Local Authorities and Government putting companies at risk.

Bullseye1

If any of you were listening to the Pat Kenny show you will have heard of a case in the district court where Fingal County Council took a business to court for unpaid rates. Now while this might seem reasonable, wait, what actually happened is the previous tenants of the commercial building left without paying the rates. The landlord gets in a NEW tenant (unconnected with previous tenants). And now the NEW tenant is being chased for unpaid rates. Why doesnt the debt follow the previous tenant? We live in a banana republic!

The Judge stated that he would not bring the charge against the new tenant. Someone with some sense.

No doubt Fingal will appeal this case to a higher court. So we have local authorities putting new companies out of business.

It is time people woke up in this country. Your government and it's cronies are ruining us.

The Waltzing Consumer

I would like to see a link for this.

I ain't no fan of county councils but this sounds very over the top and really not believable. Fingal county council has huge experience in dealing with multinationals, foreign and indigenous businesses in various business and shopping parks around Fingal and they are vital for the local and national economy.

I have never even heard of housing landlords chasing a new tenant for an old tenant's bill so the idea the council would take a new tenant to court for this sounds ludicrous.

I don't want to come out and just say this is a lie but this is not the whole picture. Are we sure it is the new tenant? Is it the old tenant under a new name? Is it the landlord they are actually chasing?

Victor

Bullseye1 wrote: »

Why doesnt the debt follow the previous tenant? We live in a banana republic!

Because tenants come and go, the property is relatively fixed. The liability attaches to the property. That's the law.

The tenant should have checked that the previous rates had been paid. If it wasn't, they should have sought a rent rebate from the landlord.

Bullseye1

Victor wrote: »

Because tenants come and go, the property is relatively fixed. The liability attaches to the property. That's the law.

The tenant should have checked that the previous rates had been paid. If it wasn't, they should have sought a rent rebate from the landlord.

It is still a stupid law and the government has not changed the legislation. Why don't they simply apply the rates to the tenants at the time of original lease. Why should someone new coming in be liable? What fool came up with that piece of legislation?

Mr.Micro

Bullseye1 wrote: »

If any of you were listening to the Pat Kenny show you will have heard of a case in the district court where Fingal County Council took a business to court for unpaid rates. Now while this might seem reasonable, wait, what actually happened is the previous tenants of the commercial building left without paying the rates. The landlord gets in a NEW tenant (unconnected with previous tenants). And now the NEW tenant is being chased for unpaid rates. Why doesnt the debt follow the previous tenant? We live in a banana republic!

The Judge stated that he would not bring the charge against the new tenant. Someone with some sense.

No doubt Fingal will appeal this case to a higher court. So we have local authorities putting new companies out of business.

It is time people woke up in this country. Your government and it's cronies are ruining us.

I cannot see any logic in law or rationale why the new tenant should be liable for any unpaid rates by a previous tenant. Fingal have no basis for appeal. Its akin to person being liable for a strangers debts. Why did such a case ever come to court? Fingal wasting public money that's why.

Bullseye1

Oh it was definitely a new tenant who had no connection to the previous tenant. As Victor points out the new tenant should have been made aware.

If he/she had been made aware they probably would not have signed the lease. Now say he found out and pulled out of signing, where would that leave the landlord? Would he have to cover the loss?

The Waltzing Consumer wrote: »

I would like to see a link for this.

I ain't no fan of county councils but this sounds very over the top and really not believable. Fingal county council has huge experience in dealing with multinationals, foreign and indigenous businesses in various business and shopping parks around Fingal and they are vital for the local and national economy.

I have never even heard of housing landlords chasing a new tenant for an old tenant's bill so the idea the council would take a new tenant to court for this sounds ludicrous.

I don't want to come out and just say this is a lie but this is not the whole picture. Are we sure it is the new tenant? Is it the old tenant under a new name? Is it the landlord they are actually chasing?

Victor

This is perfectly common in other countries. One sometimes sees large properties going for a song, simply because there is unpaid taxes.

Bullseye1 wrote: »

If he/she had been made aware they probably would not have signed the lease. Now say he found out and pulled out of signing, where would that leave the landlord? Would he have to cover the loss?

Landlords on commercial leases tend to take a three month deposit.

RichieC

You can't grow bananas here.

Bullseye1

RichieC wrote: »

You can't grow bananas here.

It's surprising with the amount of monkies legislating in this country

Bullseye1

Victor wrote: »

This is perfectly common in other countries. One sometimes sees large properties going for a song, simply because there is unpaid taxes.Landlords on commercial leases tend to take a three month deposit.

Wouldn't it make sense for people not to pay the rates then since they don't come after them?

Tipp Man

Surely if the first tenant didn't pay the charge then falls on the landlord to pay - not the new unrelated tenant

Victor

Bullseye1 wrote: »

Wouldn't it make sense for people not to pay the rates then since they don't come after them?

That's why landlords keep a three month deposit.

Tipp Man

Bullseye1 wrote: »

Wouldn't it make sense for people not to pay the rates then since they don't come after them?

