Successful appeal against the FTT’s decision on a fair rent application.

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Nicola Muir was successful in an appeal on behalf of a landlord against the FTT’s decision on a fair rent application.  The case raised some interesting jurisdictional issues.

The rent payable under a Rent Act tenancy is restricted to a fair rent as fixed by the Rent Officer under s. 70 of the Rent Act 1977.  The Rent Officer must assess the market rent for the property and adjust that figure to take into account scarcity.   By virtue of the Rent Acts (Maximum Fair Rent) Order 1999, the new rent will be capped at no more than the sum equal to the percentage change in the retail price index since the last registration plus  5%. However, that rent cap will be dis-applied if it can be shown that a change in the condition of the dwelling house or the common parts as a result of repairs or improvements carried out by the landlord would result in an increase of more than 15% on the previous rent.

In this case the landlord carried out extensive works to the property and the Rent Officer accepted that the rent cap did not apply.  However, he made a substantial deduction in the rent to take account of “scarcity”.  The landlord objected to this and the matter was referred to the FTT under Schedule 11 of the Act.  The FTT invited the parties to make written representations on their case.  The landlord submitted evidence only on the scarcity issue based on its understanding that it only needed to address the issues which were in dispute.   The tenant filed no evidence at all.  At the hearing the tenant, without prior warning, produced new evidence on the rent cap issue which the landlord was unable to counter because it did not have the relevant documentation with it.  The FTT considered the issue afresh and found that the repairs and improvements had insufficient impact on the rent achievable to dis-apply the cap.  The landlord appealed to the Upper Tribunal on three grounds.  First that the FTT had no jurisdiction to deal with issues which were not actually in dispute.  Second, in the alternative that the FTT should have made directions so that the parties knew what issues they needed to address and third, that in any event, the FTT had not given proper reasons for ignoring the repairs and improvements carried out by the landlord.  The landlord succeeded on the third ground and a re-hearing was ordered.

Martin Rodger QC found that the scheme for a referral to the FTT is not an “appeal” against the Rent Officer’s decision but an “objection” to the registered rent.  The grounds on which the landlord objects are irrelevant to the FTT’s jurisdiction.  Once a fair rent is referred to the FTT its task is not to consider the reasons which persuaded the rent officer to register a particular rent but to arrive at its own conclusion as to what the rent should be. However, he found that the FTT’s reasons for its decision were deficient.  It did not do enough to resolve the issues between the parties or to explain its own conclusions.

You can download the full judgment here