Tribunal Sets Fair Rent for Tenancy Under Rent Act 1977

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. LON/00AH/F77/2020/0084

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

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

Ms [NAME] Mrs [APPELLANT]

Landlord [NAME]

Tenant Mr [APPELLANT]

1. The fair rent is 7776.00 Per Year (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 06 April 2021

3. The amount for services is 13.50 Per Month

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

0.00 Per

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

None

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 £8619.50 per Year including £13.50 per Month for services prescribed by the Order.

Chairman Ms [NAME] of decision Tuesday 7th April 2021

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 296.0

PREVIOUS RPI FIGURE Y 278.3

X 296.0 Minus Y 278.3 = (A) 17.7

(A) 17.7 Divided by Y 278.3 = (B) 0.0636004

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

If yes (B) plus 1.075 = (C) No

If no (B) plus 1.05 = (C) 1.11136004

Last registered rent* £7740.00 Multiplied by (C) = 8619.2673 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £8619.50

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

MAXIMUM FAIR RENT = £8619.50 Per Year

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.

© CROWN COPYRIGHT 2013

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AH/F77/2020/0084 Property : [ADDRESS], [POSTCODE] Applicant : [redacted] Representative : Mr [COUNSEL] Respondent : [redacted] Representative :

Type of Application : Determination of a fair rent under section 70 of the Rent Act 1977 Tribunal Members :

Tribunal Judge Brandler Mrs S Phillips MRICS

Date of Decision : 6th April 2021 Date of Reasons :

19th April 2021

DECISION

The sum of £648.00 per calendar month will be registered as the fair rent with effect from 6th April 2021.

© CROWN COPYRIGHT 2018

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FULL REASONS

Background 1. In an application dated 03/01/2020 the landlord applied to the Rent Officer for a registration of the fair rent of £9500 per annum (£791.67 per calendar month) for the above property. The rent had previously been registered on 13/03/2013, to become effective on 26/03/2018, by the Rent Officer at £645.00 per calendar month. Mr [NAME] tenancy began on 08/01/1972. No tenancy agreement was available.

1.2 On 26/02/2020 the Rent Officer registered a fair rent of £645.00 per calendar month with effect from the same day.

1.3 By a letter dated 10/03/2020 the Landlord objected to the rent determined by the Rent Officer and the objection was referred to the Tribunal.

Inspection 2.1 The Tribunal could not inspect the property because of the COVID-19 Pandemic.

Evidence 3.1 Neither party requested a hearing. Therefore, this matter was considered on the papers.

3.2 Tenant’s Representations: None were made.

3.3 Landlord’s Representations: The Landlord’s representations were included in their reply to the Tribunal. In that form he confirmed that there is no central heating in the property. Double glazing was installed by the Landlord some 10 years ago. Croydon Council had installed a shower in the bathroom and removed the bath to assist the tenant. There is a shared garden, and some limited off-street parking. The kitchen had been redecorated by way of an insurance claim (the landlord’s contribution had been £300). The landlord states that the property has excellent transport links and that the tenant keeps the flat in excellent order. The approximate measurements of the rooms are provided as follows: bathroom (6 ft by 8 ft), kitchen (10 ft by 8 ft), the bedroom (12 ft by 12 ft) and living room (16 ft by 12 ft).

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The law 4.1 A summary of the law in respect of this case is attached to this decision.

Determination and Valuation 5.1 In the first instance the Tribunal determined what rent the landlord could reasonably be expected to obtain for the Property in the open market if it were let today in the condition that is considered usual for such an open market letting. The Tribunal considered the market in and around the area where the property is situated from its own general knowledge, rather than any specific knowledge of market rent levels in the area. The Landlord provided no comparables but stated in the reply form that he considered that the market rent was between £850-£1000 per calendar month. The Tribunal relied upon their expert knowledge and experience. The Tribunal concluded that an open market rent for an unmodernised one-bedroom flat, without central heating, in the vicinity would be in the region of £900.00 per month. This level of rent assumes a property in a refurbished condition.

5.2 The tribunal went on to consider any deduction to reflect terms and conditions, lack of central heating, tenant’s own carpets, curtains and white goods, which we consider would have an adverse effect on the open market rent level. Taking these matters into account we consider that a reduction in the open market rent of 10%, fairly reflects these issues. This therefore reduces the open market rent to £810.00 per calendar month.

5.3 The tribunal next considered the issue of scarcity. We were not provided with any specific evidence on this issue. However, the issue of scarcity is considered on the basis of the number of properties available to let and also considering the demand for such properties and over a really large area. Therefore, using our general, rather than any specific knowledge and experience, we consider that in the wide geographical area being the area around Greater London, there is an imbalance between supply and demand and this impacts upon rental values.

Accordingly, we make a deduction of approximately 20% for scarcity. The full valuation is shown below.

£/month Market Rent

900.00 Less 10%

90.00 To reflect: tenant’s own carpets curtains and white goods, lack of central heating

4 and terms and conditions

810.00

Scarcity 20%

162.00

Fair rent

£648.00

Decision 6.1 The section 70 fair rent to be registered is not limited by the Rent Acts (Maximum Fair Rent) Order 1999, because it is below the maximum fair rent of £8619.50 per annum (£718.29 per month) including £13.50 per month for services prescribed by the Order.

Accordingly, the sum of £648.00 per calendar month will be registered as the fair rent with effect from 6th April 2021 being the date of the Tribunal’s decision.

D. Brandler

Tribunal Judge Brandler Date: 19th April 2021

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ANNEX - 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 [NAME] which has been dealing with the case.

• The application for permission to appeal must arrive at the [NAME] 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.