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| At LSM Partners we have a highly professional and
experienced team of rating surveyors, supported by specialist
software, dedicated to advising clients on their business
rates liability and identifying opportunities for making
savings. We can offer clients advice and assistance
in connection with a range of service areas designed
specifically for property owners, investors or managing
agents. |
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| Unoccupied Rates |
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Property
owners
may
become
liable
for
rates
on
unoccupied
premises
in
their
portfolios.
As
a
general
rule
unoccupied
rates
are
payable
at
50%
of
the
full
rate,
after
an
initial
exemption
of
three
months.
There
are
exceptions,
primarily
industrial
and
storage
premises
and
“listed”
buildings,
which
are
exempt
from
unoccupied
rate
payments.
There are, however, numerous issues that the prudent
landlord will need to address before accepting
liability.
•
Is
there
someone
else
that
may
be
held
responsible
for
the
payments,
(e.g.
is
there
an
existing
lease
under
which
the
tenant
would
have
a
right
to
occupy),
perhaps
a
head
lessee
or
a
previous
assignee?
• If the outgoing tenant has received the
benefit of the 3 months exemption prior to lease
expiry, are there provisions in the lease that
entitle the landlord to compensation?
• Are the premises capable of beneficial
occupation or have they reached the end of their
useful life such that they have only a nominal
valuation without substantial alteration or refurbishment?
• If the premises are to be redeveloped
or refurbished are there steps that should be
taken to avoid rate liability, pending commencement
of the works?
• In the case of new premises, has the Council
served a Completion Notice and are there grounds
for appeal?
• Are there any irregularities in the service
of demands or other procedures that may give grounds
to avoid the payments? |
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Multi-let Buildings
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Landlords may also have a role to play in assisting
tenants to minimise their rate payments, as part
of their prudent asset management.
Landlords
may
take
the
view
that
the
rates
are
the
tenants’
responsibility,
and
play
no
part
in
the
appeals.
Where
the
premises
are
let
to
a
single
tenant
with
its
own
property
advisors
that
may
be
perfectly
prudent.
However
in
the
case
of
multi-let
premises,
especially
where
individual
suites
are
quite
small,
the
landlord
may
have
a
role
to
play.
Small tenants have become prey to unscrupulous,
unqualified and unregulated “Business Rate
Advisors” and often find it difficult to
obtain professional advice at a cost effective
price, having regard to the relatively small liability.
As a result the rate payments may not have been
properly tested through the appeals system, resulting
in excessive rates, which may affect the tenants’
ability to pay market rents and adversely affect
the landlord’s asset value.
Landlords are well placed to represent tenants’
interests in such situations. They have access
to full lease details for all the premises and
are able to put the best case to the Valuation
Officer when arguing for a reduction in rateable
value. The result may be an improvement in occupation
levels and rental income as well as reducing the
landlord’s direct liability for unoccupied
rates on suites that become vacant.
By arrangement with the tenants the cost of professional
advice may be recoverable through the service
charge. |
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| Shopping Centres |
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With the increasing popularity of turnover rents
the confidentiality of rental details for premises
in shopping centres may be a particular issue.
The Valuation Office will have obtained full lease
details on its “Rent Return” forms,
which can be presented in open hearings of the
Valuation Tribunal. Confidentiality agreements
may not prevent information, including details
of premiums and incentives coming into the public
arena.
Much of the information on returns will be commercially
sensitive for both landlords and tenants, as it
will disclose turnover rent formulae and may enable
turnover to be calculated.
Landlords will therefore frequently take a coordinating
role in the discussions, providing information
to the Valuation Officer in confidence and enabling
negotiations to concluded without releasing sensitive
information. |
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Statutory Compensation
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| Tenants
with
leases
protected
by
the
Landlord
and
Tenant
Act
are
entitled
to
compensation
based
on
Rateable
Value
in
some
circumstances
where
the
landlord
refuses
the
grant
of
a
new
lease.
Therefore
landlords
should
consider
whether
it
is
in
their
interests
to
appeal
the
rateable
values
of
premises
where
they
anticipate
taking
possession
at
the
end
of
leases
that
expire
during
the
currency
of
the
Rating
List. |
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