6.1 Full investigation of the facts is required before the valuer goes down the route of a separate assessment from the host.
6.2 Occupations by third parties may meet the criteria for a separate assessment, provided they meet the four tenets of rateable occupation.
6.3 The case of John Laing & Son v Kingswood Assessment Committee (1949) 1 KB All ER 224 set out the four ingredients of rateable occupation, being:
- Actual occupation
- Exclusive occupation for the particular purpose of the possessor
- Beneficial occupation
- Not too transient
6.4 These tests must be applied to retail outlets located within a host property. Generally, actual and beneficial occupation should be relatively easy to determine however exclusive occupation and transience may require more detailed information to be obtained from the occupier.
6.5 In the light of the Cardtronics Supreme Court judgment, the approach to applying these tests, in any case where there is more than one potential rateable occupier, will be first to establish whether the host of the site has parted with possession of it. Agreements that do not grant exclusive possession of a defined area may suggest that the host has not parted with possession of the retail let out concerned.
6.6 However, this is a question of fact and law, and is likely to involve considering both the details of any agreement relating to the operation of the site, and the facts of occupation as they exist at the site. If the host has parted with possession of the site, then the possibility arises that the site forms a separatehereditament.
6.7 If the host has not parted with possession, it is necessary to consider whether the host remains in rateable occupation of the site. The Supreme Court found that where Both parties derive a direct benefit from the use of the site for the same purpose and share the economic fruits of the specific activity for which the space is used the host remained in rateable occupation of the site and there was no separatehereditament.
6.8 Even where the retail unit site is under an exclusive agreement it is still necessary to consider whether the host occupier remains the paramount occupier because the use of the site is part of the normal business activity of the host. Where the host remains the paramount occupier, no separatehereditamentwill exist.
6.9 Full investigation of the facts is necessary before the valuer considers separate assessment from the hoist property.
6.10 Such retail let outs need to be considered on a case by case basis.
6.11 Further information on this point can be found in the relevant Rating Manual Section which is linked below.
6.12 Rating Manual: Section 2 - Valuation principles
