14, Gordon Avenue, Bolton BL3 5PU MAN/00BL/MNR/2022/0211
DECISION
[1]By a decision dated 27 February 2023, the Tribunal determined, in accordance with section 14 of the Housing Act 1988, that the open market rent for the Property is £650.00 per month. Background[2]By a notice dated 2 November 2022, (“the Notice”), the Landlord proposed a new rent of £650.00 per month to take effect from 5 December 2022.[3]By an application dated 30 November 2022, the Tenants referred the Notice to the Tribunal.[4]An inspection of the Property was scheduled to take place on Monday 27 February 2023 at 11:25 with a hearing scheduled at 14:30 on the same date. Inspection[5]The Tribunal inspected the Property on 27 February 2023. The Tenants were present at the Property and the inspection was also attended by Mr A Hussein, representative of the Landlord.[6]The Property is a mid-terrace house with a small front yard/garden. There is a small rear yard with access to a garage/storage shed which opens onto the rear access road. The Property comprises the following accommodation: G/F: small hall, front living room, rear living room and kitchen; 1F: 2 double bedrooms, and bathroom (W/C, WHB, walk-in shower). The Property has gas central heating and double-glazing.[7]The Tenants pointed out the following improvements they claim to have made to the Property:7.1 hallway: replaced carpets with laminate flooring;7.2 kitchen: fridge provided by the Tenants as the Landlord’s fridge dirty/not working; new kitchen units, hob and sink unit installed; replaced small radiator with a larger one; kitchen roof replaced and insulated;7.3 rear living room: two ovens and kitchen units installed in understairs space;7.4 bathroom: re-designed bathroom with small extension and installation of new bathroom fittings comprising walk-in shower and WHB;7.5 rear bedroom: new wardrobe doors fitted;7.6 garage/rear yard: garage roof replaced; new door fitted; new tiles laid to rear yard.[8]The Landlord’s representative challenged some of the claims of improvements made by the Tenants. The Law[9]The Tribunal must first determine that the Landlord’s notice under section 13(2) satisfied the requirements of that section and was validly served.[10]Section 14 of the Housing Act 1988, (“the 1988 Act”), requires the Tribunal to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy.[11]In so doing the Tribunal, is required by section 14(1), to ignore the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act.[12]Section 14(4) provides that for the purposes of section 14 “rent” includes amongst other things any sums payable to the landlord by the tenant in respect of council tax.[13]Section 14(4) provides that for the purposes of section 14 “rent” does not include a “service charge” within the meaning of section 18 Landlord and Tenant Act 1985 (i.e. where in accordance with the terms of the tenancy or other agreement a service charge payable by the tenant is variable from time to time according to changes in the relevant costs). However it does include a “fixed” service charge. Hearing[14]Both parties submitted written representations to the Tribunal prior to the hearing.[15]Both of the Tenants and Mr A Hussein, the Landlord’s representative, attended the hearing. Also in attendance was an interpreter for Mr. Byroos and a family member of the Landlord.[16]The Tenants made the following oral submissions:16.1 they are not rejecting the principle of a rent increase and consider the proposed rent to be a “fair and reasonable” rent for the Property in its present state;16.2 the Tenants’ objection is based on their contention that, with the Landlord’s consent/approval, they have spent considerable time and money on improving the Property, for which they have not been fully reimbursed;16.3 in particular, the Tenants claim that there was an agreement with the Landlord that, in consideration for their work to refurbish the Property, which was in a very poor condition when they moved in, the Landlords would allow them to remain for an extended period in the Property and that there would be no rent increase until they had been fully reimbursed for all the cost of their works;16.4 instead, ever since the renovation works have been completed, the Landlord has been trying to get the Tenants out of the Property. The parties’ written submissions to the Tribunal includes copy documents relating to possession proceedings issued by the Landlord against the Tenants in February 2022;16.5 the Tenants claim that they have spent a total of £6678 on materials for the refurbishment/improvement works to the Property;16.6 the