The primary liability to pay commercial rates is on the person in actual occupation of the property at the time the annual rate is fixed each year (usually a date in late January).   

If that person fails to pay, the rate can be demanded and recovered from the person subsequently in occupation of the property.  

The limitation period against the person primarily liable is six years, and as against the subsequent occupier, it is two years.

Once the rate is fixed for the calendar year and a tenant is in occupation, the Local Authority is not entitled to seek recovery of the tenant’s outstanding rates directly from the landlord even if the property becomes vacant during the year.  That said, any new tenant will only agree to paying rates from the date of its occupation, so the landlord will usually have no choice but to discharge rates for any unoccupied period but also any arrears of rates, up to a maximum of two years’ rates.  If the landlord re-occupies the vacant property then the landlord is treated as a subsequent occupier and is then liable for the rates going forward and any arrears, again up to a maximum of two years.

If a property is unoccupied on the date the rate is fixed for the year, the landlord is liable to pay the rates.  However, the landlord is entitled to seek a refund of rates paid if the property is unoccupied because the landlord is (i) carrying out additions, alterations or repairs, (ii) is unable to obtain a suitable tenant at a reasonable rent or (iii) if the property is vacant pending redevelopment.  To qualify for a refund where a landlord is unable to find a tenant, the property must be actively marketed for rent at the time the rate is fixed for the year.

Full refunds can be sought from Local Authorities for every month that the property is unoccupied, except for Dublin where the refund is only 50%.

Contributed by Richard Breen.

Back to Legal News