“Office rents per sq ft not legal” – says LACORS

Metric Views has received confirmation – from an impeccable authority – of what it has long suspected: that the widespread practice of pricing and advertising office rents “per square foot” is illegal under UK law.

The full story, which has only recently come to light, seems to be as follows. Upon receipt of a complaint from a member of the public about giving business grants “per square foot”, a northern local authority Trading Standards Department initially responded that “services” are not covered by the Price Marking Order (PMO), and as this grant was considered to be a “service”, pricing “per square foot” was legal. It appears that this interpretation was frequently given by other Councils, and it was even supported by Consumer Direct, a national online helpline.

However, this interpretation was challenged by the member of the public, and LACORS (the Local Authority Co-ordinating body for Regulation) was asked to look again at the issue. In August 2004 they issued new guidance which reversed their previous opinion. Specifically, they rejected the previously quoted view that the PMO only applies to the pricing of goods for sale, and that prices “per sq ft” for or a fixed area are legal because they are merely for ‘guidance’.

The opinion is reproduced in full below, but briefly it confirms that Section 8 of the Weights and Measures Act 1985 prohibits the use of imperial units “for trade” (as they are not included in the list of permitted units in the relevant Schedule to the Act). Moreover, “use for trade” includes any “transaction involving the rendering of money, where the transaction is by reference to quantity.” The opinion goes on to argue that, since office space, boat moorings, allotments etc must be priced per metre or square metre, it would be obviously sensible for them to be advertised inthe same way.

Trading Standards Departments which hitherto have relied on the earlier interpretation will now have to review their policy, and we can look forward to the gradual disappearance of imperial pricing of shop and office rents, storage space, allotments etc as Trading Standards Departments advise estate agents of the correct legal position.

The full text of the LACORS advice is given below. We have emboldened some of the more significant passages:

————————————————————————————–

Metrication

Advice on the use of imperial units

(Specifically, transactions (sale, rental, lease, grants) relating to floor
space, areas of land, length of boat moorings, length of archiving space,
etc.)

LACORS has received a number of enquiries regarding the use of imperial
units relating to transactions such as:

Sales, rental or lease of floor space (commercial or domestic
property) by reference to floor area
Rental of boat moorings by reference to length
Lease of archiving space by reference to length
Award of development grants by reference to floor area
Rental of allotments by reference to length and/or area of land

LACORS previously issued advice that “it is unlikely that room space is ‘goods’ for the purposes of either the Weights & Measures Act 1985 or the Price Marking Order 1991″. There was, therefore, no recommendation to use only metric units.

The LACORS Metrology Focus Group has revisited the question, and now finds this advice to be out-of-date. The following advice replaces that given
previously.

The legislation

The relevant section of the Weights & Measures Act 1985 reads as follows:

Section 8. Units of measurement, weights and measures lawful for use for
trade.
(1) No person shall-
(a) use for trade any unit of measurement which is not included in Parts I
to V of Schedule 1 to this Act.

It can be clearly seen from Schedule 1 that imperial units including the
foot, square foot etc. may NOT be used for trade, since they do not appear
in Parts I to V of that Schedule.

The definition of ‘use for trade’ is found in Section 7:
7. Meaning of ‘use for trade’.
(1) In this Act ‘use for trade’ means, subject to subsection (3) below, use
in Great Britain in connection with, or with a view to, a transaction
falling within subsection (2) below where-
(a) the transaction is by reference to quantity or is a transaction
for the purposes of which there is made or implied a statement of the
quantity of goods to which the transaction relates, and
(b) the use is for the purpose of the determination or statement of
that quantity.
(2) A transaction falls within this subsection if it is a transaction for-
(a) the transferring or rendering of money or money’s worth in
consideration of money or money’s worth, or
(b) the making of a payment in respect of any toll or duty.

A unit of measurement may, therefore, be deemed to be in ‘use for trade’ if
it is used in connection with a transaction involving the rendering of
money, where the transaction is by reference to
 quantity.

Since 7(1)(a) can be split into two separate clauses (that is to say ‘the
transaction is by reference to quantity’ or ‘is a transaction for the
purposes of which there is made or implied a statement of the quantity of
goods to which the transaction relates’). In the former case, there is no
requirement for the transaction to involve a quantity of ‘goods’.

Therefore, any reference to quantity, whether voluntary or otherwise, must
be made in metric units.

For clarification, it is also necessary to establish what constitutes a
‘transaction by reference to quantity’. Consider the two examples below:
1. Offices for rent
First floor offices, fully serviced, available now, 3,500 sq ft
£35,000 per annum
2. Offices for rent
First floor offices, fully serviced, £10 per sq ft per annum
3,500 sq ft unit available now

Clearly, the same office space is being offered at the same annual rental
price in each case; however, in example 1, the reference to area may be
considered to be a description – the rental price is a total sum for the
offices as described – and therefore the use of imperial units is
acceptable. In example 2, there is a clear relation between the floor space
and the calculation of the total rental price (“£10 per sq ft”), which
renders it a transaction by reference to quantity and therefore subject to
the requirements of the Weights & Measures Act 1985 requiring the use of
metric units.

When a transaction is by reference to quantity, as described above, this is
a legal requirement; where the quantity forms part of a description only,
metric units should be indicated for the sake of clarity and consistency.

2 thoughts on ““Office rents per sq ft not legal” – says LACORS”

  1. Regardless, though metric areas are becoming more common in office space adverts, imperial still persist. Is this down to the loophole of “description, not rate”? Or is it a case of solicitors and accountants, who usually handle these sales and rentals, rarely pick up a tape measure to measure anything? It is certainly at odds with planning regulations, which have been in metric for decades.

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  2. @Metricmac. Yes, I believe that this is due to the loophole of “description, not rate”. Under this loophole, you could advertise an office of 1000 square feet for £1000 per month, but you could not advertise it as “100 square foot office at £1 per square foot per month”.

    I believe that the EU directive of 2009 which updated Directive 80/181/EEC outlawed this practice by extending the scope of 80/181/EEC to cover all aspects of the COmmon Market. SInce there was no law in teh UK which exprfessly permitted the use of imperial units in descriptions, there was no law that needed changing – the requirement would only have been written into UK law as a result of case law and nobody had the need to spend lots of money to get this done.

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