Schroder Exempt Property Unit Trust v Birmingham CC [2014] EWHC 2207

Following disclaimer, the landlord is liable for business rates until a new tenant is found.

In this case, the Court had to decide who was liable for business rates following the disclaimer of the lease. In the leading authority of Hindcastle Ltd v Barbara Attenborough Associates Ltd, the Court confirmed that the liabilities of a guarantor are not affected by disclaimer, so the landlord was entitled to refuse to take the property back and continue to demand rent from the guarantor.

However, the liability to pay business rates falls upon the person who is entitled to possession of the premises and, therefore, as the disclaimer had the effect of determining the lease, the landlord is the person entitled to the possession of the property, not the guarantor. It follows that the landlord is liable for the rates.

This decision may come as a nasty surprise to some landlords, but it is unlikely to affect the decision of a landlord to rely on a guarantor post-disclaimer until a new tenant is back as the rental income from the guarantor will almost certainly exceed the business rate payments that have to be made.

 

Mavis Russell v Walker & Co and Robert Chisnall & Others

Welcome news for valuers as the Court dismiss a second claim brought against a valuer personally.

There was some concern following Merrett v Babb that the floodgates would open for claims against valuers personally. However, the Court in this case refused to find that the valuer was personally liable holding that the facts of this case could not be reconciled with the Merrett v Babb case.

The Court held that, of key importance in Merrett, the property was of low value and the Claimant was of modest means and, therefore, in the circumstances it was reasonably foreseeable that the Claimant would rely on the valuation report produced for the lender rather than obtain her own report. They also stressed that in Merrett, the firm was not a limited company, but a firm where the valuer was the sole director.

This case is further, and most welcome, confirmation that claimants will have very high hurdles to overcome to succeed in a claim against a valuer personally. However, small firms with sole directors do need to be cautious and ensure that the extent of the retainer is carefully set out and limited at the outset.

For more information about any of these cases or for advice on a contentious property issue please contact Michael Clark.