Exactly - why would anybody bother paying rates then

When paying a deposit to a landlord shouldn't the deposit be held until every charge on the property is paid by the vacating tenant

Bullseye1

Victor wrote: »

That's why landlords keep a three month deposit.

That may not cover 5-6 years of unpaid rates.

Victor

Bullseye1 wrote: »

That may not cover 5-6 years of unpaid rates.

I think councils can only claim back for two years.

Mr. Presentable

Victor wrote: »

Because tenants come and go, the property is relatively fixed. The liability attaches to the property. That's the law.

The tenant should have checked that the previous rates had been paid. If it wasn't, they should have sought a rent rebate from the landlord.

And the landlord owns the property. So it should, should it not, be the landlord who pays the rates?

Victor

Mr. Presentable wrote: »

And the landlord owns the property. So it should, should it not, be the landlord who pays the rates?

Historically it was based on occupancy, not ownership. In the future, you can change the law, but that is the law as it stands and it is what tenants sign up for.

murphaph

Victor wrote: »

That's why landlords keep a three month deposit.

To be honest (speaking as someone with some interest in a small bit of commercial property) you can't really be asking for 3 month deposits and rent in advance anymore. The money isn't out there.

We've taken people on with a month's deposit and reduced the rent after that to give their business a fighting chance of establishing itself.

We also had previous tenants leave unpaid rates bills but our local authority was much more facilitating than Fingal. Our LA gave us a large discount on the overdue rates from the previous tenant (he'd been there almost 20 years and had amassed large arrears) and we were able to get new tenants and help get a business started with them.

We understand that our bit of property doesn't do any work and doesn't in itself generate any wealth, but many LA's and the law in general has a different view. Rates are a terribly old fashioned way of doing things. The rates are meant to provide the local services the occupiers (be they owner occupiers or tenants) use. The liability should stay with the individuals, no different from income taxes, and not be attached to the property.

It is also terribly unfair when different LA's have different policies. Fingal are clearly extreme and I have heard Wexford are also tough to deal with. You could just be unlucky and have property in one of these areas where your neighbour just over the border in South Dublin etc. has a more flexible LA to deal with, one which better understands the need to get properties rented out again for realistic rents and rates and to get some income flowing again.

nuac

Rating law is as stated by Victor. New tenant liable for any rates due for previous two years.

this would or should have been standard advice from the incoming tenant's solicitor

later12

Bullseye1 wrote: »

If any of you were listening to the Pat Kenny show you will have heard of a case in the district court where Fingal County Council took a business to court for unpaid rates. Now while this might seem reasonable, wait, what actually happened is the previous tenants of the commercial building left without paying the rates. The landlord gets in a NEW tenant (unconnected with previous tenants). And now the NEW tenant is being chased for unpaid rates. Why doesnt the debt follow the previous tenant? We live in a banana republic!

The Judge stated that he would not bring the charge against the new tenant. Someone with some sense.

No doubt Fingal will appeal this case to a higher court. So we have local authorities putting new companies out of business.

It is time people woke up in this country. Your government and it's cronies are ruining us.

Victor wrote: »

Because tenants come and go, the property is relatively fixed. The liability attaches to the property. That's the law.

The tenant should have checked that the previous rates had been paid. If it wasn't, they should have sought a rent rebate from the landlord.

I think people are missing the most extraordinary aspect of the case: after asking the tenants of the property if they were willing to contribute to the rates arrears, the judge accepted their answer (in the negative) and subsequently ruled against the county council. He told the county council that they could appeal it if they want, but he wasn't willing to put the men out of business.

I have nothing but sympathy for the men who were faced with this €4,000 rates bill that they (quite rightly) do not feel responsible for.

However, on what possible grounds did the judge refuse the application?

His job is to interpret the law as it stands, not to offer his own personal opinions on what is fair beyond the legislation which is in place. Very strange decision.

slimjimmc

later12 wrote: »

I think people are missing the most extraordinary aspect of the case: after asking the tenants of the property if they were willing to contribute to the rates arrears, the judge accepted their answer (in the negative) and subsequently ruled against the county council. He told the county council that they could appeal it if they want, but he wasn't willing to put the men out of business.

I have nothing but sympathy for the men who were faced with this €4,000 rates bill that they (quite rightly) do not feel responsible for.

However, on what possible grounds did the judge refuse the application?

His job is to interpret the law as it stands, not to offer his own personal opinions on what is fair beyond the legislation which is in place. Very strange decision.

It's only a guess but there may be some basis in the Valuation Act 2001. Sect 28.14 refers to underpayments. It doesn't explicitly state the current occupier is liable or not liable, just that arrears can be recovered from "the person concerned". Perhaps the Judge considered "the person concerned" to be the previous occupier and therefore the debt should not be recovered from the current occupier.

(14) An amendment of a valuation list made under subsection (10), (11) or (12) shall have full force, from the date of its making, for the purposes of the rating authority concerned making a rate in relation to the property concerned by reference to that list as so amended.

