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

Section 1090: transport and commercial garages

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

1. Co-ordination

Transport and Commercial Garages are subject to Regional co-ordination procedures as outlined in the relevant Practice Notes.

2. Description

This section deals with Transport and Commercial Garages and includes premises used for car repairs, service and storage.

It does not cover Bus Garages which are dealt with in RM Section 6 part 3 Section 180.

It does not cover Car Showrooms, which are dealt with in RM Section 6 part 3 Section 205

3. Method of Valuation

3.1 Choice of Valuation Method

The basis of valuation will either be the rental/comparative method, where evidence exists, or the contractor’s basis where the hereditament is rebus sic stantibus so different from other warehouses/depots/bus garages that it may be regarded as “sui generis” and no rental evidence exists.

3.2 Rental Basis

It is likely that the demand in the open market for the smaller types of Commercial Transport Garage will produce sufficient rental evidence to form a reliable basis of assessment. This section is therefore designed to assist in the valuation of garages where, because of their size or for any other reason, demand is likely to be limited and rental evidence scarce.

All rental evidence must be carefully examined and where rents are found to include plant, portable equipment or services, suitable adjustment must be made (see Rating Manual: Section 4 - Part 1 para 8).

A tenant of a particular garage may have been compelled to pay what appears to be an abnormally high rent for the premises because of competing bids from other possible tenants wishing to use the premises for other purposes for which planning permission might be readily forthcoming. Such a rent may be taken into account when considering the assessment of that particular garage but it may not provide a valid basis of comparison for other garages where the question of alternative user is unlikely to arise.

In the absence of direct rental evidence and where the hereditament falls within the principles laid down in Midland Bank Ltd v Lanham (VO) 1978 LT RA1, the valuation should be by reference to the levels of value derived from comparable hereditaments.

Commercial garages used for car repairs, service and storage may also incorporate showrooms. This type of hereditament may present valuation difficulties because of the absence or unreliability of rental evidence.

Where rental evidence is insufficient for the valuation of multi-use hereditaments as a single entity, it should be possible to build a valuation on the basis of the estimated values of the component parts of the property, the total being adjusted, where necessary, to allow for the fact that the whole forms one hereditament. Normally the “alternative use” approach should only be used when considering whole hereditaments, but it may be necessary, in the absence of better evidence, to incorporate the value of the garage and workshop area in the valuation of the whole hereditament at a level derived from comparison with the general basis to be adopted in the locality for similar structures of approximately similar area and broadly in similar use.

3.3 Contractor’s Basis

Exceptionally, and only in the absence of rental evidence either for use as a garage or for an alternative use, Valuation Officers may be compelled to consider a contractor’s basis method of valuation.

4. Survey Requirements

The preferred basis of measurement for hereditaments in this class is GIA (see VO Code of Measuring Practice for Rating Purposes), plus the site area.

Some Commercial Garages may have been built or adopted to include inspection pits, cambered floors and other features which may restrict, or preclude, other potential users. It is important that such features are noted on the survey.