Tribunal Sets Rent at £705 Due to Market Conditions

OUTCOME: Allowed

MR22 First-tier Tribunal – Property Chamber File Ref No. CHI/00MS/MNR/2020/0031

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 11 [ADDRESS], [POSTCODE]

[NAME] Mr [RESPONDENT]

[COMPANY] 30 [ADDRESS], [POSTCODE]

Tenant [APPELLANT] & [APPELLANT] [NAME]

1. The rent is: £ 705.00 Per Calendar Month (excluding water rates and council tax but including any amounts in paras 3)

2. The date the decision takes effect is: 01 April 2020

3. The amount included for services is n/a Per n/a

4. Date assured tenancy commenced 26 February 2003

5. Length of the term or rental period Monthly

6. Allocation of liability for repairs As per section 11 of the Landlord & Tenant Act 1985

7. Furniture provided by landlord or superior landlord Cooker and floor coverings

8. Description of premises Purpose built two bedroom ground floor flat.

[NAME] of Decision 25 August 2020

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Case Reference : CHI/00MS/MNR/2020/0031

Property : 11 [ADDRESS], [POSTCODE]

Applicant: [redacted]

[NAME] (Tenants)

Respondent

: [redacted]

Date of Application : 26th February 2020

Type of Application : Sections 13 and 14 of the Housing Act 1988

Tribunal

: Mr [NAME] Mr [NAME]

: Considered on 25th August 2020

_______________________________________________

REASONS FOR DECISION ____________________________________

© CROWN COPYRIGHT 2020 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Background 1. The Tribunal gave formal notice of its decision by a Notice dated 25th August 2020 in the sum of £705.00 per calendar month.

2. By an application dated 26th February 2020, the tenant of the above property referred a notice of increase in rent served by the landlord under section 13 of the Housing Act 1988 to the Tribunal.

3. The landlord's notice dated the 10th February 2020 proposed a rent of £825.00 per calendar month with effect from 1st April 2020, in place of the current rent of £725.00 per calendar month.

4. A written assured shorthold tenancy agreement dated 26th February 2013 was provided to the Tribunal. That agreement is in the common form with the Landlord responsible for maintaining the property and the tenant responsible for keeping and maintaining the internal decorations.

Property and Inspection 5. Following the Directions dated 16th June 2020 and the explanation contained therein, the Tribunal did not inspect the premises.

6. Extracting such information as it could from the papers supplied to the Tribunal by the parties, by reference to information publicly available on the internet and with the benefit of its knowledge and experience the Tribunal reached the following conclusions and found as follows:

7. The property is located within an established suburban residential area of mixed dwellings. Local amenities are available.

8. The property comprises a ground floor flat in a purpose built building constructed circa 1995.

9. The accommodation comprises: Living Room, Kitchen (including cooker), Bathroom/w.c, 2 Bedrooms. Floor coverings.

10. There is off street parking available.

11. Mains gas, water, electricity and drainage are assumed to be connected. There is central heating to radiators.

12. In the absence of any representation to the contrary, the property is assumed to be in a satisfactory state of repair for letting.

Hearing 13. A hearing was not requested.

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Documents supplied to and considered by the Tribunal 14. Tribunal Directions dated 16th June 2020.

15. Tenancy Agreement dated 26th February 2013 (incomplete with two pages missing).

16. Landlord: Tribunal Reply Form, witness statement of Ms [RESPONDENT], Lead Rent and Compliance Officer, [NAME].

17. Tenant: Application form.

Landlord's Representations 18. The Landlord's witness Ms [RESPONDENT] provided a brief statement which included: a) The FTT Reply Form describing the property. b) Schedule of Comparables used to justify the rent. c) The Tenancy Agreement dated 26th February 2013. d) Notice of Rent Increase dated 10th February 2020.

19. The Schedule of comparables referred to three different 2 bedroom flats in [ADDRESS] [POSTCODE] and stated this is an older purpose built development nearby with communal gardens, some with access to private balconies and garages.

20. Specifically Ms [NAME] refers to:

a) No 20: let furnished on 21st February 2020 at £825.00 pcm. No

further details of the furnishings were provided.

b) No 18: Let unfurnished on 4th March 2020 at £825.00 pcm

c) No 17: Exchanged but with no details of the date let or the rent

agreed. The asking rent in July 2019 was £795.00 pcm.

21. In conclusion Ms [NAME] stated this was evidence to justify a rent of £825.00 pcm for the subject property, which although smaller is newer.

Tenant's Representations 22. Other than the application, the Tenant made no written representations.

The Tribunal’s Deliberations 23. The Tribunal may proceed to determine the rent at which it considers the subject property might reasonably be expected to let on the open market by a willing landlord under an assured tenancy.

24. The Tribunal found as a matter of fact that the notice was a Notice under section 13 as prescribed by Statute.

25. The Tribunal is required to determine the rent at which the subject property might reasonably be expected to be let in the open market by a willing Landlord under an assured tenancy. The personal circumstances of the Tenant are not relevant to this issue.

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26. The Tribunal finds, although the property is assumed to be in a satisfactory state and condition, that based on the knowledge of its members that the market for this type of property is very sensitive to condition and inventory. In this case, if offered today in the market, the property would require some enhancement and an upgraded inventory to include additional white goods, rather than just the cooker.

27. The Tribunal considered the comparable evidence supplied by Ms [NAME] of [NAME]. Brampton Manor is a development nearby but apart having a similar number of rooms, Ms [NAME] made no attempt to differentiate the two types of property other than acknowledging that those comparables had larger rooms and that some (not specified) had access to a private balcony and garage.

28. The Tribunal was concerned that Ms [NAME] had not drawn the Tribunal's attention to some very similar flats that were being advertised as available to let by [NAME] in [ADDRESS], all at asking rents of £705.00 per calendar month. Evidently these properties had been on the market for some time as they are advertised as 'reduced on the 1st July'.

29. The Tribunal is an expert tribunal and is entitled to rely on its knowledge and experience of the relevant property market. However given that the members had been unable to inspect the subject property as it would normally do, the Tribunal issued further direction to the parties asking for comment and specifically asking Ms [NAME] to explain why she had excluded (without explanation) similar properties in the same development.

30. The Applicant did not reply.

31. The Landlord replied in an email dated the 7th August 2020 and said: ''I have made enquiries with our Empty Homes and Lettings department as to why those properties were advertised at a lower rent. [NAME] gathered information to rebase our rents in October 2019 for rent setting in April 2020, at the time the we were advised that we would expect to achieve a rental of £825.00 per month. However since then due to various factors the property market has dipped considerably in Southampton and they had to reduce the rents in line with other landlords''.

32. The Tribunal, after careful consideration of the current market conditions, allied with the Landlord's acknowledgement that the market has dipped considerably, determined that the market rent for the subject property is £705.00 per calendar month.

33. The rent will take effect from 1st April 2020 being the date specified by the landlord in the notice of increase.

Relevant Law 34. Sections 13 and 14 of the Housing Act 1988.

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35. Assured Tenancies and Agricultural Occupancies (Forms) (England) Regulations 2015 (SI 2015 No.620)

[NAME]

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office which has been dealing with the case which application must:- a. be received by the said office within 28 days after the Tribunal sends to the person making the application written reasons for the decision. b. identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking 2. If the application is not received within the 28-day time limit, it must include a request for an extension of time and the reason for it not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.