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United Kingdom Upper Tribunal (Lands Chamber)
You are here: BAILII >> Databases >> United Kingdom Upper Tribunal (Lands Chamber) >> Wilson -Smith (t/a Crumpet Ltd) v Attrill (Valuation Officer) [2011] UKUT 287 (LC) (20 July 2011)
URL: http://www.bailii.org/uk/cases/UKUT/LC/2011/287.html
Cite as: [2011] UKUT 287 (LC), [2011] RA 499
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UPPER TRIBUNAL (LANDS CHAMBER)
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UT Neutral citation number: [2011] UKUT 287 (LC)
LT Case Number: RA/21/2010
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
RATING – valuation – coffee shop – treatment of kitchen and disability ramp – whether removal of non-structural wall minor works – rebus sic stantibus – whether ramp usable floor space – definition of net internal area considered – end allowance – rateable value determined at £22,000
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
VALUATION TRIBUNAL
BETWEEN ANDREW WILSON-SMITH Appellant
(TRADING AS CRUMPET LIMITED)
and
KEVIN ATTRILL (VALUATION OFFICER) Respondent
Re: 66 Northcote Road,
London, SW11 6QL
Before: A J Trott FRICS
Sitting at 43-45 Bedford Square, London, WC1B 3AS
on 11 May 2011
Appellant in person
Respondent in person
The following cases are referred to in this decision:
Kilmartin Sci (Hulton House) Limited v Safeway Stores [2006] EWHC 60 (Ch)
Scottish and Newcastle Retail Limited v Williams (Valuation Officer) [2001] RA119
Williams (Valuation Officer) v Scottish and Newcastle Retail Limited and Allied Domecq Retailing Limited [2001] EWCA Civ 185
DECISION
Introduction
1. This is an appeal by the ratepayer, Andrew Wilson-Smith, trading as Crumpet Limited, (the appellant), against a decision of the Valuation Tribunal dated 22 July 2010 confirming the assessment in the 2005 local non-domestic rating list of the restaurant and premises at 66 Northcote Road, London, SW11 6QL at a rateable value of £22,750.
2. Mr Andrew Wilson-Smith, the Managing Director and sole shareholder of Crumpet Limited, appeared in person for the appellant.
3. Mr Kevin John Attrill MRICS appeared in person as the duly authorised valuation officer.
4. The appeal was heard under the simplified procedure.
5. I made an accompanied site inspection of the appeal hereditament on 17 May 2011 and I also made an unaccompanied visit to a comparable property at 68 Victoria Road, Surbiton on the same day.
Facts
6. The appeal hereditament is located in a parade of shops on the west side of Northcote Road. It is south of, and approximately a ten minute walk from, Clapham Junction Station. The property comprises premises trading as “Crumpet”, a coffee shop providing drinks and light refreshments. The planning permission is for a mixed use shop (A1) and snack bar/tearoom (A3) with trading hours that are restricted to between 08.00 and 19.00. The A1 consent relates to the front of the shop and the A3 consent to the rear. There are two floors of residential accommodation above which do not form part of this appeal.
7. The appeal property measures approximately 24.5m deep by 5m wide. The front of the shop is used for retailing cakes and drinks although there is also a wall counter with bar stools where customers can eat and drink. The front elevation has a folding door which provides direct pavement access across the whole frontage. There is space on the pavement forecourt for some customer tables and chairs.
8. To the left (south) of the entrance is a corridor which gives access to the upper parts. This also acts as an emergency fire escape to the shop. On one side of the shop, occupying approximately the middle-third of its depth and approximately half of its width, is a servery and connected kitchen and preparation area. The front and the back of the shop are at different levels and there is a ramp that connects the two, occupying the space between the servery/kitchen and the party wall with No.64. There is no agreement between the parties about the area of the ramp. The appellant says that it measures 15.62 m2 while the respondent says it measures 14.87 m2.
9. The upper (rear) area of the premises is used for customer seating. Along the rear wall is a small children’s play area and a WC.
10. The appellant occupies the appeal property under a lease for a term of 15 years from 13 October 2003. The basic rent, subject to five-yearly reviews, was £45,000 per annum.
11. The compiled list entry under the 2005 rating list was £22,750. Mr Wilson-Smith served a proposal to alter the list entry on 21 November 2007 stating that the rateable value was inaccurate because the ramp which leads upwards from the front to the rear of the premises was a disabled access and “should not be included in Zone B”. He also said that the “kitchen should not be included in Zone B (£275/m2) as all other restaurants have it priced at £55/m2”.
