Relief from Rates

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Commercial property rates.

A major concern for the Landlords of commercial property and potential purchasers of commercial property has been the question of unpaid rates. What happens, who should pay, where commercial rates due to a local authority are unpaid if a tenant walks away from a premises or the current owner is selling a commercial premises and has not cleared arrears of rates? At present the occupier of the property is responsible for all rates due and this will include arrears of rates. In practice, this can mean that where a Landlord regains possession of a commercial property, the Landlord can be held responsible for arrears of rates run up by his/her tenant. Likewise an unwitting purchaser may be caught to clear arrears of rates incurred by a previous owner of the property. While this might seem unjust this has been the commercial reality for many property owners over many years and at great expense.

The existing regime will change with effect from 1st July 2014. New provisions introduced by the Local Government Reform Act 2014 will crystallise unpaid rates as a charge on property but will also permit a property owner, be he or she a Landlord or a purchaser, to take possession without becoming responsible for unpaid arrears of rates. The legislation distinguishes between “occupiers” and “owners”. Anyone wishing to avail of the new provision should comply with the new requirements and consider the merits of waiting until 1st July before possession is taken.

Colm O’Rourke