Rating Manual section 6 part 3: valuation of all property classes

Section 10: administration of justice - hereditaments - courts

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section applies to all Crown, Magistrates’, Combined and County Courts in England and Wales.

2. List description and special category code

Crown, Magistrates’ and Combined Courts

List Description: Law Court and Premises

SCAT Code 414

SCAT suffix S

County Courts List Description: Law Court and Premises SCAT Code 415 SCAT suffix G

3. Responsible teams

Crown, Magistrates’ and Combined Courts are a specialist class and responsibility for valuation will lie with the specialist team within each business unit.

County Courts are a generalist class and responsibility for valuation will lie with the generalist teams within each business unit.

Queries of a complex nature arising from the valuation of individual properties should be referred to the NSU class facilitator via the class co-ordination team (CCT).

4. Co-ordination

The Class Co-ordination Team has responsibility for ensuring effective co-ordination across this class. The team is responsible for approach, accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers have a responsibility to:

  • follow the advice given at all times
  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
  • seek advice from the co-ordination team before starting any new work

Purpose built Crown, Magistrates’ and Combined courts are a sui-generis class and consequently, as a general rule, only evidence relating to hereditaments in the same mode or category of use is pertinent.

See:

  • Scottish and Newcastle (Retail) Ltd v Williams (VO) (RA 2000 P 119) and the subsequent Court of Appeal decision –Williams (VO) v Scottish and Newcastle Retail and Allied Domecq [RA 2001 P 41)
  • Re the appeal of Reeves (VO) RA 2007 P168
  • Dawkins (VO) v Royal Leamington Spa BC and Warwickshire County Council (1961) RVR 291.

The method of valuation applicable to Crown, Combined & Magistrates’ Courts is the contractor’s basis; this methodology was endorsed by the Lands Tribunal (Upper Tribunal Lands Chamber) in Lavery (VO) -v- Leeds City Council (2002)

The method of valuation applicable to County Courts is the rentals method and the general legal principles that apply to all hereditaments in rating lists apply to County Courts. (See Rating Manual section 2 part 4 - paragraph 9.2 (b) and appendix 1 thereof for further guidance on mode and category of use).

6. Survey requirements

6.1 Method of measurement

Crown, Combined & Magistrates’ courts should be measured to Gross Internal Area (GIA), in accordance with the VOA Code of Measuring Practice.

County Courts should be measured to Net Internal Area (NIA), in accordance with the VOA Code of Measuring Practice.

6.2 Description

Criminal Courts (Crown, Combined & Magistrates’) are generally housed in purpose-built, highly specialised courthouses. Court buildings need to be seen to be there and seen to be public, authoritative and important in society. They represent the concept of justice and, therefore, have a symbolic function in their architecture. A great many court buildings have historic value and the courtrooms are often very popular with the Judiciary and Magistrates. This civic quality is something that is also very much sought after in modern court complexes.

Criminal Courts require intricate segregated circulation routes so that the judge, jury, and defendant(s) (if in custody) can make their way to the court room without meeting each other or any other users (e.g. members of the public). Such complexity makes criminal courts a difficult building type to design and procure. They generally comprise an entrance hall that clearly displays the law court function of the building. In addition there will be formal court rooms typically with secure docks as well as informal family and youth courts. Areas for sensitive and intimidated witnesses may exist and these are typically accessed separately from the public entrance. Separate retiring rooms for Judges and Juries will also form part of the accommodation. If a custody area is present this will be a self-contained compartment within the main court building. Car parking ranges from a limited number of secure spaces reserved for the Judiciary to extensive areas of public parking.

The accommodation found within a County Court is generally little different to that found within standard office accommodation; the Judge’s Chamber is typically the only area that has any significant uplift in terms of quality.

6.3 Requirements

a) Unit of assessment

Where co-located with other users it is possible that unit of assessment issues may arise, particularly where some facilities are shared. In these circumstances the principles referred to in Rating Manual section 3 part 1 should be adhered to.