12. The Valuation Tribunal upheld the compiled list assessment. In the present appeal the appellant argues for a rateable value of £17,500 and the respondent for £22,500 (£250 less than the current 2005 list figure of £22,750).
13. The effective date and the material day are both 1 April 2005.
14. There is agreement between the parties on the following matters:
(i) the tone of the list is £550 per m2 Zone A.
(ii) before the Valuation Tribunal the valuation officer had included, and that tribunal had accepted, a figure of £214 in respect of the partial air-conditioning at the premises. It is agreed that the air-conditioning was installed after the material day and that consequently no value should be attributed to it in the compiled list assessment.
(iii) the rent of £45,000 per annum payable under the lease dated 13 October 2003 does not represent an arms-length transaction and no account has been taken of it.
(iv) while the claimant used the pavement area outside the front of the premises to accommodate customer tables it is agreed that this does not add to the value of the hereditament because it was a concession granted by the local authority and was one which was shared by other A3 retailers along Northcote Road, any value therefore being reflected in the tone of the list.
The RICS Code of Measuring Practice
15. There is no dispute that the measurement of the appeal hereditament should be based upon the RICS Code of Measuring Practice (“the Code”). As at the material day, 1 April 2005, the fifth edition of the Code was in force. In his evidence Mr Attrill refers to the sixth edition of the Code, which was effective from September 2007. The purpose of the Code in the two editions is the same, namely:
“to provide succinct, precise definitions to permit the accurate measurement of buildings…. on a common and consistent basis.”
The status of the Code changes in terms, but not substance, between the two editions. The fifth edition:
“…is not mandatory: it is a code of quality practice”.
The sixth edition:
“…is a Guidance Note. It provides advice to Members of the RICS on aspects of the profession. Where procedures are recommended for specific professional tasks, these are intended to embody ‘best practice’ …
Members are not required to follow the advice and recommendations contained in the Note.”
16. Both editions emphasise that the Code is a code of measurement and not a code of valuation. It deals only with standard measurement practice. In both editions it is said that:
“the [Property Measurement] Group has not attempted to define everyday words and phrases. To do so is to go beyond the purpose of the Code. The Group is of the view that most weight should be given to commonsense interpretations, and less weight to reliance on semantics, when interpreting the meaning of the Code.”
The sixth edition adds the following sentence:
“The Group has however taken the opportunity to incorporate recent judicial guidance on the meaning of ‘useable area’.”
That judicial guidance is found in Kilmartin Sci (Hulton House) Limited v Safeway Stores [2006] EWHC 60 (Ch), a case to which both parties refer. The main issue in that case was the interpretation and application of the definition of net internal area (NIA) contained in the fifth edition of the Code. The parties agree that the appeal hereditament should be measured to NIA.
17. The definition of NIA is contained in paragraph 3.0 of the fifth edition. It is:
“the useable area within a building measured to the internal face of the perimeter walls at each floor level.”
Following this definition are two lists, one of inclusions (paragraphs 3.1 to 3.10) and one of exclusions (paragraphs 3.11 to 3.21). In the present appeal the relevant inclusions are kitchens (3.4) and ramps of lightweight construction to false floors (3.6). The relevant exclusions are:
“Corridors and other circulation areas where used in common with other occupiers or of a permanent essential nature (e.g. fire corridors, smoke lobbies, etc.)” (3.15); and
“Internal structural walls, walls enclosing excluded areas, columns, piers, chimney breasts, other projections, vertical ducts, and the like” (3.17).
18. The sixth edition of the Code keeps the same core definition of NIA but has amended some of the inclusions and exclusions. Kitchens are still included but the inclusion at paragraph 3.6 now reads:
“Ramps, sloping areas and steps within useable areas.”
The exclusion at paragraph 3.15 has been sub-divided into two parts:
“3.15(a) Corridors and other circulation areas where used in common with other occupiers
3.15(b) Permanent circulation areas, corridors and thresholds/recesses associated with access, but not those parts that are useable areas.”
Exclusion 3.17 remains, for the purposes of this appeal, materially unchanged.
Issues
19. The main issue between the parties is how to value the kitchen and the ramp, and, in particular, whether the kitchen should be valued as an ancillary area and whether the ramp should be included within the NIA of the appeal hereditament.
