Under the current definition of rateable value there is an assumption property will be ‘in a state of reasonable repair’. The overall effect in most cases is that repair will not be a significant consideration in rating valuation; this is not necessarily the case for property undergoing construction works.
In 2015 the Supreme Court found case law distinguishing between lack of repair and redevelopment works which made a building uninhabitable. The key point from the case was the objective test of whether a property is undergoing construction, rather than being in a state of disrepair. If the former, the premises would be incapable of beneficial occupation and of no value.
We have seen many cases where the occupier continues to pay the business rates liability whilst they undertake substantial works. Whether a property is in disrepair or undergoing works is a complex area of business rates law and time is of the essence. It is important occupiers seek the right advice early on in the process.
Vickery Holman have a dedicated team of chartered surveyors who have the knowledge and expertise to identify whether your commercial property is undergoing works or in a condition or state of repair which could impact your rateable value. If you have an empty commercial property, a property undergoing works, or require general business rates advice, please contact a member of the business rates team.