Regard must also be had to The Local Government and Rating Act 1997 Part 1 Section 3 (3) - “the property is to be treated for the purposes of this Part as if it were a single hereditament occupied by such one of the occupiers as appears to the billing authority to occupy the largest part of the property.” The Crown is indivisible and so in instances where there are more than one Crown occupier in a courthouse they should be treated as a single ratepayer. In cases of difficulty advice from the NSU specialist should be obtained.

b) Survey detail

The following information is required:

i) A plan (CAD or otherwise) should be obtained where available and check dimensions taken on site as necessary; if a plan cannot be obtained then one should be drawn up.

ii) A description of the building(s) to include details of age, general condition, the date of refurbishment (if applicable) and the method of construction.

iii) Where the contractor’s basis is to be the method of valuation only the GIA of individual building(s) is required.

iv) Where the rentals basis is to be the method of valuation the NIA and a detailed description of each individual room is required.

v) A description and full detail of all services to the hereditament e.g. heating, air conditioning, security systems, solar panels etc.

vi) The number of car parking spaces (or the dimensions of the area used for parking), the nature of the parking surface and a note of the extent of site landscaping

vii) The site area.

7. Survey capture

Survey information including plans should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

Where property is to be valued using the contractor’s basis of valuation, the GIA of the building(s) should be entered onto the valuation spreadsheet held on the non-bulk server (NBS).

Where the property is to be valued using the rentals method then data, utilising appropriate BCI and sub location codes, should be captured within RSA.

8. Valuation approach

The contractor’s basis of valuation should be adopted when valuing Crown, Combined & Magistrates’ Courts.

When applying the contractor’s basis the guidance given in Rating Manual section 4 part 3 and the Practice Note applicable to the Rating List for which the valuation is being undertaken is to be followed. The rentals method should be adopted when valuing County Courts.

9. Valuation support

Valuations undertaken using the contractor’s basis should be entered onto the Non-Bulk Server (NBS) (Class - Courts (Contractors) (Scat 414)).

Valuations undertaken using the rentals method are to be carried out on the Rating Support Application.

Other support available:

  • Survaid
  • Class Co-ordination Team

Practice note 1: 2017 - Administration of Justice - county courts

1. Market appraisal

HM Courts & Tribunals Service is an agency of the Ministry of Justice. It is responsible for the administration of the criminal, civil and family courts and tribunals in England and Wales. It operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.

The Service currently operates 460 courts and tribunal centres at a reputed cost of £500 million per annum. The estate is made up of a varied mix of buildings inherited when the organisation was formed in 2011 following the merger of HM Courts Service and the Tribunals Service. The nature and quality of the accommodation it occupies ranges from historic listed buildings to new builds completed to a very high standard.

The increased use of technology, changes to working practices and the Court Estate Reform programme of rationalisation which ran from 2010 to 2014 has seen the size of the estate reduce significantly since 2010.

In March 2014, the Lord Chancellor, the Lord Chief Justice of England and Wales and the Senior President of Tribunals announced details of a programme of reform for the courts and tribunals. HM Treasury has agreed to a 5 year investment programme totalling £375 million which will enable HMCTS to undergo a Reform Programme designed to deliver “ through the use of modern technology, an improved estate and modernisation of current working practices, a more effective, efficient and high performing courts and tribunals administration”.

The joint statement acknowledged that there is a need to invest and modernise the estate, make better use of its buildings and reduce the on-going costs of maintenance.

Consultation on the provision of the court and tribunal estate in England and Wales began on 16 July 2015 and is due to end on 8 October 2015. This consultation puts forward proposals that aim to reduce surplus capacity by closing those courts and tribunals that are unused or underused, or that are simply unsuitable for the services that need to be provided from them.

2. Changes from the 2010 practice note

There are no changes from the approach that was adopted for the 2010 Rating List.

3. Ratepayer discussions

There have been no 2017 List discussions on this class of property.

4. Valuation sheme

The accommodation found within a County Court is little different to that found within a standard office property.

The recommended approach is to value / treat County Courts as offices and adopt a price per square metre NIA which reflects the location and physical characteristics of the property. The value to be adopted should be derived from an analysis of all the available rental evidence in the locality.

Practice note 2: 2017 - Administration of Justice: Crown, combined and Magistrates courts

1. Market appraisal

HM Courts & Tribunals Service is an agency of the Ministry of Justice. It is responsible for the administration of the criminal, civil and family courts and tribunals in England and Wales. It operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.

