In this section
Car parks are subject to co-ordination procedures in accordance with the relevant Practice Note.
For rating purposes there are three types of Car Parks that can be rateable;
- car parks open for use by the general public and forming a separate hereditament for rating purposes;
These will include both open sites and covered areas (ie surface, underground and multi-storey). These may be subject to any of the following forms of occupation:-
- Privately run, fee charging car park - eg National Car Parks;
- Privately run, but Local Authority control charges levied;
- Fee charging Local Authority car parks;
- Free Local Authority car park with barriers, attendants, etc;
- Free Local Authority car park without barriers, attendants, etc;
- Privately run free car park built with adjoining shopping centre.
- car parks, not open to the general public and forming a separate hereditament for rating purposes;
- car parks occupied and forming part of another hereditament for rating purposes. (These are dealt with in the Rating Manual under the individual class of the principal use.)
In order to establish the rateability of a car park it is necessary to consider who, if anyone, satisfies the four tenets of rateability. For car parks open for use by the general public, the most contentious of these has in the past been that of determining 'beneficial occupation'. More recently questions have arisen concerning 'exclusive occupation'. Whilst legal title may be used to identify legal rights that exist, it will be the actual occupation found on the ground, which will take priority.
Occupation is a matter of fact, requiring some positive act of user performed by the potential rateable occupier. An adequate measure of control must be demonstrated of a kind which prevents strangers from interfering with the enjoyment of premises for the purposes for which they are occupied (see Newcastle City Council v Royal Newcastle Hospital 1959 PC 52 RIT 293).
An area of land abandoned to unregulated public car parking will not generally constitute a unit of occupation unless, in addition, there is some act of occupation. Charging and/or some system of management or control of the land as a car park will make it easier to identify the rateable occupier.
Maintenance of a car park is not itself sufficient to establish rateable occupation, other measures of occupation or control are necessary. When acts of occupation or control exist, the totality of those acts and the maintenance can be used to substantiate rateability. Therefore a distinction needs to be drawn between "acts of maintenance" and "control":
- Maintenance deals with the property, as opposed to its use, and is often capable of performance by either a landlord or tenant - eg repairing parts, renewing, decorating and, possibly, gardening;
- Control deals specifically with the way a hereditament is occupied or used. Examples of control usually relate to the regulation and enforcement of the manner of parking and may include:
(i) display signs (regulating use and/or showing names of occupier);
(ii) control of where parking takes place, eg white lines;
(iii) some form of time period enforcement;
(iv) a physical presence;
(v) deterrence of vandalism;
(vi) removal of abandoned vehicles;
(vii) clearance of rubbish;
(viii) permission/refusal for an otherwise unauthorised use (eg preventing HGVs overnight, parking of ice cream/fish and chip vans etc);
(ix) safety measures (eg controlling the playing of ball games);
(x) clearing snow;
(xi) paying/controlling timers for electric lighting;
(xii) supervision of trolley parks;
(xiii) periodic closure.
Although the above is not exhaustive, it does provide a useful check list of the indicators of control which should be noted when referencing car parks. The onus of proof will fall on the VO to show that control is exercised on the ground. It is not enough to assert that the owner has the power to exercise control over the car park unless that power is exercised in practice.
In a limited number of cases a rateable occupier may not be readily identifiable (eg where a number of shop tenants and their customers have similar rights to use the car park and the person to whom the service charge is paid does not exercise sufficient control). Where these circumstances arise the case should be referred to CEO (Rating) via the GVO.
4.1 Extent of Hereditament
The geographical extent of a hereditament will be determined by the extent of the rateable occupation(s).
Car parks used and occupied with adjoining premises will generally together form the hereditament. However, where separated from these other premises by a public highway, or other property, they will in most cases form separated hereditaments.
Internal roadways under the control of the same car park occupier will seldom justify more than one assessment being placed on a retail centre's car parks.
Car parks not within the same rateable occupation as adjoining premises should be separately assessed.
It is important to define the geographical extent of the hereditament especially in cases where use is made from time to time of land adjoining a car park for parking purposes (eg overspill parking facilities at peak times of the year).
4.2 Spaces in separate occupation
Single spaces, or groups of spaces, are sometimes let separately on terms which show that the owner no longer exercises control and that the actual user can be considered to be in exclusive occupation. Provided that they can be identified, such spaces may be treated as separate hereditaments. (see Renore Ltd v Hounslow London Borough Council  RA 567).
In the case of licences, or other similar arrangements, it is important to investigate the facts to discover who is in rateable occupation. It was held in Port (VO) v Gray, Son & Cook and Cambridge Corporate (1952) 42 R&IT 28 that on the facts of the case, the licensor had not relinquished control, despite the licensees having a key to the enclosure.
4.3 Residual hereditaments at retail centres
The choice will be between the car parks being separately assessed, or their being included with other public, non let out property serving the centre, as the residual hereditament. Please see RM 5:200 Appendix 1 for more details.
5.1 Rentals method
Usually there will be sufficient rental evidence available to provide a basis for the valuation of car parks.
