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Commercial property news – Makro case sets precedent

27th July 2012

The recent court case concerned Makro, a cash and carry chain, and rate relief regulations which have been in force since April 2008. Under the terms of the regulations, rate relief is applicable to empty industrial property for the six months following vacancy, provided it was occupied for a minimum of 42 days in the period immediately preceding vacancy.

The Makro case hinged on the question of whether it applied for rate relief at one of its properties – it had used only 0.2 per cent of the available 140,000 sq ft floor area. However, in a decision that surprised many, the company’s commercial property solicitors successfully argued that this use met the terms of the 2008 regulations, as such entitling it to rate relief worth nearly £120,000.

“This case will be a welcome relief for landlords and tenants alike as it indicates that an extremely small amount of occupation could trigger a new relief period,” commented one commercial property lawyer.

Furthermore, the ruling is likely to lead to greater simplicity and transparency regarding rate minimisation arrangements. Until now, many companies have used the repeat occupy-vacate strategy in order to save money.

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