Landlords Bible : Rent disputes between landlords and tenants

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RENT DISPUTES BETWEEN LANDLORD AND TENANT

The Residential Property Tribunal Service (RPTS)

The Residential Property Tribunal Service (RPTS) is the umbrella organisation for five regional offices called Rent Assessment Panels providing an independent, fair and accessible tribunal service in England for settling disputes between landlord & tenant involving private rented and leasehold property. They deal with:

Rent Assessment Panels do not have the power to deal with all types of dispute about rents and leasehold matters. They are quasi-judicial bodies; which means that housing legislation has given them the powers to settle some disputes which would otherwise have to be dealt with by the Courts. They provide an easier and generally cheaper alternative to the Court system. The Panels do not charge for dealing with disputes about rents or the Right to Buy. There is a scale of fees for some, but not all, types of leasehold dispute.

Rent Assessment Panels have no legal powers to become involved in disputes about commercial property.

The legislation which gives Rent Assessment Panels their powers allows them to work either as Rent Assessment Committees, Rent Tribunals, Leasehold Valuation Tribunals or Residential Property Tribunals.

Rent disputes between landlord & tenant

Since the introduction of the 1988 Housing Act rent levels are largely dictated by market forces. However, in a small number of cases this is not true and where a dispute a rises these are decided by local Rent Assessment Committees (RACs) which follow the process described below.

Rent Tribunals decide the rent the tenant should pay where the landlord lives in the property and a restricted contract exists between a resident landlord and tenant and when there is an application from either party or the local authority. Procedures for these types of case are similar to those of the RAC.

The Rent Assessment Committee (RAC)

RACs can decide the following types of dispute:

When a landlord or tenant of a regulated tenancy has objected to the rent assessed by The Rent Service (formerly the Rent Officer), the case will be referred by the Rent Service to the RAC to determine the fair rent;
A tenant with an assured tenancy may apply to the RAC for a determination on an open market rent for the property if their landlord tells them they plan to increase the rent by serving them with the form, "Landlord's notice proposing a new rent under an Assured Periodic Tenancy or Agricultural Occupancy";
A tenant with an assured short hold tenancy can apply within the first six months of their tenancy. Thereafter they can apply if their landlord tells them they plan to increase the rent by serving them with the form, "Landlord's notice proposing a new rent under an Assured Periodic Tenancy or Agricultural Occupancy";
Where a fixed term assured or assured short hold tenancy has ended and the landlord or tenant has served a notice proposing new terms for the statutory periodic tenancy which has automatically risen, the recipient of the notice can ask the RAC can determine new terms and any rent adjustment for the statutory periodic tenancy.
RAC's can also become involved where a long lease at a low rent that is governed by the Local Government and Housing Act 1989 has expired. More information about this type of cases is contained at Annex B of the detailed Guidance Note " Rent Assessment Committees: Market Rents"

Making an application

For regulated tenancies, the landlord or tenant writes to The Rent Service objecting to the fair rent set. The Rent Service will then refer the objection to the Rent Assessment Panel.

Applications in respect of other types of dispute should be made using the relevant forms where available in the forms and publications section of this site. Alternatively, you can obtain a copy from your regional Rent Assessment Panel.

Processing the application

When the Rent Assessment Panel receives a case, the Clerk will write to all parties advising them of the next steps and enclosing copies of relevant case papers for anyone who is not an applicant. Where the case will involve a rent determination, the letter will include a date for the RAC to hold an oral hearing. Lastly, the letter will enclose a reply form which asks the parties to submit their representations and to confirm that they want to attend an oral hearing.

If the parties do not wish to attend a hearing, the Clerk will write advising that the RAC will determine the rent on the basis of the written evidence given by the parties. Sometimes the Committee itself will decide that the fairest way to deal with a case is to hold a hearing.

Attending a hearing

If one or all of the parties want a hearing, the Clerk will write to the parties giving details of when and where the hearing will take place. Hearings usually take place in meeting rooms as close to the property concerned as possible, for example in the local Town Hall or in a church hall. Hearings organised by the London Panel generally take place at the panel offices in central London. These hearings are open to the public. Sometimes, for example if a tenant has restricted mobility, hearings can take place at the property itself if the tenant agrees.