The case for the appellant
20. Mr Wilson-Smith said that it had not been possible to agree the area of the premises because the respondent had consistently varied, and increased, the area since the original measurements were taken. The property was first measured at 94.35 m2 for the purposes of the compiled list but this was increased by the valuation officer at the Valuation Tribunal hearing to 96.61 m2 . Mr Attrill’s figure was now 97.55 m2 . Mr Wilson-Smith submitted that the original area should stand.
21. Mr Wilson-Smith disputed the valuation officer’s approach to the valuation of the kitchen. He said that what mattered was the use of the floor space as a kitchen, not whether or not it was enclosed by a load-bearing wall. He explained that when he acquired the shop in 2003 he had wanted to put the kitchen at the back of the premises. However, because no external fire exit could be provided at the rear of the shop the kitchen had to be positioned centrally with a fire exit leading into the corridor from the upper parts that led to the outside street. According to Mr Attrill the kitchen was worth more when positioned in the centre of the property than it would be if it was located at the rear. Mr Wilson-Smith said that regardless of its location a kitchen was ancillary space and should be valued as such, in this case at a rate of £55/ m2 (Zone A/10).
22. Mr Wilson-Smith then considered how the ramp should be valued. He acknowledged that Kilmartin had shown that a ramp was not excluded from the NIA just because it did not fall within the definition contained in paragraph 3.6 of the Code (fifth edition). The ramp in Kilmartin could be racked and used for storage. It was capable of being used in connection with the purpose for which the premises were to be used (a food superstore) and was therefore a “useable area” under the definition of NIA. He distinguished the ramp in the appeal hereditament on the facts. He said that the ramp was a disability ramp and therefore a legal requirement. It could not be levelled off and used to accommodate tables and chairs for customers. To do so would be to defeat its purpose. It could not be used for A1/A3 purposes. It was unusable and was not easily rendered usable, if at all. It was not sufficient in order to render it part of the NIA for the ramp to connect two areas of usable space. The ramp itself had to be a usable area and it was not. It should therefore be excluded from the NIA. He said that his argument about the ramp was a separate point to the disadvantage associated with the difference in floor levels within the unit. Even if there was a step inside the shop instead of a ramp (and the occupier could therefore use at least part of the floor space that was occupied by that ramp) it would still create an unfavourable trading environment for which an allowance should be made.
23. Mr Wilson-Smith acknowledged that customers used the ramp as a buggy park. It had not been designated for such a use; the customers had used it spontaneously. There used to be a buggy park at the rear of the shop but this had now been replaced with high chairs.
24. Mr Attrill had cited 68 Victoria Road, Surbiton (Starbucks) as a comparable property, where there was also a ramp inside the unit. Mr Wilson-Smith distinguished this shop from the appeal hereditament on two grounds. Firstly, the ramp at No.68 was much smaller (4.5 m2) and less steep (1:20) being only some 3m long and rising only some 15cm. The ramp at the appeal hereditament was much larger (15.62 m2) and steeper (1:13.5). Mr Wilson-Smith calculated that the ramp at No.68 occupied only 3.2% of the total floor area compared to the ramp at the appeal property which occupied at least 15% of the floor space. The two ramps were completely different in terms of their scale. Mr Attrill said that the rating assessment at No.68 had included a 2.5% end allowance to reflect the difference in floor levels and the existence of the ramp. If that was appropriate for such a small ramp and height difference any such allowance in respect of the appeal property should be much greater. Mr Wilson-Smith suggested 25%.
25. Secondly, Mr Wilson-Smith said that the ramp at No.68 was located at the rear of the shop in a much less prominent position, out of sight from the street. It gave access to the toilets and did not interfere with the commercial operations. It primarily occupied Zone C. The ramp at the appeal property was much more prominent being centrally located and mainly in Zone B.
26. Mr Wilson-Smith’s valuation of £17,500 is shown in Appendix 1 attached.
The case for the respondent
27. Mr Attrill measured the property to NIA using the sixth edition of the Code and by reference to the notes on the changes to the previous edition. He inspected the property in October 2010 and had returned subsequently to make check measurements. He calculated the NIA to be 97.37 m2. He recorded all the space within the property as retail area since there were no structural walls which would necessitate the division of the floor space into retail and ancillary areas. He included the area of the ramp, relying upon paragraph 3.6 of the sixth edition of the Code which stated that “ramps, sloping areas and steps within usable areas” were included within the NIA.
