The Law Commission

appendix g
RENT ASSESSMENT COMMITTEES

part i
lEGISLATIVE BACKGROUND

                  G.1                Rent Assessment Committees (RACs) [1] determine a number of matters relating to regulated and assured tenancies in the private rented sector. They are currently constituted pursuant to section 65 and Schedule 10 to the Rent Act 1977 (the “1977 Act”). In the generic sense, “Rent Assessment Committees” consist of panels of persons selected by the Secretary of State[2] and Lord Chancellor from time to time to carry out particular functions. There are two sub–categories of “Rent Assessment Committees”, namely Leasehold Valuation Tribunals[3] and Rent Tribunals.[4] These both exercise particular functions designated to them under statute. “Rent Assessment Committees” also exercise in specie jurisdiction qua RACs. That is, certain statutory functions are specifically conferred on RACs. This review covers the jurisdiction of this category of “Rent Assessment Committees”. The common collective term for Leasehold Valuation Tribunals, Rent Tribunals and in specie RACs is “RPTS Tribunals”.[5] However, the true statutory designatum is “Rent Assessment Committees”.[6]

                  G.2                RACs differ from Leasehold Valuation Tribunals and Rent Tribunals in that they are both a first instance and an appellate tribunal. In some cases they hear disputes that are referred directly by the landlord or tenant and in other cases they hear appeals from the decision of a rent officer. The Housing Act 1988 (the “1988 Act”) terminated the jurisdiction of rent officers to issue certificates of fair rent in respect of lettings made after the 15 January 1989. The appellate jurisdiction of RACs in respect of such determinations is therefore in decline. The procedure of hearings before in specie RACs are held in accordance with the provisions of the Rent Assessment Committees (England and Wales) Regulations1971.[7]

 

part ii
Substantive jurisdiction

                  G.3                RACs exercise jurisdiction under the 1977 Act, the 1988 Act, the Local Government and Housing Act 1989 (the “1989 Act”) and the Landlord and Tenant Act 1954 (the “1954 Act”) (as applied by the 1989 Act).[8] The jurisdictional review hereunder is concerned solely with the instances where RACs are empowered to adjudicate matters that arise directly from a disagreement between landlords and tenants or on appeal from a decision of a rent officer. It should, however, be noted that RACs also exercise an administrative function under section 29 of the Landlord and Tenant Act 1985 (the “1985 Act”). It provides that a single member of the local RAC can certify an association of qualifying tenants to be a “recognised tenant’s association” for the purposes of certain matters relating to service charges under the 1985 Act. Any member of the local RAC may also cancel a certificate so issued.[9]

                  G.4                The basis of jurisdiction exercised by RACs under the 1954 Act is complex. Paragraph 19 of Schedule 10 to the 1989 applies certain provisions of the 1954 Act for the purposes of Schedule 10. In particular paragraph 19(3) applies, with modifications, Schedule 5 to the 1954 Act. Schedule 5 to the 1954 Act makes detailed provision for where the intermediate landlord of a tenancy is not the freeholder. Paragraph 19(3)(d) provides that any reference to the “court”[10] in Schedule 5 to the 1954 Act includes a reference to a RAC. The court has adjudicative jurisdiction under four provisions of Schedule 5: paragraph 4(2); paragraph 5; paragraph 7(2); and paragraph 11(4). Paragraph 19(3)(e) of Schedule 10 disapplies paragraphs 7 and 11 of Schedule 5 for the purposes of the Schedule 10 to the 1989 Act. Therefore, RACs only share jurisdiction with the court in respect of matters within the court’s jurisdiction under paragraphs 4(2) and 5 of Schedule 5. The overall effect of paragraph 19 of Schedule 10 is to apply the provisions of Schedule 5 regarding intermediary landlords to assured tenancies that arise under the 1989 Act.

                  G.5                There are a total of 8 distinct areas of jurisdiction exercises by RACs. RACs were granted jurisdiction under section 14B(1) of the 1988 Act to determine the new rent set by a landlord in a notice served under section 14A(1) as a result of the tenant’s liability to pay council tax accruing. Section 14A(4) provided that no such notice could be served after the 31 March 1994. The section 14B(1) jurisdiction is therefore effectively defunct and even though it remains on the statute books it is not treated as being within the jurisdiction of RACs for the purpose of this review. The table below summarises the jurisdictional position.

 

 

Jurisdiction Table

Act	Legislative Provision	Matter	Further Appeal	County Court*
1977 Act	Paragraph 9 of Schedule 11	Variation/Confirmation of Fair Rent Assessment	High Court	A
1988 Act	Section 6(4)	Terms of Statutory Periodic Tenancy	High Court	B
1988 Act	Section 14(1)	Rent under Assured Periodic Tenancy	High Court	B
1988 Act	Section 23	Rent Under Assured Shorthold Tenancy	High Court	B
1989 Act	Paragraph 6(3) of Schedule 10	Interim Rent under Assured Tenancy	High Court	A
1989 Act	Paragraphs 11(3) and (5) of Schedule 10	Terms and Rent under Assured Tenancy	High Court	A
1954 Act	Paragraph 4(2)	Compensation for Failure to Obtain Consent	High Court	C
1954 Act	Paragraph 5	Order Deeming Other Landlords’ Consent	High Court	C

 

* Column 5 entitled “County Court” summarises the jurisdictional relationship between RACs and the County Courts.

