Landlord and tenant – Assured tenancy – Rent – Social housing – Respondent tenant challenging increase in rent proposed by appellant landlord – First-tier Tribunal restricting rent referable to fixed service charge – FTT relying on own general knowledge of management charges – Appellant appealing – Whether decision procedurally unfair – Appeal dismissed
In May 2013, the respondent was granted a tenancy of a social housing flat at 62 Apsley House, Dickens Yard, Longfield Avenue, London W5. The tenancy was initially for a trial period of 12 months but continued as an assured tenancy under which rent was payable weekly. Her original landlord was a registered provider of social housing. In May 2023, the property was transferred to the appellant, which was also a registered social housing provider.
The appellant’s predecessor had proposed a rent of £191.78 for the respondent’s flat, inclusive of a fixed service charge of £48.53, from 4 April 2022. The First-tier Tribunal (FTT) determined that the weekly rent for the flat in the open market (on the assumptions required by section 14 of the Housing Act 1988) would be £300, inclusive of a fixed service charge of £39. The appellant appealed.
Because of a government directive limiting the rate at which providers of social housing might increase rents, the amount which the respondent would in fact pay was £172.25. The difference between the proposed rent and the rent the respondent would pay was entirely referable to the fixed service charge, the only part of the rent which was not restrained by government directive.
The appellant appealed contending that the way in which the FTT had determined the new rent was procedurally unfair.
Held: The appeal was dismissed.
(1) A civil claim was to be conducted on the basis that a party was entitled to know, normally through a statement of case, the essentials of its opponent’s case in advance so the trial could be fairly conducted and, in particular, the parties could properly prepare their respective evidence and arguments for trial: Al Rawi v Security Service [2010] 3 WLR 1069 considered.
On the evidence in the present case, it was disingenuous to suggest that the appellant’s lack of preparedness was due to a failure on the part of the respondent to identify the point at issue or a breach by the FTT of the rules of natural justice.
(2) The process of determining a new rent under section 14 of the 1988 Act did not require that the tenant disprove the landlord’s entitlement to the increase it had proposed. Whatever material the parties put before it, and whatever issues they chose to contest, the FTT was under a statutory duty, imposed by section 14(1), to determine the rent at which it considered the property might reasonably be expected to be let on the statutory assumptions. The FTT was relieved of that obligation only if the landlord and tenant gave notice in writing that they no longer required a determination or that the tenancy had come to an end (section 14(8)).
The determination of a rent was not simply the resolution of a dispute between private individuals: it also touched on matters of public administration and the FTT’s functions were, in part, concerned with the determination of entitlement to housing benefit and universal credit. A duty was imposed on the FTT by section 41A of the 1988 Act to assist in connection with those benefits by noting in every determination under section 14 the amount (if any) of the rent which, in its opinion, was fairly attributable to the provision of services. The president of the property chamber of the FTT was required by section 42A to make information publicly available with respect to rents determined by the FTT (including the amounts attributable to services).
(3) It was entirely appropriate that an expert tribunal should use its knowledge and experience to test, and if necessary reject, the evidence before it, subject to three requirements: (i) as a tribunal deciding issues between the parties, it had to reach its decision on the basis of evidence that was before it; (ii) it should not reach a conclusion on the basis of evidence that had not been exposed to the parties for comment; and (iii) it had to give reasons for its decision: Arrowdell Ltd v Coniston Court (North) Hove Ltd [2006] EWLands LRA/72/2005 (31 October 2006) considered.
In the present case, the FTT explained, when it refused permission to appeal, that the proposed charge was outside the parameters expected in a similar block and said it had relied on its own general knowledge of management charges and not on any specific property.
The FTT was a specialist tribunal whose members were appointed because of their experience and professional background in residential property matters. The more experienced the panel (and the panel in this case was particularly experienced) the deeper would be its reserves of knowledge and the more reliably it would be able to form an opinion on a matter of assessment within the scope of its expertise. That was particularly important in dealing with the numerous cases of modest value in which a decision had to be made on very limited information. Rent assessments were typical of those types of cases.
(4) There was an important dividing line between making use of the expertise of the members of the FTT panel in determining an issue and relying on evidence which the parties were entitled to an opportunity to comment on.
The rules of natural justice required that matters which were likely to form the subject of decision, in so far as they were specific matters, should be exposed for the comments and submissions of the parties. However, implicitly, and necessarily, the tribunal panel member’s general experience and knowledge might be relied on without the parties first being forewarned: Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 considered.
The tribunal was satisfied here that the FTT did not break those rules. It did not rely on specific examples of management charges, but on its own general experience of the level of charges typical of such blocks. It was neither necessary nor practical to identify all the numerous buildings of which the members of the panel were likely to have been aware. It was entitled to rely, without more, on its general experience of management charges. That was what it was appointed to do and, in the absence of assistance from the parties, there was no other source on which it could rely.
Victoria Osler (instructed by Devonshires Solicitors) appeared for the appellant; The respondent appeared in person.
Eileen O’Grady, barrister
Click here to read a transcript of Peabody Trust v Welstead
