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The Upper Tribunal (Lands Chamber) has determined that the rating assessments of three purpose-built doctors’ surgeries should be arrived at using the Contractor’s Basis of valuation, rather than by reference to the “Current Market Rents” (CMR’s) derived under the Doctors’ Rent and Rates Reimbursement Scheme (DRRS). The decision in Gallagher (VO) v Dr M Read & Partners and Dr J Poyser and Partners (2015 UKUT 00001 LC) concerned three purpose-built General Practitioner surgeries in Sheffield. These three cases represented lead cases for some 1,600 other appeals in respect of GP surgeries in the 2005 Rating List.
At an initial hearing, the Valuation Tribunal for England had determined that the CMR’s referred to by the Valuation Officer did not represent open market rents and that, in the absence of evidence of open market rental values, a Contractor’s Basis approach was to be preferred. The Valuation Officer appealed to the Upper Tribunal against that decision.
The Appellant argued that the DRRS effectively represented a market for purpose-built surgery premises and that the CMR’s determined under that scheme should be taken as evidence of market rents. From this evidence it was possible to determine rateable values in a way that complied with the statutory hypothesis.
The Respondents argued that, whilst the CMR’s could not excluded as evidence as a matter of law, the VTE had been correct to conclude that, as a matter of valuation judgement, no weight should be given to them as they did not represent market rents.
The Upper Tribunal accepted the Respondent’s contentions, finding that the CMR’s were appraisal based figures and that “they are not based on the vacant and to let principle and do not represent the value of the occupation to the occupier”. The appeals were dismissed and the rateable values determined by the VTE were confirmed.
