Carey Group PLC v A Ricketts (Valuation Officer)

The statutory assumption that a hereditament is in reasonable repair requires valuation on the basis that damage has been remedied, including by reasonably necessary works which prevent its recurrence. Repair is not confined to replacing damaged material. Where damage caused by an inherent defect can only realistically be remedied by correcting that defect, the corrective and preventative works may be repair.

The assumption does not apply merely because premises have always been functionally inadequate without deterioration. But water ingress which damages internal parts of a hereditament and creates hazardous mould may put it in disrepair. The reasonable-repair assumption may then require a permanent solution, rather than repeated replacement of the damaged parts.

The appellant occupied ground-floor and basement offices. From March 2020 water entered the basement through the joint between the concrete floor and wall. The resulting damp, mould and damage made the premises incapable of beneficial occupation until remedial waterproofing works were completed in April 2021.

The appellant proposed that the hereditament be removed from the 2017 rating list, or valued at £1. The valuation officer maintained the existing assessment. The Valuation Tribunal for England dismissed the appellant’s appeal on 24 October 2023.

On a rehearing appeal, the Upper Tribunal considered whether sealing the defective joint was repair within paragraph 2(1)(b) of Schedule 6 to the Local Government Finance Act 1988.

1. Appeal dismissed. The premises had suffered damage caused by water penetration. Under the repair assumption in paragraph 2(1)(b) of Schedule 6 to the Local Government Finance Act 1988, they had to be valued on the basis that the damage had been repaired.

2. The Tribunal accepted that repair is the converse of disrepair. It ordinarily requires a deterioration from a former, better physical condition. Thus, a building which has always been defective, but has suffered no deterioration, may remain functionally inadequate without requiring repair. That was the significance of Post Office v Aquarius Properties Ltd [1987] 1 All ER 1055.

3. Here, however, water ingress caused damage to internal partitions and created mould hazardous to health. That established disrepair of the hereditament. The appellant did not establish that the only relevant condition was an original and undeteriorated defect in the concrete joint.

4. Repair may include the eradication of an inherent defect and preventative work necessary to stop recurring deterioration. Applying the principles reviewed in London Borough of Hounslow v Waaler [2017] EWCA Civ 45, the Tribunal held that reasonable repair could not consist merely of repeatedly replacing damaged partitions and cleaning mould. The permanent sealing of the joint was the only realistic and reasonable remediation.

5. The decision in SJ & J Monk v Newbigin [2017] UKSC 14 concerned a building undergoing redevelopment. It did not resolve whether premises incapable of beneficial occupation solely through disrepair cease to be a hereditament. That broader issue was not determined in this appeal.

6. The repair assumption therefore required the Property to be valued as if the water damage had been repaired, including by sealing the joint so that water could no longer enter the premises.

• Upper Tribunal (Lands Chamber): dismissed the ratepayer’s appeal and upheld the valuation officer’s position.

• Valuation Tribunal for England: dismissed the ratepayer’s appeal against the valuation officer’s decision on 24 October 2023.