Tribunal Sets Fair Rent for Tenant: Market vs. Maximum Fair Rent

OUTCOME: Allowed

FR24 First-tier Tribunal – Property Chamber File Ref No. GB/LON/00AZ/F77/2024/0118

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were A, 22 [ADDRESS], [POSTCODE]

Judge [NAME]

Landlord [NAME]

Tenant [NAME]

1. The fair rent is £157.11 Per Week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 14 May 2024

3. The amount for services is £6.11 Per Week

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

not applicable Per

5. The rent is 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

A 3 bedroom modernised ground floor flat with living room, 3 bedrooms, kitchen and bathroom/w.c.

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 £462 per week including £ 6.11 per week for services (variable).

Chairman Judge Tagliavini Date of decision 14 May 2024

FR24 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 383

PREVIOUS RPI FIGURE Y 260.6

X 383 Minus Y 260.6 = (A) 122.4

(A) 122.4 Divided by Y 260.6 = (B) 0.46968534

First [NAME] for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.51968534

Last registered rent* 99.16 Multiplied by (C) = 150.6919983144 *(exclusive of any variable service charge)

Rounded up to nearest 50p = 151.00

Variable service charge YES If YES add amount for services £6.11

MAXIMUM FAIR RENT = £157.11 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 [NAME] was the first since 1 February 1999) or 5% (if it is a second or subsequent [NAME] 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 [NAME] of the formula is ascertained the service charge is then added to that sum in order to produce the maximum fair rent.

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AZ/F77/2024/0118 Property : [ADDRESS] [POSTCODE] Applicant/Tenant : [NAME] Respondent/ Landlord : [NAME] of [NAME] : [NAME] for a Fair Rent - Rent Act 1977 Tribunal members : Judge [NAME] of hearing and venue : 14 [ADDRESS] [POSTCODE] Date of decision : 14 May 2024

DECISION

Summary of the tribunal’s decision 1. The tribunal determines the Fair Rent to be registered with effect from 14 May 2024 is £157.11 per week (inclusive of variable service charges of £6.11 per week).

_________________________________________________ Background 1. This is an [NAME] made by the applicant tenant seeking to appeal the fair rent registered by the Rent Officer of £150.00 per week (inclusive of £6.11 variable service charges) with effect from 4 January 2024.

2 2. The applicant tenant objected to the fair rent registered by the Rent Officer. She asserted she had carried out works of modernisation to the subject property and the landlord had been historically slow in carrying out repairs. The applicant also stated the proposed increase in rent was unaffordable for her due to her limited income.

3. The tribunal noted the landlord’s confirmation that it had notified the applicant that any increase in rent was limited to 7.7% regardless of the new rent registered.

4. In determining the new fair rent, the tribunal is required to (i) calculate the fair rent payable starting with the market rent that would be payable for a similar property and (ii) to calculate the Maximum Fair Rent (MFR) that would be otherwise payable. It is the lower of the two figures that represents the new registered Fair Rent.

5. In this [NAME], the tribunal considered comparable properties in [ADDRESS]23, [ADDRESS]23 and Kirkdale SE26. The tribunal therefore determined a market rent for a similar property was £462 per week and therefore calculated the fair rent as follows: Market Rent calculation Market rent:

£462 per week Less deductions for: Tenant’s repair liability:

5% No white goods:

5% Unmodernised Kitchen And bathroom (tenant’s Improvements:

20% Poor repair and decorations: 10% No floor coverings/curtains: 5%

Total deductions 45% (£254.10 per week)

6. The tribunal considered the appropriate figure to apply for scarcity in the Greater London area to be 20% This left an adjusted market rent of £203.28 per week 7. However, the MFR (see calculation sheet) was calculated as £157.11 per week and this was registered as the fair rent payable with effect from 14 May 2024.

3 Name: Judge Tagliavini Date: 14 May 2024

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this 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. 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]. 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. 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. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

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