Rental evidence should be analysed on a price per standard space basis. The density of spaces within car parks can vary, sometimes significantly, depending on the physical characteristics of a particular site. Adopting a price per space basis, rather than a price per m2, enables direct comparison of uniform sites with those bound by the limitations of an irregular shape.
When analysing a rent on a per space basis a standard sized space should be taken as the norm and non-standard sized spaces should be treated as relative to this. Non-standard sized spaces will be designed and marked out for specific users such as lorry/trucks, coaches, motorbikes, bicycles and wider-access spaces for disabled or parent and baby users.
Although a car park operator will, no doubt, generally seek to make the best use of the space available to him given the shape of the site, the policy of individual operators may lead to potentially different mixes of types of spaces. By considering rental levels in relation to the number of standard spaces allowance is made for operator policy and again enables direct comparison of different sites. If rental evidence has been analysed and applied on the basis of a price per standard space, the resulting valuation should be little changed by the operator’s policy.
5.2 Contractors basis
In exceptional cases (eg isolated multi-storey car parks not let at a rack rent) consideration may have to be given to a contractor's basis approach but an assessment should not be determined on this basis alone. Reference should also be made to the background of rental evidence for comparable hereditaments elsewhere. Where consideration of the contractor's basis is essential, the appropriate statutory decapitalisation rate should be adopted to arrive at the rateable value and the site should be included at a value which assumes that it is available for development only as a car park.
5.3 Receipts and Expenditure basis
This (R&E) basis is not normally a suitable method of assessing car parks, particularly those occupied by local authorities because financial gain is rarely the primary motive in providing the facility. However, in a commercially run car park VOs may have to consider an approach on this basis in those exceptional cases where there is superfluous accommodation (eg one provided for a substantial development but in advance of its completion).
5.4 Rents related to Turnover
For car parks operated purely for profit, a direct relationship between rents and receipts is a common basis of letting, and in such cases rent review clauses stipulate a specific percentage of turnover. The adoption of this approach for purposes of comparison does mean that account is automatically taken of factors such as location, size, relative pricing, occupancy rates and all advantages and disabilities in existence during the period covered.
It is emphasised that this approach should only be adopted in the light of market rental evidence in support of the percentages adopted.
6.1.1 Car parks should be compared on a "like for like" basis - so that surface car parks are compared with other surface car parks, and multi-storey car parks with other multi-storeys.
6.1.2 The value of a car park will be affected by a number of external factors including nearby on- and off-street parking provisions and policies, levels of charges/free parking, how well placed for shopping, entertainment and business centres, railway stations, and other facilities together with the pattern of demand. Consequently when making comparison with those car parks these factors should be weighed as part of the overall consideration. Relative social and economic factors are also important, when comparison is made outside the immediate locality.
6.2.1 Comparability of physical features, such as size, layout, facilities, and state of structure, should be taken into account.
6.2.2 As fewer adjustments would be necessary greater weight should be given to evidence of properties which are located in the immediate vicinity of the appeal hereditament providing they share common characteristics in terms of physical features.
6.2.3 Where there is little reliable evidence of similar multi-storey car parks nearby, it may be necessary to extend the area of search to find suitable comparables. The choice of comparables should be made on the basis that the greater the similarly in the physical nature of the hereditament and of the locality, the more reliable is the evidence.
6.2.4 Comparables should be selected from locations and towns with similar characteristics in terms of demand. Social and economic factors in the area in which they serve, the proximity to major attractions, and supply (or the competition from both on and off street facilities, restrictions, and policies) should also be weighed.
7.1 Road Traffic Regulation Act
Local Authorities have powers under the Road Traffic Regulation Act 1984 to provide and control off-street parking and parking on roads. Sec 35 of the Act enables Local Authorities, where they have provided parking spaces under s.32 or 33, to make provision as to:-
(i) the use of the parking place, and in particular the vehicles or class of vehicles which may be entitled to use it,
(ii) the conditions on which it may be used,
(iii) the charges to be paid in connection with its use (where it is an off-street one), and
(iv) the removal of a vehicle left there in contravention of the order.
Car parks in towns are frequently provided under this Act and therefore it will not be uncommon for a Local Authority to possess the powers outlined above. The impact of the exercise of these powers as it would have been at the valuation date is a factor which should be taken into account when assessing a car park or comparing it with other car parks.
7.2 Car parks at Retail Centres - appurtenant or inseparable rights and double counting
7.2.1 The question of double counting is sometimes raised in regard to the valuation of car parks at shopping centres and at retail parks. In such cases the car parks will have been built as part of the retail development scheme. Because the parking benefits the adjoining shops/retail units it is sometimes contended that this means that the value of the car park is reflected in their rents and assessments. Therefore, it is argued that a separate assessment of the car park would lead to double counting.
7.2.2 The value of virtually all property depends on its location, and its surroundings. Merely because some properties enhance, or detract from the value of others nearby, it does not mean that there has been double counting and values need correcting.
7.2.3 Double counting can arise when a single rent is paid for a property (eg. shop with car parking spaces) but it is split for rating purposes into separate assessments. In these cases care needs to be taken to ensure that the rent is appropriately adjusted so that any rental value attributed to the car parking spaces is correctly deducted.
