £276 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 13 November 2020

3. The amount for services is - Per

negligible/not applicable

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

- Per

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 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 £ ................................................................................................................................................ per ............................... including £ .................... per .............................. for services (variable).

(b) The fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is the same as/below the maximum fair rent of £ 307.50 ........................ per week ....................................................................................................... including £ ...................................... per ..............................for services (variable) prescribed by the Order.

First-tier Tribunal – Property Chamber File Ref No. LON/00AT/F77/2020/0023

Chairman A [NAME] of decision 13 November 2020

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 294.3

PREVIOUS RPI FIGURE Y 275.8

X 294.3 Minus Y 275.8 = (A) 18.5

(A) 18.5 Divided by Y 275.8 = (B) 0.0670775

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) 1.117078

Last registered rent* 275 Multiplied by (C) = 307.20 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 307.50

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

MAXIMUM FAIR RENT = £307.50 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.

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AC/F77/2020/0023

HMCTS code :

P: PAPERREMOTE

Property : 6 [ADDRESS], [POSTCODE] Landlord : Northumberland and Durham Property Trust Limited Representative : In House Tenant : Miss [COUNSEL] : In Person Type of Application : Determination of a fair rent under section 70 of the Rent Act 1977 Tribunal Members :

Mr [NAME] [NAME] of Decision :

13 November 2020

Date of Reasons :

9 December 2020

REASONS

Covid-19 pandemic: description of hearing

This has been a remote hearing on the papers although the Tenant would have preferred a hearing and inspection. The form of remote hearing was P:PAPERREMOTE. The Directions dated 1 September 2020 set out that the tribunal was not able to hold face to face hearings or carry out internal inspections. The documents that the tribunal was referred to are in a bundle of 99 pages, the contents of which have been noted. The decision made is described at the end of these reasons.

Background

1. On 8 November 2019, the Landlord applied for registration of a fair rent of £316.25 per week.

2. The Rent Officer registered a rent of £303.50 per week. The rent was registered on 13 December 2019 and is effective from 30 January 2020. The certificate recorded the uncapped rent was £375 .00 per week.

3. Accommodation is ground floor 2 rooms, kitchen/diner and first floor 3 rooms, bathroom/WC.

4. The previous registered rent was £275.00 per week registered on 28 November 2017 and effective from 30 January 2018.

5. The Tenant objected to the registered rent by letter and the matter was referred to the tribunal.

6. On 15 September 2020, the tribunal issued Directions for proceeding by written representations. Both parties made written representations.

Evidence

The Landlord’s Case

7. Written representations from the Landlord describe the location of the house as close to public transport and other amenities.

8. The landlord referred to 3 comparables, the first being [ADDRESS] W4 described as being recently let at £4550 per calendar month. The accommodation consists of three double bedrooms, one reception room, two bathrooms and kitchen.

9. [ADDRESS] W4 was let at £2253 per month described as having three bedrooms, two bathrooms, a modern kitchen/reception room and garden.

10. [ADDRESS] W4 was let in £2400 per calendar month and is described as having three bedrooms, one reception room and two bathrooms.

11. Details taken from Rightmove of three flats were also included but these are not relevant to the assessment of rent on a house.

12. Taking these comparables into account the landlord submits that a fair rent for the property would be £316.25 per week (£1370 per month).

The Tenant’s case

13. The Tenant submitted a letter to the Rent Officer complaining about disrepair which had required the involvement of the Environmental Health Officer. Additionally, photographs were included in the tribunal’s papers showing disrepair to the property. This includes unsatisfactory repairs to the bathroom and to the kitchen with the cooker being left disconnected. Other disrepair referred to is large crack in the landing wall.

14. The house has central heating installed by the tenant.

15. In the reply form the third bedroom is described as a box room and not large enough to be used as a bedroom.

16. The tenant did not supply any rental comparables.

Inspection

17. In accordance with the directions the tribunal did not inspect the property. The tribunal took into account the photographs of condition of the property.

The Law

18. When determining a fair rent, the Tribunal, in accordance with section 70 of the Rent Act 1977, has regard to all the circumstances (other than personal circumstances) including the age, location and state of repair of the property.

19. 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 emphasized 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 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.

20. The rent has been previously registered, and the Rent Acts (Maximum Fair Rent) Order 1999 therefore applies unless there are significant improvements

made by the Landlord which increase the rent which would be registered by more than 15%.

Discussion and Valuation

21. The Landlords evidence is not of great assistance to the tribunal. Simply listing three properties without any explanation as to how these justified the rent applied for in excess of the capped rent does not assist in the assessment of the section 70 rent. The information supplied on the three comparable houses is insufficient to allow for any meaningful comparison.

22. In the absence of any useful comparable information supplied by the parties, the tribunal relied on its knowledge and experience.

23. The tribunal firstly has to consider the rent in accordance with section 70 of the Rent Act as a market rent less scarcity. The tribunal has considered all of the rental evidence and applied its knowledge and experience and considers that the house of this type in this location and in the condition which the market would expect would be £530.00 per week (£2300 per month). The tribunal has adjusted for the condition of the property, lack of white goods and for the different terms of the tenancy as compared with a standard assured shorthold tenancy and makes a deduction of 35% for these factors.

24. The Tribunal found that there was substantial scarcity of letting property in the locality of Greater London and using its knowledge and experience made a deduction of 20% from the adjusted market rent. The calculation of the s70 rent is set out below.

per week

Market rent

£ 530.00 less condition 35% -£ 185.50 adjusted rent

£ 344.50

less scarcity off adj rent 20% -£ 68.90 Fair rent

£ 275.60

Rounded to £276.00

Capped rent

25. In accordance with the Rent Acts (Maximum Fair Rent) Order 1999 the maximum rent is the previous registered rent increased in accordance with the Order which provides for the previous rent to be increased by the percentage

increase in the retail prices index plus 5% if the application is a second or later application since 1 February 1999.

26. The retail prices index figure to be used is the figure published in the month before the decision. The decision was made in November, and the figure published in October is that for September which was 294.3. and which is the upper figure to be used. The index at the date of the last registration was 275.8. Applying the formula produces a maximum fair rent of £307.50 per week which is above the s70 rent of £276.00 per week.

27. The rent to be registered is the lower of the two figures and is the section 70 rent of £276.00 per week.

28. The effective date is the date of the decision.

[NAME] [NAME] - 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.