LA chasing me for rates arrears (commercial lease) not paid by a previous tenant.

Hi,

I am hoping somebody can help me please.

I am having problems with one of the council authorities who are hounding me for outstanding rates on a commercial lease I am the holder of.

The monies they are chasing me for are arrears belonging to the previous tenant that was there before me and are quite substantial.

The authorities have continued to bill me for the previous lease holders arrears but have yet to invoice me for the present day bill that I do owe. When I questioned this I was told that I must pay something off the previous arrears before they issue me with an invoice for the time I have been at the unit. I do not understand their motives and when I question them they say they will invoice me when I clear part of the previous arrears. I am totally lost for words and my heath is beginning to be effected by these games.

I have since being served with legal paperwork and am terrified of the outcome. I have so many questions that need answering I don't know were to begin; what will the courts do with me if I cannot pay?, how long will it take to get to court?, will my lease with my landlord be terminated?

They tell me they are well in their right to chase me as there is a law that backs up their case and shows that a previous tenants debt can follow the next occupant for one or two years if unpaid.

Don't know about the specifics, but as a first step, take you case to the relevant Director of Services at the local authority. If that doesn't work, and right is on your side, take it to the Ombudsman.

What does your lease agreement state about rates?

Did your solicitor not check whether there were any outstanding rates?

What does your landlord say?

Go to your solicitor in the first instance and show them the legal papers and ask for a view.

You and/or Your solicitor should have checked for outstanding rates before you signed the lease. It only required a quck phone call to the local rates office.

They tell me they are well in their right to chase me as there is a law that backs up their case and shows that a previous tenants debt can follow the next occupant for one or two years if unpaid.

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I would not have known that and would have signed a lease without checking the arrears position.

[broken link removed]

Occupying a property where there are rates due

A new occupier can be held liable for any rates due on the property. This includes the current year's rates and any arrears.
We would advise you to check that all charges are paid before buying or leasing a property. This includes:

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And from [broken link removed]

I am taking over a premises - What should I do about the Rates?
It is very important to check with the Rates Section that all rates are paid up to date. Otherwise you will be liable for unpaid rates – this is known as “subsequent occupier” liability.

What is Subsequent Occupier Liability?
A subsequent occupier can be liable for arrears of rates for up to two years from the making of the rate. It is up to the new occupier to ensure that all rates, including the current year's rates, and all other liabilities, i.e. water charges, etc. have been paid before the closing of a sale or the assignment of a lease of any rateable property. Information can be obtained from the Rates Section regarding outstanding balances in respect of rates and water charges due on properties.

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When you signed the lease agreement, did you consult a solicitor at the time? If there is a liability for arrears of rates, that is something the solicitor should have checked.

Presumably you can sue the previous occupant, but that might not be worth doing.

I wonder what a landlord does if a tenant vacates the lease without paying their rates. This would mean that the landlord is effectively responsible for the arrears.

Kinsale Town Council has a good section on the legal process for recovering rates.

Brendan

All particulars are with my solicitor who I will meet today. I am currently the holder of a caretakers agreement lease and had been told that the previous rates would not apply to me yet I am now being legally chased for them. My main fear at the moment is my goods being seized by the sheriff to pay off this debt.

Brendan, thank you for the links. Yes as far as I've been lead to believe the landlord will be lumbered with the arrears if I vacate the premises and then I think he/she is legally made accountable for. There must be a whole lot of cases of landlords being chased for liquidated companies debts.

I think that's an unfair law, but equally the "caveat emptor" rule applies.

It emphasises the need to obtain competent professional advice when dealing in property.

ONQ.

Ireland.1 said:

had been told that the previous rates would not apply to me

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Who told you this?

It is a long-established principle that rates are a charge on property, not on the owner or lessee of the property. The local authority is within its rights to pursue the person currently holding the property. In buying and selling property which might be subject to rates or other charges it is standard practice to adjust for over- or underpaid charges in calculating the final payment.

I would be disgruntled with a solicitor who let that one slip.

This is something that your solicitor should have done before you signed the lease. It is standard practice when taking over a property for your solicitor to check the outstanding rates with the local authority and for your predecessor to pay the outstanding rates up to the date that you sign the lease.

Complainer said:

Who told you this?

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The landlord and council.

PadraigB, do you think I should promptly leave or can they pursue my company?

Sorry, Ireland.1, I can't answer that. It's a big question, and I presume that you have signed a lease.

If both the landlord and the council told you that you would not be liable for outstanding rates, you might (just might) have some recourse. It depends on the form of words they used and, most critically, what evidence you have. If it's no more than an idea you came away with after general conversation, you might not get far along that road.

OP, I cannot believe you took the word of the landlord or council. Have you got this in writing?

What if you don't mind me asking is a caretakers lease. It doesn't sound very official to me

ireland.1 said:

the landlord and council.

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wishes said:

op, i cannot believe you took the word of the landlord or council. Have you got this in writing?

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+1

A caretakers agreement is an official document.

No I don't have it in writing. Its their word against mine. I had been unemployed for months and ran head first into something, I will admit, I knew very little about.

Complainer said:

+1

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I realise I am in deep, deep trouble. I spoke to the council today and they told me they would rectify the bill if I made some payment but they refuse to remove the arrears until I make that payment and it has cleared. I am very skeptical to make the payment in case they do not rectify the bill.

Did you get legal advice before signing the lease?

Subseqent occupier liable for two years of predecessors rates. "Occupier" is a question of fact - irrelevant whether or not you are a lessee.

What would the outcome be if the OP vacated? I'm guessing the LL would have to cough up for the predecessors rates along with what the OP has managed to incur. Surely this would make it almost impossible for the LL to rent the property again as nobody is going to take out a lease with a rates debt on the building. Are the councils more lenient on LL's than an ill-informed tenant?

OP you have allowed yourself be tricked once so I presume you are not going to make the ghastly mistake of paying rates while the previous tenants debts are still attached to the main debt. This without a doubt needs to be rectified.

Wishes said:

Surely this would make it almost impossible for the LL to rent the property again as nobody is going to take out a lease with a rates debt on the building.

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Isn't this what already happened?