Market rack rent leases
8(1)The standard valuation method is not compulsory for the property comprised in a current lease if it is a market rack rent lease at the valuation date.
(2)If section 3(3) of the LRA 1967 applies to the current lease (successive leases treated as a single lease), sub-paragraph (1) is to apply only if the one of those leases which is in effect at the valuation date is a market rack rent lease.
(3)A “market rack rent lease” is a lease which—
(a)was granted—
(i)for no premium, or
(ii)for a premium which was low relative to the value of the freehold of the property with vacant possession at the time of the grant,
(b)was granted at a market rack rent, and
(c)the parties entered into with the intention that the rent would be a market rack rent.
(4)In this paragraph “market rack rent” means a rent which was, or was reasonably close to, a market rack rent at the time of the grant.