28. Mr Attrill said that the area of the hereditament in terms of Zone A was 44.34 m2. He explained that this was based upon a Zone A depth of 4.57m (15ft) and Zone B and C depth of 7.62m (25ft). Applying the agreed tone of £550 per m2 to this area gave a total valuation of £23,838.
29. He accepted that the difference in floor levels between the front and back of the property and the ramp which connected the two did represent a disadvantage for which an allowance should be made. He referred to two comparables when deciding what adjustment was appropriate. He looked firstly at the neighbouring (corner) property, 64 Northcote Road, where a similar difference in floor levels had been overcome by constructing a false floor. This meant the need for two steps up from the street; disability access being available from a separate entrance in Mallinson Road. The rateable value for this shop was agreed on the established tone of £550 per m2 with no allowance made for the steps. The ratepayer was professionally advised. Secondly, Mr Attrill considered the comparable at 68 Victoria Road, Surbiton (Starbucks). This shop had a similar layout to the subject hereditament and also had a ramp between different levels at the front and the back of the property. The rateable value was agreed at a figure which included a 2.5% end allowance to reflect this disadvantage. The ratepayer was professionally advised.
30. The effect of the ramp at 68 Victoria Road was less pronounced than that in the subject hereditament and Mr Attrill, adopting a “stand back and look” approach, considered that an end allowance of 5% was appropriate for the appeal property. In reaching this conclusion Mr Attrill considered by how much the disability of the ramp restricted the flexibility of the use of the unit. His answer was “not substantially”, and he said it was difficult to see how the unit would have been arranged differently with or without the ramp. In his informed opinion the market would accept a 5% allowance. He stressed that this allowance was for the ramp and the reduced flexibility that it caused and not for the location of the kitchen which, he said, was not a particularly relevant factor in the appeal.
31. Commenting upon Mr Wilson-Smith’s evidence, Mr Attrill said that every occupier of a business property needed to ensure that there were adequate exit routes to allow evacuation in the event of a fire. The use of the ramp as a fire corridor therefore had no valuation significance. With regards to the location of the kitchen Mr Attrill pointed out that there was no evidence that the lack of a fire exit required the kitchen to be located next to the ramp. Mr Attrill said that it was a feature of many coffee shops to have an arrangement where the kitchen and servery was located along the side of the shop. This allowed customers buying takeaway drinks to avoid conflict with customers eating-in who could move easily to the seating areas. In cross-examination Mr Wilson-Smith accepted that having the kitchen at the side of the unit was useful and helpful to his business. He also said that there was a similar arrangement in another coffee shop that he owned in Wandsworth, although this arrangement had been inherited from the previous occupier. Mr Attrill concluded that it had been the intention of the ratepayer to put the kitchen in the middle of the shop.
32. Mr Attrill explained that a kitchen was valued at an ancillary rate where there was a structural wall dividing it from the retail area of the hereditament. He gave details of several properties in the Northcote Road parade which Mr Wilson-Smith said showed the valuation of kitchens being based on ancillary rates. Mr Attrill said that such rates applied only where the kitchen was enclosed by a structural wall. Where a kitchen was enclosed by demountable partitions, as was the case with the appeal hereditament, it should be valued by reference to the zoned area in which it was located.
33. The definition of Retail Area (being the NIA of a shop) contained in the Code included ancillary accommodation formed by non structural partitions. Kitchens were specifically included under paragraph 3.4 of the core definition of NIA.
34. In Kilmartin Warren J said at paragraph 57:
“an area is usable if it can be used for any sensible purpose in connection with the purposes for which the premises are to be used.”
Mr Attrill argued that the ramp was used for three sensible purposes (which need not necessarily be commercial) in connection with the use of the appeal hereditament as a coffee shop. Firstly, people ordering from the servery had to stand on the ramp. Secondly, it was used as the access way to the tables at the rear of the shop. Lastly, it was used by parents as a buggy park. The ramp was therefore usable floor space and should be included in the NIA.
35. Mr Attrill said that there were no fundamental differences between the fifth and sixth editions of the Code and that the hypothetical tenant would have taken the same view about the ramp whichever edition was in force. The decision in Kilmartin had not, in his opinion, fundamentally changed anything.