A = RACs exercise exclusive jurisdiction

B = RACs exercise exclusive jurisdiction except where their jurisdiction is joined to proceedings heard before County Courts.

C= RACs and County Courts share jurisdiction.

Determination of Fair Rent

               G.6                The rent officer keeps a register of rents for each registration area. He can register fair rents for most private sector residential accommodation that was let before 15 January 1989. A landlord or tenant can apply under section 67 or 67A of the 1977 Act to a rent officer to register a rent of a dwelling house. The application procedure of the 1977 Act extends to statutory tenancies that were created pursuant to the Rent (Agriculture) Act 1976.[11] Schedule 11 to the 1977 Act lays down the procedure to be followed where an application for the registration of a rent has been made to a rent officer. The rent officer, having consulted with the parties, determines or confirms the rent already in the register.[12]  The landlord or tenant is entitled to lodge an objection to the rent officer’s decision with the relevant RAC within 28 days. The RAC has jurisdiction under paragraph 9 of Schedule 11 to confirm or vary the determination of the rent officer. Under Paragraph 9B the RAC’s determination as to rent must not exceed the maximum rent calculated in accordance with the Rent Acts (Maximum Fair Rent) Order 1999.[13]

Determination of Terms of Statutory Periodic Tenancy

               G.7                On the termination of the former tenancy the landlord or tenant may, pursuant to section 6(2) of the 1988 Act, serve on the other a notice proposing terms of the statutory periodic tenancy different to the implied terms.[14] The statutory periodic tenancy is the periodic tenancy that arises by virtue of section 5 on the termination of an assured tenancy.[15] The landlord or tenant, as the case may be, may refer the notice to the relevant RAC. The RAC has jurisdiction under section 6(4) to determine the terms proposed in the notice as they might reasonably be found in an assured periodic tenancy of the dwelling concerned.

Determination of Rent under Assured Periodic Tenancy

               G.8                An “assured periodic tenancy” is a statutory periodic tenancy or any other periodic tenancy that is an assured tenancy.[16] The landlord of an assured periodic tenancy may serve a notice on the tenant proposing a new rent to take effect at the beginning of the new tenancy. A tenant may refer that notice to the relevant RAC pursuant to section 13(4)(a) for its consideration. RACs are granted jurisdiction under section 14(1) of the 1988 Act to determine the rent such that a willing landlord under an assured tenancy, subject to certain conditions might reasonably let it in the open market.

Determination of Rent under Assured Shorthold Tenancy

               G.9                Under section 23 of the 1988 Act a tenant may apply to the relevant RAC to determine the rent to be paid under an assured shorthold tenancy,[17] which in its opinion the landlord might reasonably expect to obtain.

Determination of Interim Rent under an Assured Tenancy

               G.10                Section 186 and Schedule 10 to the 1989 Act provide for the establishment of assured tenancies on the termination of long residential tenancies that are held at low rents. A landlord can terminate a long residential tenancy by serving a notice in accordance with paragraph 4 of Schedule 10. Having served that notice he serves a further notice under paragraph 6 of Schedule 10 proposing an interim monthly rent for the new assured tenancy. The tenant may refer the notice within two months of its service to the relevant RAC. The RAC has jurisdiction under paragraph 6(3) to determine the rent as it might reasonably be expected to be let on the open market by a willing landlord.

Determination of Terms and Rent under an Assured Tenancy

               G.11                Where a landlord proposes an assured tenancy in accordance with paragraph 4 of Schedule 10 the tenant may respond by serving a notice under paragraph 10 of Schedule 10 proposing different terms and rent under the proposed assured tenancy. Within two months of the service of the tenant’s notice the landlord may refer the matter to the relevant RAC for its consideration. The RAC must first decide whether there is a dispute between the parties over the terms and rent of the proposed assured tenancy. The RAC has jurisdiction under paragraph 11(3) to determine the terms as they might reasonably be expected to be found in an assured monthly periodic tenancy of the dwelling house. The RAC has jurisdiction under paragraph 11(5) to determine the rent as it might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy.

Determination of Compensation for Failure to Obtain Consent

               G.12                Paragraph 4 of the 1954 Act (as applied by paragraph 19 of Schedule 10) provides that where a notice is given by a component landlord under paragraph 4(1) of Schedule 10[18] without the written consent of every other landlord, any other such landlord is entitled to be compensated by the competent landlord for any loss that arises in consequence of the giving of the notice. The RAC has jurisdiction, under paragraph 4(2), in default of agreement between the parties, to determine any amount of compensation payable. 

               G.13                The procedure to be followed at RACs in relation to applications made pursuant to Paragraph 4(2) of Schedule 5 to the 1954 Act is unclear. The Rent Assessment Committees (England and Wales) Regulations 1971[19]do not cover applications that are made under paragraph 4(2) of Schedule 5.[20] The omission of such applications from the procedure regulations would seem to be an anomaly.

