Tribunal Sets Fair Rent Under Rent Act 1977

OUTCOME: Allowed

FR27 First-tier Tribunal – Property Chamber File Ref No. HS/LON/00BE/F77/2024/0062

Notice of the Tribunal Decision

Rent Act 1977 Schedule 11

Address of Premises The Tribunal members were 18 [ADDRESS], [POSTCODE]

Mrs [APPELLANT]

Landlord [RESPONDENT] ([COMPANY])

Tenant Mr [APPELLANT]

1. The fair rent is £236 Per week (excluding water rates and council tax but including any amounts in paras 3&4)

2. The effective date is 16 April 2024

3. The amount for services is £9.50 Per week

negligible/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 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 £ 282 per week including £ 9.50 per week for services (variable).

Chairman E [NAME] of decision 16 April 2024

FR27 MAXIMUM FAIR RENT CALCULATION

LATEST RPI FIGURE X 381.0

PREVIOUS RPI FIGURE Y 292.7

X 381 Minus Y 292.7 = (A) 88.3

(A) 88.3 Divided by Y 292.7 = (B) 0.30167

First application for re-registration since 1 February 1999 NO

If yes (B) plus 1.075 = (C)

If no (B) plus 1.05 = (C) 1.35167

Last registered rent* 167.22 Multiplied by (C) = £226..02 *(exclusive of any variable service charge)

Rounded up to nearest 50p = £226.50

Variable service charge YES If YES add amount for services £9.50

MAXIMUM FAIR RENT = £236 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.

Case Reference : LON/00BE2024//F77/0062

P:PAPERREMOTE

Property : 18 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted] : 29 December 2023

Type of Application : Determination of the registered rent under Section 70 Rent Act 1977

Tribunal

: Mrs [NAME] and venue of : 16 April 2024 Hearing

remote on the papers

_______________________________________________

DECISION ____________________________________

This has been a hearing on the papers which has been consented to by the parties. A face to face hearing was not held because it was not practicable, no- one requested the same. The documents that I was referred to were in an electronic bundle the contents of which we have recorded. The registered rent with effect from 16 April 2024 is £236 per week including £9.50 variable service charge.

© CROWN COPYRIGHT

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Background

1. On 8 November 2023 the landlord applied to the rent officer for registration of a fair rent of £178.54 inclusive of £9.50 variable sevice charge per week for the above property.

2. The registered rent at the date of the application was £175.50 inclusive of £8.28 variable service charge per week which had been registered by the rent officer on 3 June 2020 with effect from the same date.

3. The rent officer registered a fair rent of £241 per week inclusive of £9.50 service charge with effect from 21 December 2023.

4. The tenant objected to the registered rent on 29 December 2023.

5. The tribunal issued Directions on 21 February 2024. The landlord and tenant made brief written representations which were copied to the lother party.

6. The tenant has been in occupation since 19 October 1987.

The Evidence

7. The tenant stated that the property is a maisonette on the second and third floors comprises three trooms, kitchen and bathroom/wc. The heating is via night storage heaters. He had the kitchen fitted using a disability grant in 2016, the landlord had supplied a single wall cupboard. He had supplied the carpets, curtains and white goods.

8. The landlord noted that the property had easy access to local buses and stated that it was about a twenty minute walk to the station. A booklet sent to the [NAME] regarding the rent indicated that the rent to be charged form 1 April 2024 was £166.69 inclusive of £13.12 variable sevice charge.

9. Neither party referred to any rental evidence.

The Law

10. When determining a fair rent the tribunal, in accordance with section 70 of the Rent Act 1977, must have regard to all the circumstances including the age, location and state of repair of the property. It also must disregard the effect of any relevant tenant’s improvements and the effect of any disrepair or any other defect attributable to the tenant or any predecessor in title under the regulated tenancy, on the rental value of the property. The Tribunal is unable to take into account the tenant’s personal circumstances when assessing the fair rent.

11. 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 emphasised:

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 to that of a regulated tenancy, and

That for the purposes of determining the market rent, assured tenancy market rents are usually appropriate comparables; adjusted as necessary to reflect any relevant differences between the comparables and the subject property.

Valuation 12. In the first instance I 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 and on the terms considered usual for such an open market letting. As no evidence had been provided by either party I relied on my own general knowledge of rental values of within Rotherhithe and concluded that the likely market rent for the property would be £460 per week.

13. However, it was first necessary to adjust the hypothetical rent of £460 to allow for the differences between the terms and condition considered usual for such a letting and the condition of the actual property at the valuation date, ignoring any tenant’s improvements, (disregarding the effect of any disrepair or other defect attributable to the tenant or any predecessor in title). I determined that the hypothetical rent should be reduced by £120 to reflect the difference in the terms of the tenancy, the condition of the property and the lack of white goods, carpets and curtains which are usually provided by the landlord on the open market.

14. This leaves an adjusted market rent for the subject property of £340 per week. I am of the opinion that there is substantial scarcity for similar properties in Greater London and therefore made a deduction of 20% from the adjusted market rent to reflect this element. The uncapped fair rent is £282plus £9.50 variable service charge per week.

Decision

15. The uncapped fair rent initially determined by me, for the purposes of section 70, is above the maximum fair rent of £236 per week inclusive of £9.50 variable service charge calculated under the Rent Acts (Maximum Fair Rent) Order 1999.

16. Accordingly, the sum of £236 per month will be registered as the fair rent with effect from 16 April 2024 being the date of my decision. This is the maximum which the landlord may charge, it is not necessarily the amount which the landlord will charge.

Chairman: [NAME]: 16 April 2024

ANNEX - 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 application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber 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. Please note that if you are seeking permission to appeal against a decision made by the Tribunal under the Rent Act 1977, the [RESPONDENT] 1988 or the Local Government and [RESPONDENT] 1989, this can only be on a point of law. If the First-tier Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).