Tenants acknowledge that, after a 3-month rent-free period at the beginning of the tenancy in April 2019, they have paid a rent of £350 per month less a deduction of £100 per month in or towards repayment of the cost of the refurbishment/improvement works;16.7 the Tenants claim that £1978 remains unpaid for materials. In addition, the Tenants claim that no allowance has been made for the labour costs of Mr Byroos who undertook the works in his spare time;16.8 the Tenants claim that the following works constitute improvements to the Property:(1) re-felting of the kitchen roof and repair of the kitchen ceiling(2) securing of unstable kitchen units(3) installation of two new ovens in the rear living room as oven in the kitchen not working/electricity supply to the kitchen insufficient(4) provision of fridge as the Landlord’s fridge not working(5) repairs to the garage roof(6) re-tiling of the rear yard(7) repair/refurbishment of garage floor(8) repair/re-painting of window sills(9) repair to front door frame and fitting of new lock(10) repairs to hallway including fitting of new timber insulation and laminate flooring(11) new floorings throughout the Property(12) repair to bathroom roof(13) painting of staircase(14) installation of fitted wardrobes in front bedroom(15) repair to window in front bedroom(16) extension to bathroom and installation of new bathroom fittings (shower/WHB) and ceiling lights(17) repair to boiler(18) fitting of doors to cupboard in rear bedroom(19) arranging for improvements to water pressure at the Property16.9 With regard to the rent increase proposed, the Tenants referred to the following: (1) the current rent of £320 per month which they state is being paid by the tenants of No. 6, Gordon Avenue; and, (2) a conversation with the Landlord by an employee of Bolton Council Housing Department requesting the Landlord to agree a rent of £500 per month.[17]The Landlord made the following oral submissions:17.1 there is no dispute that, at the outset of the tenancy, the Property required work to be done to it;17.2 it is also agreed that there was an agreement with the Tenants that, in consideration of their effecting repairs to the Property, there would be an initial 2 months’ rent-free period, after which the rent would be £350 per month with an agreed deduction of £100 per month to allow for the ongoing costs of the agreed repairs;17.3 the initial estimated cost of the repairs was £3000, but an increase to £5000 was subsequently agreed;17.4 it was always understood by the Landlord that the works would be undertaken by Mr Byroos but not that he would expect to receive reimbursement for their time spent on these works; 17.4 the Landlord disputes the need to undertake certain of the works carried out by the Tenants, and/or that certain works have been undertaken. In particular,:(1) bathroom: at the outset of the tenancy , the bathroom was in full working order and the roof was not leaking. Further, there was no agreement to the bathroom extension which has adversely impacted on the accommodation afforded by the rear bedroom;(2) kitchen: at the outset of the tenancy, the cooker was in working order, the kitchen units were not unstable and the previous tenants had not complained about any leaks from the roof and the Landlord had not seen the collapsed ceiling in the kitchen. The Landlord had agreed to the changes to the kitchen units made by the Tenants;(3) garage: the Landlord accepts that the Tenants have put a new plastic roof on the garage but does not accept that the previous roof was leaking. The Landlord also accepts that some of the roof timbers have been replaced by the Tenants. The Landlord disputes that the garage floor has been repaired and/or replaced;(4) rear yard: the Landlord disputes the need for the replacement by the Tenants of certain of the tiles in the rear yard;(5) front door: the Landlord disputes that the Tenants have replaced the front door frame; further there was no need to replace the lock which was in working order;(6) hallway: the Landlord accepts that the Tenants have installed laminate flooring in the hallway and the front living room but not that this was required because of defective floorboards;(7) rear living room: the Landlord did not consent to the installation of the ovens in the under-staircase space;(8) staircase: the works undertaken by the Tenants, ie the removal of the carpets and the re-painting of the staircase, were unnecessary;(9) front bedroom: the Landlord accepts that the Tenants have repaired the window opener/lock. The removal of the carpet, double bed and free-standing wardrobe were all unnecessary/the Tenants’ choice;(10) rear bedroom: the cupboard doors were already there and were in good condition. The Landlord also referred to the adverse impact to the size of this bedroom as a result of the bathroom extension;(11) boiler: the Landlord has seen no paperwork for this alleged repair in July 2021.17.5 The Landlord referred to the letter dated 14 February 2023 from Sovereign Estates confirming that, in their opinion, in the “current market” a rental of £700 per month is achievable for “a similar property of decent condition”. Tribunal’s Deliberations[18]The Tribunal determined the Notice to be valid in accordance with s13(2).