92 Leaford Crescent Watford WD24 5JG CAM/26UG/F77/2018/0038

FIRST-TIER TRIBUNAL
PROPERTY CHAMBER (RESIDENTIAL PROPERTY)
Case No CAM/26UG/F77/2018/0038
Between
Mr Neil N A HobbsApplicantConsolidated Equities LimitedRespondent
Before
Mrs E Flint DMS FRICSMr J Francis QPMDate 19 February 2019Type of application: Determination of the registered rent under Section 70 Rent Act 1977 S

DECISION

The registered rent with effect from 18 February 2019 is £150 per week. © CROWN COPYRIGHT S E C FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) 2 Background[1]On 30 October 2018 the landlord applied to the rent officer for registration of a fair rent of £166.75 per week for the above property.[2]The rent payable at the date of the application was £145 per week which had been registered by the rent officer on 17 November 2016 2015 with effect from 8 December 2016.[3]On 19 November 2018, the rent officer registered a fair rent of £162.50 per week with effect from 8 December 2018.[4]The tenant objected to the rent determined by the Rent Officer.[5]The tribunal inspected the house on the morning of 18 February 2019. The Evidence[6]The tenant stated that the lease is fully repairing and that theflat has no heating and is single glazed.[7]No representations were made by or on behalf of the landlord. Inspection[8]The premises comprise a ground floor flat in a two storey purpose built block of flats, with garden and car space.[9]The accommodation is three rooms, kitchen and bathroom/wc. The tenant has refitted the kitchen and the landlord has rewired with surface mounted conduit otherwise the flat is as at the beginning of the tenancy in 1971.[10]The windows are single glazed with Crittall frames. Heating is via the tenant’s gas fire in the living room and a freestanding electric heater. Valuation[11]In the first instance the Tribunal determined what rent the landlord could reasonably be expected to obtain for the property in the open market if it were let today in the condition that is considered usual for such an open market letting. It did this by having regard to the evidence supplied by the parties and the Tribunal's own general knowledge of market rent levels in Watford. Having done so, it concluded that the likely market rent for the flat would be £250 per week.[12]However, it was first necessary to adjust the hypothetical rent of £250 per week to allow for the differences between the terms and condition 3 considered usual for such a letting and the condition of the actual property at the date of the inspection, ignoring the tenant’s improvements, (disregarding the effect of any disrepair or other defect attributable to the tenant or any predecessor in title). The Tribunal noted that flats available on the open market were all modernised and centrally heated with white goods, floor and window coverings. The Tribunal considered that these differences plus the repairing liability of the tenant required a deduction of £75 per week.[13]This leaves an adjusted market rent for the subject property of £175 per week. The Tribunal was of the opinion that there was substantial scarcity in the commuter belt of Hertfordshire for similar properties and therefore made a deduction of approximately 15% from the market rent to reflect this element. The Tribunal’s uncapped fair rent is £150 per month. Decision[14]The uncapped fair rent initially determined by the Committee, for the purposes of section 70, was accordingly £150 per week.[15]This is below the maximum fair rent that can be registered by virtue of the Rent Acts (Maximum Fair Rent) Order 1999 (Details are provided on the back of the decision form).[16]Accordingly the sum of £150 per week will be registered as the fair rent with effect from 18 February 2019 being the date of the Tribunal's decision. Chairman: Evelyn Flint Dated: 19 February 2019 --- decision_2.pdf --- © CROWN COPYRIGHT 2013 Page 1 of 2 First-tier Tribunal Property Chamber (Residential Property) The Law Relating to the Assessment of Fair Rents INTRODUCTION[1]This is a brief summary of the law applied by the Tribunal (formerly call a Rent Assessment Committee) when reaching its decision. It is an integral part of the decision.[2]The definition of Fair Rent is contained in the Rent Act 1977 i.e.:- 70(1) In determining ......a fair rent under a regulated tenancy of a dwelling house, regard shall be had to all the circumstances (other than personal circumstances) and in particular to:- a) the age, character, locality and state of repair of the dwellinghouse b) if any furniture is provided for use under the tenancy, the quantity, quality and condition of the furniture, and c) any premium, or sum in the nature of a premium…… 70(2) For the purposes of the determination it shall be assumed that the number of persons seeking to become tenants of similar dwellinghouses 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 dwellinghouses in the locality which are available for letting on such terms 70(3) There shall be disregarded:- a) any disrepair or other defect attributable to a failure by the tenant under the regulated tenancy or any predecessor in title of his…… b) 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 e) 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[3]The Tribunal also has to take into account the Human Rights Act 1998. However, when interpreting the Rent Act 1977 (primary legislation) the Tribunal will have to follow the wording of the Act if it cannot be read or given effect in a way which is compatible with rights contained in the European Convention on Human Rights. Any party dissatisfied will then have to refer the matter to the High Court for the making of a Declaration of Incompatibility. © CROWN COPYRIGHT 2013 Page 2 of 2[4]All other rights granted by the Convention such as the right to a fair and public hearing by an independent tribunal and the right to respect for a person’s private and family life are to be observed by the Tribunal[5]There have been a number of cases decided over the years most of which have been either unreported or reported only in professional journals. However in 1997 a Court of Appeal decision was reported as Curtis v London RAC (No. 2) [1997] 4 AER 842 where the Court reviewed the various authorities and provided guidance to Tribunals to assist them in reaching decisions.[6]The Court confirmed that a Tribunal must first find an open market rent for the property taking into account evidence before it from the parties and the Rent Officer. It will not consider other registered rents unless there are very exceptional circumstances which will be set out in the decision if appropriate.[7]A Tribunal can use such factors as comparable rents being paid for similar properties in the locality, capital values and return on expenditure as well as the experience and expertise of its members.[8]Having established an open market rent the Tribunal then has to consider the deductions and allowances referred to above[9]In all cases the Tribunal will try its best to give the parties details of its calculations. The Curtis case (above) made it clear that a Tribunal’s decision must be supported by some workings out, but precise arithmetical calculations are not possible in all cases. There are many properties where the deductions and allowances are of such proportions that a Tribunal must simply take a view as to how much a rent would have to be reduced in order to obtain a tenant. This may not be the same as the sum total of the Statutory deductions/allowances.[10]If the Tribunal considers that the demand for similar properties in the locality is substantially greater than the supply then a deduction has to be made in accordance with Section 70(2) Rent Act 1977. This is the so-called “scarcity factor”. The Tribunal is obliged to look at scarcity in terms of people wanting regulated tenancies. However the reality is that no new regulated tenancies are created nowadays and scarcity is therefore considered using the types of tenancy currently in use.[11]The word “locality” in Section 70(2) has a different meaning to that in Section 70(1). In the case of Metropolitan Property Holdings Limited v Finegold [1975] 1 WLR 349 it was decided that the “locality” for this purpose should be a really large area. A Tribunal must define the extent of that “locality” when reaching its decision.[12]In determining scarcity, Tribunals can look at local authority and housing association waiting lists but only to the extent that people on such lists are likely to be genuine seekers of the type of private rented accommodation in question if the rent were to exclude the scarcity element.[13]The Tribunal must apply the Rent Acts (Maximum Fair Rent) Order 1999 – known as the “capping” provision – unless there is an exemption.