thames valley association 13 july 2011 completion notices gary l watson irrv (hons) deputy chief...

Thames ValleyAssociation

13 JULY 2011

COMPLETION NOTICES

GARY L WATSON IRRV (Hons)

DEPUTY CHIEF EXECUTIVE IRRV


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


13 JULY 2011

QUESTIONS

WHAT ARE RATES?


13 JULY 2011

QUESTIONS

IS UNOCCUPIED RATEA TAX OR A RELIEF?


13 JULY 2011

QUESTIONS

IS THERE A CIVIC DUTY FOR AN OWNER TO

CONTRIBUTE TOWARDS THE EXPENSES OF A

PROPERTY?


13 JULY 2011

STATEMENTS

Richard Crossman - June 1966Richard Crossman - June 1966

““I do not regard the proposal to I do not regard the proposal to introduce a charge on empty property introduce a charge on empty property

as a revenue raiser. Its main purpose is as a revenue raiser. Its main purpose is to discourage owners from keeping their to discourage owners from keeping their property vacant and thus to reduce the property vacant and thus to reduce the

waste of accommodation.waste of accommodation.

It was an affront that houses or flats It was an affront that houses or flats should be left empty in areas where should be left empty in areas where

housing lists were long and the housing lists were long and the pressure on accommodation severe.”pressure on accommodation severe.”


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’


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.”


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


13 JULY 2011

LIABILITY

COUNCIL TAXCOUNCIL 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 In order to determine the date when the six month

exemption is to commence, it is necessary to exemption is to commence, it is necessary to establish the date a dwelling became establish the date a dwelling became

unfurnished. For an existing dwelling, this would unfurnished. For an existing dwelling, this would be the date furniture was removed from a be the date furniture was removed from a

property and now deemed to be vacant. For a property and now deemed to be vacant. For a new dwelling, the six month period is to be new dwelling, the six month period is to be

established by the date specified in a completion established by the date specified in a completion notice (CN) served by the billing authority (BA).”notice (CN) served by the billing authority (BA).”


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


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.”


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


13 JULY 2011

THE RATLING LIST

• 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?


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


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.


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


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


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


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


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


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)


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)


13 JULY 2011

GOOD PRACTICE

• LIASION * Internal * External

• VT HEARINGVT 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


13 JULY 2011

CASE STUDIESCASE STUDIES


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?


13 JULY 2011

CASE STUDIES

CASE 1

NO!NO!


13 JULY 2011

CASE STUDIES

CASE 2CASE 2

The billing authority have established The billing authority have established that a building was complete back on that a building was complete back on

the 1st October 2010. Can the the 1st October 2010. Can the completion date be backdated to this completion date be backdated to this

date?date?


13 JULY 2011

CASE STUDIES

CASE 2CASE 2

NO!NO!


13 JULY 2011

CASE STUDIES

CASE 3CASE 3

The billing authority have served a The billing authority have served a completion notice stating a completion completion notice stating a completion

day as 27th August 2011. However, due day as 27th August 2011. However, due to the current economic climate, the to the current economic climate, the

owner is unable to secure a tenant (and owner is unable to secure a tenant (and is suffering hardship) and feels this is suffering hardship) and feels this should be taken in to consideration should be taken in to consideration

when determining a completion day. Is when determining a completion day. Is this the case?this the case?


13 JULY 2011

CASE STUDIES

CASE 3CASE 3

NO!NO!


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?


13 JULY 2011

CASE STUDIES

CASE 4

NO!NO!(BUT!)(BUT!)


13 JULY 2011

CASE STUDIES

CASE 5CASE 5

Hereditament A is vacant and has been Hereditament A is vacant and has been for a year. It is split to create two for a year. It is split to create two separate hereditaments B and C separate hereditaments B and C

although no structural alterations have although no structural alterations have taken place. B is occupied but C is not. taken place. B is occupied but C is not. Is it necessary to serve a completion Is it necessary to serve a completion

notice on C?notice on C?


13 JULY 2011

CASE STUDIES

CASE 5CASE 5

NO!NO!


13 JULY 2011

CASE STUDIES

CASE 6

A vacant hereditament is deleted from A vacant hereditament is deleted from the local rating list on 1st June 2011. the local rating list on 1st June 2011. Following major building work, two Following major building work, two separate hereditaments have been separate hereditaments have been

created which will be completed on 1st created which will be completed on 1st September 2011. Is it necessary to September 2011. Is it necessary to

serve completion notices on the new serve completion notices on the new hereditaments?hereditaments?


13 JULY 2011

CASE STUDIES

CASE 6

YES!YES!


13 JULY 2011

CASE STUDIES

CASE 7CASE 7

A completion notice has been served on A completion notice has been served on a building which is now being split in to a building which is now being split in to

ten separate units. Is it necessary to ten separate units. Is it necessary to serve completion notices on each serve completion notices on each

individual unit?individual unit?


13 JULY 2011

CASE STUDIES

CASE 7CASE 7

NO!NO!


13 JULY 2011

CASE STUDIES

CASE 8CASE 8

A completion notice was served with a A completion notice was served with a completion day of 1st April 2011. On completion day of 1st April 2011. On appeal, the Valuation Tribunal agreed appeal, the Valuation Tribunal agreed

the day as 1st May 2011. Is it necessary the day as 1st May 2011. Is it necessary to withdraw the original completion to withdraw the original completion

notice and issue a new one?notice and issue a new one?


13 JULY 2011

CASE STUDIES

CASE 8CASE 8

NO!NO!


13 JULY 2011

CASE STUDIES

CASE 9CASE 9

The billing authority has served a The billing authority has served a demand notice following the expiration demand notice following the expiration of the 3 (or 6) month exemption period. of the 3 (or 6) month exemption period.

However, they did not serve a However, they did not serve a completion notice and relied on the date completion notice and relied on the date that was entered in the local rating list that was entered in the local rating list for establishing when the exemption for establishing when the exemption period should start. Would the billing period should start. Would the billing

authority be entitled to recover the Non-authority be entitled to recover the Non-Domestic Rate in such circumstances?Domestic Rate in such circumstances?


13 JULY 2011

CASE STUDIES

CASE 9CASE 9

YES!YES!


13 JULY 2011

CASE STUDIES

CASE 10

The billing authority has served a The billing authority has served a summons for non-payment of Non-summons for non-payment of Non-

Domestic Rate and the ratepayer has Domestic Rate and the ratepayer has raised the defence that he disagrees raised the defence that he disagrees with the completion notice that was with the completion notice that was

served. Would this be a valid defence to served. Would this be a valid defence to a liability order?a liability order?


13 JULY 2011

CASE STUDIES

CASE 10

NO!NO!


13 JULY 2011

CONTACT DETAILS

GARY L WATSON IRRV (Hons)

Deputy Chief Executive IRRV

Tel: 0207-691-8988

E-Mail: [email protected]

thames valley association 13 july 2011 completion notices gary l watson irrv (hons) deputy chief...

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