[19]At the hearing, the Tribunal explained to the parties that their jurisdiction was limited to a determination of an open market rent for the Property in accordance with section 14 of the 1988 Act.[20]The relevance of the improvements claimed to be undertaken by the Tenants was the extent to which, if at all, they should be disregarded by the Tribunal in accordance with section 14(2)(b) of the 1988 Act in its determination of the rent for the Property.[21]The Tribunal accepted the Tenants’ evidence of the works undertaken by them.[22]The Tribunal noted that there was no dispute between the parties that an agreement had been made between them that, in consideration of the Tenants’ agreement to do works at the Property, the Landlord would reimburse them for the cost of the works through a combination of a rent-free period and a reduced rent.[23]The Tribunal determined that the improvements did not constitute relevant improvements to be disregarded under section 14(2) of the 1988 Act as they were carried out “in pursuance of an obligation to his immediate landlord” by the Tenants in accordance with the agreement reached between the Landlord and the Tenants prior to the commencement of the tenancy.[24]The Tribunal noted the Tenants’ statement that the proposed rent of £650 per month was “fair and reasonable” for the property in its current state.[25]The Tribunal placed no reliance on the Tenants’ evidence of the rent of £320 per month payable by the tenant of No.6, Gordon Avenue as evidence of the open market rent payable for properties similar to the Property as the Tenants had failed to provide any supporting evidence of the terms of the tenancy, when the tenancy commenced, details of the property etc.[26]The Tribunal noted the Tenants’ reference to an email from an employee of Bolton Council’s Housing Department. This email did not appear in the hearing bundle although a conversation said to have been held between this employee and the Landlord was referenced in the Tenants’ statement to the Tribunal where it states, “The Bolton council housing department staff Ms Susan McCarthy also spoke with the landlord and said that we pay £500 per month rent and let us go live as we had put our energy and money on renewing his property….But he refused”.[27]Following the hearing, the Tribunal had sight of an email dated 9 June 2022 from a Ms S McCarthy to Mrs Byroos in which Ms McCarthy states that she has been advised that “considering the Local Housing Allowance rates for Bolton…the proposed rent increase to £450 is not unreasonable”, and in which she offers to speak to the Landlord if the Tenants confirm their agreement to pay a rent of £450 per month.[28]The Tribunal placed no reliance on this evidence in its determination of the open market rent for the Property. It is clear from the email that the opinion offered was based upon the then current Local Housing Allowance rates for the relevant area which is not relevant to a determination under section 14 of the 1988 Act.[29]The Tribunal noted the Landlord’s oral evidence that, notwithstanding the evidence from Sovereign Estates of rents payable for a “similar property of decent condition” of £700 per month, the “fair rent” for the Property is £650 per month.[30]Having regard to the parties’ evidence and relying on its own knowledge and experience the Tribunal determined that the open market rent for a comparable property to the Property in its present condition is £650.00 per month.[31]This rent will take effect from 5 December 2022 being the date stipulated in the Notice.[32]Having regard to the Tribunal’s jurisdiction as explained to the parties at the hearing, this determination is without prejudice to any right which the Tenants may have to seek recovery from the Landlord of costs incurred for labour and materials in undertaking works at the Property. This statement should not be taken as a statement that the Tenants have any such right.