We have previously reported on the case of SJ & J Monk v Newbigin (VO) and the long running legal process on deciding whether a property can be deleted from a rating list during significant building works.
In brief the case was based around works being undertaken to an office building in Sunderland. The works involved stripping the unit back to a shell prior to creating three new office suites. The Ratepayer argued the property should be deleted from the rating list whilst the works to the unit were ongoing. The Ratepayer’s case was that the property was incapable of beneficial occupation and should be removed from the rating list whilst the works were going. The Valuation Officer contended that despite the condition of the property, the works to put it back into repair were “economic” and therefore felt it should not be deleted.
Initially the Valuation Tribunal found for the Valuation Office. The Ratepayer (SJ & J Monk) appealed the decision to the Upper Tribunal (UT) who then decided in favour of the Ratepayer and deleted the assessment. The case was then subsequently appealed to the Court of Appeal who reversed the decision of the UT, which they found to be legally flawed, and found in favour of the Valuation Officer that the assessment should not be deleted.
The case was then appealed to The Supreme Court which unanimously allowed the ratepayer’s appeal and reversed the Court of Appeal decision. The consequence of this important decision and common sense clarification of the law, is that buildings undergoing significant building works such as a refurbishment scheme or development to another use, will now not be liable to a rate liability whist the building is undergoing these works. This will be very welcome news to developers as the previous Court of Appeal decision was viewed to be a disincentive to development as it would add a significant cost to any project.
Whist this decision has now brought some clarity to the issue of benefical occupation and whether rates should be levied during building works, we would always encourage ratepayers to still take advice when undertaking a scheme of works to determine that the works comply with this ruling.
Should you have any queries regarding this update and what it means for you please do not hesitate to contact me or one of my team.