Local ratings specialists hail Supreme Court decision

Nottingham business rates specialists have welcomed a decision by The Supreme Court yesterday (March 1) which has overturned a judgement by the Court of Appeal that ruled that an office building that was undergoing redevelopment could be occupied by tenants and was therefore liable for full business rates.

The case relates to a commercial office building undergoing a scheme of works and had been stripped to shell and whether it should be valued for the purposes of non-domestic rating (business rates) and went beyond “repairs” and if it were still a useable office?

In the Valuation Tribunal and the Court of Appeal the judgement was for the Valuation Officer but many expressed concern as to the practical application of the decision and the matter was appealed by the owner of the building, the firm S&J Monk.

In yesterday’s unanimous judgment the Supreme Court reversed the Court of Appeal decision and agreed with the judgment of the Upper Tribunal (Lands Chamber) that the property should be reduced in value to Rateable Value £1 and be described as a “Building Undergoing Refurbishment”.

However, in the judgement the Supreme Court preferred to ask first whether ‘the property that was undergoing alteration was incapable of occupation’ and if the answer is ‘yes’ it should be assessed accordingly which, in this case, was a reduction in the rateable value from £102,000 to £1.

David Cureton, a business rates consultant at NG Chartered Surveyors has hailed the decision as “fantastic news for city developers, landlords and tenants”.

He added: “The Supreme Court decision is welcome news for landlords, occupiers and developers who have recently redeveloped their property or are intending to. The wait for this decision has put a block on a whole raft of ratings appeals as we have been waiting for this decision since 2013 and we’d urge anyone who has recently been through the process of redevelopment and whose property hasn’t been fit for occupation to contact us immediately.”

Peter Fulham

Peter Fullam national director rating at JLL said: “This is the outcome that the property industry has been hoping and praying for and will restore the law to its previous position.

“Now the battle is over, developers and investors will be able to commission new schemes with far more certainty going forward.

“With all the recent publicity about the revaluation it is pleasing to be able to cover good news, not only for ratepayers but also for the property market as a whole in removing a potential obstacle to much needed redevelopment in towns and cities.”

Andrew Martin, director of rating at national property consultancy Lambert Smith Hampton (LSH) in Nottingham, commented: “Property owners, developers and ratepayers who are or have altered property will be relieved at this decision. There are a significant number of rating appeals that have been held up pending this decision which will now hopefully be resolved.”