Business rates during building works
Discussion
I was at one of my company 'offices' yesterday, accompanied by a surveyor and a local commercial property agent.
A previous tenant, now bust, had used it as laboratory space. It was left like this:
It requires a hefty refurbishment / modernisation which will take in the region of 8 weeks.
Surveyor and agent concur that this is required prior to the space being marketable. There is currently no heating, working electrics, ceiling (aside from one small section), WC facilities or finished floors etc. When the subject of rates came up, they suggested that I should not be paying whilst the property was in this state.
From google, I see a lot on this topic:
"The test of whether a property is capable of beneficial occupation is whether the premises are ready for occupation as a building, it was not whether the premises are fit to be used by a specialist occupier or for some special purpose."
Does anybody have any recent experience of claiming a nominal valuation during works of this nature?
PS - previous tenant used up the full vacancy allowance, so that's a no-go.
A previous tenant, now bust, had used it as laboratory space. It was left like this:
It requires a hefty refurbishment / modernisation which will take in the region of 8 weeks.
Surveyor and agent concur that this is required prior to the space being marketable. There is currently no heating, working electrics, ceiling (aside from one small section), WC facilities or finished floors etc. When the subject of rates came up, they suggested that I should not be paying whilst the property was in this state.
From google, I see a lot on this topic:
"The test of whether a property is capable of beneficial occupation is whether the premises are ready for occupation as a building, it was not whether the premises are fit to be used by a specialist occupier or for some special purpose."
Does anybody have any recent experience of claiming a nominal valuation during works of this nature?
PS - previous tenant used up the full vacancy allowance, so that's a no-go.
This is a particularly difficult area to work in. Chris, a specialist rating surveyor often looks in on the section - he will comment I am sure,
When I was active in this area, an 8 week 'build' time would not be enough to get a property taken out of the rating list. My understanding is that this has only got harder since then.
If you think about it logically otherwise anyone with a unit which they could not let would strip the electrics and loo out and hey presto....
When I was active in this area, an 8 week 'build' time would not be enough to get a property taken out of the rating list. My understanding is that this has only got harder since then.
If you think about it logically otherwise anyone with a unit which they could not let would strip the electrics and loo out and hey presto....
Sorry for being late to the thread. In my opinion there is very little chance of that receiving a nominal assessment during the works. As Surveyor says it used to be a lot easier to get properties needing works deleted from the rating list.
The issue is that under rating law we are obliged to value a business property as if the works that are needed have been done unless they wouldnt be done by the hypothetical landlord because they are uneconomic. Now of course this is a big problem because landlords are doing the works to improve the property so it can be let, therefore they cant be uneconomic, so we have to value the property as if it is in good condition.
This wouldnt be quite so bad but in many cases the VO bases the rateable value of a property on when it was last refurbished so the VO increase the value because the property as been refurbished but wont take it out during those works of refurbishment!
There is an ongoing legal case which is currently waiting for the Supreme Court to issue their decision. In my case it was not an ideal case to take to the Supreme Court because it involves an office stripped out for a refurb, but then works stopped so it was left stripped. However the decision of the Court should give guidelines of when a property can be reduced to a nominal assessment.
I dont believe this is one of those cases. I guess the question is whether the assessment is correct in the first place, if the OP can either post the address in the thread or email it to me I will have a look at it from the desk to see if it looks correct.
The issue is that under rating law we are obliged to value a business property as if the works that are needed have been done unless they wouldnt be done by the hypothetical landlord because they are uneconomic. Now of course this is a big problem because landlords are doing the works to improve the property so it can be let, therefore they cant be uneconomic, so we have to value the property as if it is in good condition.
This wouldnt be quite so bad but in many cases the VO bases the rateable value of a property on when it was last refurbished so the VO increase the value because the property as been refurbished but wont take it out during those works of refurbishment!
There is an ongoing legal case which is currently waiting for the Supreme Court to issue their decision. In my case it was not an ideal case to take to the Supreme Court because it involves an office stripped out for a refurb, but then works stopped so it was left stripped. However the decision of the Court should give guidelines of when a property can be reduced to a nominal assessment.
I dont believe this is one of those cases. I guess the question is whether the assessment is correct in the first place, if the OP can either post the address in the thread or email it to me I will have a look at it from the desk to see if it looks correct.
Gassing Station | Business | Top of Page | What's New | My Stuff