The Service currently operates 460 courts and tribunal centres at a reputed cost of £500 million per annum. The estate is made up of a varied mix of buildings inherited when the organisation was formed in 2011 following the merger of HM Courts Service and the Tribunals Service. The nature and quality of the accommodation it occupies ranges from historic listed buildings to new builds completed to a very high standard.

The increased use of technology, changes to working practices and the Court Estate Reform programme of rationalisation which ran from 2010 to 2014 has seen the size of the estate reduce significantly since 2010.

In March 2014, the Lord Chancellor, the Lord Chief Justice of England and Wales and the Senior President of Tribunals announced details of a programme of reform for the courts and tribunals. HM Treasury has agreed to a 5 year investment programme totalling £375 million which will enable HMCTS to undergo a Reform Programme designed to deliver “ through the use of modern technology, an improved estate and modernisation of current working practices, a more effective, efficient and high performing courts and tribunals administration”.

The joint statement acknowledged that there is a need to invest and modernise the estate, make better use of its buildings and reduce the ongoing costs of maintenance.

Consultation on the provision of the court and tribunal estate in England and Wales began on 16 July 2015 and is due to end on 8 October 2015. This consultation puts forward proposals that aim to reduce surplus capacity by closing those courts and tribunals that are unused or underused, or that are simply unsuitable for the services that need to be provided from them.

2. Changes from the 2010 practice note

This Practice Note introduces a change to the approach to the application of the contractors basis as compared to that adopted for the 2010 List. It is the modern equivalent of a comparable sized courthouse of a specification similar to that being assessed which is to be costed at stage 1 rather than (as in previous lists) the hereditament itself. Adjustments to take account of the deficiencies of the actual hereditament in terms of physical, functional and technical obsolescence are made at stage 2 of the valuation process. In addition there are changes to the level of costs, fees, values, allowances and rates associated with the contractors basis of valuation.

3. Ratepayer discussions

There have been no 2017 List discussions on this class of property.

4. Valuation scheme

The contractors basis is to be applied in accordance with Rating Manual section 4 part 3 using the guidance below in relation to each stage of the valuation process.

The costs shown in this section are for ease of reference. In all cases where a cost guide code is shown it is this that which must be input into the NBS template, not the costs shown here. Where the cost guide code shows options, the costs shown in this practice note should be used to aid selection. Should the cost guide show different costs to those shown in a current version of this practice note, please refer to the CCT.

4.1 Stage 1 - estimated replacement cost

Building costs

With the exception of areas that are not used at the AVD and have no prospect of being used, the actual GIA of the courthouse should be used to calculate the Estimated Replacement Cost (Stage 1) of the hereditament in accordance with Appendix A.

External works

The cost of external works is to be added in accordance with Appendix B

Location factors

Location factors should be applied in accordance with the VOA Cost Guide 2017

Professional fees and charges

Criminal Courts are complex in design and are usually highly serviced. As a result, fees tend to be at the higher end of the range when compared with other classes of property valued by the Contractor’s Basis

The normal addition for fees will be 15%. An addition of 12.5% will be appropriate for Courts of a more basic design and up to 17.5% may be applied to the most complex buildings.

4.2 Stage 2 – allowance for age and obsolescence

Adjustments for physical, technical and functional obsolescence should be made in accordance with the scales contained in Rating Manual: section 4 part 3 - The Contractor’s Basis of Valuation : R2017 Practice Note: Stage 2 - age and obsolescence allowances.

In the case of buildings that have been significantly refurbished a lower allowance than that indicated solely by reference to the building’s age in the scale may be applicable.

In all cases the actual age of the building is to be recorded for the purposes of determining the appropriate age and obsolescence allowance. When refurbishment has taken place the allowance and not the buildings age should be over written

The weighted average obsolescence allowance applied to all the buildings should also be applied to the external works.

4.3 Stage 3 - land value

Land values should be arrived at having regard to values prevailing in the locality in accordance with Rating Manual section 4 part 3.

Assistance on the level of value to apply can be found within the 2017 Land Valuation for the Contractor’s Basis Practice Note. (Rating Manual section 6 part 3 - Section 1200).

The weighted average obsolescence allowance applied to all the buildings (the “Ebdon allowance”) should normally be applied to the land value, but see Rating Manual section 4 part 3 for advice.

