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Practice Note 2: Appendix 4 – The treatment of National Trust composites

1.0 Introduction

1.1 Many National Trust (NT) properties comprise large mansion houses open to the public containing domestic non self-contained flats, apartments or houses that form part of the overall NT occupation, and the hereditament is a composite containing non-domestic and domestic parts. Living accommodation within a mansion house may often be accessed via parts of the main house which are open to the public, or have very poor access arrangements along tortuous passages and back stairways.

1.2 An understanding has been reached with NT following proposals and representations, that the following principles will be recommended to Listing Officers (LOs) when asked to consider proposals or review the banding of living accommodation within NT holdings. The following principles have been established with the NT representative as a basis for an agreed approach to any future adjustments in banding of such properties.

1.3 The following principles should be adopted where the LO is approached by the NT or their agents to undertake a band review where a proposal cannot be validly made, or where a new individual resident makes a valid proposal.

2.0 Part of composite or not?

2.1 It must first be established whether the domestic accommodation is part of the composite. The occupants will be NT staff who are required to occupy the rooms for the better performance of their duties on the estate. They will not have separate tenancy agreements which give them rights of occupancy apart from their job contract.

2.2 Accommodation occupied by workers who have separate tenancies, or whose location on site is not for the better performance of their duties and not linked to their employment, will not be part of the composite.

3.0 Apportionment of value of domestic accommodation.

3.1 The whole of the hereditament is assumed to be sold as at AVD to arrive at the ‘relevant amount’ and the domestic part apportioned out of that value and subject to banding. Where more than one self contained unit of domestic accommodation exists each such unit must be treated as a dwelling under article 3 of the Council Tax (Chargeable Dwellings) Order 1992.

3.2 The relevant amount will be the value of the whole hereditament to one purchaser including the mansion and any flats & houses. Whilst a rental value in Rating terms of the mansion may be nil, it is not considered the same can be said of the capital value. NT houses are often unique treasures preserved for the enjoyment of the nation. Whilst they may be expensive to upkeep and not produce a positive divisible balance when adopting a receipts and expenditure valuation, it does not necessarily follow that the Open Market value would be low. Many of the houses would be in a world market, which might attract bids from very wealthy foreign buyers to whom economic considerations are not a prime consideration. The NT itself has paid large sums for mansions. What that precise figure is does not matter, however.

3.3 Following the approach in Atkinson v Lord (See PN 2 para 6) the valuer simply has to have regard to the relevant amount, not necessarily calculate the exact amount, and make a reasoned apportionment of the domestic element. In the Lord case, an agricultural estate with domestic properties, a fixed deduction amounting to 10% deducted from non composite evidence was judged to comply with the statute.

3.4 A similar approach in principle is to be applied to NT properties to reflect domestic elements. It will thus be demonstrated that the LO has reflected an apportionment, having regard to the relevant amount, and has not simply adopted a separate lotting approach. A check should be made to identify the individual dwellings, and then compare with external comparisons. Where the values of the subject dwellings appear not to have been discounted, but appear in similar bands to comparables in the locality, then a reduction in value approximating to 20% should be considered. This approximates to one band reduction.

3.5 It is conceded that this approach cannot be an exact method because of the varying band widths and individual circumstances. Though there may be exceptions, there is no doubt that as a general rule, the dwellings as part of a whole, and subject to various forms of disability over shared access and layout, will be worth considerably less than if sold on an individual basis, and a deduction of 20% is felt to take a realistic stance overall. This approach is agreed to cover all the variations, and should be applied generally to all composite dwellings within NT properties.

4.0 Where not part of composite

4.1 Where the accommodation is not part of the composite, for example, where a dwelling is let on a normal tenancy whether to staff or not, the property must be compared with normal comparables and not be subject to any notional deductions for apportionment. The physical situation, location and nature of the accommodation will, of course, still be relevant in calculating its open market value.

5.0 Possible exceptions

5.1 It is acknowledged that the above approach will not necessarily be a ‘fit all’ solution e.g.

Where the dwelling is not part of a mansion house complex, but, for example is a sm

all domestic part of a hereditament consisting of mainly ruins or other structures like bridges that are very expensive to maintain, then it may be that the above approach will not offer a satisfactory approach. Such necessary liabilities within the hereditament, that remain after applying the valuation assumption of ‘reasonable repair’ may warrant a lower banding on the domestic part to reflect a fair apportionment.

5.2 In cases of high value properties where an estimated 20% value reduction does not come anywhere near a band margin.

6.0 Individual residents have rights to make a proposal

6.1 The paramount occupier of the dwelling will often be NT. Therefore, for establishing the extent of the hereditament this will be a relevant factor. However, being a resident of a dwelling, according to the CT legislation, is the overriding criteria defining an interested person who has a right to make a valid proposal, notwithstanding they may not be the paramount occupier of the whole hereditament. Thus, it would be possible for a resident to make a valid proposal, should circumstances allow. If such a proposal is received it should be dealt with on the basis of the principles outlined in this advice.

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