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Appeal No. VA96/3/083 AN BINSE LUACHÁLA A.I.B. Bank, O'Connell Street, Sligo APPELLANT RE: Bank at Map Ref: 3, O'Connell Street, Townland:
Knappagh Beg (part of), B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 29th day of July, 1996 the Appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of £175 on the above described hereditament. The grounds of appeal as set out in the Notice of Appeal are that:- The Property: The premises is located in a designated area and is held on a lease for 9.75 years from 9th July, 1992 at a rent of £46,000pa. The accommodation comprises:- Written Submissions: In his written submission, Mr. Killen set out a description of the property
and its valuation history. He submitted that in arriving at his calculation
of the correct rateable valuation on the subject premises he had had regard
to two methods of valuation, the rental method and the comparative method.
In relation to the rental method, Mr. Killen submitted that certain adjustments
must be made to the rent of £46,000pa before arriving at the correct
rateable valuation on the subject property:- In relation to the comparative method, Mr. Killen submitted two types
of comparisons, that is, valuations on other banks:- and valuations on other premises recently revised:- Having taken the foregoing into consideration Mr. Killen said that the subject would have a Zone A price of £30 psf as set out below:- "Zone A 368 ft2 @ £ 30 = £ 11,040 Mr. Killen submitted the following from his calculations as set out above:- A further document was received on the 3rd June, 1997 from Mr. Killen in the form of an Agreement dated 7th February, 1992 between Clive and Marie Howard and Allied Irish Banks Plc. A written submission was received on the 15th May, 1997 from Mr. Christopher Hicks, Valuer in the Valuation Office on behalf of the Respondent. In his written submission, Mr. Hicks set out a description of the subject property. He assessed the rateable valuation on the premises as follows:- "Rent £46,000 from 9th July, 1992: @ 76% = £34,960 OR Zone A: 18' + 20' 360 @ £44.60 Mr. Hicks in support of his valuation submitted four comparisons in a
non designated area as follows:- (3) Tylers, 43 O'Connell Street, Sligo. (4) San Sad (Singh), 7 O'Connell Street, Sligo. Mr. Hicks also gave details of four properties in a designated area as
follows:- (2) Body Shop, 13 O'Connell Street, Sligo. (3) Brian Green, 11 Tobergal Lane, Sligo. (4) Ulster Bank, Unit 3 Bridge Street, Sligo. Oral Hearing: Mr. Killen adopted his written précis as his sworn evidence and submitted that the rent passing in relation to the subject premises was artificial and must be viewed as such. He said that the rent reflected the availability of the rates relief and tax incentives available under the designated area scheme, the costs of relocating the previous occupiers business and the extensive conversion works carried out by the landlord in order to render the premises suitable for bank accommodation. Mr. Killen referred also to the option of the Appellant's to acquire the freehold interest in the property but when the Agreement in relation to the option was in fact produced to the Tribunal it was clear that the option was to acquire the freehold interest at full market value. Mr. Killen said that the adjustment made by Mr. Hicks in relation to allowances for the designated area status and the back dating to 1988 rent levels was not sufficient. He referred to his comparisons attached to his written précis and said that if the subject premises were to be treated as any other commercial property in O'Connell, Sligo Zone A of the ground floor could not devalue at more than £30. Mr. Hicks also adopted his written précis as his sworn evidence.
He submitted that the rental evidence in relation to the subject premises
must be considered of primary importance. In this connection he said that
the property was located in what he described as the High Street of Sligo
and that even if the subject were out of line on a square foot basis with
other properties in O'Connell Street the passing rent should not be ignored.
Determination: The Tribunal must, in accordance with Section 11 of the Valuation (Ireland) Act 1852, have regard primarily to the passing rent. Undoubtedly the situation of the subject in a designated area with the concomitant rates relief and tax advantages must be taken into account in deciding whether or not the passing rent reflects the actual NAV. The Tribunal notes Mr. Hicks' submission that his allowance of 24% reflects not only the designation of the subject but also the backdating of rents to 1988 levels which, he said, varied very little from the rents in 1992. It seems to the Tribunal that while the Respondent may have made sufficient allowance in relation to the designated area status he may not have made sufficient allowance in relation to the backdating to 1988. While acknowledging that the devaluation of the subject property does appear to show it as being somewhat out of line with comparable properties on the same street the Tribunal is nonetheless compelled by statute to have regard primarily to the passing rent. In the circumstances therefore, having regard to the passing rent and making what it considers appropriate allowances for the designated area status of the property and the backdating of the rent to 1988 values, the Tribunal determines that the correct rateable valuation of the subject is £160. |