36. The appellant’s valuation of £17,500 was less than Mr Attrill’s combined valuation of Zones A and B (before deducting the end allowance). Mr Attrill said that Mr Wilson-Smith was not, in effect, placing any value on the rear part of the shop. He submitted that the equivalent end allowance of 26.5% which Mr Wilson-Smith’s valuation implied was unacceptable. He did not accept that the ramp could have no value.
37. Mr Attrill applied an end allowance of 5% to his valuation of £23,838 to give a rateable value of £22,645 which he rounded down to £22,500. Mr Attrill’s valuation is shown in Appendix 2 attached.
Conclusions
38. Before dealing with the main issues I comment briefly upon the measurement of the property. Mr Wilson-Smith relies upon an area of 94.35m2 that he says supported the original compiled list entry. Mr Attrill relies upon an area of 97.37 m2 which is derived from his own survey of the appeal hereditament. The Valuation Tribunal said that “floor areas had been agreed at a joint inspection of the property” but did not record what those areas were. I note that the appellant attended a joint inspection of the appeal hereditament with Mr Stephen Milner of the Valuation Office Agency on 15 December 2009. Mr Milner recorded the overall area as 97.39 m2. Mr Attrill’s figure is very close to that measurement, the difference possibly reflecting the exclusion by Mr Attrill of the area of the columns enclosing service ducts from the upper parts. I am satisfied that Mr Attrill’s measurement is an accurate statement of the overall area of the appeal hereditament and I adopt it for the purpose of my decision.
39. The dispute between the parties centres around how to treat and value the kitchen and the ramp. I consider each issue in turn.
(i) The Kitchen
40. It is helpful to set out two of the principles upon which the hereditament is to be valued. Firstly, the hereditament is assumed to be vacant and to let in the sense that the existing business has ended and any process machinery has been removed. Secondly, paragraph 2 of Schedule 6 to the Local Government Act 1988 sets out the matters to be taken into account as they are assumed to be on the material day. These include:
(a) Matters affecting the physical state or physical enjoyment of the hereditament, and
(b) The mode or category of occupation of the hereditament.
Together these matters make up the two limbs of what is known as the “rebus sic stantibus” (“as things stand”) rule.
41. In Scottish and Newcastle Retail Limited v Williams (Valuation Officer) [2001] RA 119 the Lands Tribunal, the President and P H Clarke FRICS, said of the first limb of the rebus rule at 173 [152]:
“In carrying out a valuation under the rating hypothesis the following assumptions are to be made about the hereditament:
(a) That the hereditament was in the same physical state as on the material day. Alterations which the hypothetical tenant might make to the hereditament may be taken into account if, taken overall, they are minor. All other prospective alterations to the hereditament are to be ignored.”
42. The Tribunal explained its reasoning for reaching this conclusion at 167 [134]:
“In our judgment the approach adopted by the Tribunal in the cases we have cited, with the exception of Midland Bank, correctly interprets the effect of the first limb of the rebus sic stantibus rule: that minor alterations of a non-structural character and structural alterations which are de minimis may be taken into account, but that any other alterations to the hereditament which a person bidding for it would plan to carry out must be disregarded. Expressed in this way the rule appears to require that consideration must be given in each case as to whether the works in question are or are not structural – often, as in the present case, a time-consuming and unsatisfactory inquiry. Morever it is the totality of the works that has to be considered, and, since some of the works may be structural and some non-structural, to seek to differentiate between them on this basis is likely to confuse rather than to assist the overall analysis. We believe that the test may most usefully [be] expressed in this way: are the works in question, taken as a whole, minor? So expressed it encompasses both elements of the approach adopted by the Tribunal in the cases we have referred to, since works which involve alterations to the structure that are more than minimal would not be minor, but it avoids the need for an unhelpful classification of the works under consideration.”
43. In Williams (Valuation Officer) v Scottish and Newcastle Retail Limited and Allied Domecq Retailing Limited [2001] EWCA Civ 185 the Court of Appeal upheld the Tribunal’s decision on this point. Walker LJ said at paragraph 74:
“Turning to the first limb of the [rebus] rule, I consider that the Lands Tribunal was clearly right, following Fir Mill, to allow for the possibility of minor alterations in the hereditament on the occasion of its hypothetical letting. …
75. Mr Holgate criticised the test of “minor” alterations as being imprecise, which indeed it is. But the Lands Tribunal was in my view right to prefer it to drawing the line at a suggested distinction between structural and non-structural alterations, which would be even less satisfactory.”
