The Upper Tribunal (UT) heard an appeal against a First-tier Tribunal (FTT) decision regarding fair rent determination under the provisions of Section 70 of the Rent Act 1977.
Background:
The property in question is a small one-bedroom flat situated on the fourth floor of 61 Queen's Gardens. The fair rent had previously been determined by the rent officer to be £1,210 per calendar month from 24 April 2015 and was subsequently reappraised by the valuation officer at £1,235 per calendar month as of 19 June 2023. The landlord objected to that figure and the matter was referred to the FTT in December 2023.
The landlord submitted that the market rent typically ranged between £3,445 and £4,312 per calendar month based on a recently rented flat in the same building and that the fair rent should accordingly be set at £2,492 per calendar month. The FTT ruled that the market rent was £2,600 per month but made a 35% deduction on account of the condition of the property, resulting in a rent of £1,690. It determined the fair rent to be £1,352 per month, a figure that fell below the maximum under the Rent Act (Maximum Fair Rent) Order 1999.
The landlord appealed on the basis that the FTT had provided no reasons for its conclusion on the market rent and its disregard for the landlord’s schedule.
Decision:
The UT set aside the decision, remitting the case for redetermination due to a lack of adequate reasoning regarding the market rent assessment in the FTT’s decision. The UT reiterated the findings of Martin Rodger QC in The Trustees of the Israel Moss Children's Trust v Bandy [2015] which requires the FTT to give reasons for their decision when determining fair rent and quoted “… the reasons need not be elaborate or lengthy but they must be intelligible and deal with the substantial points which have been raised. Having read the reasons the parties should be able to understand why the decision had been reached.”
The major issue here is the lack of explanation as to why the FTT took £2,600 per month as a starting figure instead of using the comparables given by the landlord. The UT did not find it sufficient that the FTT relied on its “own general knowledge of the Greater London property market and, in particular, the property market in the immediate locality of the subject property.”
Implications:
This very short ruling highlights the importance of providing the courts or tribunals with sufficient evidence and comparables, as the landlord duly did. Engaging in some due diligence might seem time-consuming but it might pay off in the end and enable a ruling to be aside. The UT did not rule that the FTT’s conclusion was wrong as such, but that the landlord has the right to understand the decision and why a different amount was taken as a starting point.
This case is also in line with another recent decision by the UT on rent determination (Rylands v Hopkins & Anor (LANDLORD AND TENANT – RENT DETERMINATION) [2024] UKUT 276 (LC)) in which the Tribunal found that the FTT erred in not considering the lack of a valid electrical safety certificate and the danger of the prevailing electrical installation.