Order Deeming Other Landlord’s Consent

               G.14                The competent landlord may serve a notice under Paragraph 5 of the 1954 Act (as applied by paragraph 19 of Schedule 10) requiring that any other landlord give his consent to the granting of the assured tenancy. If no consent is given or if it is given on unreasonable terms, the RAC has jurisdiction under paragraph 5 to order, as it thinks fit, that the other landlords be deemed to have consented to the grant of the assured tenancy.  

part iii
TERRITORIAL JURISDICTION

               G.15                The territorial jurisdiction of RACs is identical to that of Leasehold Valuation Tribunals (as Leasehold Valuation Tribunals are a category of “Rent Assessment Committee”).[21] Comments regarding the transfer of jurisdiction to the National Assembly for Wales apply equally. The substantive jurisdiction of RACs is not affected by the devolution of power to Wales because all jurisdiction exercised by RACs is directly referable to primary legislation.

part iv
relationship with County Courts and further appeals

RACs and the County Courts

               G.16                The relationship between RACs and the County Courts varies according to the enactment under which RACs exercises jurisdiction. To assess what the relationship is, one must therefore examine separately the situation under the 1977 Act, the 1988 Act, the 1989 Act and the 1954 Act (as applied by the 1989 Act).

The 1977 Act

               G.17                The jurisdiction conferred on RACs by paragraph 9 of Schedule 11 to the 1977 Act is exclusive to RACs. As noted in paragraph G.3 above, RACs have jurisdiction to vary the fair rent assessment of a rent officer. Section 141 lists the jurisdiction exercisable by County Courts under the 1977 Act. In particular section 141(1)(b) states that County Courts have jurisdiction to determine any question “as to the rent limit”. One possible interpretation of this provision is that County Courts also have jurisdiction to vary the fair rent determination of a rent officer. The Court of Appeal in Tingey v Sutton[22] ruled on this very point. It held[23] that section 141(b) permitted the County Court to determine the maximum rent chargeable in respect of a dwelling that falls within the 1977 Act, but that the County Court has no jurisdiction (on appeal or concurrently) to fix the registered rent or alter it in any way. RACs therefore exercise exclusive jurisdiction under paragraph 9 of Schedule 11 to the 1977 Act.

The 1988 Act

               G.18                RACs generally exercise exclusive jurisdiction under the 1988 Act. However, their jurisdiction may potentially be joined in proceedings before the County Court. The relationship between RACs and the County Court under Part I of the 1988 Act is determined by section 40 of that Act. Section 40(1) provides that County Courts have jurisdiction to determine any question other than a question falling within the jurisdiction of RACs. Section 40(3) qualifies section 40(1) by providing that whenever the County Court exercises jurisdiction conferred on it by section 40(1) that it may also hear any other joined proceedings notwithstanding that those proceedings would otherwise be outside of its jurisdiction. County courts may therefore assume the jurisdiction of RACs when hearing a matter that is within its jurisdiction. Otherwise, RACs exercise exclusive jurisdiction under the 1988 Act.

The 1989 Act

               G.19                It would appear that RACs have exclusive jurisdiction to determine matters within their jurisdiction under Schedule 10 to the 1989 Act. Paragraphs 6(3) and 11(3) of Schedule 11 refer only to RACs and there is no other provision in the 1989 Act to imply that County Courts have any role to play in relation to matters falling to be determined under those paragraphs. This review therefore takes the position that RACs exercise exclusive jurisdiction under the 1989 Act.

The 1954 Act (as conferred by the 1989 Act)

               G.20                The jurisdiction exercised by RACs under the 1954 Act (as conferred by the 1989 Act) runs concurrent to the jurisdiction of the County Courts in respect of the same matters. As noted in paragraphs 2.10–2.12 above, paragraph 19(3) of the 1989 Act applied certain parts of Schedule 5 to the 1954 Act for the purposes of Schedule 10 to the 1989 Act. Section 19(3)(d) provides that any reference to the court includesa reference to a RAC. RACs therefore share jurisdiction with the court to hear matters that are referred to it under paragraphs 4(2) and 5 of the 1954 Act, as applied to Schedule 10 to the 1989 Act. Section 63(1) of the 1954 Act makes it clear that a reference to “court” in Schedule 5 is a reference to the County Court.

Further Appeals

               G.21                Any party to proceedings before a RAC who is dissatisfied in point of law with a decision of the RAC may, pursuant to section 11(1) of the Tribunals and Inquiries Act 1992 (the “1992 Act”), either appeal to the High Court or require that the RAC state a case for the opinion of the High Court. Schedule 1 to the 1992 Act lists all tribunals whose decisions may be appealed to the High Court. Paragraph 37 thereof refers to “Rent Assessment Committees” constituted in accordance with Schedule 10 to the 1977 Act. This includes in specie RACs.

               G.22              The appeal route from RACs are the same as from Rent Tribunals but differ from Leasehold Valuation Tribunals whose decisions may be appealed to the Lands Tribunal.