Jaggard’s Farm, Long Road, Comberton, Cambridge, CB23 7DQ CAM/12UG/F77/2024/0608
DECISION
[1]Description of hearing 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 Fair Rent of £190 per week effective from 2 May 2025.REASONS
[1]The Landlord made an application dated 3 October 2024 to register the rent of the Property at £200 per week. This was stated to be exclusive of any variable Service Charge.[2]The Rent Officer registered a Fair Rent of £190 per week on 27 November 2024 effective from 9 December 2024. This was in lieu of the previous rent of £185 per week which was registered on 9 December 2022 and effective from the same date.[3]The Landlord submitted an objection dated 10 December 2024.[4]The Tribunal issued Directions on 16 December 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. The Property[5]The Tribunal inspected the Property on 7 March 2025. The Landlord did not attend the inspection.[6]The Property is located in open countryside and comprises a detached period house of brick and tile construction providing a kitchen, WC, bathroom, lounge and two hallways, sitting room at ground floor and three bedrooms together with a boxroom at first floor. There is a concrete/asbestos garage together with gardens to the front and rear.[7]The carpets, curtains, kitchen units and white goods were installed by the Tenant together with the downstairs WC. The Tenant also installed the bath and sink. The Landlord has installed double glazing and central heating.[8]There is evidence of damp throughout the Property including areas where the plasterwork is crumbling away despite the best attempts of the Tenant. In this regard, there does not appear to be a DPC and the external hard surfaces directly abut the outside walls in a number of places such that rain and surface water is unable to drain away. The brickwork and decorative finish thereto is also in poor condition in a number of locations such that there may be both rising and penetrating damp.[9]There are also a number of cracks. Notwithstanding that it is entirely usual for cracks to open up due to flexing, it does appear that there may be some historic and potentially continuing movement.[10]The Tribunal noted the installation of a fan on the first floor landing which it understands is intended to remove damp air from the Property albeit there is no obvious exit point in the roof for the warm damp air to be expelled from. Notwithstanding that this does not appear to be effective, it does not address the fundamental issue of water getting into the walls in the first place hence not address the root issue.[11]The Tribunal also notes that, although it was intended to mitigate the existence of damp in the property, the Tenant was required to reimburse the cost of the supply and installation of this fan such that it comprises a Tenant’s improvement thereby falling to be disregarded in assessing the rent.[12]In general, the Tribunal has significant concerns in respect of the condition of the Property structure, the prevalence of damp and water ingress and the lack of rectification. The Law[13]The relevant law is set out in section 70 of the Rent Act 1977 (the Act) and The Rent Acts (Maximum Fair Rent) Order 1999 (the Order).[14]Section 70 (1) of The Act provides that in assessing the rent: “regard shall be had to all the circumstances (other than personal circumstances) and in particular to— i. the age, character, locality and state of repair of the dwelling-house, ii. if any furniture is provided for use under the tenancy, the quantity, quality and condition of the furniture and iii. any premium, or sum in the nature of a premium, which has been or may be lawfully required or received on the grant, renewal, continuance or assignment of the tenancy.”[15]Section 70 (3) of the Act provides that: “…there shall be disregarded. i. any disrepair or other defect attributable to a failure by the tenant under the regulated tenancy or any predecessor in title of his to comply with any terms thereof. ii. any improvement carried out, otherwise than in pursuance of the terms of the tenancy, by the tenant under the regulated tenancy or any predecessor in title of his iii. if any furniture is provided for use under the regulated tenancy, any improvement to the furniture by the tenant under the regulated tenancy or any predecessor in title of his or, as the case may be, any deterioration in the condition of the furniture due to any ill-treatment by the tenant, any person residing or lodging with him, or any sub-tenant of his.”[16]In addition, section 70 (2) of The Act requires the Tribunal to assume: “that the number of persons seeking to become tenants of similar dwelling-houses in the locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling-houses in the locality which are available for letting on such terms.”[17]This latter provision requires the Tribunal to assume that the demand for similar rented properties in the locality does not significantly exceed the supply of such properties for rent; in effect, if such scarcity exists, the Tribunal is to adjust the rental figure so that the fair rent is not affected by it.[18]In Spath Holme Ltd v Chairman of the Greater Manchester etc. Committee (1995) 28 HLR 107 and Curtis v London Rent Assessment Committee [1999] QB 92 the Court of Appeal emphasised:(a) “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 – other than as to rent- to that of the regulated tenancy) and(b) that for the purposes of determining the market rent, assured tenancy (market) rents are usually appropriate comparables. (These rents may have to be adjusted where necessary to reflect any relevant differences between those comparables and the subject property).”[19]In considering scarcity under section 70 (2) the Tribunal recognised that:(a) “there are considerable variations in the level of scarcity in different parts of the country and that there is no general guidance or “rule of thumb” to indicate what adjustment should be made; the Tribunal therefore considers the case on its merits.