Commercial Rates-How the Property Owner Can Avoid Liability for the Occupier’s Rates


Are you the owner of a commercial property which is let?

Are you concerned about outstanding rates not being paid by the occupier, and being stuck with a charge on your property?

The best way for you to avoid any liability for commercial rates is if your occupier pays the rates.

But there is another safeguard for you to avoid liability.

Let me explain:

Section 32(4) of the Local Government Act, 2014 states:

(4) The owner of relevant property shall be liable for a charge equivalent to no more than 2 years of the outstanding rates due from the previous occupier or occupiers where—
(a) the owner has not notified the rating authority in writing of a transfer of relevant property or an interest in relevant property in accordance with subsection (2)(a), and
(b) the requirements of subsection (2)(b) have not been met.

This means that the property owner can avoid liability for an occupier’s rates provided he complies with subsection 2(a) which obliges the property owner to notify the local authority within two weeks of a transfer of the property.

Provided the property owner does this he should be free of any liability for an occupier’s unpaid rates.

Section 2 states:

(2) Where relevant property, or an interest in relevant property, is transferred from one person to another person in circumstances that render that other person liable for rates on the property so transferred, then—
(a) it shall be the duty of the owner of the property (being the owner of the property prior to transfer) or such other person as the owner has authorised in writing to act on his or her behalf to notify, in writing, the rating authority in whose functional area the property is situated of the transfer not later than 2 weeks after the date of the transfer, and
(b) it shall be the duty of the person transferring the property being either the occupier or the owner, to discharge all rates for which he or she is liable for at the date of the transfer of the property or of an interest in it.

Here’s a link to section 32 of the Local Government Act, 2014.

So, while it is still best if the tenant actually pays the rates, provided you, as property owner, notifies the local authority within 2 weeks of any transfer/assignment/surrender of the lease you should be clear of any liability.

Regardless of how the property ends up back in the landlord’s possession-for example surrender or eviction- the safest approach is to send the notice to the local authority.

Some local authorities are requesting that these notices be sent in on a prescribed form, but a letter should suffice.