Hearings are kept as informal as possible. Parties can state their own case if they wish or they may have someone to speak for them, for example a friend, relative or professional expert. RACs seek to ensure that both sides have a fair chance to state their case, especially when one party to a case is professionally represented but the other party presents their case in person. Parties should not produce documentation for the first time at a hearing; otherwise the hearing will need to be adjourned to enable the other party to consider the new evidence.

Inspections

Whether or not there is a hearing, in most cases the RAC (generally accompanied by the Committee Clerk) will wish to make an inspection of the property. They may also look at other similar properties mentioned in evidence if they think this is appropriate. Internal inspections can only be made if the tenant agrees that the Committee may enter the property. Inspections may take place before or after the hearing, and are generally on the same day but may occasionally be on another agreed date.

RACs do not normally take representations from parties or their representatives during the inspection, although limited exceptions may be made where both parties are present at the inspection and agree to the representations being made.

Landlords and their representatives may attend inspections if the tenant agrees. However, they must arrange this with the tenant before the date of the inspection. If the tenant does not agree, the landlord or their representative cannot enter the property.

Evidence

Whether at the hearing or in making written representations, you should point out anything that you consider would have a bearing on the rent that can be determined by the RAC. You will have the opportunity to comment on anything the other party has written or said at a hearing. You can produce evidence relating to improvements and repairs. It would be helpful if you could obtain evidence relating to recent tenancies of similar properties in the area such as the rent payable and the condition and type of the property.

The decision process

The decision process can be complex and is fully described in the relevant Guidance Notes. This section contains summary information that may not apply in all cases.

For regulated tenancies, the RAC will determine a rent that reflects the current condition of the property in the open market after making adjustments to reflect any tenant's improvements and the "scarcity element" . The "scarcity element" arises in localities where the number of people seeking to become tenants of similar properties substantially exceeds the number of properties available, thereby pushing comparable market rental values above what they would have otherwise been. The RAC will take account of any services provided by the landlord, and whether the rent includes council tax. Finally, in certain circumstances, the RAC will apply the capping rules set out in the Rent Acts (Maximum Fair Rent) Order 1999 which, subject to certain conditions, links the amount by which fair rents can rise to percentage changes in the Retail Price Index. To find out more about how the capped rent is calculated you should read the guidance note on fair rents or contact the local rent assessment panel. The final figure reached will be registered as the fair rent.

For assured tenancies, the RAC will first decide whether it has jurisdiction, possibly by holding a preliminary hearing. If it decides it does have jurisdiction, the RAC will determine a rent for the property that reflects what rent the landlord could reasonably expect to obtain in the open market if he were letting it on a new tenancy on the same terms as the present tenancy. This will include looking at rental values in the area for similar properties let on similar terms. If there are tenant's improvements, the RAC will ignore any effects these might have on the rental value. Similarly, if the rental value has been decreased because of a failure to carry out repairs for which the tenant is responsible, the RAC will value the property as if the repairs had been done. The RAC will take account of any services provided by the landlord, and whether the rent includes council tax. It is important to note that the RAC may determine a rent that is higher, lower or the same as that proposed by the Landlord.

For assured short hold tenancies where the application is made within the first six months of the tenancy, the RAC will only determine a rent if it considers there are enough similar properties let locally on assured short hold tenancies and that the rent payable for the property in question is not significantly higher than the rents payable under those tenancies. If those conditions are met, the RAC will determine the rent it considers the landlord might reasonably be expected to obtain.

The decision and after

Once the RAC is satisfied that it has all the information it needs, it will make its decision. Usually within a few days of the inspection / hearing, the clerk will write to you enclosing the decision notice stating the rent determined by the RAC. The decision notice will state the date from which the rent determined will be payable. Rent Tribunal determinations are issued in a standard register format. You will also be sent at the same time or soon after a copy of the written reasons for the RAC's decision. These may be in the form of summary or full reasons. If the RAC sends summary reasons you can within 21 days of receipt ask for full reasons, which should be issued within 28 days of receipt of your request.

Rent Assessment Committee and Rent Tribunal decisions are binding on all parties, although there are specific grounds for appeal.

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