Tribunal Sets New Rent for Assured Tenancy

MR22 First-tier Tribunal – Property Chamber File Ref No. BIR/00CN/MNR/2023/0245

Notice of the Tribunal Decision and Register of Rents under Assured Periodic Tenancies (Section 14 Determination)

Housing Act 1988 Section 14

Address of Premises The Tribunal members were 121 [ADDRESS] [POSTCODE]

[RESPONDENT] [RESPONDENT]

Landlord [RESPONDENT] [NAME] [ADDRESS] [POSTCODE]

[NAME] [APPELLANT] & [APPELLANT]

1. The rent is: £1,100 Per Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 3 May 2024

3. The amount included for services is not applicable - Per =

4. Service charges are variable and are not included

5. Date assured tenancy commenced 1 August 2020

6. Length of the term or rental period Periodic - Monthly

7. Allocation of liability for repairs S11 LTA 1985

8. Furniture provided by landlord or superior landlord -

9. Description of premises Three bedroom terraced house including 2 living rooms, bathroom and kitchen.

[NAME] of Decision 3 May 2024

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Case Reference : BIR/00CN/MNR/2023/0245

Property : 121 [ADDRESS] [POSTCODE]

Landlord : [APPELLANT] [NAME]

Tenant : [APPELLANT] & [APPELLANT] of Application : An Application for a Determination under Section 14 of the Housing Act 1988

Tribunal Members : [NAME]

[NAME] of Decision : 24 July 2024

_____________________________________________________

STATEMENT OF REASONS _____________________________________________________

© CROWN COPYRIGHT 2024

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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BACKGROUND

1. The Landlord served a notice on the Tenant dated 3 November 2023 under section 13 of the Housing Act 1988 seeking to increase the rent of the Property from £825 to £1,200 per month with effect from 1 January 2024.

2. Upon receipt the Tenant made an application dated 7 November 2023 referring the notice of the proposed increase to the First-tier Tribunal Property Chamber (Residential Property).

3. The Tribunal issued its Directions dated 5 January 2024 and listed the case for a hearing on 3 May 2024 without an inspection.

4. Reply Forms were sent to the Tenant and Landlord to complete giving details of the Property and also inviting the parties to submit any other further comments and/ or documents they wish the Tribunal to take into consideration. Only the Tenant returned a completed Form to the Tribunal. In addition, the Tenant completed a Hardship Reply Form asking the Tribunal to use its discretion to defer the starting date for any rental increase.

5. Neither party requested the Tribunal inspect the Property and advised were content for the matter to proceed by way of a video hearing only. At the hearing the Landlord was represented by Mr [APPELLANT] who is a lettings manager. [NAME] represented themselves with the assistance of an interpreter.

6. The Tenant also submitted various photographs to the Tribunal. No further written submissions were received from either party.

7. After consideration of the available evidence and the applicable law, the Tribunal determined a rent of £1,100 per month with effect from 3 May 2024 and issued its decision on this basis.

8. Upon receipt of an email dated 7 February 2023 the Tenant requested the Tribunal provide reasons. These written reasons should therefore be read in conjunction with the Decision of the Tribunal dated 3 May 2024.

THE PROPERTY

9. The Property is located in the [ADDRESS] area of Birmingham.

10. It is a traditional three-bedroom terraced house that includes two living rooms, kitchen and bathroom and a rear garden. There is no off-street parking.

11. There is central heating, and the windows are double glazed.

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12. No improvements have been carried out to the Property by either the Landlord or Tenant since it was first let.

EVIDENCE

13. [NAME] form stated that the Property was let unfurnished and included carpets and curtains but that they had provided the white goods (cooker, washing machine, fridge).

14. The Tenant also stated that the Property was suffering from damp and mould throughout and in support of this submitted various photographs.

15. At the [NAME] advised they considered that the initial rent was already in excess of the market level and that they could not afford an increase given their current financial commitments. They also advised the Tribunal that the Property was suffering from mice and that the Landlord had served a section 21 Notice seeking possession of the Property. [NAME] also advised the Tribunal that they found communicating with the Landlord to be difficult and referred to the damp and mould issues and that although this had been painted over it had returned soon afterwards.

16. The Tribunal asked [NAME] if they had carried out any investigations into rental values for similar properties in the area and they advised they had not but advised they were aware of what rents were being paid by some of their neighbours. And to that extent were of the opinion that the market rent of the Property should be no more than £825 per month.

