2.1 Where the billing authority has not served a completion notice, it will be necessary to consider whether the new building is practically complete and ready for occupation for the purpose for which it was intended. If this is not the case then the building cannot properly be described as a hereditament and cannot be entered into the rating list. If rateable items are absent, but their lack will not prevent beneficial occupation for the intended purpose, then the hereditament should be entered in the rating list.
2.2 The main test is: can the hereditament be beneficially occupied for its intended purpose in its current physical state? If the answer is yes, then the hereditament will be considered ready for occupation and will be entered into the rating list. If, however, the building lacks certain facilities, and even if the work to install them might be considered de minimis, then it is not a hereditament and should not be entered into the rating list.
2.3 If the building is in fact completed then the VO can, and should, enter it into the list. It is of course difficult on occasion to be completely sure that a building is in fact complete and the existence of a completion notice gives the comfort of certainty. In practical terms VOs should be wary of bringing into assessment new but unoccupied properties without a completion notice.
2.4 In Porter (VO) v Gladman SIPPS (2011) RA-63-2008 the President of the Lands Tribunal, having reviewed the previous case law (Watford Borough Council v Parcourt Property Investment Co Limited [1971] RA 97; Ravenseft Properties Ltd v Newham London Borough Council [1976] QB 464; Post Office v Nottingham City Council [1976] 1WLR 624; and French Keir Property Investments Limited v Grice (VO) and Liverpool City Council [1985] RA 202), said, a building is only a hereditament if it is ready for occupation, and whether it is ready for occupation is to be assessed in the light of the purpose for which it is designed to be occupied. If the building lacks features which will have to be provided before it can be occupied for that purpose and when provided will form part of the occupied hereditament and form the basis of its valuation it does not constitute a hereditament and so does not fall to be shown in the rating list. There is in consequence no scope for including in the list a building which is nearly, even very nearly, ready for occupation unless the completion notice procedure has been followed.
2.5 A more recent case, Aviva Investors v Whitby (VO) [2013] RA/3/2011, cleared up a question left over from the decision in the Gladman case about what to do with buildings which are not actually completed but where similar buildings are occupied in an incomplete state nearby. In the case the warehouse buildings were accepted by the VO not to be fully finished but she said similar buildings nearby were occupied in an unfinished state. This showed that the buildings did not lack features that would have to be provided before they could be occupied. The ratepayers argued evidence that a very small minority of occupiers with unusual or atypical requirements were prepared to occupy premises without undertaking otherwise essential works was not a reliable guide to the test from Gladman SIPPS of whether a building was ready for occupation.
2.6 The Tribunal rejected the VOs arguments. It considered the examples provided by the VO did not represent use of the properties in the manner for which they were designed. The Tribunal found that additional lighting and power distribution in the warehouse areas of the appeal properties was required before they were ready for, or capable of, occupation.
2.7 It seems it is necessary to decide how a particular building would typically be completed to be used in the manner for which it was designed. If it is not fully finished to that standard then it will not be ready to be included in a rating list unless a completion notice has been served or it is, in fact, occupied.
**2.8 ** Evidence of other similar buildings in the locality actually occupied in the same state as the property being considered will be of great assistance in confirming a property is complete and ready for occupation for its intended purpose. It should be noted this does not necessarily mean that it can actually be used for the purpose for which it is designed.
2.9 In the case of light industrial units the required level of fit out can vary significantly and therefore judgement will have to be made by reference to others in the locality. Each case will need to be judged on its merits and the locality not restricted to the actual estate or estates nearby.
2.10 The requirement stops short of fully equipping or furnishing a completed building. There will usually be things required to actually use the building for the intended purpose but their lack would not prevent occupation for the purpose e.g. desks, chairs and filing cabinets, or the non-rateable telecommunications equipment in Post Office v Nottingham City Council 1976 1 WLR 624 CA.
2.11 A useful test is - will this item be part of the hereditament when provided? If it is, then, unless the unit is occupied (and that occupation in effect creates a hereditament), the unit is not complete until it is provided.
2.12 This might appear to be a paradox but the test recognises that factual occupation of a building can give rise to a rateable hereditament, whereas the same building left short of completion within the Porter context and unoccupied may not be a hereditament in law unless there is a suitably occupied comparator in the locality.
2.13 In summary, in determining whether a new or reconstructed building or part of a building constitutes a hereditament that can be entered in a rating list without a completion notice being served, the following should be considered:
