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maximum fair rent order 1999

📖 What is maximum fair rent order 1999? Meaning and definition

This Order introduces 'capping provisions' which mean that the fair rent determined by a tribunal cannot exceed a certain maximum amount, even if the market rent would be higher. The purpose is to prevent excessive increases in rent for tenants under the Rent Act 1977. When a tribunal assesses a fair rent, they first determine what the rent would be under Section 70 of the Rent Act 1977, considering the property's condition and market levels. Then, they compare this figure with the maximum rent allowed by the 1999 Order.

The calculation for the maximum fair rent involves using the Retail Price Index (RPI). It takes the latest RPI figure and the previous RPI figure to determine a percentage increase. This percentage is then adjusted by either 1.075 (if it's the first re-registration since 1 February 1999) or 1.05 (if not), and multiplied by the last registered rent (excluding any variable service charge). The resulting figure, often rounded up to the nearest 50p, is the maximum fair rent that can be registered.

In practice, this means that the fair rent registered will be the lower of the rent determined under the Rent Act 1977 and the capped amount calculated by the 1999 Order. This ensures that while rents can be adjusted, they do not increase beyond a prescribed limit, offering a degree of protection to tenants in properties subject to fair rent registration.

📋 Requirements

  • The property must be subject to fair rent determination under the Rent Act 1977.
  • A re-registration of fair rent is being applied for.
  • The calculation requires the latest and previous RPI figures.
  • The last registered rent (exclusive of any variable service charge) is needed for the calculation.

📝 Procedure

  • The Tribunal determines the rent under Rent Act 1977 Section 70, considering the property's condition and market value.
  • The Tribunal then calculates the maximum rent permitted under the Rent Acts (Maximum Fair Rent) Order 1999.
  • This calculation involves using the latest and previous RPI figures to find a percentage increase.
  • The percentage is adjusted (either +1.075 or +1.05) and multiplied by the last registered rent.
  • The fair rent to be registered is the lower of the two figures (the Section 70 rent or the capped rent), rounded up to the nearest 50p.

💡 Examples

  • A tribunal determined a market rent of £240.00 per week, but due to the 1999 Order's capping provisions, the registered fair rent was £191.50 per week.
  • Even though a property's open market rent was assessed at £3000.00 per month, the fair rent to be registered was capped by the Order at £791.00 per calendar month.
  • A tenant's last registered rent was £142.00, and after applying the RPI-based calculation from the Order, the new maximum fair rent was £191.48, rounded to £191.50.

📚 Legal basis

  • Rent Acts (Maximum Fair Rent) Order 1999
  • Rent Act 1977

❓ Frequently asked questions

What does 'capping provisions' mean in relation to my rent?

Capping provisions refer to the rules set out in the Rent Acts (Maximum Fair Rent) Order 1999 that limit how much your fair rent can increase. It means the registered rent cannot go above a certain calculated maximum, even if the market rent is higher.

How is the maximum fair rent calculated?

The calculation uses the Retail Price Index (RPI). It compares the latest RPI figure with the previous one to find a percentage increase, which is then adjusted and multiplied by your last registered rent to determine the maximum allowable rent.

Does this Order apply to all rental properties?

No, it specifically applies to properties where a fair rent is determined under the Rent Act 1977. It does not apply to all types of tenancies, such as assured shorthold tenancies.

What if the market rent for my property is much higher than the capped rent?

If the market rent is higher, the fair rent registered will still be limited by the maximum fair rent calculated under the 1999 Order. The Order acts as a ceiling to protect tenants from significant rent increases.

Where can I find the RPI figures used in the calculation?

The RPI figures are publicly available from official sources, often provided by the Office for National Statistics. Tribunals use these figures when performing the maximum fair rent calculation.

Is the maximum fair rent always rounded up?

Yes, the calculation often results in a figure that is then rounded up to the nearest 50p to determine the final maximum fair rent.

⚖️ Case law mentioning maximum fair rent order 1999

First-tier Tribunal (Property Chamber)AllowedTribunal Sets Maximum Fair Rent for PropertyFirst-tier Tribunal (Property Chamber)OtherFirst-tier Tribunal sets fair rent at £222.50 per weekFirst-tier Tribunal (Property Chamber)Allowed in PartTribunal Caps Shared Ownership Property's Fair RentFirst-tier Tribunal (Property Chamber)AllowedFirst-tier Tribunal Sets Maximum Fair Rent for Property TenancyFirst-tier Tribunal (Property Chamber)AllowedTribunal Caps Fair Rent at Maximum Level Under Rent Act
Entry: maximum fair rent order 1999 — Housing & Tenancy. Content produced by Artificial Intelligence based on legal sources and current UK legislation.