Two Office Block Floors Form a Single Hereditament

In a decision of wide importance to property professionals, the Court of Appeal has ruled that two non-contiguous floors of a modern office block can be viewed as a single ‘hereditament’ (i.e. one property as a whole) for the purposes of calculating rateable values. The Court emphasised that common sense and a flexible application of a physical or geographical test should be employed when identifying a hereditament.



The case concerned an office block, situated on the outskirts of the City of London, two floors of which – floors two and six – were tenanted by a firm of solicitors. In a ruling later upheld by the Upper Tribunal (UT), the Valuation Tribunal for England (VTE) had entered a rateable value of £1,205,000 on the basis that both floors represented a single hereditament.



On appeal to the Court of Appeal, a valuation officer argued that the VTE had erred in law and should have treated each of the two floors as an independent unit of property and a separate hereditament. Acknowledging the significance of the case, the Court observed that the question of the identification of hereditaments in a modern office block is of wide importance.



Dismissing the valuation officer’s appeal, the Court noted that the two relevant floors, although not contiguous, were linked by a fast-moving lift and were occupied by the same tenant. From the tenant’s point of view, there was no practical difference between floors that adjoined each other and those that were separated by intervening floors.



Although the primary test to be applied in the identification of a hereditament is a physical or geographical one, the UT had rightly taken a flexible approach and applied common sense to the issue. The test of contiguity was not decisive on the facts of the case and it did not matter that the two floors did not constitute a ‘physical cube’, the Court concluded.