previously owed rates

betonit

Hi, a friend off mine opened a shop in the last year leasing the premises. There are rates owed on it and in the last week the council have come a knocking about 20k. He is dimissive of this just laughin it off really as ridiculous and if it went to court the judge would just throw it out. But legally i think he might have an issue because i think the rates should have been cleared before he took over the lease. Does he have a problem... if he does it is ridiculous any biz that closed down must have rates owing so hows any new biz suppoesed to start up.

jimmii

Seems crazy that this would have to be paid by him! There must have millions in unpaid rates owed around the country with all the places that have closed down. Hopefully its just a case that the council weren't aware of the change in tenant and that when they do they will go after the previous tenant and not your friend!

betonit

they know he's a new tenant, he thinks they are just chancing their arm, but somehow i think they might have some enforceable legal standing

jimmii

Possibly so. I can't imagine how many times they would need to pull something like that to find someone willing to pay up 20k!

lomb

Yes up to 3 years back rates are legally owed by the new tenant. Where was the solicitor in this checking this out?
Someone laughing and joking about 20k for nothing will probably be bankrupt in due course.

jimmii

Wow that is pretty scary.

ImDave

I have heard of this previously also.

From Dublin City Council (I presume the same applies with other councils):

A new occupier can be held liable for any rates due on the property. This includes the current year's rates and any arrears.

Source: http://www.dublincity.ie/Business/CommercialRates/pages/whopays.aspx#default_property

betonit

lomb wrote: »

Yes up to 3 years back rates are legally owed by the new tenant. Where was the solicitor in this checking this out?
Someone laughing and joking about 20k for nothing will probably be bankrupt in due course.

he probably thought it was so implausible that he would have to owe someones elses debt that he thought they were just chancing their arm. I say it to him about the solicitor

betonit

also is to old tennant relieved of the outstanding debt if a new tenant takes over the property

lomb

I would say in law the new tenant will have to pay it, then sueing the old tenant for the debt? If its a limited company then he wont see a penny. I would be seeking legal advice immediately. One of the things to do when signing a commercial lease is to ensure the councils rates are fully paid up both on building and water.

clio_16v

He is liable for the rates. I got caught with this a while back, took it to court and lost the case. Now I have a nice hefty bill that could close down my business even though I had nothing to do with it!

GerardKeating

lomb wrote: »

I would say in law the new tenant will have to pay it, then sueing the old tenant for the debt? If its a limited company then he wont see a penny. I would be seeking legal advice immediately. One of the things to do when signing a commercial lease is to ensure the councils rates are fully paid up both on building and water.

Or sue the solicitor that let him sign the lease, assuming of course that the "new Tenant" did bother with one.

lomb

I hope he signed as a ltd company. If so I would consider liquidating it.

lucky john

As has been established all ready your friend is in trouble on this one. The council are within their rights to go after him. Even if a judge takes his side in court he may not like it but he will find for the council.
I would be surprised if a solicitor missed this so maybe he didn't have one working on it. An auctioneer selling doesn't need to mention the rates. Don't ignore the council either. They follow a set of guidelines that will lead to court eventually.

If he is a company he could liquidate as mentioned but that's costly especially if he wants the business. The other option is to negotiate with the council. They do have the power to write off the rates and that's what they generally have been doing. A premises with the previous tenant gone and rates owed is hard to rent. So to generate rates again they clear the slate and hope the new business makes income for them.

If you're friend closes because of the bill that's no use to them. This is his only bargaining chip. Offer them something small on the arrears and see if they are interested. Also offer to pay his own rates by direct debit.