“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:
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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.
May 31st, 2007 at 14:57
When renting office space it is important to consider costs of altering the office to meet the needs of the lessor. Typical things that need to be taken into consideration are floor coverings (sold per square metre), health and safety regulations (metric) and furniture (usually in sensible metric dimensions). Any work by architects will be metric too (millimetre exact).
It strikes me that the persistence of per square foot prices is because it appears less than the equivalent price per square metre. This is the same reason that some market traders like pounds rather than kilos. In contrast filling stations couldn’t wait to dump the gallon for the smaller litre.
The current mess illustrates the contempt our government and opposition have for consumer protection.
May 31st, 2007 at 21:25
The original LACROS position appeared to follow the position taken by the Department of Trade and Industry. In particular, the DTI’s advice entitled “Guidance Note for Business on the use of Metric Units of Measurement and the EC Units of Measurement Directive” (published late3 1994 or early 1995 and available at http://www.dti.gov.uk/consumers/buying-selling/weights-measures/Metrication/businessguide/index.html) stated:
“The majority of commercial transactions in goods, land and services are not regulated by the Weights and Measures Act 1985. These transactions are therefore not subject to any express sanction under provisions in UK legislation that regulate the use of units of measurement.”
There was however the normal disclaimed advising any business that wished to use the DTI advice to seek legal opinion first. It seems that LACROS have done so and have decided that the DTI’s advice was incorrect.
Where then did the DTI go wrong, or did they go wrong? If one reads the DTI statement carefully, one will notice that it only makes reference to the Weights and Measures Act 1985. While it is true that the 1985 Act does not require that the size of a piece of land be stated when it is being advertised, bought, leased or sold it often happens that a piece of land is described in terms of its size or that rentals are determined using a formula that incorporates size. In such cases UK law has, since time immemorial, required that the measurements used do not misrepresent the land in question. The EC (now EU) directive catalogued the units that could be used and the European Communities Act 1972 gave a legal status to EC directives. I believe therefore that the DTI statement was not incorrect, but that the caveats were wide-ranging as to make the statement misleading.
June 1st, 2007 at 03:46
I can see in the two examples given above, that if the issue is pushed, that renters will have their ads look like the one in example 1. According to the explanation this method is legal and allows for the continued use of square feet.
Both examples should be made illegal.
June 1st, 2007 at 08:12
What strikes me as odd about this whole thing is that, in common with other areas of metrication legislation, while it is required that the actual trade is required to be in metric, advertising of the land/space in question does not. So office furniture, carpet and such are going to be in metric but the signs advertising office space is generally still in “sq ft” and so long as no price is shown this is still legal and no metric equivalent is required!
The same is the case for warehouse and land, in the latter case the estate agents signs will more often than not show acres rather than hectares. I’m fairly certain that, for instance, EU farm subsidies are given out by the hectare so it seems of little use to anybody to see advertising of this sort in imperial units!
It would seem reasonable to most people to believe that legislation of “weights and measures” would apply to anything to be traded by weight or measurement and that advertisement of goods, services, etc. would be covered by the same rules. British law however seems to have so many holes in it that this is not the case.
June 1st, 2007 at 15:45
I am astonished that during earlier times, trading standards would be content to regard units of measurement in respect of rent any different from outright sale. Why should the units allowed when renting be any different to that when selling?
I am pleased to see common-sense has finally prevailed.
It is yet another argument to show that whilst we have dual measures and try to legislate to accomodate both we will always have this kind of stupidity!
June 4th, 2007 at 22:20
Isn’t the obvious answer to this and other imperial / dual measurement issues to remove legal definitions of units other than metric?
Eg - I could start a market stall and advertise “Apples - 1 p per lb”. Some old biddy comes up and asks for a pound of apples. I weigh 1 apple and tell her “that will be £1 please”. She will obviously reply summat along the lines of, “There’s no way one apple can weigh 100 lb, there are about 4 apples in a pound”. To which I;d reply, “Ah, you’re talking about pounds avoirupois, I’m selling in pounds Rick (1 lb Rick = 1 gram)”. Wouldn’t take long for dual pricing to disappear and metric only to reign.
BTW, I went to my first ever Farmers’ Market at the weekend - 100% metric, not a per lb or per quarter sign anywhere.
June 10th, 2007 at 16:09
so does this mean we finally see the disappearance of sq ft? I do hope so. After all the shops sell in m2 now.