Owners of vacant non-domestic premises that are undergoing refurbishment should not automatically assume that their properties will be assessed at a nominal rateable value.
The Court of Appeal has held that a property that had been undergoing internal refurbishment was not exempt from business rates.
In this instance, on the valuation date, various major building elements had been removed including the air conditioning system, electrical wiring, sanitary fittings and most of the ceiling tiles.
By statute, where a non-domestic property is vacant, the rateable value of the property has to be assessed on the assumption that before the tenancy commences the property is in a state of reasonable repair, but excluding any repairs that a reasonable landlord would consider to be uneconomic.
On the facts of the case, the court held that replacement of the stripped out elements (none of which were structural) were repairs, as they required replacement of subsidiary parts of a whole and therefore not exempt from business rates.