Thames Valley Association 13 JULY 2011 COMPLETION NOTICES GARY L WATSON IRRV (Hons) DEPUTY CHIEF EXECUTIVE IRRV

Thames Valley Association 13 JULY 2011 OUTLINE OF PAPER QUESTIONS STATEMENTS LEGISLATION LIABILITY THE RATING LIST GENERAL PROVISIONS PRACTICAL ISSUES REFERENCE INFORMATION GOOD PRACTICE CASE STUDIES CONTACT DETAILS

Thames Valley Association 13 JULY 2011 QUESTIONS WHAT ARE RATES?

Thames Valley Association 13 JULY 2011 QUESTIONS IS UNOCCUPIED RATE A TAX OR A RELIEF?

Thames Valley Association 13 JULY 2011 QUESTIONS IS THERE A CIVIC DUTY FOR AN OWNER TO CONTRIBUTE TOWARDS THE EXPENSES OF A PROPERTY?

Thames Valley Association 13 JULY 2011 STATEMENTS Richard Crossman - June 1966 “I do not regard the proposal to introduce a charge on empty property as a revenue raiser. Its main purpose is to discourage owners from keeping their property vacant and thus to reduce the waste of accommodation. It was an affront that houses or flats should be left empty in areas where housing lists were long and the pressure on accommodation severe.”

Thames Valley Association 13 JULY 2011 STATEMENTS Sir Michael Lyons – 21/03/07 “Empty properties should pay full business rates as an incentive to encourage local business growth, with the exceptions allowable for any property owner who can prove that they are doing all they can to fill the property and are delayed by means beyond their control.” ‘Federation of Small Businesses’

Thames Valley Association 13 JULY 2011 STATEMENTS Gordon Brown – 21/03/07 “As recommended by the Barker Report and now today by the Lyons Report and in line with representations from the Federation of Small Businesses, commercial property lying empty should not continue to be given generous business rate relief, particularly because this leads to higher rents in areas with highest demand. So to encourage better use of commercial premises I will restrict the relief available for empty industrial properties to 6 months, and for empty offices and retail to 3 months. There will be special exemptions for charities.”

Thames Valley Association 13 JULY 2011 LEGISLATION LOCAL GOVERNMENT ACT 1966 GENERAL RATE ACT 1967 LOCAL GOVERNMENT ACT 1974 LOCAL GOVERNMENT FINANCE ACT 1988 LOCAL GOVERNMENT FINANCE ACT 1992 S.I.1989/2261 S.I.1992/558 RATING (EMPTY PROPERTIES) ACT 2007 S.I.2008/386

Thames Valley Association 13 JULY 2011 LIABILITY COUNCIL TAX COUNCIL TAX * Schedule 4A Local Govt. Finance Act 1988 * Schedule 4A Local Govt. Finance Act 1988 * Sections 4 & 17 Local Govt. Finance Act 1992 * Sections 4 & 17 Local Govt. Finance Act 1992 * Regulation 3(1) Council Tax (Exempt Dwellings) * Regulation 3(1) Council Tax (Exempt Dwellings) Order 1992 (S.I.1992/558) Order 1992 (S.I.1992/558) “In order to determine the date when the six month exemption is to commence, it is necessary to establish the date a dwelling became unfurnished. For an existing dwelling, this would be the date furniture was removed from a property and now deemed to be vacant. For a new dwelling, the six month period is to be established by the date specified in a completion notice (CN) served by the billing authority (BA).” “In order to determine the date when the six month exemption is to commence, it is necessary to establish the date a dwelling became unfurnished. For an existing dwelling, this would be the date furniture was removed from a property and now deemed to be vacant. For a new dwelling, the six month period is to be established by the date specified in a completion notice (CN) served by the billing authority (BA).”

