Since black Friday, 13 February 2015, the Valuation Office Agency has been making the most of the change in the law that occurred on that day.
Readers of these insights will recall that date for a decision of the Court of Appeal on the assessment for rating of a stripped out floor of an office. The floor was earmarked for subdivision into three lettable parts but that work had not yet occurred. The replacement of stripped out, non-structural elements is repair. Therefore, one assumes that the premises are in repair and they are rateable.
In this case, the repairs would be economic to perform.
The Valuation Office Agency publishes, in its Rating Manual, its guidance on rating law and practice. The Court of Appeal was referred to two extracts from the Manual which suggested:
- Regard should be had to whether the outcome of an ongoing scheme of works would result in a different hereditament. If it would, then the works required to complete the scheme are not works of repair. The Court of Appeal said that this was wrong because “the rateable quality of land is not to be determined by what it once was or by what it may become.”
- The intention of the particular ratepayer or building owner about the end product of a partly executed scheme or works is a relevant factor. The Court did not agree.
The outcome is a much more expensive regime for owners or developers dealing with repairs, alterations, refurbishment or redevelopment.
The ratepayer in the Court of Appeal case has applied to the UK Supreme Court for permission to appeal.
Hopefully, the Supreme Court will grant permission and take the opportunity to restore the status quo.