The Business Rates Revaluation will have an Impact on Tenants Statutory Compensation.
The Business Rates revaluation should be taken into account by Landlords when considering the amount of tenant's statutory compensation payable under the Landlord and Tenant Act 1954.
If a landlord successfully opposes the renewal of a business lease on grounds such as wishing to develop the premises or occupy them itself then this can give rise to the payment of statutory compensation to a tenant.
The amount of statutory compensation payable under the 1954 Act is usually based on 1 X the £ RV of the premises. However, where the tenant has occupied continuously for 14 years or more, the compensation will be 2 X the £ RV.
The rateable value used to calculate the statutory compensation is based on the valuation list in force at the date either of either:
- The landlord's notice ending the tenancy or
- The landlord's counter-notice opposing the tenant's request for a new tenancy.
The last day that the current valuation list will be in force is 31 March 2017.
From 1 April 2017, the amount of compensation will be calculated using the new rateable value.
Therefore the timing of service of either of the above notices could be critical and have a significant impact on the level of statutory compensation that may be payable by landlords to tenants, and likewise that which a tenant may be entitled to.
It is of upmost importance therefore for both Landlords and tenant take advice on the timing of such notices. Roger Hannah & Co can provide a bespoke professional service advising on all aspects of Business rates and Landlord and tenant issues.