4.4 Stage 4 - decapitalisation rate

The higher statutory de-capitalisation rate for England or Wales as appropriate should be applied to the Effective Capital Value (ECV) to arrive at an annual equivalent.

4.5 Stage 5 - end adjustments

Any advantage or disadvantage which might affect the value of the occupation of the hereditament as a whole should be reflected at this last stage. An adjustment under this head should not duplicate adjustments made elsewhere. Most hereditaments will not warrant further allowances at this stage and where allowances are appropriate, it is expected that they should not normally exceed 10%.

Appendix A

Stage 1 Building costs

Type of Court

Description

Cost Guide Reference

£/m2

Law Centre

 

(The modern substitute for all courts built post 2010)

A 3 storey block containing 4 formal crown and magistrates' courtrooms, an informal county court, judges chambers, public waiting areas, interview rooms, administration offices, van dock and custody suite.  A steel framed building enclosed with a mixture of facing brick, render, curtain walling and metal cladding walls and a flat roof incorporating an atrium. Internally, the building comprises plastered, tiled and panelled wall finishes, suspended ceilings, raised flooring, fitted furniture, sanitary ware, central heating, air conditioning, electric lighting and power, lifts, alarms, data installation, public address, CCTV and security systems.

61K00U

£2,700/m2

Crown Court

A detached 4 storey building comprising four equal sized crown courts, a civil court and judges chambers, public waiting areas, interview rooms, administration offices, van dock and custody suite.   A steel framed building enclosed by white rendered blockwork part curved cavity walls, aluminium windows, doors and curtain walling and flat roofs with roof lights and a continuous atrium.  Internally, the building comprises hardwood veneered doors, plastered, painted, tiled and wood panelled wall finishes with some internal glazing,  part raised flooring, suspended ceilings, fitted furniture, sanitary ware, central heating, partial air conditioning, electric lighting and power, lifts, alarms, data installation, public address, CCTV and security systems.

61K00Z

£2,400/m2

Magistrates' Court

A 2 storey magistrates court comprising 2 formal custody courtrooms and 3 informal courtrooms, public waiting areas, interview rooms, administration offices, van dock and custody suite.  A steel framed building enclosed with brick cavity walls enhanced in part with stone features and metal cladding and a pitched roof covered with metal cladding.  Internally, the building comprises hardwood veneered doors, plastered, tiled and panelled wall finishes, suspended ceilings, raised flooring, sanitary ware, central heating, part air conditioning, electric lighting and power, lifts, alarms, data installation, public address, CCTV and security systems.

61K00B

£2,350/m2

 

 

 

 

Appendix B

Stage 1 The addition of external works

Description

Addition for External Works

1

City or town centre or island site typically with 90% or greater building ratio, no more than a very limited number of Judges parking spaces.

2.5%

2

As 1 above, but typically with an 80% to 90% building ratio, limited parking, external lighting, landscaping and some boundary fencing.

5%

3

Site typically with circa 75% building ratio, some landscaping around buildings, secure boundary fencing, surface parking for judges & magistrates, external lighting and landscaping

10%

4

As 3 above, but typically with landscaping around buildings, secure boundary fencing, external lighting, general parking for judges, magistrates & staff within the hereditament.

15%

5

As 3 above, but typically with landscaping around buildings, secure boundary fencing, external lighting, general parking for judges, magistrates, staff and public within the hereditament.

20%

Practice note: 2010 - Valuation for Non-domestic rating of Crown, Magistrates and Combined Courts in England & Wales

1.0 Preamble

This Memorandum provides guidance on the valuation for rating purposes in the circumstances where it is appropriate to adopt the Contractor’s Basis of valuation for Criminal Courts.

It has been drawn up with reference to current legislation and relevant case law.

The Memorandum has been accepted by the Chief Executive of the Valuation Office Agency and GVA as representatives of Her Majesty’s Courts and Tribunals Service.

2.0 Her Majesty’s Courts and tribunals service

A Government White Paper ‘Justice for All’, published in 2002, recommended that instead of the Magistrates’ Courts Service and Court Service being administered separately, a single agency should be developed, supporting the delivery of justice in all courts in England and Wales.

The Courts Act 2003 provided the legal framework that enabled the changes to be made.

