Rating List

February 13th, 2020 by James Goudie KC

When should contiguous units of property occupied by the same occupier be entered on the non-domestic rating list as a single hereditament, pursuant to Section 64(3ZD) of the Local Government Finance Act 1988, as amended, and the Rating (Property in Common Occupation) etc Act 2018?

The position has been clarified by Deputy President Martin Rodger QC in the Upper Tribunal (Lands Chamber) in Roberts (Valuation Officer) v Backhouse Jones Ltd (2020) UKUT 38 (LC). The presence of a space or void within a wall or ceiling separating units did not prevent otherwise contiguous hereditaments from being treated as a single hereditament; but two separated by a fire corridor could not be treated as contiguous. As appears from paragraphs 34-37 of the Judgment, with regard to the purpose of Section 64 (3ZD) of the 1988 Act, the subsection defined what was meant by contiguous not only in the context of vertical and horizontal divisions within buildings, but with hereditaments separated by walls, fences and “other means of enclosure”.  A wall which separated two units of occupation might be solid or more complex, with a void or compartment separating external skins on either side. In the case of a solid wall it could readily be said that the same wall enclosed the premises on either side of it. The same statement could not be made with confidence about a wall which contained a void or service compartment within. In the context of rating, occupation was important in defining the unit of assessment. On normal principles the fact that such a void in a wall or floor might not be in the occupation of the person occupying the rooms on either side, and might be used by the building owner to house conduits and service installations, would arguably be enough to justify the conclusion that premises so separated were not contiguous. They were not enclosed by the same wall, but by two walls with a void between them; or the floor of one was not “directly” above the ceiling of the other, but was above a service void below which lay the ceiling. The clear purpose of the space proviso in subsection (3ZD) was to deal with that uncertain situation, and to confirm that the presence of such a space or void did not prevent otherwise contiguous hereditaments from being treated as one. The space proviso was not intended to be an alternative to the conditions in Section 64(3ZD)(a) or (b), but was provided to clarify or qualify their application.  Once it was recognised that the requirement of separation by the same wall, or by a common floor and ceiling, remained an essential characteristic of contiguity, it became clear that the space to which the proviso referred was a space within the wall or ceiling, forming part of the same enclosing structure which surrounded both hereditaments.

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