Decision Nº RAP 15 2013. Upper Tribunal (Lands Chamber), 04-02-2014
| Jurisdiction | UK Non-devolved |
| Judge | Mr Peter McCrea FRICS |
| Date | 04 February 2014 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | RAP 15 2013 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral citation number: [2014] UKUT 0021 (LC)
UTLC Case Number: RAP/15/2013
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
LANDLORD AND TENANT –assured tenancy – rent determination by rent assessment committee – deduction for repairing liability – whether reasons given for deduction – appeal on error of law – requirement for valuation tribunals to give adequate reasons – appeal allowed – remitted to first-tier tribunal (property chamber) – s14 Housing Act 1988
IN THE MATTER OF AN APPEAL AGAINST A DECISION
OF THE LEASEHOLD VALUATION TRIBUNAL FOR THE
SOUTHERN RENT ASSESSMENT PANEL
BETWEEN THE JOHN JACKSON CHARITABLE TRUST Appellant
and
(1) MR AND MRS J HORNBLOWER Respondents
(2) MR AND MRS A DAVIES
Re: Nos. 4 and 6 Windmill Close,
Eastbourne,
East Sussex
BN21 1UA
Before: P D McCrea FRICS
Sitting at: 45 Bedford Square, London WC1B 3AS
on
20 January 2014
Ian Rees Phillips, instructed by Heringtons LLP for the appellant.
Andrew Board of Cornfield Law LLP for the respondents.
Guppys Properties v Knott and another (No3) [1981] 1 EGLR 85
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This is an appeal against two decisions of a Rent Assessment Committee for the Southern Rent Assessment Panel (“the committee”) each dated 8 June 2013 in respect of No.4 Windmill Close, (tenants, Mr and Mrs J Hornblower) and No.6 Windmill Close, (tenants, Mr and Mrs A Davies), Eastbourne, East Sussex, BN21 1UA. The appeal is by the freehold landlord, the John Jackson Charitable Trust (the appellant). There is no differentiation between the cases taken by Mr & Mrs Hornblower and Mr & Mrs Davies and I refer to them jointly as the respondents.
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The respondents hold assured periodic tenancies of the respective properties. The appellant served notices under s.13 of the Housing Act 1988 on the respondents on 5 November 2012 to increase the respondents’ rents from £1,560 per quarter to £3,000 per quarter. The notices were referred to the committee on 12 March 2013. The committee’s decisions were dated 8 June 2013, in which they found that the rent of each property, having made deductions from the market rent of £3,000 per quarter for tenants’ improvements, the provision of white goods, and tenants’ internal decorating liability, was £1,750 per quarter with effect from 25 March 2013. The appellant sought permission to appeal the decision, first from the committee and upon permission being refused by the committee, from the Tribunal.
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Permission to appeal the committee’s decision was granted by the Deputy President on 16 October 2013, confined to one single issue by way of review – that of the committee’s deduction for internal decorating liability.
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The appeal was held under the Tribunal’s simplified procedure. Mr Rees Phillips of counsel appeared for the appellant. Mr Andrew Board of Cornfield Law LLP appeared for the respondents. No witnesses were called.
Facts
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The parties produced a statement of agreed facts and issues. From this and the evidence I base my review of the committee’s decision on the following facts.
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No.4 Windmill Close is a detached two-storey house with three bedrooms and a combined bathroom/w.c. on the first floor and two reception rooms and kitchen on the ground floor. There were good sized gardens to the front and rear. The tenants had carried out many improvements during their occupation, including but not limited to the fitting of a new kitchen and bathroom, sun lounge, side extension to provide a utility room, the installation of gas fired central heating and extensive improvements to the gardens.
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No. 6 Windmill Close is a similar property with three bedrooms and a combined bathroom/w.c. on the first floor and two reception rooms and kitchen on the ground floor. Again, there were good sized gardens to the front and rear. The tenants had carried out many improvements during their tenancy including but not limited to the fitting of a new kitchen and bathroom, sun lounge, side extension to provide a utility room and the installation of gas fired central heating. They installed decking and a summer house in the garden.
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The subject properties are the only ones on Windmill Close within the appellant’s ownership that are let on periodic assured tenancies – the others being let on assured shorthold tenancies.
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Mr & Mrs Hornblow’s tenancy of 4 Windmill Close stems from a brief, handwritten tenancy agreement dated 4 October 1992, within which the landlord was “responsible for structural repairs – outside decoration - & plumbing”. The tenants were “responsible for minor repairs - interior decoration - & to maintain and keep the garden tidy”.
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Mr & Mrs Davies’s tenancy of 6 Windmill Close stems from an equally brief handwritten tenancy agreement dated 13 July 1995, within which the landlord was “responsible for structural repairs and the immersion heater”. The tenants were “responsible for minor repairs and for heating the house and for keeping the property in good decorative condition with the garden maintained and tidy”. The appellant’s obligations are supplemented by statute (section 11, Landlord and Tenant Act 1985) but not in a material way.
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The parties agree that nothing turns on the slightly differing wording of the tenancies.
The Committee’s Decision
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The committee heard the respondent’s application and inspected the properties on 7 June 2013. A notice of the committee’s decision for each property was dated 7 June 2013, with reasons subsequently issued dated 8 June 2013. The decisions were identical with the exception of small differences in the descriptions of the two properties and the different wording of the tenancy agreements. I therefore refer to both decisions as being “the decision”.
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The committee said that in coming to its decision it had had regard to the evidence supplied by the parties and the members’ own general knowledge of the market rent levels in the area of East Sussex. It concluded that the appropriate market rent for each property would be £3,000 per quarter if they were in a good letting condition appropriate for the style and type of property in a similar setting. The committee went on to say that the rent levels are similar, if not identical, irrespective of whether the tenancy is an assured tenancy or an assured shorthold tenancy.
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The committee then said;
“From the starting market rent, deduction should be made to reflect the improvements undertaken by the tenants, including the installation of central heating.”
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There is no mention there of a reduction for internal decorating liability.
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It then produced the following calculation:
Open Market Rent £3,000 per quarter
Less allowances for:
Tenants’ improvements £800
Tenants’ provision of white goods £250
Tenants’ internal decoration liability £200
Total deductions £1,250
Net market rent £1,750 per quarter
(my emphasis)
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The committee therefore directed that the rent would be set at £1,750.00 per quarter with effect from 25 March 2013.
The statutory context
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Section 14 of the Housing Act 1988 sets down how the committee should come to their decision as to rent. So far as relevant here, this provides;
“14(1) Where, under subsection (4)(a) of section 13 above, a tenant refers to the appropriate tribunal a notice under subsection (2) of that section, the appropriate tribunal shall determine the rent at which, subject to subsections (2) and (4) below, the appropriate tribunal consider that the dwelling-house concerned might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy—
(a) which is a periodic tenancy having the same periods as those of the tenancy to which the notice relates;
(b) which begins at the beginning of the new period specified in the notice;
(c) the terms of which (other than relating to the amount of the rent) are the same as those of the tenancy to which the notice relates; and
(d) in respect of which the same notices, if any, have been given under any of Grounds 1 to 5 of Schedule 2 to this Act, as have been given (or have effect as if given) in relation to the tenancy to which the notice relates.
(2) In making a determination under this section, there shall be...
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