Monday 11 December 2017

Firms now off the hook for any rates arrears of previous tenants

Shoppers on Dublin's Grafton Street
Shoppers on Dublin's Grafton Street
Sarah McCabe

Sarah McCabe

BUSINESSES moving into new premises can no longer be forced to cough up for commercial rates left unpaid by previous tenants, under proposals just approved by the Dail.

Under the current laws governing local authority rates – some of which date from 1838 – businesses moving into a property are liable for up to two years of unpaid rates if the previous tenant left them unpaid.

But an amendment changing this has just been approved by TDs.

The amendment was introduced by Environment Minister Phil Hogan during committee stage in the Seanad and approved by the Dail on Wednesday. It amends the Local Government Reform Bill 2013, which was first introduced late last year.

The bill must still be signed by the President and officially enacted, but this is usually a formality.

New tenants in a commercial property, the amendment says, should be able to move in without fear of being forced to pay for their predecessors' unpaid local authority bills.

"The measure eliminates the financial burden for new occupiers, in order to ensure that any possible barriers to enterprise development are removed," a government spokesman told the Irish Independent.

The move is also aimed at giving the commercial property sector a boost.

"Equally, removing this financial liability offers the possibility that property that may otherwise have remained vacant and unoccupied can now be re-let, thus improving opportunities in the property market and a reduction in the incidence of vacant commercial properties," the spokesperson said.

The news was welcomed by lobby group the Irish Small and Medium Enterprises Association (ISME).

"ISME has been lobbying for this change for many years, which will have a positive impact on businesses all over the country," said chief executive Mark Fielding.


"The amendment will mean the new tenants will no longer be liable for the rates arrears of previous tenants. This will allow new businesses to take up new premises and existing businesses to change premises without the fear of having a massive rates bill hanging over them after they move in."

The amendment is just one of several introduced by the Seanad to try and appease businesses angry at the burden of local authority rates.

Originally, and controversially, the Local Government Reform Bill had sought to make commercial property owners liable for 50pc of commercial rates even if the property was vacant, with no tenant.

However, an amendment was put forward to soften this blow, giving local authorities the right to refund rates charged to the owners of vacant commercial properties by as much or as little as they like.

A separate amendment also affects who is liable for outstanding commercial rates if a property is sold. The cost of any unpaid rates, it says, should be deducted from the sale price when the property is sold.

Irish Independent

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