COMMERCIAL RATES – IMPORTANT CHANGES

The Local Government Reform Act 2014 introduced a number of important changes to liability for rates.
The relevant section, Section 32 of the Act, came into force on the 1st July 2014 and applies to all sales/leases completing on or after this date.

Main Changes
• Vendors are now obliged to notify the rating authority of sale;
• Vendors are obliged to discharge all arrears for which the Vendor is liable;
• Unpaid rates will be a charge on property for a period of 12 years;
• Landlords are obliged notify the rating authority within 2 weeks if a tenant transfers its
interest;
• Landlords are liable for 2 years of outstanding rates due by a previous tenant where the rating authority was not notified that the tenant had transferred their interest and the tenant did not discharge the arrears prior to the transfer of their interest.

Practical Implications
Receivers should no longer employ the current practice of undertaking to discharge unpaid rates with to a maximum of 2 years as rates are now a charge on property.

Landlords should ensure that tenants have discharged all rates prior to consenting to the tenant transferring their interest in a property (assignment).

Link to legislation:
http://www.irishstatutebook.ie/2014/en/act/pub/0001/sec0032.html