44. In Scottish and Newcastle the Tribunal reached the following conclusion about the second limb of the rebus rule at 173 [152]:
“In carrying out a valuation under the rating hypothesis the following assumptions are to be made about the hereditament:
…
(b) That the hereditament could only be occupied for a purpose within the same mode or category of purpose as that for which it was being occupied on the material day. Any prospective change of use outside that mode or category is to be ignored. ….”
45. The Court of Appeal agreed with this part of the Tribunal’s decision on the second limb of the rebus rule (although it did not accept the view that the Tribunal went on to express that in determining the mode or category of occupation regard should be had to “the methods of valuation commonly applied by rating surveyors”).
46. In Scottish and Newcastle the Tribunal considered the second limb of the rebus rule by reference to the current Use Classes Order. In the Court of Appeal Walker LJ said of this approach at paragraph 72:
“Both sides agreed use classes and classes of permitted development, as determined from time to time for the purposes of town and country planning law, cannot be determinative as to “mode or category of occupation”. Mr Holgate [for the respondent Valuation Officer] made plain that he accepted this only as a matter of law, and the qualification is sensible, because any system of classification for planning purposes must be expected to reflect economic and social realities. But it may be arguable that the B1 use class is now so wide that it may span more than one mode or category of occupation for rating purposes. I express no view on that.”
47. Applying the rebus rule to the appeal hereditament, as thus defined by the Tribunal and the Court of Appeal, I reach the following conclusions:
(i) Mr Attrill’s distinction between structural and non-structural walls (a distinction which is also made in the Code when defining the Retail Area (NIA) of a shop) is not in itself the relevant distinction when applying the first limb of the rebus rule. The fact that a wall is non-structural does not necessarily mean that its removal will be a minor work of alteration.
(ii) However, on the facts and from my site inspection, I conclude that the removal of the non-structural wall enclosing the existing kitchen at the appeal hereditament would constitute a minor alteration and would therefore be taken into account by a hypothetical tenant bidding for the premises.
(iii) A1 retail use (a shop) is the same mode or category of occupation as the ratepayer’s use of the appeal premises as a coffee shop. Although the Court of Appeal noted the agreement of the parties in Scottish and Newcastle that the use classes order cannot be determinative of the mode or category of use, in my opinion it is a relevant consideration and, in this appeal, a persuasive one. The appeal hereditament has a mixed A1/A3 planning permission. The Use Classes Order that was in force at the material day was the Town and Country Planning (Use Classes) Order 1987. (This order was amended with effect from 21 April 2005. Those amendments, which would have been known about at the material day, did not affect the A3 use – restaurant and Café – of the appeal hereditament.) Under the Town and Country Planning (General Permitted Development) Order 1995 development consisting of a change of use from A3 to A1 was permitted development not requiring planning permission.
(iv) Therefore it may be assumed that the hypothetical tenant could use the premises as a shop (second limb of the rebus rule) and could remove the wall enclosing the existing kitchen (first limb of the rebus rule).
It follows from the above analysis that the area of the kitchen should be valued by reference to the zoned floor space within which it is located, namely the approach, if not the reasoning, adopted by Mr Attrill.
(ii) The Ramp
48. The issue regarding the ramp is whether or not it should be included within the NIA of the appeal hereditament. This question is informed by the decision in Kilmartin which considered the definition of NIA that appears in the fifth edition of the Code. That definition is set out in paragraph 3.0 of the Code (see paragraph 17 above) and refers to the usable area within a building. In Kilmartin Warren J said at paragraph 57 that:
“… an area is usable if it can be used for any sensible purpose in connection with the purposes for which the premises are to be used. This is so whether or not it is ‘floor’. Such space will therefore be within NIA subject to the express exclusions in section 3 of the Code. In practice virtually every area of space which is excluded from NIA will fall within one of the express exclusions. It is not easy to think of areas which are both (i) not ‘usable’ and (ii) not within one of the express exclusions. A steep ramp of a permanent nature might be one such example but it is the only one which comes to my mind.”
49. Applying these criteria to the present appeal requires two questions to be answered:
(i) Is the ramp a usable area of floor space?
(ii) Is the ramp specifically excluded from NIA under the fifth edition of the Code?
50. In my opinion the ramp is usable floor space for the reasons given by Mr Attrill. In summary these reasons are (a) customers stand on the ramp to order their drinks and pay for their purchases; (b) it provides access to the rear sitting area; and (c) it is used at a buggy park (as can be seen in the exhibited photographs and as I saw on my site inspection).
