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Court decision on rates liabilities is welcome news for property owners and developers

This case was about works being undertaken to an office building in Sunderland which 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 on the basis that the property was incapable of beneficial occupation. 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 and 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. This new decision allows the ratings liability of a property under extensive refurbishment works to be reduced to £1.

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 to project costs. However, those with ideas of exploiting this decision by removing certain features of the building e.g. plumbing, and claiming their premises are incapable of beneficial occupation should be aware that the Local Government Finance 1988 Act contains anti-avoidance powers.

A fuller summary of the decision by David Reade QC and Dominic Bayne, who appeared in the Supreme Court on behalf of the successful appellant is available here and the Supreme Court’s judgment is available here.

Court Successes: A welcome result for Landlords

The ruling in two recent court cases should be welcomed by landlords as they usefully clarify the extent of their duties under the Defective Premises Act 1972.

 

J Bainton v First Choice Homes Limited (Oldham County Court) – there is no duty of care to rectify something that is not in disrepair

Read more

 

Perry Masters Anthoni v Coast & Country Housing (Middlesborough County Court – Appeal) – a relevant defect must arise out of a failure to maintain or repair

Read more

 

Right to Rent checks – Landlords and Letting Agents beware!

From 1 December 2016 landlords need to check tenants right to rent and comply with new provisions concerning illegal immigrants.

Whilst some of these new provisions are welcomed, others may be of concern to landlords.

Previously if a landlord found that an existing tenant is an illegal immigrant they could not evict them from the property but the new provisions do allow landlords to evict such tenants more easily, and, in some circumstances, without a court order.

However, Landlords should also be aware that the new provisions also introduce four new criminal offences.

Landlords that fail to conduct “Right to Rent checks” or who fail to take steps to remove illegal immigrants from a property can face:-

  • unlimited fines
  • up to five years’ imprisonment
  • sanctions under the Proceeds of Crime Act if convicted
  • in addition to a civil penalty of up to £3,000 per illegal immigrant for tenancies that already exist.

Whilst the government has made clear these new criminal offences are aimed at rogue landlords and letting agents that exploit migrants it is recommended that all landlords and agents should review their procedures to ensure that they are performing adequate checks on potential tenants and to ensure adequate status checks have been performed in respect of existing tenants.

Government guidance on Right to Rent can be found here