In its decision in Pall Mall Investments Ltd v Gloucester City Council (2014) EWHC 2247 the High Court has decided that two office buildings in London Road, Gloucester were liable for empty rates. The case concerned two office buildings in London Road, Gloucester where the ratepayer argued that the buildings were prohibited by law from being occupied because of their poor condition. Whilst the structural fabric of the buildings was generally intact, the interiors were in poor condition. The ratepayer contended that if the buildings were to be occupied as offices the owner would be in breach of its responsibilities under the Health and Safety at Work Act 1974. The ratepayer suggested that any occupation of the buildings as offices would be an offence under the 1974 Act and that the effect of this was to prohibit law the occupation of the premises.

The court determined that there was no actual prohibition of occupation and that the owner could take occupation for the purposes of repairing the buildings or for purposes that did not breach health and safety provisions.

This judgment means that owners cannot rely simply upon a poor state of repair to claim exemption from empty rates. It is necessary to show an active prohibition of occupation, such as a dangerous structure notice or a prohibition or enforcement notice.