Notice

New guidance on fair rentsHousing practitioners will be aware of the recent difficulties caused to Rent Act tenants by the approach taken by rent assessment committees (RACs) to the decision by the House of Lords in R v Secretary of State for the Environment Transport and the Regions, ex parte Spath Holme Ltd, [2001] ALL ER 195.

Following the House of Lords' decision, it was clear that the Rent Acts (Maximum Fair Rent) Order 1999, which had introduced a limit on fair rent increases, was lawful.

However, despite a helpful fact sheet prepared by the Department of the Environment, Transport and Regions (DETR), the RACs refused to revisit rents they had set between 20 January 2000 and 7 December 2000 without reference to the order, on the basis that they had no remit to reopen decisions already taken.Following lobbying by the Law Society and others about this issue, the DETR has now published additional guidance to the rent service on how it should treat such cases.

This provides that rent officers should revise the rent register to the effect that the RAC's decision is of no practical effect because it failed to take account of the order.

Therefore, the fair rent will revert to the figure previously determined by the rent officer, which will have taken account of the order.

Either side can appeal this determination again to the RAC, but this time the RAC's decision will be subject to the order.

The DETR's further guidance noteThe Rent Acts (Maximum Fair Rent) Order 1999 - further guidance note for the rent service1.

This guidance note updates and revises the guidance note for the rent service and rent assessment panels issued by DETR on 11 December 2000.2.

The rent service will appreciate that the department's interpretation of the law carries no particular authority and the effect of the House of Lords judgement is ultimately a matter for the courts.

However, the following guidance reflects the department's view.

3.

In the department's view, the practical effect is that the order has been in force continuously since 1 February 1999.

All applications for fair rent registration made since this date are subject to the rules set out in the order.

4.

Under section 66(1) of the Rent Act 1977 the rent officer is under an obligation to 'keep up to date' a register for the purposes of the Act.

Where an entry in the register is incorrect or has been made erroneously the rent officer is under a duty to correct this by making a further entry to keep the register up to date.

5.

The rent service has reviewed all rent officer determinations made between 20 January 2000 and 7 December 2000 (including those that were subject to appeal to the Rent Assessment Committee) and made further entries in the register to take account of the provisions of the order.

6.

Since the publication of the earlier guidance, it has become apparent that rent assessment committees cannot reopen of their own volition cases they have already determined.

Therefore, the section of the earlier guidance headed 'Rent registered pursuant to a determination by a rent assessment committee made on or after 20 January 2000 and before 7 December 2000' - paragraphs 20-25 inclusive - is withdrawn.

7.

In order to keep the register up to date, the rent service should undertake the following actions in connection with cases that fall within this category: Action: identify all cases where the current registered rent is that decided by a rent assessment committee between the dates of 20 January 2000 and 7 December 2000.

For these cases the remarks box of sheet 2 of the register should be annotated as follows: 'The House of Lords has held that the Rent Acts (Maximum Fair Rent) Order 1999 was validly made.

As a result the decision of the rent assessment committee recorded on sheet 2 of the register is of no practical effect because it did not take into account that order.

The registered rent is shown in box (a) of sheet 1 valid from the date in box (c).' The rent officer should inform the parties of this action by sending a letter similar to the example at annex A.

The following example letters attached to the earlier guidance are withdrawn: Letter 1.10 - Revision by RAC of decision made between 20 January 2000 and 7 December 2000: where RAC decides rent is not exempt due to repairs and improvements.

Letter 1.11 - Revision by RAC of decision made between 20 January 2000 and 7 December 2000 where RAC decides rent is exempt due to repairs and improvements.

Letter 2.1 - RAC decision made between 20 January 2000 and 7 December 2000: maximum fair rent is greater than fair rent.

Letter 2.2 - RAC determination made between 20 January 2000 and 7 December 2000: maximum fair rent is less than fair rent 'intention to determine rent' notification.

Letter 2.3 - RAC determination made between 20 January 2000 and 7 December 2000: follow on letter from 2.2 rent not exempt due to repairs and improvements.Letter 2.4 - RAC Determination made between 20 January 2000 and 7 December 2000: follow on letter from 2.2 rent is exempt due to repairs and improvements.

This guidance note was published by DETR in May 2001.

All enquiries from rent officers should be referred to the Rent Service Technical Advice and Guidance Unit.

All other enquiries should be referred to DETR.

The address to write to is Zone 2/H6, Eland House, Bressenden Place, London SW1E SDU.

Tel: 020 7944 3554 or e-mail: private-rented@detr.gov.uk

Annex A Rent service letter to revise RAC's determination between 20 January 2000 and 7 December 2000

Premises: Notification of revised registered rent Registration no: We wrote to you recently to tell you that the original rent officer rent had been affected by a decision made by the House of Lords.

However, because a rent assessment committee had reviewedthe original rent set by the rent officer that original rent only applied for the period up to the date of the rent assessment committee decision.

The rent assessment committee's determination did not take account of the change in the law and the House of Lords decision.

It is therefore of no practical effect and has been removed from the rent register.

The registered rent reverts to the one determined by the rent officer on (insert date) This is shown in box (a) of the attached rent register.

This is effective from the date in box (c).

The amount of rent registered by the rent officer is the most that the landlord is entitled to charge.

The tenant may be entitled to recover any sum paid over and above the amount shown in box (a).

Rent officers are not able to adjudicate on disputes about recovery of overpaid rent.

Where a dispute about rent cannot be resolved by agreement you should seek advice from a solicitor, citizen's advice bureau or housing advice centre.

The guidance note I sent you earlier provides advice on recovery of overpaid rent.

Tenants who are claiming housing benefit should contact their local housing benefit office straight away to let them know about the change in the rent.

Landlords who receive housing benefit payments through the direct payment scheme should also tell the housing benefit office straight away.

You have the right to object to the latest rent that is registered.

If you make an objection it must be in writing and I will refer it to a rent assessment committee again.

Yours faithfully Rent Officer