Deepak Shah & Anor v Julian Thomas & Anor

This is an appeal against the First-tier Tribunal’s determination of the market rent for 24 Bridge Place. Amersham, of which the appellants are the landlords, pursuant to section 14 of the Housing Act 1988. There is no appeal from the amount determined, but the landlords have permission to appeal the FTT’s decision to delay the commencement of the new rent on account of the hardship to the tenant. The appeal has been determined under the Tribunal’s written representations procedure; neither party has been legally represented.

When a property is let on a statutory periodic tenancy (after the end of an assured tenancy), or on an assured tenancy where there is no provision for rent review, section 13 of the Housing Act 1988 provides that a landlord may serve upon the tenant a notice proposing a new rent to take effect on a specified date. That date must be at the start of a new period of the tenancy, and in the case of a monthly tenancy will be at least one month after the date of the notice. The new rent will take effect on that date unless before then the tenant refers the matter to the FTT.

If the tenant does so, the FTT has jurisdiction to determine a market rent for the property, on certain specified assumptions, in accordance with section 14. Section 14(7) reads as follows:

“(7)

Where a notice under section 13(2) above has been referred to [the FTT] , then, unless the landlord and the tenant otherwise agree, the rent determined by [the FTT] … 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 FTT] 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 FTT] may direct.

The respondents Mr and Mrs Thomas are the tenants of 24 Bridge Place, Amersham. The appellants served on them a notice dated 31 July 2024 proposing a new rent for the property with effect from 3 September 2024. The respondents referred the matter to the FTT and so the new rent did not take effect on the date proposed.

In determining the rent the FTT had to consider evidence about the condition of the property and about comparable properties nearby. It determined a market rent, and although the appellants have applied for permission to appeal that decision permission has been refused. The only issue in the appeal is the FTT’s decision pursuant to section 14(7) of the Housing Act1988 to postpone the start of the new rent. The FTT said this at its paragraph 19:

“The tenant made limited representations to the Tribunal on their expected hardship if the rent was to be increased as proposed but gave no hard facts, details, figures or supporting information. The legislation allows the Tribunal a small degree of flexibility to reflect any hardship element on an increased rent. To this extent the Tribunal determines that the effective start date for the new rent be delayed from the date in the Notice of 3 September 2024, to the date of this determination, 9 December 2024.”

The appellants have permission, granted by this Tribunal, to appeal that postponement of the coming into effect of the new rent. They say that there was no basis on which the FTT could postpone the new rent until 9 December 2024 without actual evidence from the tenant. They say that the tenant’s household income was ample according to references taken before the start of the tenancy in 2018.

In response the tenants have provided a great deal of information about the condition of the property and other matters which are not the subject of this appeal. They have also produced some evidence of their financial position; but the difficulty with that is that I have to review the FTT’s decision on the basis of the evidence before it. In any event, the evidence now produced, in the form of a letter from HMRC stating that Mr Thomas had no taxable income for the year 2024-25, would not by itself prove that it would cause undue hardship for the rent to come into effect from September 2024 – and “undue hardship” is a precondition for postponement under section 14(7). The FTT cannot simply postpone the rent just in case it causes a problem; it has to make a specific finding of fact of undue hardship on the basis of evidence. There was no evidence and no such finding.

The appeal is allowed. There is no basis on which the respondents can be offered a fresh opportunity to produce information and evidence that they could have produced before the FTT at the hearing in December 2024, and accordingly I substitute the Tribunal’s decision that the rent is to take effect on the date specified in the notice, being 3 September 2024.