Valuation of Factory Undergoing Works

The Upper Tribunal (Lands Chamber) has dismissed an appeal made by the occupier of a factory to delete or reduce the rating assessment of the property whilst works were going on to the electrical services to the building. The decision in R3 Products Limited v Salt (VO) (2014) concerned a factory building near Sheffield.

The ratepayer took a lease of the building and began work to install a HV electricity supply, which had been disconnected and removed. A proposal to delete the rating assessment of the property was made for the period during the works.

At the Upper Tribunal the ratepayer contended that there was no beneficial occupation of the property during the works to the HV electricity supply and that the property was incapable of beneficial occupation and that the assessment should be deleted from the rating list. Alternatively, if the assessment was not to be deleted, he contended that a nominal value was appropriate during the works and that the property should be reintroduced into the rating list in phases as the works were completed.

The Valuation Officer contended that the ratepayer had been in beneficial occupation and that the property remained capable of beneficial occupation throughout the works and, because of this, the assessment should not be deleted. The Valuation Officer also contended that the alternative contention of a nominal assessment was outside the scope of its original appeal and could not be pursued. The Valuation Officer also contended that there was no mechanism for a phased reintroduction of the property to the rating list.

The Tribunal determined that the ratepayer was in beneficial occupation of the property throughout the works for the purposes of undertaking refurbishment work and making it suitable for his own requirements. Because of this the Tribunal found that there was no basis to delete the assessment from the rating list as being incapable of beneficial occupation.

The Tribunal found that the works being undertaken by the Appellant were works of repair and, as a result, the property had to be valued in a reasonable state of repair, which meant that there was no basis on which to find a nominal value.

This will inevitably be compared to the recent decision in Monk v Newbigin (VO) where the Tribunal reduced to a nominal figure the assessment of an office undergoing works. This decision is under appeal, however there are differences in the two cases which are that it was only the high voltage electrical supply which had been removed; a domestic supply remained in place rendering the property capable of beneficial occupation.

Unfortunately property owners simply cannot rely on obtaining a deletion or reduced assessment during works, the rating of property undergoing works is likely to remain a highly contentious area.