The Unified Courts Administration Programme was set up to create the new agency and on 1st April 2005 H.M. Courts Service was launched.

On 1 April 2011 Her Majesty’s Courts & Tribunals Service was created. This brings together HM Courts Service & Tribunals Service into one integrated agency providing support for the administration of justice in courts and tribunals.

H.M. Courts & Tribunals Service is an agency of the Ministry of Justice. It uniquely operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.

3.0 Approach to valuation

Criminal Courts are generally housed in purpose-built and specialised courthouses and as such are considered sui generis.

They should be valued using the Contractor’s Basis of valuation with the Specialist Rating Teams having full responsibility.

All Crown and Combined Courts in England and Wales are dealt with by one Specialist Caseworker - D.A.Knott (Specialist Rating Team NDR NW) – who is also the Lead Specialist in respect of Magistrates Courts.

This property is valued using the non-bulk server. The manual can be accessed here.

4.0 Basis of measurement

Cost information has been derived from a Gross Internal Area (GIA) basis.

The definition of GIA should be as provided in the RICS Code of Measuring Practice.

HMCTS provides CAD (Computer Aided Design) drawings for all locations.

5.0 The contractor’s basis

5.1 Stage 1

5.1.1 Estimated replacement cost

HMCTS have been provided with Asset Valuation & Estate Terrier reports by the Valuation Office Agency. CAD drawings and GIA figures have been provided by the clients, incorporated into these reports and subsequently accepted. It is recommended, therefore, that unless specific errors are properly identified, these areas are adopted to calculate the Estimated Replacement Cost (ERC) of the building.

The following costs should be adopted:-

Age

Build Cost per m2 GIA

Remarks

Pre – 1950

£1,470

Includes the old Assize Courts

1950 – 1964

£1,559

1965 – 1974

£1,647

1975 – 1984

£1,765

Beginning of major development programme

1985 – 1995

£1,882

60% of Crown Courts built 1980 – 2003

1996 – 2010

£2,000

Lord Chancellors Dept. takes over sponsorship of all Courts

Post 2010

To be individually costed

Only in circumstances where fully analysed and adjusted costs are available and the costs of all non-rateable elements can be properly deducted should the actual adjusted cost be adopted. In the absence of such information the £2,000/m2 cost should be applied.

Notes

The above costs relate to a well-designed and constructed Court building commensurate with its age.

For buildings which are of an inferior standard of construction and/or design to that which would typically be expected for the period, it may be necessary to make some adjustments to the costs shown in the table. This will, however, be subject to a minimum of £1,470/m2. Such adjustments may be of particular relevance to Magistrates Courts where there were wide variations in the quality of construction prior to the centralisation of development resourcing from 1996.

Courts which have undergone extensive modernisation to such an extent that the building is now wholly different from that originally constructed, should be treated as having a build date at an intermediate point between the date of original construction and the date of modernisation, having regard to the quality of the scheme. The cost adopted will however, be subject to a maximum of £2,000/m2.

Generally, where plant rooms or other ancillary areas are located within the main envelope of the courthouse they will be included in the GIA and should be valued in accordance with the table of costs above. However, where the plant rooms and ancillary areas are excessive as a proportion of the total GIA of the main building or incorporate significant internal car parking or separate rooftop or external buildings, consideration should be given to adopting a lower build cost rate for these areas commensurate with the quality of construction and finish. This should not be less than 50% of the appropriate build cost rate adopted for the Courthouse itself, unless the construction is of a wholly inferior standard.

5.1.2 External works

The external works element of the ERC should be calculated with regard to the 2010 Cost Guide.

Where file records are insufficient to enable individual elements of external works to be costed, a percentage addition is recommended.

The range of additions will be between 2.5% and 7.5%. It is expected that 5% will be the benchmark

5.1.3 Contract size adjustment

The aggregates of locationally adjusted building costs and external works costs are subject to a contract size adjustment. The appropriate levels of adjustment are set out in the Cost Guide.

5.1.4 Professional fees

Crown Courts and the more significant Magistrates Courts are complex in design and are usually highly serviced. As a result, fees tend to be at the higher end of the range when compared with other classes of property valued by the Contractor’s Basis.