(b) terms relating to rent are to be excluded. A lack of demand at a particular rent is not necessarily evidence of no scarcity; it may be evidence that the prospective tenants are not prepared to pay that particular rent.”[20]Section 71 (1) of the Act provides that the registration of the rent takes effect from the date that the Tribunal makes its decision.[21]Fair rents are subject to a capping procedure under the Rent Acts (Maximum Fair Rent) Order 1999 which limits increases by a formula based on the increase in the Retail Price Index since the previous registration.[22]Section 72 (1) (b) of the Act provides that the registration of a rent takes effect: “…if the rent is determined by the appropriate tribunal, from the date when the tribunal make their decision” Representations – Tenant[23]The Tenant completed a Reply Form supported by photographs.[24]It was apparent from the Tenant’s representations that she had various concerns in respect of the extent of disrepair due to a lack of maintenance carried out at the Property by the Landlord with particular emphasis on the extent of damp penetration and cracking. Representations –Landlord[25]The Landlord’s objection was submitted by Ms Martin of Savills plc and simply stated: “Please can we appeal this. The rent officer has come back with a proposed increase to £190 per week (£9,880 per annum) from £185 per week (£9,620 per annum). An increase of 2.7%.”[26]No evidence or representations were submitted to substantiate or explain the Landlord’s objection. Determination[27]In assessing the Fair Rent the Tribunal is unable to take into account the personal circumstances of the Parties. As such, the assessment of rent has no regard to the personal, financial or health circumstances of either party both of whom are considered to be hypothetical. The Tribunal has therefore had regard to hypothetical, willing parties in the open market. The ownership costs arising to the actual Landlord are therefore irrelevant to this exercise.[28]Having determined that the parties to the assumed transaction are hypothetical, the next step, as set out in the Spath case as referred to above, is to determine the rent which a landlord could reasonably expect to obtain for the Property in the open market if it were let today in the condition and on the terms now usual for open market lettings.[29]The rent currently paid and/or registered is not relevant to this exercise. As such, the Tribunal has not relied upon the previous rent in any way and has disregarded historic evidence/determinations.[30]It is also not relevant whether or not the Landlord considers that the rent paid is sufficient to fund its liabilities and/or repair obligations. The cost to the Landlord of putting the Property into a suitable state and complying with its obligations is not a matter for consideration in determining the rent payable.[31]In the absence of any evidence being made available, the Tribunal has relied upon its own knowledge/expertise and is of the opinion that the Property would, if fully redecorated, modernised and refurbished such that it was free from damp, attract a rent in the region of £380 per week. However, this is before account is taken of the need to disregard the Tenant’s improvements.[32]In this context, the Tribunal has deducted 10% for the tenant’s fit out of the kitchen, 5% for the supply of White Goods, 5% for the provision of curtains and carpets, 10% for the bathroom units and 5% for decoration.[33]The Tribunal also notes that there is a scarcity of supply of similar properties in the general location at the present time and therefore considers that a scarcity allowance of 10% is appropriate on this occasion.[34]These adjustments assume that the Property is free from damp and the Landlord has rectified the exiting defects and made good. However, this is clearly not the case and further adjustments are required to take account of the impact these issues would have on the rent that would be offered in the market.[35]In this regard, the Tenant may have their own personal reasons for paying a certain level of rent in order to remain in occupation despite the damp but, as has already been set out, the Parties to the assumed letting are hypothetical. The rent that the Tenant might be prepared to pay to remain in occupation, is therefore of no assistance in considering the rent that would be paid by an incoming tenant who is under no compulsion to take occupation.[36]The existence of damp and mould together with the potential for resulting rot in the Property would be of significant concern to an incoming tenant and it is therefore appropriate to make a further allowance.[37]Having fully considered all matters relevant to this case, the Tribunal therefore considers the Fair Rent to be £190 per week.[38]The provisions of the Rent Acts (Maximum Fair Rent) Order 1999 require that the registered rent is either the capped Fair Rent, details of which are attached to this Decision, or the Fair Rent.[39]As set out above, the capped rent is determined by a formula that has regard to the increase in the Retail Price Index since the date of the last rent registration.[40]The Tribunal notes that the previous net rent detailed on the Rent Register was £185 per week effective from 9 December 2022. The calculated capped net rent as at the date of this Determination is therefore £212.50 per week.[41]The Fair Rent is below the Capped Net Rent. Therefore, the Fair Rent of £190 per week applies. The Tribunal also directs that the revised Rent takes effect from the date of this Determination. Name: Peter Roberts FRICS CEnv Date: 2 May 2025 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 either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. 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 to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013). 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). If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).