96 Limbury Road, Luton, LU3 2PL CAM/00KA/MNR/2024/0149
DECISION
[1]This has been a remote determination on the papers which the parties are taken to have consented to, as explained below. The form of determination was a paper determination described above as P:PAPERREMOTE The documents that the Tribunal was referred to are in bundles from the Applicant and the Respondent. The Tribunal has noted the contents and the decision is below. Decision[2]The Tribunal determined a market rent of £1,425 per calendar month effective from 6 October 2024.REASONS
[1]On 14 August 2024 the Landlord served notice under section 13 (2) of the Housing Act 1988 to increase the passing rent from £1,300 per calendar month (pcm) to £1,550 per month with effect from 6 October 2024.[2]This rent is stated to be exclusive of Council Tax, Water Charges and fixed service charges.[3]The Tenant made an application to the Tribunal in reliance on section 13 (4) of the Housing Act 1988 on 13 September 2024.[4]The Tribunal issued directions on 20 September 2024, inviting the Parties to submit any further representations (including any photographs and details of rentals for similar properties) they wished the tribunal to consider.[5]Further directions were issued on 17 October 2024. The Property[6]The Tribunal have relied upon the evidence provided by the Parties together with information in the public domain including Google Earth Pro.[7]The Property comprises an end/terraced house of brick and tile construction providing a sitting room, lounge and kitchen at ground floor level and three bedrooms with a family bathroom at first floor level. There is external car parking to the front and a garden to the rear.[8]The Property benefits from central heating and double glazing together with carpets and curtains. The Tenancy[9]The Tenant occupied the Property by virtue of an Assured Shorthold Tenancy that commenced 6 October 2018 for a term of 6 months.[10]The rent reserved under this Tenancy was £1,100 pcm.[11]The Tenant’s obligations are set out within the Tenancy at clause 3. Paragraphs 3.3 and 3.5 state: “3.3 – Not to damage or injure the property or make any alteration or addition to it. Any redecoration is to be made only with the prior written consent of the Landlord or the agents. 3.5 – To keep the interior of the property and the contents in good and clean condition and complete repair (reasonable wear and tear accepted) and to keep the property at all times well and sufficiently aired and warmed during the tenancy.”[12]Clause 4.4 confirms that the Landlord will comply with their statutory repair obligations.[13]In the absence of a new Tenancy being entered into, an Assured Periodic Tenancy pursuant to Section 5 (2) of the Housing Act 1988 (the 1988 Act) has arisen such that Sections 13 and 14 of the Act now apply. The Law[14]Section 5 (3) of the Act provides that the periodic tenancy arising on expiry of the Assured Shorthold Tenancy is one: “(a) taking effect in possession immediately on the coming to an end of the fixed term tenancy; (b) deemed to have been granted by the person who was the landlord under the fixed term tenancy immediately before it came to an end to the person who was then the tenant under that tenancy; (c) under which the premises which are let are the same dwelling-house as was let under the fixed term tenancy; (d) under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and (e) under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy”[15]Section 14 (1) of the 1988 Act provides that the Tribunal is required to determine the rent at which the Property might reasonably be expected to let in the open market by a willing landlord under an assured tenancy:a. “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 rent) are the same as those of the existing tenancy.”[16]Section 14 (2) of the 1988 Act requires the Tribunal to disregard: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 (as defined by section 14 (3) of the Act) otherwise than as an obligation;c. Any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy.”[17]Section 11 of the Landlord and Tenant Act 1985 (the 1985 Act), provides that the Tribunal is to imply a covenant by the Landlord:a. “to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes),b. to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), andc. to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.”[18]Section 14 (7) of the 1988 Act states: “Where a notice under section 13(2) above has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the rent under the tenancy with effect from the beginning of the new period specified in the notice or, if it appears to the appropriate tribunal that that would cause undue hardship to the tenant, with effect from such later date (not being later than the date the rent is determined) as the appropriate tribunal may direct.” Representations – The Tenant[19]The Tenant identified 4 main issues within their Application stating the following: “1) I further confirm there is disrepair in the Property such as water is leaking from the bathroom floor, which is affecting the kitchen and lounge ceiling, this is affecting the lighting in the kitchen and lounge, and I have inserted a tube light via extension lead which is a safety hazard 2) There is also heating problem, we have to turn on the heaters in the summer to use hot water without turning on the heaters there is no facility of hot water. In winter it turn off on continue mode and makes noise. 