17. Mr [RESPONDENT], for the Landlord, advised the Tribunal that when the Property was originally let it was marketed at£995 per month as it is an end terrace and is larger than the others in the street. Mr [RESPONDENT] also advised that the Landlord had not had any issues with [NAME] previously and that the rent had not been increased for 5 years. The Landlord had tried to negotiate a increase with [NAME] but that that had proved impossible. The Landlord was also aware of the pest issue referred to by [NAME] and was looking into it. Mr [APPELLANT] also stated that he believed [NAME] had not looked after the Property properly despite the Landlord having refurbished the kitchen. As regard the items of disrepair the Landlord was also dealing with these but that the mould and damp was in fact due to [NAME] use and failure to heat the Property and to adequately ventilate the rooms concerned which has led to excessive condensation forming on the walls.

18. Mr [NAME] advised that he had carried out research into rental values in the area and was of the opinion that £1,200 per month was a fair figure for the Property.

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19. In support of [NAME] request for the Tribunal to consider a Hardship application, the Tenant advised that he had limited income and simply could not afford such a large increase in rent. In response Mr [APPELLANT] advised the Tribunal that [NAME] have a [NAME] and that he had been informed that the [NAME] would pay whatever is determined and owed as well as would deal with any disrepair.

THE LAW

20. Section 14 of The Housing Act 1988 states:

'(1) Where, under subsection (4)(a) of section 13 above, a tenant refers to a rent assessment committee a notice under subsection (2) of that section, the committee shall determine the rent at which, subject to subsections (2) and (4) below, the committee consider that the dwelling-house concerned might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy -

(a) which is a periodic tenancy having the same periods as those of the

tenancy to which the notice relates; (b) which begins at the beginning of the new period specified in the notice; (c) the terms of which (other than relating to the amount of the rent) are the

same as those of the tenancy to which the notice relates;...'

'(2) In making a determination under this section, there shall be disregarded -

(a) any effect on the rent attributable to the granting of a tenancy to a sitting

tenant; (b) any increase in the value of the dwelling-house attributable to a relevant

improvement carried out by a person who at the time it was carried out

was the tenant, if the improvement- (i) was carried out otherwise than in pursuance of an obligation to the

immediate landlord ...

21. The jurisdiction of the Rent Assessment Committee was transferred to the First- tier Tribunal (Property Chamber) from 1st July 2013.

22. In accordance with the terms of section 14 of the Housing Act 1988 the Tribunal must determine the rent at which it considers that the subject property might reasonably be expected to let on the open market by a willing landlord under an assured tenancy.

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23. In so doing the Tribunal, as required by section 14(1), must ignore the effect on the rental value of the property of any relevant [NAME] improvements as defined in section 14(2) 0f the Act.

VALUATION

24. In reaching its determination, the Tribunal had regard to the evidence and submissions of the parties, the relevant law and their own knowledge and experience as an expert Tribunal but not any special or secret knowledge.

25. In the first instance, the Tribunal determined what rent the landlord could reasonably be expected to obtain for the Property if it were let today in the condition that is considered usual for such an open market letting.

26. The Tribunal considered all the evidence submitted but preferred the rental evidence submitted by Landlord. The Tribunal also used its own general knowledge of market rental levels in the area and had regard to its own research into rental values for similar types of property from the surrounding areas and found similar type properties that supported the Landlord’s rental proposal. The Tribunal also had regard to the character of the Property as well as the location, accommodation and condition of the Property in arriving at its valuation of the Property after making some deductions for the disrepairs referred to by the Tenant.

27. There were no Tenants’ improvements and so no deductions were made in this respect.

28. Taking all these factors into consideration, the Tribunal was satisfied and concluded that the likely market rental of the Property would be £1,100 per month.

29. The rent determined by the Tribunal for the purposes of Section 14 was, therefore, £1,100 per month.

30. The Tribunal then considered [NAME] application for hardship. The Tribunal was persuaded by [NAME] that this was a significant rental increase notwithstanding the [NAME] promises to settle any increase determined and that it would cause some difficulties if the increase were to be backdated to the date in the Notice. The Tribunal was of the view that this would therefore cause undue hardship on the Tenant and consequently determined that the rental increase shall take effect from the date of the decision, that being 3 May 2024.

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RIGHT OF APPEAL

31. If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on a point of law only. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013) stating the grounds upon which it is intended to rely in the appeal.

[NAME] (Hons) FRICS