Flat 3 1 Croft Street, Clayton, Manchester M11 4RQ MAN/00BN/MNR/2024/0706
REASONS
The Tribunal determined, in accordance. with section 14 of the Housing Act 1988, that the open market rent for the Property is £650 per month, effective from 14 October 2024. The Background[1]On 14 September 2021 Marcus Roberts (the Tenant) entered into a fixed term Assured Shorthold tenancy agreement with OCP Manchester LTD (the Landlord), of Flat 3 1 Croft Street, Clayton, Manchester M11 4RQ (the Property).[2]On 8 June 2024, the Landlord sent a Notice proposing a rent increase from £650 to £895 starting 14 August 2024. There was an error in the Notice and he served another one dated 15 August 2024 increasing the rent to £850 from 14 October 2024. No additional services are provided.[3]On 8 October 2024, the tribunal received an application under section 14 of the Housing Act 1988 (“the Act”).[4]Following notification to the parties, the Tenant and Landlord sent in representations. Neither party requested an oral hearing and the Tribunal determined that we were able to reach a fair decision without a hearing. The Tribunal inspected the property at around 10.45. The Tenant would not allow access to the Landlord. His reason was he had suffered harassment at the hands of his Landlord. The Property and Inspection[5]The property is a basement flat within a converted property comprising two further flats on the first floor. On the ground floor is a pharmacy and convenience store. The property is accessed via a common front door and narrow stairs with no handrail. Accommodation comprises of bedroom, open-plan kitchen/dining room and shower/WC. Ventilation and natural light is poor. This is provided by a small lightwell located in the open-plan kitchen/dining room. This is an open shaft which extends vertically adjoining a commercial property with Roller shutter doors. At time of inspection the Tribunal found the Roller shutter down and had concerns with adequate fire escape from a tenant.[6]Internally the ceiling height throughout is very low. The bedroom, open plan kitchen living room, and bathroom are large. There were signs of dampness to the floor in the bathroom apparently caused by leaks from the saniflow. The same hardwood flooring was fitted throughout, as were LED lighting. The fittings are of good quality. The Property is partly furnished with white goods.[7]The Property has no outside space and backs onto a carpark and small affluent area. It is in is not in an affluent area. It is near a large sports stadiums and by good transport links into the city centre.[8]The Tribunal also noted from the tenant that there was no dedicated refuse bin for the Basement flat and the flat suffered from vermin infestation. The Law[9]The Tribunal must first determine that the Landlord’s notice under section. 13(2) of the Housing Act 1988 (the 1988 Act) satisfied the requirements of that section and was validly served.[10]Section 14 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.[14]Section 14 (6) provides that “…unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal ….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.” The Tenants Case[15]The Tenant has provided detailed written submissions and evidence.[16]On 11 March 2024 Manchester City Council Housing Compliance and Enforcement Team placed a Suspended Prohibition Order on the Property and deemed the Property uninhabitable for further tenants to occupy because of no natural light. There has been no work since the Prohibition Order. The Order states that the Landlord is to add windows. It also orders the Landlord to remove the common parts electricity supply from the Property. The Tenant contended that he was paying the electricity for the shops. He does not pay for gas or water. The Landlord had not applied for planning permission.[17]He has provided three comparables of one bedroom flats in the M11 area in 2024/25 with a rentable market value of £700 per month. Flat 2 in his building rents for £650 from 20/8/2023 . He has been served a s21 Notice that was due to expire on 8 May 2025. The Landlords Case[18]The Landlord has said the tenant of Flat 2 agreed to an increase to £825, though he has not increased the rent as he is in the process of obtaining possession. He includes an email where the tenant agrees to this increase. The Property is 30% bigger than Flat 2. All are fitted to a high standard. The rent asked for is standard for the area, though they have not provided specific comparables. Tribunals Deliberations[19]The Validity of the Notice was not in dispute.[20]The Tribunal had to assess the rent in accordance with Section 14 of the 1988 Act, being the rent at which the Tribunal considered that the subject property might reasonably be let on the open market by a willing landlord under an assured tenancy. In doing so it must comply with section 14 (1) of the 1988 Act as referred to above.[21]The Landlords comparator of £825 for one of the flat upstairs, though in the same building with similar fittings, it has two large windows in the living room, though smaller than the Property. The Tenants comparators of £700 for Greenside Street and Victoria Street have little detail and are likely to be smaller with a lower spec.[22]Despite the email from the landlord regarding the agreed rent of £825 for the upstairs flat, the tenant’s comparators are considerably less.[23]The Tribunal has to value the Property with the Prohibition Order. It does not prohibit the Landlord from renting to the current tenant. However, the order prohibits the Landlord from renting the Property in its present condition on the open market. If the Landlord did so he could be in breach of the order and committing a criminal offence. It may also affect the security of tenure of any new tenant. This does not mean the Order would lead to a nil rent. It is an important factor to take into account when assessing the open market rent. In addition, though the Property has higher spec fittings and is substantially larger than flat 2, the very low ceilings and virtually no natural light or ventilation, substantially affect the value. Other factors are the damp and infestation identified above.[24]The Tribunal finds that the open market rent for the Property, would be the same as 2023. The Tenant rented the Property in a similar condition as it is now. The Prohibition Order and, damp and infestation would have reduced any increase. The Tribunal did consider whether the effect of the Prohibition Order would reduce the rent to below this figure, though decided on balance that there would still be a rental value given the current state of the market in the area.[25]This rent of £650 per month will take effect from 14 October 2024, being the effective date of increase in the notice. Judge J White 27/05/2025 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 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, further application for permission may be made to the Upper Tribunal (Lands Chamber).