7.2.4 Rights over other land which are appurtenant and inseparable from the hereditament, should be taken in account in valuing the hereditament - Shell Mex & BP v Langley (VO)  RA 476. In the case of a retail centre where the landlord of the retail units and the rateable occupier of the centre's car park(s) is the same, it is appropriate to check the facts of the case to discover if the retail units have such rights over the car park(s).
7.2.5 Valuations of both hereditaments affected should reflect any appurtenant and inseparable rights, enhancing the value of the one and reducing that of the other - Hodgkinson (VO) v Strathclyde Regional Council Superannuation Fund  RA 129. Such rights as exist need to be taken into account when retail centre car parks are valued. When retail tenants, their staff and visitors have to pay the same parking charges as members of the general public, no such rights should be implied - Church Commissioners for England v Mummery (VO)  RA 327.
7.2.6 These rights are examined in more detail in RM5:200 Appendix:1.
7.3 Car parks catering for the needs of a community, town, village
7.3.1 Value will be influenced by the extent of the demand for parking set against the provision of on and off street parking in the area, charges made, and/or the socio-economic benefits derived.
7.3.2 Where a local authority is operating a loss-making car park, the LA will normally have an alternative; it may pay a private operator to manage the car park instead. This has in fact occurred in many cases, and where the arrangement between LA and commercial manager leaves the latter in paramount control, the manager is treated as the rateable occupier; he may then be rated on a value found by application of the R&E basis, incorporating in his receipts the management fee paid by the LA. Whether or not the manager or the LA is in rateable occupation of other municipal facilities (eg swimming pools) depends on the control exercised by the LA over opening hours and charges. But with car parks there are statutory controls which LAs can exercise over both the level of charges and parking periods, at least in some situations. In some cases, LAs do not need to have rateable occupation in order to impose their chosen parking policy; they can impose it on a commercially motivated occupier. In such cases there is no need for the LA to overbid a commercially motivated tenant. Where a LA is in fact in actual occupation of a car park which would be operated in exactly the same way by a commercially motivated party, and where it would be cheaper for the LA to pay an annual subsidy (or management charge) rather than a rent based on the statutory decap rate, it would be reasonable to suppose that the LA would pursue the cheaper option.
7.3.3 If the LA cannot impose their preferred parking policy without exercising paramount control over the hereditament, it should be concluded that they will not be prepared to subsidise a commercially motivated tenant. So in these circumstances where commercial viability is dependent upon an LA subsidy which would not be offered, the LA becomes the only bidder for the hereditament. And since the value which it places on occupation is not profit-driven, but socio-economic, the monetary receipts and outgoings are no guide to its rental bid. The Contractors Basis becomes the only available method. It should be assumed that the LA would be prepared to build an alternative car park as at AVD, but this assumption is capable of rebuttal, on specific evidence to the contrary.
8.1 Uneconomic sites
Cases will arise where the value of car parks is adversely affected by circumstances, rendering them temporarily uneconomic. Examples are:-
- car parks constructed as a planning condition in new town in advance of requirements;
- car parks in areas where ample street parking is permitted but which are taken on lease by commercial operators in the expectation of a future demand consequent upon the eventual restriction of street parking. A lease of a car park of this type may provide for the payment with a condition that the rent will be increased to an economic level when restrictions are imposed.
Some allowances may be justifiable when assessing hereditaments where these or similar circumstances arise.
The situation may arise where a car park is considered to be permanently uneconomic (eg due to lack of demand caused by vandalism or poor siting). Details of such cases should be referred to the GVO, who may wish to refer the case to CEO (Rating).
8.2 Peak period car parks
Cases may also arise where local authorities provide car parks designed to cater for peak period use, for which there may be only limited use at other times. Examples are:-
- car parks at coastal resorts which are only fully used from say June to September;
- car parks catering for peak demand (eg on market days, Christmas shopping period, of Saturdays etc).
Such car parks meet a special need and, even where the motive of the occupier of the park is the provision of a service, it should be assumed that the occupier would be willing to pay a market rent for that use which would reflect the nature of the demand.
8.3 Superfluous accommodation
Superfluity of car parking spaces should be considered against the background of local patterns of demand. In general, apart from 8.1 above, an allowance should only be made where it can be proved that there is an excess of accommodation, due regard being had to the likelihood that the car park had been provided to satisfy peak demand and expected to be filled only rarely at other times. Church Commissioners for England v Mummery (VO)  RA 129.
8.4 Weekend Markets and Car Boot Sales
Car Parks are often used for other purposes outside their peak times, and this should be taken into account when rents or receipts are being analysed, and comparisons made. The four tenets of rateable occupation should be examined to see if a separate assessment is justified. In the majority of cases rateable occupation will not pass to the operators of markets or car boot sales.
8.5 Disabled parking
See Rating Manual 4:8.
Separately assessed car parks which are not available for public use but are provided for a limited private purpose, (eg for employees or customers of a nearby establishment) should be assessed at figures properly comparable with those adopted for similar public car parks. Regard should be had to any Planning or Highways restrictions imposed on the use of the car park if it could not reasonably be envisaged that these would be relaxed for the hypothetical tenant.