The normal addition for fees will be 15%. An addition of 12.5% will be appropriate for Courts of a more basic design including many of the standard Magistrates Courts and up to 17.5% may be applied to the most complex buildings.

5.2 Stage 2

5.2.1 Physical and functional obsolescence

The age-related allowance scale shown below should be considered in the first instance. The age of the building should be taken as one year before its opening.

Year of Building Completion

% Allowance

Year of Building Completion

% Allowance

2010

0

1984

21

2009

0.5

1983

22

2008

1

1982

23

2007

1.5

1981

24

2006

2

1980

25

2005

2.5

1979

26

2004

3

1978

27

2003

3.5

1977

28

2002

4

1976

29

2001

4.5

1975

30

2000

5

1974

31

1999

6

1973

32

1998

7

1972

33

1997

8

1971

34

1996

9

1970

35

1995

10

1969

36

1994

11

1968

37

1993

12

1967

38

1992

13

1966

39

1991

14

1965

40

1990

15

1964

41

1989

16

1963

42

1988

17

1962

43

1987

18

1961

44

1986

19

1960

45

1985

20

Pre 1960

45-50

Since most Court buildings have traditionally been subject to high standards of repair and programmed maintenance, physical obsolescence should be carefully considered having regard to these programmes and their actual implementation. In recent years, cuts in funding have caused slippage in many of these programmes which may have led to value significant issues in some cases.

Functional obsolescence in most modern Crown Courts tends to be limited although some Courts may not now conform to the current Design Guide in relation to their layout and the movement of Defendants, members of the public, Jurors and the Judiciary.

The design and quality of Magistrates Courts is more likely to vary, particularly for those constructed prior to HMCS taking over the sponsorship role for Magistrates Court development in the mid 1990’s. Accordingly, further allowances for functional obsolescence may be applicable to Magistrates Courts buildings. However, any adjustments in this respect should not duplicate those under 5.1.1.

For those buildings which have been extensively rebuilt/modernised a standard age related allowance may not be appropriate. In such cases, an intermediate level of allowance can be adopted between that of the original construction date and the date of modernisation. However, once again any adjustments made must not duplicate those made under 5.1.1.

5.2.2 Multi-floor allowances

Multi-floor allowances will not normally be applicable as the assumption is that there will be adequate lift provision. Where, exceptionally, lifts are inadequate to serve the actual use an allowance may be warranted. This must be justified according to the actual facts of each particular case. Allowances made under this heading should not duplicate adjustments made under 5.1.1.or 5.5.

5.3 Stage 3

Land value should be arrived at by having regard to values prevailing in the locality, in accordance with Rating Manual section 4 part 3.

Most main Courts are well located within a town or city centre and it would be reasonable to assume a similar location at AVD. However, where values have shifted through redevelopment, some downward adjustment of peak values may be necessary.

The Asset Valuation & Estate Terrier reports give details of the Total Site Area and Building Footprint Area. The Worth in Existing Use: Land Value will provide a useful opinion of value, subject to the need to adjust for the difference in valuation dates. The maximum land addition should not exceed 30% of the adjusted ARC.

Where the site is considered to be excessive in size, then reasonable assumptions should be made to arrive at an appropriate substitute. Where the site is restricted in size the actual area should be valued.

5.4 Stage 4

The Adjusted Replacement Cost (ARC) of the hereditament shall be decapitalised to an annual equivalent by taking the prescribed rate.

5.5 Stage 5

Any advantage or disadvantage which might affect the value of the occupation of the hereditament as a whole should be reflected at this last stage. An adjustment under this head should not duplicate adjustments made elsewhere. Most buildings will not warrant further allowances at this stage and where allowances are appropriate, it is expected that they should not normally exceed 10% although it is recognised that there might be exceptional circumstances where this could be justified

Enquiries

Enquiries about this Memorandum to Lead Specialist - D.A.Knott (Specialist Rating Team NDR NW – 07931 592758)

Practice note: 2005 - Valuation for Non-domestic rating of Crown, Magistrates and Combined Courts in England & Wales

1.0 Preamble

This Practice Note constitutes a Memorandum providing guidance on the valuation for rating purposes in the circumstances where it is appropriate to adopt the Contractor’s Basis of valuation for Criminal Courts.

