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9 Cards in this Set

  • Front
  • Back
In assessing the Rateable Value of a property, the following must be observed?
• Vacant and to let
• Rebus sic stantibus
• Actual rent passing
• Assessments of comparable properties
• “Tone of the List”
What is a ratable hereditament?
A rateable hereditament is a property which fulfills the requirements to render it subject to a rating assessment
What does "Vacant and to let" mean in assessing business rates
• The hereditament is assumed to be vacant and to be let, even if actually occupied
• The rental offer of a hypothetical tenant on the statutory terms, taking account of market conditions, is then assessed
• The value arrived at should represent the result of bargaining between the landlord and prospective tenant, reflecting supply and demand (the “higgling of the market”) i.e inequality in bargaining power.
What does "Rebus sic stantibus" mean in assessing business rates
• The hereditament is valued in its existing physical state
• Minor changes of a non-structural nature may be assumed
• The possibility of change of use is precluded
• Every intrinsic quality and circumstance which may affect the value up or down must be taken into account
• See Williams (VO) v Scottish & Newcastle Retail Ltd and Another (2001) confirmed this.
Williams (VO) v Scottish & Newcastle Retail Ltd and Another (2001)
This case clarified that the rebus principle allows the prospect of “minor alterations” to be taken into account. It of course remains open to interpretation as to what is a “minor” alteration. Case by case.
What does "Actual rent passing" mean in assessing business rates
• All relevant evidence must be considered, including comparables but usually the rent passing is likely to be the best evidence of rental value for the property providing agreed at “arms length" and dependent on when agreed and on what terms
• Where actual rent passing evidence is not available, other factors which may influence a tenant in making a rental bid (such as making a profit) may be taken into account - specialised then may use profits method
• In practice usually both passing rent and comps are used if possible
What does "Assessments of comparable properties" mean in assessing business rates
• Where there is no tenant in occupation or the rent being paid is not at the correct date nor considered to be market rent then the value must be obtained from comparison, unless profits or cost approach is applicable
• i.e. In the absence of better evidence (passing rent)
What does "tone of the list" mean in assessing business rates
• "Tone of the list" refers to the fact that the valuation date for rating is currently 1 April 2008 so all rating valuations must be consistent with the values prevailing at that time, not today
• When compiling a list of valuations a stage is reached when enough assessments have been settled or are to establish a pattern of established values, "a tone of the list"
• Does NOT apply to pubs, mines, quarries or public utilities valued on a profits basis
What are the potential consequences for businesses of the delay of VO revaluation?
• will force those struggling the most to continue to pay over the odds
• those sectors which have prospered such as central London retail are shielded from paying a fairer share of the rates burden