The rating agents’ search for ways of reducing their client’s rates bills seem to get ever more imaginative.

We have seen a number of recent challenges seeking to rely on section 45(1)(d) of LGFA 1988, and the associated Unoccupied Property Regulations of 2008. In particular Regulation 4(c), where an empty hereditament normally liable for unoccupied rates would not attract the rates where the “owner is prohibited by law from occupying it or allowing it to be occupied”.

In a number of similar cases we have dealt with recently, a property owner has been carrying out redevelopment works at a property and has sought to argue that due to the nature of the works, and the fact that the property has been left in a hazardous condition, only workers with appropriate personal protection equipment are allowed on site and only when escorted by a member of the construction team.

In Westminster City Council v Regent Lion Properties Limited [1990] asbestos was discovered in premises undergoing building works. A notice was served under the Health and Safety At Work, Etc. Act 1974 which prohibited certain specified activities until various steps had been taken to remedy the asbestos problem. The Court of Appeal held that the owner was prohibited by law from occupying the hereditament or allowing it to be occupied until the steps required by the notice had been taken. The owner was therefore allowed to rely on 4(c) of the Regulations. However in that case the court also held that an owner was not prohibited by law for occupying a hereditament for which there was no permitted use for the purposes of the planning legislation so that the commencement of any use would have involved breach of planning control.

In Pall Mall Investments (London) Limited v Gloucester City Council [2014] (a High Court decision) the ratepayer owned two vandalised office buildings. The structural fabric of the building was genuinely intact but building surveyors indicated that where the building is to be occupied as offices, the owner would be in breach of its responsibilities under health and safety legislation. The High Court rejected the ratepayer’s argument and stated the health and safety legislation does not of itself prohibit occupation. The risk of breach of the legislation if the premises were occupied did not suffice to exempt the owner. Nothing less than the prohibition from occupation would suffice to create the exemption.

It is therefore suggested that any attempt at a refund of already paid rates in respect of the period concerned should be resisted. Each case is of course fact sensitive and it is right to say that to simply argue that the health and safety legislation does not prohibit occupation was an argument rejected in the Regent Lion Properties case. However, in our view, most cases can be distinguished from Regent Lion Properties because it concerned works affected by the existence of asbestos and therefore there was a distinct risk of a prohibition notice, whereas the normal redevelopment works associated with such properties do not normally attract prohibition notices. Of course these works are done by and for the benefit of the property owner concerned.