3) The window in one of the bedrooms does not shut entirely. 4) I have not been provided with keys for the lounge windows and door therefore I am unable to open the windows and door which is causing ventilation problem.”[20]The Tenant completed the Reply Form which expanded upon these comments and raised further issues. In addition, The Tenant attached photographs of each room detailing the issues complained of. The Tribunal does not consider it beneficial to list all the issues identified but has had full regard to the entirety of the material provided.[21]No rental evidence was provided. Representations – The Landlord[22]The Landlord completed the Reply Form. In contrast to the evidence provided by the Tenant, the Landlord described the Property as being in “overall good condition.”[23]It was stated within the Comments that: “Semi-detached 3 bedroom property in good condition throughout. Landlord mortgage has risen significantly and requires increase in rent to pay the mortgage. Similar 3 bed properties are in region of £1500 – “£1600 per calendar month.”[24]No rental evidence was provided. Determination[25]In determining the market rent, the Tribunal has regard to prevailing levels of rent in the general locality and achieved rental values in respect of other properties of comparable accommodation and provision that would be likely to be considered by a prospective tenant. The current rent, and the period that has passed since that rent was agreed or determined is not relevant.[26]Previous changes in rent are not, therefore, relevant as the Tribunal is required to assess the rent that would be offered by a prospective tenant who has no knowledge of the existing or previous rents.[27]The legislation requires the Tribunal to have regard to market demand assuming that the landlord is willing. The Tribunal is therefore unable to have any regard to the personal circumstances or identities of the actual landlord and tenant in assessing the level of rent.[28]In that regard, it is irrelevant whether or not the Landlord requires the rent to be at a certain level to fund its mortgage repayments and/or its repair obligations under the lease or whether the Tenant feels that the services provided by the Landlord are “value for money”. As such, the cost of property maintenance to the Landlord does not affect the rent that would be offered by a prospective tenant in the market and must be disregarded.[29]However, as set out above, the Tribunal is required to have regard to the obligations of the Landlord and Tenant in respect of the repair, maintenance and upkeep of the Property and take into account the extent to which these obligations have been complied with.[30]Section 14 (2) (c) of the 1988 Act requires the Tribunal to disregard any failure by the Tenant to comply with their lease obligations. However, the Tribunal is to have regard to matters that do not arise as a direct consequence of the Tenants’ failure to comply with any of their obligations.[31]There is a clear disparity between the condition of the Property as described by the Tenant and that described by the Landlord. In this regard, the Tribunal has had the greatest regard to the photographic evidence provided by the Tenant. It is not surprising, bearing in mind that the Tenant has been in occupation since 2018 that the Property is in clear need of repair, renewal and redecoration.[32]The market would not, therefore be likely to offer the same level of rent for the Property as they would for a property that had been modernised and was in full decoration and repair but was otherwise identical.[33]Neither of the Parties have provided any rental evidence and it is therefore necessary for the Tribunal to rely upon its own knowledge and experience of the market making appropriate deductions on account of the general condition.[34]In this regard, the Property could be worth £1,550 pcm as contended for by the Landlord if it was in a condition commensurate with equivalent properties being offered to the market but a prospective tenant would either want a discount to account for the actual condition or take alternative premises thereby reducing the pool of prospective tenants bidding for the Property.[35]The Tribunal has therefore reviewed all the evidence provided and determines the market rental of the Property to be £1,425 pcm. The rent payable may not, therefore, exceed this figure. However, this does not prevent the Landlord from charging a lower figure.[36]This rent is to be effective from 6 October 2024. Name: Peter Roberts FRICS CEnv Date: 26 November 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 application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. 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. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).