The true test is whether the occupation is “of value”, contrasted with an hereditament that is sterile in any and everybody’s hands. In Telereal Trillium v Hewitt (VO) (2019) UKSC 23 the Supreme Court endorses the distinction drawn in previous Land Tribunal cases between a property which is unoccupied merely because of a surplus between supply and demand in the market, and a property which has “reached the end of its economic life”. The Valuation Office Agency’s guidance on whether a property is obsolete lists several relevant considerations, including whether the property was occupied at the antecedent valuation date, and whether there are other similar properties in the locality that are occupied. This highlights the issues of fact which may become relevant in drawing the distinction in particular cases.
Whether the building is occupied or unoccupied, or an actual tenant has been identified, at the relevant date is not critical. Even in a “saturated” market the rating hypothesis assumes a willing tenant, and by implication one who is sufficiently interested to enter negotiations to agree a rent on the statutory basis. There is no reason why, in the absence of other material evidence, the level of that rent should not be assessed by reference to “general demand” derived from “occupation of other office properties with similar characteristics”.