Flat 3, Keble Court, Gateshead Road, WD6 4AY CAM/26UE/MNR/2024/0017
DECISION
The Tribunal determined a market rent of £1,475 per month effective from 25 February 2024.REASONS
[1]The Landlord served a notice dated 11 January 2024 pursuant to section 13 (2) of the Housing Act 1988 which states an increase in the passing rent from £1,100 per month to £1,800 per month with effect from 25 February 2024.[2]This rent is stated to be exclusive of Council Tax, Water Charges, and fixed service charges.[3]The Tenant made an application on 22 January 2024 to the Tribunal in reliance on section 13 (4) of the Housing Act 1988.[4]The Tribunal issued directions on 6 January 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 25 March 2024.[6]The Property comprises a ground floor flat within a purpose built complex constructed circa 2008 and providing a hallway, single bedroom, double bedroom with ensuite, family bathroom and kitchen/living room together with an allocated car parking space. The Tenancy[7]The Tenant took occupation pursuant to an Assured Shorthold Tenancy commencing 25 February 2020 for a term of 12 months at an initial rent of £1,100 per month.[8]The Tenant’s repair liabilities are set out at clause 9.16 of the Tenancy which states: “The Tenant must maintain the interior of the Property, the Internal decorations, the furniture and effects and any fixtures, fitings and appliances in as good a condition as they were in at the beginning of the tenancy…”[9]The Landlord’s repair obligations are set out at clause 11.3 of the Tenancy which states: “The Landlord must repair and keep in repair the structure and exterior of the Property. He must also keep in repair and proper working order the installations in the Property for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences) and for space and water heating… …The Landlord must further ensure that the Property is reasonably fit for human habitations. The Landlord must also comply with his repair obligations under section 11 of the Landlord and Tenant Act 1985.” The Law[10]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”[11]Section 14 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:• “having the same periods as those of the tenancy to which the notice relates;• which begins at the beginning of the new period specified in the notice;• the terms of which (other than relating to the amount of rent) are the same as those of the existing tenancy.”[12]Section 14 (2) of the 1988 Act requires the Tribunal to disregard:• “Any effect on the rent attributable to the granting of a tenancy to a sitting tenant;• 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;• Any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy.”[13]Examples of a tenant’s failure to comply with the terms of the lease may include, for example, a lack of redecoration.[14]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.”[15]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[16]The Tenant did not provide any reasons for appealing within their Application Form. However, they made various comments in their Reply Form including references to council tax and fuel costs relative to the Landlord’s comparables and that “…the size of the bedrooms are much smaller then the size of the bedrooms of the flats what Mr Desai has provided in his email.”[17]Rent Confirmation Letters were also provided in respect of a flat at Downing Court let for £1,150 per month and a 3-bedroom detached house at £1,200 per month. Representations – The Landlord[18]The Landlord’s agents completed the Reply Form from which the Tribunal notes the following points.• The carpets and kitchen were replaced in 2023• Similar properties in the area comprise: i. Owen Court - £1,750 pcm ii. Eaton Way - £1,450 pcm iii. Coleridge Way - £1,750 pcm iv. Manor Way - £1,650 pcm Determination[19]In determining the market rent in respect of the Property, 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.[20]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. The Tribunal is therefore unable to take into account the Tenant’s ability to pay the rent or the Landlord’s need to achieve a certain income.[21]In addition, historic matters between the actual landlord and tenant are not relevant to the rent likely to be offered by a prospective tenant. The Tribunal can therefore only have regard to the Property as it exists on the relevant date of the proposed rent review having regard to the statutory assumptions.[22]As set out above, section 14 of the 1988 Act requires the Tribunal to determine the rent at which the Property might reasonably be expected to let with effect from the date specified for commencement of the new rent as set out in the section 13(2) Notice.[23]The Tribunal notes the evidence provided by the Landlord and the Tenant but has also had regard to its own knowledge and experience of the rental market in the general locality. In this regard, it has taken into account that the Property is on the ground floor, which is generally considered to be comparatively less attractive to occupiers and overlooks the car park.[24]The Tribunal therefore determines the market rental of the Property as at the effective date to be £1,475 pcm.[25]The Tribunal appreciates that this may appear to be a relatively large increase when compared to the current passing rent of £1,100 per month. However, the Parties should bear in mind that the rent has not been increased since the commencement of the lease (i.e., 4 years ago) since when rents have increased significantly.[26]The fact that the rent has not been increased in the meantime is not relevant to these proceedings but hopefully this explanation is helpful in setting out the context.[27]The rent payable may not exceed £1,475 per month. However, this does not prevent the Landlord from charging a lower rent. Name: Peter Roberts FRICS CEnv Date: 27 April 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 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).