It has been drawn up with reference to current legislation and relevant case law.

This Memorandum has been accepted by the Chief Executive of the Valuation Office Agency and GVA Grimley as representatives of H.M.Court Service.

2.0 H.M. Court service

A Government White Paper ‘Justice for All’, published in 2002, recommended that instead of the Magistrates’ Courts Service and Court Service being administered separately, a single agency should be developed, supporting the delivery of justice in all courts in England and Wales.

The Courts Act 2003 provided the legal framework that enabled the changes to be made.

The Unified Courts Administration Programme was set up to create the new agency which was launched on 1 April 2005.

Her Majesty’s Courts Service (HMCS) is an executive agency of the Ministry of Justice.

HMCS is structured into 25 areas within 7 regions, together with the Royal Courts of Justice group whose role includes the administration of the Court of Appeal, High Court and Probate Service.

3.0 Approach to valuation

Criminal Courts are generally housed in expensive, purpose-built and specialised courthouses and as such are considered sui generis.

They should be valued using the Contractor’s Basis of valuation with the Specialist Rating Unit having full responsibility.

All Crown & Combined Courts in England and Wales are dealt with by one SRU Caseworker – D.A.Knott (SRU Northern) – who is also the Lead Specialist in respect of Magistrates Courts.

4.0 Basis of measurement

Cost information has been derived from a Gross Internal Area (GIA) basis.

The definition of GIA should be as provided in the RICS Code of Measuring Practice.

HMCS provides CAD (Computer Aided Design) drawings for all locations and these are held with Trevor Routledge (SRU Northern).

5.0 The contractor’s basis

5.1 Stage 1

5.1.1 Estimated replacement cost

HMCS has been provided with Asset Valuation & Estate Terrier reports by the Valuation Office Agency. CAD drawings and GIA figures have been provided by the clients, incorporated into these reports and subsequently accepted. It is recommended, therefore, that unless specific errors are identified these areas are adopted to calculate the Estimated Replacement Cost (ERC) of the building.

The following costs should be adopted :-

Age

Build Cost per m2

GIA

Remarks

Pre – 1950

£1,250

Includes the old Assize Courts

1950 – 1959

£1,325

1960 – 1969

£1,400

1970 – 1979

£1,500

Beginning of major development programme

1980 – 1989

£1,600

60% of Crown Courts built 1980 - 2003

1990 – to date

£1,700

The above costs relate to a well-designed and constructed Court building commensurate with its age. For buildings which are of an inferior standard of construction and/or design to that which would typically be expected for the period, it may be necessary to make some adjustments to the costs shown in the table. This will, however, be subject to a minimum of £1,250/m2.

5.1.2 External works

The external works adjustment should be made to the locationally adjusted ARC of the building(s). Where sufficient information is available this element should be valued having regard to the 2005 VO Cost Guide. Where file records are insufficient to enable individual elements of external works to be costed a percentage addition is recommended.

The range of additions will be between 2.5% and 5%, with up to 7.5% in exceptional cases. It is expected that 5% will be the benchmark addition.

5.1.3 Contract size adjustment

The aggregates of locationally adjusted building costs and external works costs are subject to a contract size adjustment. The levels of adjustment are as per those established and adopted for other categories of property valued utilising the contractor’s basis.

5.1.4 Professional fees

Crown Courts and the more significant Magistrates Courts are complex in design and are usually highly serviced. As a result, fees tend to be at the higher end of the range when compared with other classes of property valued by the Contractor’s Basis.

The normal addition for fees will be 15%, although 12.5% will be appropriate for Courts of a more basic design and up to 17.5% may be considered for the most complex buildings.

5.2 Stage 2

5.2.1 Physical and functional obsolescence

The age-related allowance scale contained in the 2005 Cost Guide should be considered in the first instance.

Since most Court buildings are subject to high standards of repair and programmed maintenance, physical obsolescence should be carefully considered having regard to these programmes and their actual implementation.

However, with regard to functional obsolescence it is worth noting the following comments taken from the Crown Courts Standards and Design Guide :-

“…The practical effect of tradition in court design is the expectation that the building will have a long life. Courtrooms built two hundred years ago are still able to cope with their original function and it may reasonably be anticipated that present day courts could still be in use a century or two hence, given sufficient flexibility in the ancillary accommodation in which changes will inevitably occur.”