(15) Where—

(a) an amount of monies is paid on account of a rate made in respect of a property, and

(b) it appears, consequent on an amendment of the value of the property made pursuant to an exercise of the powers under this section, that that payment involved an overpayment or an underpayment of the amount due in respect of such a rate,

then the balance owing or owed, as the case may be, to or by the person concerned may be paid or recovered, as appropriate—

(i) in the case of an overpayment, by making a refund to the person concerned of an amount equal to that balance or allowing an amount equal to that balance as a credit against the amount owed by the person concerned on account of a rate made in respect of that or any other property, and

(ii) in the case of an underpayment, by recovering from the person concerned an amount equal to that balance as arrears of the rate concerned (and, accordingly, any of the means provided under any enactment for the recovery of a rate may be employed for that purpose).

Overheal

Victor wrote: »

Because tenants come and go, the property is relatively fixed. The liability attaches to the property. That's the law.

The tenant should have checked that the previous rates had been paid. If it wasn't, they should have sought a rent rebate from the landlord.

No clause for full disclosure??

Overheal

Bullseye1 wrote: »

If any of you were listening to the Pat Kenny show you will have heard of a case in the district court where Fingal County Council took a business to court for unpaid rates. Now while this might seem reasonable, wait, what actually happened is the previous tenants of the commercial building left without paying the rates. The landlord gets in a NEW tenant (unconnected with previous tenants). And now the NEW tenant is being chased for unpaid rates. Why doesnt the debt follow the previous tenant? We live in a banana republic!

The Judge stated that he would not bring the charge against the new tenant. Someone with some sense.

No doubt Fingal will appeal this case to a higher court. So we have local authorities putting new companies out of business.

It is time people woke up in this country. Your government and it's cronies are ruining us.

A banana republic is a politically unstable country that economically depends upon the exports of a limited resource (fruits, minerals), and usually features a classed society — a large, impoverished working class and a ruling plutocracy, the rich élites of business, politics, and the military.

...?

Victor

murphaph wrote: »

We also had previous tenants leave unpaid rates bills but our local authority was much more facilitating than Fingal. Our LA gave us a large discount on the overdue rates from the previous tenant (he'd been there almost 20 years and had amassed large arrears) and we were able to get new tenants and help get a business started with them.

By discount, do you mean they only demanded the last two years worth?

The council was negligent to allow such arrears to build up and perhaps you were too tolerant of the situation.

We understand that our bit of property doesn't do any work and doesn't in itself generate any wealth, but many LA's and the law in general has a different view.

If I have machines in a factory, I can make things. If I have machines in a field, I can't make things.

Councils will offer discounts to vacant properties.

murphaph

Victor wrote: »

By discount, do you mean they only demanded the last two years worth?

Victor wrote: »

The council was negligent to allow such arrears to build up and perhaps you were too tolerant of the situation.

No, they only asked for a couple of months worth. Negligent perhaps but the whole system is broken. The council aren't normally bothered running to court for rates bills because they can take the lazy option and just send the bill to the new occupant or landlord, so they let these massive rates arrears develop, just as they will with the household charge.

As for being tolerant, well it's a long story that ended in the circuit court so I don't really want to go into too many details. If a tenant doesn't want to pay their rent or rates all of a sudden then the law won't move at any more than a snail's pace to grant the landlord possession. Suffice to say the LA were pretty sound, certainly compared to Fingal in this case.[/QUOTE]

Victor wrote: »

Councils will offer discounts to vacant properties.

They don't have to though and the law says that the rate payer must first pay the due rates and then apply for a rates rebate due to vacancy, which must be proved to the council's satisfaction. You have to prove that you made bona fide attempts to rent the premises at a reasonable market rate. It's not that straightforward if the council wants to make it awkward.

I imagine the likes of Fingal (if this case is anything to go by) would set the burden of proof quite high and make it as difficult as possible to get said rebate.

In practice the tenant's rent and rates form a large part of their business costs. As a landlord I know that my tenants have rates to pay, so the rent charged has to reflect that or they'll be unable to make a profit. If rates where liable by the landlord, then he'd increase the rent to cover it and the tenants would be liable for the same total.

If the law was changed to lay the liability at the foot of the landlord, then other laws should be changed to enable fast track evictions of non-paying commercial tenants. It's bad enough for landlords to cover the cost of public liability insurance etc. on a premises in which the tenant is overholding, nevermind landing the landlord with bills for services provided to the tenant who isn't even paying his rent.

The whole thing needs reform and I understand that very few people on here have any experience with dealing with the practicalities of commercial tenancies. People often believe that landlords are sure to be loaded and "good for a mark" as a solicitor might say.

egan007

I'm in this situation - 6 months in premesis - got a bill for 18K for previous tennants.

heres the pat kenny link

http://www.rte.ie/radio1/todaywithpatkenny/2012-04-18.html


http://www.rte.ie/radio/radioplayer/rteradioweb.html#!rii=9%3A3260882%3A133%3A18-04-2012%3A

Go to about 11 minutes into it....

Bullseye1

Shocking stuff.