Tribunal Sets Fair Rent for Tenancy Property

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HS/LON/00AC/F77/2024/0198

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 108A [ADDRESS], [POSTCODE]

[NAME] [RESPONDENT] [NAME] [NAME] [RESPONDENT] [NAME]

[APPELLANT] c/o [APPELLANT]

Tenant [NAME] [APPELLANT] J [APPELLANT]

1. The fair rent is 192.50 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 13th September 2024

3. The amount for services is

Per

not applicable

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

Per

not applicable

5. The rent 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)

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 £297.60 per week

[NAME] [NAME] of decision 13th September 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 387.5

PREVIOUS RPI FIGURE Y 265.5

X 387.5 Minus Y 265.5 = (A) 122

(A) 122 Divided by Y 265.5 = (B) 0.459

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) 1.509

Last registered rent* 127.50 Multiplied by (C) = 192.39 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 192.50

Variable service charge NO If YES add amount for services

MAXIMUM FAIR RENT = £192.50 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

: LON/00AC/F77/2024/0198

Property : 108A [ADDRESS] [POSTCODE]

Tenant

: [NAME] [APPELLANT]

Landlord : [APPELLANT] c/o [RESPONDENT] of Objection : 28th March 2024.

Type of Application : Section 70, Rent Act 1977

Tribunal

: [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] of Summary Reasons

: 13th September 2024

_______________________________________________

DECISION

The sum of £192.50 per calendar month will be registered as the fair rent with effect from 13th September 2024 being the date the Tribunal made the Decision. FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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© CROWN COPYRIGHT 2023

SUMMARY REASONS

Background 1. Following an objection from the Tenant to the determination of a fair rent by the Rent Officer, the Tribunal has made a determination under the provisions of the Rent Act 1977.

Inspection

2. A hearing was arranged for 10am on the 13th September 2024 but this was not attended by the parties. The Tribunal inspected the property at around 12 noon in the presence of the tenant. The landlord did not attend. During the inspection the tenant explained the condition of the property and confirmed improvements made by him and a number of associated damp and mould defects.

The Tribunal explained the formula for the calculation of the maximum fair rent. The reason for the increase is that the formula is based upon the Retail Price Index (RPI) which has seen significant growth in the past 18 months due to rampant inflation.

Evidence

3. The Tribunal has consideration of the written submissions from both parties and the inspection of the property. Neither party provided the Tribunal with evidence of rental levels for comparable properties in the area.

Determination and Valuation

4. Having consideration of our own expert, general knowledge of rental values in the [ADDRESS] area together with the Landlords comparable evidence, we consider that the open market rent for the property in its current condition would be in the region of £620 per calendar week. From this level of rent we have made adjustments in relation to: the damp and mould, the access via an external metal staircase, the noise from the elevated railway line, the presence of various metal containers, terms of tenancy, no white goods, no carpets or curtains, tenants improvements including kitchen and shower room fittings, roof leaks which equates to approximately 40%

5. The Tribunal has also made an adjustment for scarcity at 20%

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6. The full valuation is shown below:

Market Rent £620 pw

Less

approx. 40%

£248 Terms and condition

Leaves

£372

Less Scarcity

approx. 20%

£74.40

Leaves

£297.60 pw

7. The Tribunal determines a rent of £192.50 per calendar week

Decision

8. The uncapped fair rent initially determined by the Tribunal, for the purposes of section 70, was £297.60 per calendar week. The capped rent for the property according to the provisions of the Rent Acts (Maximum Fair Rent) Order 1999 is calculated at £192.50 per calendar week. The calculation of the capped rent is shown on the decision form. In this case the lower rent of £192.50 per calendar week is to be registered as the fair rent for this property effect from 13th September 2024 being the date the Tribunal made the Decision.

Chairman: [NAME] [NAME]: 13th September 2024

APPEAL PROVISIONS

4 These summary reasons are provided to give the parties an indication as to how the Tribunal made its decision. If either party wishes to appeal this decision, they should first make a request for full reasons and the details of how to appeal will be set out in the full reasons. Any subsequent application for permission to appeal should be made on Form RP PTA