Transcript Document

Thames
Valley
Association
13 JULY 2011
COMPLETION NOTICES
GARY L WATSON IRRV (Hons)
DEPUTY CHIEF EXECUTIVE
IRRV
OUTLINE OF PAPER
Thames
Valley
Association
13 JULY 2011
• QUESTIONS
• STATEMENTS
• LEGISLATION
• LIABILITY
• THE RATING LIST
• GENERAL PROVISIONS
• PRACTICAL ISSUES
• REFERENCE INFORMATION
• GOOD PRACTICE
• CASE STUDIES
• CONTACT DETAILS
QUESTIONS
Thames
Valley
Association
13 JULY 2011
WHAT ARE RATES?
QUESTIONS
Thames
Valley
Association
13 JULY 2011
IS UNOCCUPIED RATE
A TAX OR A RELIEF?
QUESTIONS
Thames
Valley
Association
13 JULY 2011
IS THERE A CIVIC DUTY
FOR AN OWNER TO
CONTRIBUTE TOWARDS
THE EXPENSES OF A
PROPERTY?
STATEMENTS
Thames
Valley
Association
13 JULY 2011
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.”
STATEMENTS
Thames
Valley
Association
13 JULY 2011
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’
STATEMENTS
Thames
Valley
Association
13 JULY 2011
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.”
LEGISLATION
Thames
Valley
Association
13 JULY 2011
• 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
LIABILITY
13 JULY 2011
COUNCIL TAX
* Schedule 4A Local Govt. Finance Act 1988
* Sections 4 & 17 Local Govt. Finance Act 1992
* Regulation 3(1) Council Tax (Exempt Dwellings)
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).”
LIABILITY
Thames
Valley
Association
13 JULY 2011
• 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
LIABILITY
Thames
Valley
Association
13 JULY 2011
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.”
LIABILITY
Thames
Valley
Association
13 JULY 2011
• 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
THE RATLING LIST
Thames
Valley
Association
13 JULY 2011
• DUTY OF THE VALUATION OFFICER (VO)
* Compile and maintain rating lists (Section 41
1988 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 9 1988
Act)
• THE DILEMMA FOR THE VO IN RESPECT
OF A NEWLY CONSTRUCTED BUILDING
* Must be complete
* Approach by BA’s
* Post code lottery?
GENERAL PROVISIONS
Thames
Valley
Association
13 JULY 2011
• 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
GENERAL PROVISIONS
Thames
Valley
Association
13 JULY 2011
• 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.
GENERAL PROVISIONS
Thames
Valley
Association
13 JULY 2011
• 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
GENERAL PROVISIONS
Thames
Valley
Association
13 JULY 2011
• 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
GENERAL PROVISIONS
Thames
Valley
Association
13 JULY 2011
• 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
GENERAL PROVISIONS
Thames
Valley
Association
13 JULY 2011
• 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
PRACTICAL ISSUES
Thames
Valley
Association
13 JULY 2011
• 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
REFERENCE INFORMATION
Thames
Valley
Association
13 JULY 2011
• 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)
GOOD PRACTICE
Thames
Valley
Association
13 JULY 2011
• 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)
GOOD PRACTICE
Thames
Valley
Association
13 JULY 2011
• LIASION
* Internal
* External
• VT HEARING
* Know the law
* Understand the procedure
* Be familiar with case
* Supporting evidence
- Statements
- Dates
- Photographs
Thames
Valley
Association
13 JULY 2011
CASE STUDIES
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 1
NO!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 2
The billing authority have established
that a building was complete back on
the 1st October 2010. Can the
completion date be backdated to this
date?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 2
NO!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 3
The billing authority have served a
completion notice stating a completion
day as 27th August 2011. 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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 3
NO!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 4
NO!
(BUT!)
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 5
NO!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 6
A vacant hereditament is deleted from
the local rating list on 1st June 2011.
Following major building work, two
separate hereditaments have been
created which will be completed on 1st
September 2011. Is it necessary to
serve completion notices on the new
hereditaments?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 6
YES!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 7
NO!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 8
A completion notice was served with a
completion day of 1st April 2011. On
appeal, the Valuation Tribunal agreed
the day as 1st May 2011. Is it necessary
to withdraw the original completion
notice and issue a new one?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 8
NO!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 9
YES!
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 10
The billing authority has served a
summons for non-payment of NonDomestic 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?
CASE STUDIES
Thames
Valley
Association
13 JULY 2011
CASE 10
NO!
CONTACT DETAILS
Thames
Valley
Association
13 JULY 2011
GARY L WATSON IRRV (Hons)
Deputy Chief Executive IRRV
Tel: 0207-691-8988
E-Mail: [email protected]