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

Section 800: post office properties

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1. Co-ordination

Post Office properties are not included within the National Co-ordination schemes since, in most instances, assessments will be related to the most comparable hereditaments in the locality. Nevertheless Technical Advisors should ensure that there are no unjustifiable differences of approach in dealing with the same problem eg sorting offices attached to public offices, Post Office depots etc.

2. Description

Under the Post Office Act 1969, the Post Office became a public authority when its former status as a Department of the Crown ceased. The British Telecommunications Act 1981 further established British Telecommunications as a public corporation and transferred to it certain property, rights and liabilities of the Post Office. As a consequence the powers and duties imposed on the Post Office by virtue of the Post Office Act were suitably amended.

Apart from the Post Office underground railway the “Post Office” occupy various types of buildings which can be readily identified with some common group such as shops, offices or warehouses to which the general law and practice of rating applies.

The Post Office is divided into three main divisions:-

  1. Post Office Counters Limited (POCL)
  2. Royal Mail
  3. Parcel Force

Post Office Counters Limited represent the public face of the Post Office, Royal Mail the letter service, and Parcel Force deals exclusively with the delivery of parcels.

Of the three, only POCL, as a limited company, has any separate legal identity, the other two being merely business names.

Use as a post office is listed in The Town and Country Planning (Use Classes) Order 1987 [1987 SI No 764] under Class A1 (Shops). This use can be taken to mean a hereditament where the dominant part is in use for counter services to the public. The occupier of any such post office may be Post Office Counters Limited (formerly known as “Crown Post Offices”) or some other person who has been granted some form of right or franchise. The latter, which used to be referred to as “Sub Post Offices”, will usually combine the PostOffice function with some other retail business. Other Post Office occupations are generally in the nature of offices and/or warehouses. There is therefore considered to be no special significance attaching to Post Office occupations.

3. Survey Requirements

Buildings should be measured in accordance with the appropriate category of the Valuation Office Code of Measuring Practice for Rating Purposes.

4. Basis of Valuation

Where direct rental evidence is available this should be adopted, adjusted as appropriate. However, as indicated above, the various types of buildings are readily capable of identification with other common groups such as shops, offices or warehouses to which the general law and practice of rating valuation applies.

4.1 Unit of Assessment

On the allocation of property assets between the Post Office and Post Office Counters Limited (POCL) for balance sheet purposes in 1986/87, several hundred Inter Business Commercial Leases (IBCLs) for twenty year terms were created in those locations where both a POCL public counter and a Royal Mail sorting office were on the same site. This type of occupation was known initially as “shared” but this term has now dropped out of usage as far as the Post Office is concerned and the term “IBCL” is now more commonly used.

Although these leases were legally registered and stamped they are all subject to a standard National Inter Business Variation Agreement document which overrides certain of the IBCL clauses and allows many of the established shared accommodation and occupational facilities to continue while both businesses are in occupation of the same building. If however one of those businesses vacates the premises the variation agreement ceases immediately and the full effect of the IBCL comes into force.

Accordingly the National Variation Agreement will, in the vast majority of cases, restrict the situations where separate hereditaments exist to those where works physically separating the two occupations have been undertaken.

Another category of occupation is referred to as “Mixed Building”. This is a phrase used to describe any other existing joint user of a building not covered by an IBCL. This type of occupation is governed by a further national Inter Business Accommodation Agreement but is not legally documented in the same way as the IBCL.

In the case of a “ Mixed Building” identification of separate occupations will be a difficult task and in these circumstances it is recommended that no action be taken to disturb the existing basis of assessment.

Rents in respect of mixed accommodation only became payable from 1 April 1990 and rents for the IBCL occupations reflect the provisions of the standard lease but take no account of the National Variation Agreement.

In some cases POCL have franchised rights to sub postmasters and will undertake “separation” work to restrict the franchisee’s access to the remainder of the property. In such circumstances it is likely that a separate hereditament will exist.