Thames Valley Association 13 JULY 2011 LIABILITY COUNCIL TAX (CONT.) * 2 types of dwelling - Chargeable dwelling - Exempt dwelling * Owner liable - Definition - Contrast with Non-Domestic Rate * Exemptions - Class C (6 months) (including 6 week rule) - Miscellaneous

Thames Valley Association 13 JULY 2011 LIABILITY NON-DOMESTIC RATE * Sections 45, 46A & Schedule 4A Local Government Finance Act 1988 * Regulation 4 Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (S.I.2008/386) “In order to determine the date when the three or six month exemption is to commence, it is necessary to establish the date a hereditament became unfurnished. For an existing hereditament, this would be the date furniture / stock etc. was removed from a property and now deemed to be vacant. For a new hereditament, the three or six month exemption is to be established by the date specified in a CN served by the BA.”

Thames Valley Association 13 JULY 2011 LIABILITY NON-DOMESTIC RATE (CONT.) * 4 conditions of unoccupied rate * Relevant hereditament (definitions) * Owner liable - Definition - Contrast with Council Tax * Exemptions - 3 (or 6) months (including 6 week rule) - Miscellaneous

Thames Valley Association 13 JULY 2011 THE RATLING LIST DUTY OF THE VALUATION OFFICER (VO) * Compile and maintain rating lists (Section Act) DUTY OF THE BILLING AUTHORITY (BA) * Inform the valuation officer (VO) of any information that may give rise to an alteration of the rating list (Schedule Act) THE DILEMMA FOR THE VO IN RESPECT OF A NEWLY CONSTRUCTED BUILDING * Must be complete * Approach by BA’s * Post code lottery?

Thames Valley Association 13 JULY 2011 GENERAL PROVISIONS REASONS FOR A CN * Owner may leave the building incomplete (i.e. until tenant found) * Allows VO to assess the building 4 IMPLICATIONS OF A CN * It sets a date where the building is deemed to be complete and entered in the rating list * It sets the effective date of the assessment * It sets the date for unoccupied liability * It determines the date of deletion for any hereditament from which the new hereditament is created

Thames Valley Association 13 JULY 2011 GENERAL PROVISIONS CIRCUMSTANCES WHEN A CN IS SERVED * 2 scenarios - Building can ‘reasonably’ be expected to be completed within 3 months (shall) - Building is complete (may) (Note: key date is when ready for occupation; not necessarily when substantially or structurally complete) * Must be served on the owner ‘as soon as is practicable’ (unless the VO directs otherwise (i.e. to protect the effective date)) * BA can withdraw a CN by serving a subsequent notice although owner must agree if an appeal has been brought.

Thames Valley Association 13 JULY 2011 GENERAL PROVISIONS CONTENTS OF A CN * Mandatory - 2 conditions * Building * Completion day (actual or proposed) * Discretionary DETERMINATION OF RELEVANT DAY * Agreement - If the completion day is agreed in writing by the owner, the day is agreed and the CN is deemed to have been withdrawn - BA and ratepayer can agree an alternative date

Thames Valley Association 13 JULY 2011 GENERAL PROVISIONS DETERMINATION OF RELEVANT DAY (CONT.) * No agreement - If an appeal is made to the Valuation Tribunal (VT), they will determine the date - If the CN is not withdrawn or no appeal lodged, the day on the notice is the completion day SERVICE OF A CN * Schedule 4A - 3 options * Other legislation - Alternative modes

Thames Valley Association 13 JULY 2011 GENERAL PROVISIONS DUTY TO INFORM THE VO * The BA shall supply the VO with a copy of a CN when served * If the BA withdraws the CN, the VO shall be informed * A BA shall supply the VO with a copy of any agreement reached with the owner

Thames Valley Association 13 JULY 2011 GENERAL PROVISIONS Appeals against a CN * Initiated within 4 weeks of service (Note: VT have discretion to extend date) * Must be served on the clerk to the relevant VT * Must include:- - Copy of the CN - Statement on the grounds of appeal * Clerk must advise the appellant within 2 weeks that the appeal has been received and serve a copy on the BA (but not VO) POSITION PENDING APPEAL * BA / VO must use date on the CN as the completion day