51. I do not consider that the ramp is excluded under paragraphs 3.11 – 3.21 of the fifth edition of the Code. The appellant argued that the ramp needed to be kept clear as a fire corridor and indeed it is the only way to leave the premises either directly to the front of the building or via the emergency escape behind the servery leading to the access corridor for the upper parts. But the ramp is not exclusively used for that purpose and, in my opinion, does not forego its usability as retail floor space as a result.
52. I agree with Mr Attrill that the appropriate way to treat the ramp when valuing the appeal hereditament is to make an end allowance to reflect its disadvantages to the unit as a whole. But I disagree with Mr Attrill about the amount of that allowance.
53. Mr Attrill makes an end allowance of 5% which he derives in the context of the adjoining property at 64 Northcote Road (no end allowance) and the comparable (Starbucks) at 68 Victoria Road, Surbiton (2.5% end allowance). The neighbouring property at No. 64 is different, having a false floor and a separate disability access at the rear of the shop. The Starbucks unit is similar in layout to the appeal premises, but the ramp is far less intrusive in terms of size, steepness and position. The ramp in the appeal hereditament is substantial (see paragraphs 24 and 25 above). In my opinion a 5% allowance is inadequate to reflect the disadvantage of the ramp and the difference in floor level (approximately 0.5m) between the front and rear of the property. I consider that the allowance should be increased to 7.5%. The effect of this, when applied to the value of £23,838, is to produce a valuation of £22,050 which I round down to £22,000.
54. Mr Attrill’s measurement of the area of the ramp is 14.87 m2 . Applying Zone B and Zone C rates to this area as appropriate gives a value of £3,612. Mr Attrill’s end allowance was £1,192 (5% of £23,838). This allowance can also be expressed as 33% of the value of the ramp. My end allowance of 7.5% represents £1,788. This is 50% of the value of the ramp which I consider to be a fairer representation of the disadvantage of the ramp and the change in floor levels to the occupier of the appeal hereditament. My valuation is the same as Mr Attrill’s (Appendix 2) with the exception that my end allowance is increased from 5% to 7.5% as explained above.
Determination
55. The appeal is allowed. The hereditament must be entered in the list with an assessment of £22,000 with effect from 1 April 2005.
56. Costs under the simplified procedure are only awarded if there has been an unreasonable failure by a party to accept an offer to settle, or if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional. None of these factors apply in this appeal and I therefore make no award as to costs.
Dated: 20 July 2011
A J Trott FRICS
APPENDIX 1
MR WILSON-SMITH’S VALUATION
|
ZONE |
TOTAL AREA m2
|
NIA (USABLE AREA) m2 |
£/ m2
|
TOTAL(£) |
|
1. Retail Zone A |
18.14 |
18.14 |
550 |
9,977 |
|
2. Retail Zone B |
26.53 |
14.921
|
275 |
4,103 |
|
3. Retail Zone C |
29.05 |
13.872 |
137.5 |
1,907 |
|
4. Retail Zone C (masked) |
7.72 |
0 3
|
110.0 |
---- |
|
5. Remainder |
3.95 |
3.95 |
68.75 |
272 |
|
6. Remainder (masked) |
8.96 |
8.96 |
61.11 |
548 |
|
7. Kitchen |
|
18.89 |
55 |
1,039 |
|
8. Staff toilets |
---- |
---- |
---- |
---- |
94.35
Less area of ramp 15.62
_____
78.73 78.73 £17,846
Rounded to £17,500
Notes: 1 Excludes 11.61 m2 of ramp
2 Excludes 4.01 m2 of ramp and 11.17 m2 of kitchen
3 Excludes 7.72 m2 of kitchen
APPENDIX 2
MR ATTRILL’S VALUATION
|
ZONE |
NIA m2
|
£/ m2
|
TOTAL (£)
|
NOTES |
|
1. Retail Zone A |
17.46 |
550.00 |
9,603 |
|
|
2. Retail Zone B |
29.93 |
275.00 |
8,230 |
A/2 |
|
3. Retail Zone C |
37.36 |
137.50 |
5,137 |
A/4 |
|
4. Remainder |
12.62 |
68.75 |
868 |
A/8 |
97.37 23,838 Equivalent
ITZA of 43.34 m2
Less 5% end allowance 1,193
_______
22,645
say £22,500