The Business Rates revaluation should be taken into account by Landlords when considering the amount of tenant's statutory compensation payable under the Landlord and Tenant Act 1954.
If a landlord successfully opposes the renewal of a business lease on grounds such as wishing to develop the premises or occupy them itself then this can give rise to the payment of statutory compensation to a tenant.
The amount of statutory compensation payable under the 1954 Act is usually based on 1 X the £ RV of the premises. However, where the tenant has occupied continuously for 14 years or more, the compensation will be 2 X the £ RV.
The rateable value used to calculate the statutory compensation is based on the valuation list in force at the date either of either:
- The landlord's notice ending the tenancy or
- The landlord's counter-notice opposing the tenant's request for a new tenancy.
The last day that the current valuation list will be in force is 31 March 2017.
From 1 April 2017, the amount of compensation will be calculated using the new rateable value.
Therefore the timing of service of either of the above notices could be critical and have a significant impact on the level of statutory compensation that may be payable by landlords to tenants, and likewise that which a tenant may be entitled to.
It is of upmost importance therefore for both Landlords and tenant take advice on the timing of such notices. Roger Hannah & Co can provide a bespoke professional service advising on all aspects of Business rates and Landlord and tenant issues.