Landlord thinking of redeveloping? Urgently check the new ratings list

England and Wales

If you are a landlord considering opposing your tenant’s lease renewal in the next year (either by serving an opposed section 25 notice or responding to a tenant’s section 26 request) then there may be a significant financial impact based on whether or not the relevant notice is served before or after 1 April 2023.

This may mean urgent action is needed in next couple of weeks.  The first step is to check the current rateable value of the property and what it is proposed to be after 1 April 2023.  

The obligation to pay statutory compensation crystallises automatically when a landlord opposes the grant of a new lease under the “no faults” grounds of the Landlord and Tenant Act 1954 (which includes redevelopment).

The level of statutory compensation is linked to the rateable value of the property as at the date the relevant notice from the landlord is served.  If the rateable value is going up after 1 April, then this may be a relevant consideration to getting the landlord’s notice out sooner.