Tribunal Sets Fair Rent for Tenancy Agreement

OUTCOME: Allowed

First-tier Tribunal – Property Chamber File Ref No. LON/00AQ/F77/2019/0166

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 90 [ADDRESS], [POSTCODE]

Ms [NAME] BA (Hons) DipLaw LLM Mr [RESPONDENT]

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is 728.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 17 January 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 do not apply because 1st registration/15% exemption.

7. Details (other than rent) where different from [NAME] entry

As per [NAME].

8. For information only:

(a) 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 £728.00 per Calendar.

Chairman Ms [NAME] BA (Hons) DipLaw LLM Date of decision 17th January 2020

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 291.0

PREVIOUS RPI FIGURE Y 272.9

X 291.0 Minus Y 272.9 = (A) 18.1

(A) 18.1 Divided by Y 272.9 = (B) 18.1

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

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.116325

Last registered rent* 705.00 Multiplied by (C) = 787.01 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 787.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £787.50 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.

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : KA/LON/00A/F77/2019/0166 Property : 90 [ADDRESS], [POSTCODE] Tenant :

Mr. [APPELLANT]

Landlord :

[COMPANY] of Application : Fair rent Tribunal Members :

Judge [NAME], MRICS

Date and venue of hearing

: 17 [ADDRESS] [POSTCODE]

Date of Decision Date of (corrected) Decision and reasons : 17 January 2020 4 February 2020

Corrected Decision and extended Reasons _____________________________________________________________________

2 Summary decision of the tribunal

I. The rent to be registered for the first floor flat at 90 [ADDRESS] [POSTCODE] is £728 per lunar month (£9,464 per annum).

_________________________________________________

The application

1. This is an application seeking a determination by the tribunal of the rent to be registered after an objection was made by the landlord to the rent registered of £720 per lunar month with effect from 16 September 2019.

The property

2. The subject property is described in the [NAME] as a first floor purpose-built self-contained (maisonette) flat without central heating, comprising 3 rooms, kitchen, bathroom and w.c.

Background

3. Mr. [APPELLANT] has been the tenant of the subject property since 8 April 1978 as recorded in the [NAME]. The respondent is the current landlord and is represented by its agent [RESPONDENT]. By an Application for Registration of Fair Rent dated 27 June 2019, the landlord sought an increase in the registered rent of £176.25 (weekly) to £203.00 per week. The Rent Officer subsequently registered the rent as £720 per lunar month representing (£180 per week/£9360 per annum).

4. By a letter to the tribunal received on 13 September 2019, the landlord sought to object to the rent registered. Neither party provided the tribunal with any representations as to why they agreed or disagreed with the Rent Officer’s registration. Further, neither party requested an oral hearing of the application to the tribunal to provide any oral evidence. Therefore, the tribunal determined the application on the papers provided from the Valuation Office Agency (incorporating Rent Officer functions) and from its own inspection of the subject property.

Inspection

5. The tribunal inspected the property on 17 January 2020 in the presence of Mr. [RESPONDENT]. The landlord did not attend and was not represented. The tribunal found the subject property to be in a good decorative condition with tenant’s central heating and modern kitchen and bathroom.

3

[NAME]: Do you remember who put these in? We have deducted for them. Yes it was the tenant.

The tribunal’s decision

6. The tribunal drew upon its expertise and experience of properties in the subject area and in particular the similar properties at 98, 62 and [ADDRESS] and determined that the appropriate market rent is £1300 per four weeks (lunar month). However, the tribunal determined that deductions of 30% should be made to reflect the lack of white goods, carpets, tenant’s improvements including gas central heating, kitchen and sanitary fittings and the terms and conditions of the tenancy to which the repairing covenant of section 11 of the Landlord and Tenant Act applies. This provided an adjusted figure of £910 per lunar month. The tribunal made a deduction of 20% to reflect the scarcity of similar properties in the Greater London area which provided a figure of £728 per lunar month (£9,464 per annum)

7. The tribunal was also required to carry out a calculation under the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 and provided the calculation sheet to the parties. This produced a rental figure of £785.50 per lunar month.

8. As the Fair Rent figure calculated by the tribunal is lower than the Maximum Fair Rent the tribunal determines that £728.oo per lunar month is the rent to be registered as the Fair Rent with effect from 17 January 2020.

9. In accordance with rule 50 of The Tribunal (First-tier tribunal) (Property Chamber) Rules 2013, the tribunal corrects the Notice of the Tribunal Decision dated 17/01/2020 to read £728 per lunar month (thereby replacing the words per month).

Signed: Judge Tagliavini

Dated: 4 February 2020

Rights of Appeal

1. 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 this case.

4 2. 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.

3. 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 each reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

4. 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.

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Ms [NAME] BA (Hons) DipLaw LLM Mr [RESPONDENT]

Landlord [APPELLANT]

Tenant Mrs [APPELLANT]

1. The fair rent is 728.00 Per Lunar Month (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 17 January 2020

3. The amount for services is N/A Per

N/A Per

5. The rent is not to be registered as variable.

As per [NAME].

8. For information only:

MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 291.0

PREVIOUS RPI FIGURE Y 272.9

X 291.0 Minus Y 272.9 = (A) 18.1

(A) 18.1 Divided by Y 272.9 = (B) 18.1

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.116325

Rounded up to nearest 50p = 787.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £787.50 Per Calendar Month

Explanatory Note

The result is rounded up to the nearest 50 pence.