Thames Valley Association 13 JULY 2011 PRACTICAL ISSUES 3 AREAS TO BE ADDRESSED BY THE VO * Unit of assessment * Assumed standard of completion * Description, timing of alterations and effective dates WORK THAT IS ‘CUSTOMARILY’ DONE TO A BUILDING AFTER IT HAS BEEN COMPLETED (CATEGORY A AND B) * What is included - Decoration - Internal decorations * What is not included - Flooring, walls / partitions - Major services

Thames Valley Association 13 JULY 2011 REFERENCE INFORMATION CASE LAW * Watford BC v Parcourt Investment Co. Ltd. (1971) (High Court) * French Kier Property Investments Ltd. V Grice (VO) and Liverpool CC (1985) (Lands Tribunal) * Spears Brothers v Rushmoor BC (2006) (Lands Tribunal) * Porter (VO) v Trustees of Gladman Sipps 2011 (Upper Tribunal – Lands Chamber) IRRV * Technical enquiries * Forum service * Publications * Magazines (Insight / Valuer)

Thames Valley Association 13 JULY 2011 GOOD PRACTICE LETTERS / LEAFLETS / WEB SITES ETC. * Keep simple * Look at Council Tax and Non-Domestic Rate separately * Explain the purpose * Ensure any legislation is accurate * Seek a response to the notice (either agreement or reasons for objection) * Provide contact details at BA * Advise on appeal procedure (including time periods and address)

Thames Valley Association 13 JULY 2011 GOOD PRACTICE LIASION * Internal * External VT HEARING VT HEARING * Know the law * Know the law * Understand the procedure * Understand the procedure * Be familiar with case * Be familiar with case * Supporting evidence * Supporting evidence - Statements - Statements - Dates - Dates - Photographs - Photographs

Thames Valley Association 13 JULY 2011 CASE STUDIES

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 1 The billing authority have served a completion notice on the rating agent for a ratepayer (at the request of the rating agent … not the owner) who has confirmed their acceptance in writing. However, the owner has subsequently challenged the completion notice stating that it has not been served on the owner and is therefore invalid. Is the completion notice valid?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 1 NO! NO!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 2 CASE 2 The billing authority have established that a building was complete back on the 1st October Can the completion date be backdated to this date?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 2 CASE 2NO!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 3 CASE 3 The billing authority have served a completion notice stating a completion day as 27th August However, due to the current economic climate, the owner is unable to secure a tenant (and is suffering hardship) and feels this should be taken in to consideration when determining a completion day. Is this the case?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 3 CASE 3NO!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 4 A ratepayer did not appeal until 5 weeks after the issue of a completion notice and the property has now been entered in the local rating list? Can the ratepayer still lodge an appeal?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 4NO!(BUT!)

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 5 CASE 5 Hereditament A is vacant and has been for a year. It is split to create two separate hereditaments B and C although no structural alterations have taken place. B is occupied but C is not. Is it necessary to serve a completion notice on C?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 5 CASE 5NO!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 6 A vacant hereditament is deleted from the local rating list on 1st June Following major building work, two separate hereditaments have been created which will be completed on 1st September Is it necessary to serve completion notices on the new hereditaments?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 6YES!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 7 A completion notice has been served on a building which is now being split in to ten separate units. Is it necessary to serve completion notices on each individual unit?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 7 NO!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 8 CASE 8 A completion notice was served with a completion day of 1st April On appeal, the Valuation Tribunal agreed the day as 1st May Is it necessary to withdraw the original completion notice and issue a new one?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 8 CASE 8NO!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 9 CASE 9 The billing authority has served a demand notice following the expiration of the 3 (or 6) month exemption period. However, they did not serve a completion notice and relied on the date that was entered in the local rating list for establishing when the exemption period should start. Would the billing authority be entitled to recover the Non-Domestic Rate in such circumstances?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 9 CASE 9YES!

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 10 The billing authority has served a summons for non-payment of Non- Domestic Rate and the ratepayer has raised the defence that he disagrees with the completion notice that was served. Would this be a valid defence to a liability order?

Thames Valley Association 13 JULY 2011 CASE STUDIES CASE 10NO!

Thames Valley Association 13 JULY 2011 CONTACT DETAILS GARY L WATSON IRRV (Hons) Deputy Chief Executive IRRV Tel: