‘Don’t ignore’ business rates

Commercial landlords could be left with liabilities for tenants’ business rates even after a lease has expired, an expert has warned.

Chris Addison, a legal assistant specialising in commercial property litigation at regional law firm Napthens, warns this could also be the case if a tenant absconds and the landlord takes back possession of a property.

He warns that landlords should seek legal advice if they are notified a tenant has vacated a property to limit liability in respect of business rates, and also council tax and utilities.

For instance, councils will often pursue the easiest target when attempting to collect business rates – often the landlord as they are easy to trace and may have the funds to satisfy a demand from a local authority.

Chris warned that even if a landlord believes the business rates are not their responsibility they should not avoid the issue.

He said: “If the liability for business rates is transferred into a landlord’s name – without their permission – the council will send demands for payment followed by a final reminder.

They may then apply to the magistrates’ court to issue a summons for you to appear. It is vital that evidence is presented at that hearing to avoid a liability order being made.

“If an order is made against a landlord, the court has decided that the business rates are their responsibility. The council then has a number of enforcement options which include attachment of earnings orders, removing goods to sell to satisfy the debt, statutory demands or in some cases committal to prison.

“There is a complex test that the court will consider when deciding whether to set aside an order. If an application to do this is not made quickly it is unlikely to succeed. This means the council would be at liberty to enforce the order.

“Prompt action is therefore vital. It may be that a landlord can prove without doubt that the debt is not theirs – mainly if the lease is still technically in existence – but if an application to set aside the order is not made quickly the court will not take that evidence into account.”

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