Since the introduction of the Rating (Empty Properties) Act 2007 businesses are always thinking of ways to avoid paying the rates on their vacant premises. Rates Mitigation schemes are becoming increasingly popular and it has become clear that even minimal occupation of a property can be enough to amount to rateable occupation.

A recent local case – Sunderland City Council v Stirling Investment Properties LLP (2013) – involved a 15,000 sq ft warehouse which was used by a marketing company for 43 days to house a small Bluetooth box which promoted services to people with a Bluetooth device passing the building within a 20 metre range. Following the tenants vacation of the property the Landlords were then able to claim a further 6 month relief from any liability to pay empty rates.

In determining the rateable occupation of the property it was concluded that the marketing company had means of entry, a right to occupy and had placed all the equipment their for use in the business, and therefore had occupation of the property albeit a very small part of the whole premises. The Court also determined that there was no relevance in regards to the premises not being used for the purpose determined in the Rating List. This was sufficient in determining the rateable occupation of the premises leading to Stirling having their 6 months relief from empty rates.

Even though the test of occupation to pay rates is the same it is now clear that the occupation of the property only has to be minor and that the purpose of the new occupation doesn’t necessarily have to relate to the property determined use by the Valuation Office. Courts are continuing to support these mitigation schemes that rely on only a small period of occupation to trigger a new rate free period.

For further information please contact David Johnson, Partner.