The implication of this advice is that Court design is traditional and well-tested. Functional obsolescence in most modern Crown Courts tends to be limited although some older Courts may not now conform to the current Design Guide in relation to the movement of Defendants, members of the public, Jurors and the Judiciary.

The design and quality of Magistrates Courts is more likely to vary, particularly for those constructed prior to HMCS taking over the sponsorship role for Magistrates Court development in the mid 1990’s. Accordingly, allowances for functional obsolescence may be applicable to Magistrates Courts buildings, however any adjustments in this respect should not duplicate adjustments made under 4.1.1.

5.2.2 Multi-floor allowances

Multi-floor allowances will not normally be applicable as the assumption is that there will be adequate lift provision. Where, exceptionally, lifts are inadequate to serve the actual use an allowance may be warranted. This must be justified according to the actual facts of each particular case. Allowances made under this heading should not duplicate adjustments made under 4.1.1. or 4.5.

5.3 Stage 3

Land value should be arrived at by having regard to values prevailing in the locality, in accordance with Rating Manual section 4 part 3.

Most main Courts are well located within a town or city centre and it would be reasonable to assume a similar location at AVD. However, where values have shifted through redevelopment, some downward adjustment of peak values may be necessary.

The Asset Valuation & Estate Terrier reports give details of the Total Site Area and Building Footprint Area. The Worth in Existing Use : Land Value will provide a useful opinion of value, subject to the need to adjust for the difference in valuation dates. Details of the most recent reports have been circulated to all SRU’s.

Where the site is considered to be excessive in size, then reasonable assumptions should be made to arrive at an appropriate substitute. Where the site is restricted in size the actual area should be valued.

5.4 Stage 4

The Adjusted Replacement Cost (ARC) of the hereditament shall be decapitalised to an annual equivalent by taking the prescribed rate.

5.5 Stage 5

Any advantage or disadvantage which might affect the value of the occupation of the hereditament as a whole should be reflected at this last stage. An adjustment under this head should not duplicate adjustments made elsewhere. Most buildings will not warrant further allowances at this stage and where allowances are appropriate, it is expected that they should not normally exceed 10% although it is recognised that there might be exceptional circumstances where this could be justified.

Enquiries

Enquiries about this Memorandum to SRU Lead Specialist - D.A.Knott (SRU Northern – 0161 245 4414)

Practice note 2: 2005 - Administration of Justice – County Courts

1. Coordination arrangements

The responsibility for this Class is split between Groups and Specialist Rating Units. Responsibility for ensuring effective co-ordination lies with SRUs. Technical Advisors are charged with facilitating co-ordination at the Group / SRU interface.

The R2005 Special Category Codes are:

415 - Courts (Rental) - suffix G

414 - Courts (Contractors) – suffix S

2. Approach to the valuation

County courts

An inspection of a County Court will quickly demonstrate that the accommodation is little different to standard offices with only the Judges Chamber having any significant uplift in terms of quality. County Courts should be valued on the Rental Comparative method on the basis of the Net Internal Area of the buildings (see VOA Code of measuring Practice for Rating Purposes).

Group VOs will have full responsibility for County Courts.

Crown / Magistrates courts

Crown, Magistrates and Combined Courts are housed in specialised, purpose-built and highly-expensive courthouses and should be valued by the Contractors Basis with reference to the Memorandum of Agreement (see 2005: PN1).

(SRUs will have full responsibility for Crown / Magistrates Courts.

All Crown & Combined Courts within England & Wales are dealt with by a single SRU caseworker: i.e. D.A.Knott (Northern SRU) who is also the Lead Specialist for Magistrates Courts. )

3. Rental / comparative method

The Court Service is the occupier of all County, Crown & Combined Courts and has provided a great deal of useful information including :-

  • excel files of Lease details for all locations.

  • Asset Valuation & Estate Terrier reports for all locations.

  • in addition, the ratepayer provides CAD (Computer Aided Design) drawings for all locations to

Trevor Routledge (Northern SRU). He will be pleased to assist, if you have any problems in agreeing floor areas.

4. Enquiries

Enquiries about this Practice Note to Dave Knott (SRU Lead Specialist) (0161 245 4415).