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In Buzz Group Limited v Salmon (VO) (2020) UKUT 0116 (LC), the Upper Tribunal (Lands Chamber) considered the valuation for rating purposes of a bingo hall following subletting of part of the property to another occupier. The case concerned a bingo hall in Erdington, Birmingham. This property was originally assessed in the 2010 rating list at rateable value £179,000, a figure that had been agreed between the occupier and the valuation officer based on the fair maintainable trade (FMT) of the bingo hall as it then stood.
Attendances at bingo halls generally have declined over the life of the 2010 rating list and, as a reflection of this, a number of bingo halls have been reduced in size. In this case, part of the property was sublet to a gym operator, which reduced the size of the bingo hall from 3,704 square metres to 2,595 square metres. Following that change, the ratepayer made a proposal seeking a reduction in the rating assessment of the bingo hall. As the ratepayer was not able to agree a revised assessment with the valuation officer, the dispute was referred to the Valuation Tribunal for England (VTE) as an appeal. The VTE determined a 10% reduction in the assessment, to rateable value £161,000. The reduction was an allowance for the disturbance caused by the building works to the new gym property adjoining the bingo hall, but did not reflect any permanent reduction in the assessment of the bingo hall. The ratepayer appealed against this decision to the Upper Tribunal (Lands Chamber).
Before the Upper Tribunal, the ratepayer contended for a reduced rateable value of £106,000, based on the original agreed rateable value of £179,000, adjusted pro-rata to the reduction in floor area. The ratepayer sought to support this figure by reference to the expert determination of a rent review in respect of another bingo hall in Coventry.
The valuation officer contended that the figure determined by the VTE was derived from an agreed scheme of valuation, which was based upon a percentage of FMT and this was a scheme of valuation applied generally to bingo halls throughout England and Wales. The valuation officer maintained that the assessment determined by the VTE was correct and that there was no evidence to show any reason to depart from the agreed scheme of valuation. The valuation officer’s evidence was that there had been no reduction in admissions as a result of the change in floor area.
The Tribunal found that the valuation approach adopted by the appellant ratepayer was a hybrid approach that was “fundamentally flawed”. The initial valuation of the entire building had been based on a percentage of FMT; to then adjust this pro rata to floor area was not right in principle. The appellant had not produced any evidence to show that the change in floor area would have resulted in a different FMT figure at the relevant valuation date. The Tribunal dismissed the ratepayer’s appeal.
The Tribunal’s decision reminds valuers that, whilst an agreed valuation methodology does not always have to be followed slavishly, it does require evidence to justify departing from a previously agreed valuation approach. In this case there was no such evidence and the Tribunal found that the new approach now propounded by the ratepayer was “without foundation”.
