The Local Government Reform Act 2014 has introduced a number of changes in respect of commercial rates legislation.
Repeal of subsequent Occupier Liability
Section 71 of the Poor Relief (Ireland) Act 1838 provides that a person in occupation of a premises on the date the rate is struck is primarily liable for rates and in the case of default, the subsequent occupier is liable. Section 19 of the Poor Relief (Ireland ) Act 1849 provides that in the event that rates cannot be recovered from the person with whom the primary liability lies, a subsequent occupier can be held liable for up to two years arrears of rates.
The Local Government Reform Act 2014 partly deletes section 71 of the Poor Relief (Ireland) Act 1838 and fully deletes section 19 of the Poor Relief (Ireland ) Act 1849. The effect of these amendments which came into force on 24th March 2014 is to remove the liability of subsequent occupiers for up to two years of arrears of previous occupiers. This means that no new liability is accrued from the 24th March 2014, but it does not have any impact in cases where payments have already been made in respect of a previous occupier, or in cases where a local authority has already demanded, entered into any agreement with a subsequent occupier to pay by instalments or have commenced legal proceedings to recover rates due from an occupier relating to subsequent occupier liability.
The repeal of subsequent occupier liability does not affect the existing primary liability of the person in occupation on the date of striking the rate. Local Authorities will continue to seek to recover the outstanding rates from the previous occupier in the normal way.
New duty on owners/ratepayers in relation to transfer of property
Section 32 of the Local Government Reform Act 2014 introduces a new obligation on property owners to notify the local authority of a change in interest in a property within two weeks of transfer, where the transfer results in a change in the person liable for commercial rates. A penalty for non-compliance is included which provides that the owner becomes liable for an amount which is equivalent to the level of outstanding liabilities (up to a maximum of 2 years liability), that may have accrued to any previous occupier of the property.
It also provides a new duty to discharge any commercial rates outstanding on property prior to sale or transfer of tenancy or interest. In the event that the owner does not discharge any outstanding liabilities, which arise from either occupation, or unpaid vacancy rates charged on the property, the unpaid amount becomes a charge on the property.
This obligation came into effect on 1st July 2014.
Amendment to certain provisions relating to rates on vacant properties
The Local Government Reform Act 2014 provides that Councils in all local authorities can, as a reserved function, identify a local electoral district or districts where a differing rate of refund can apply. This discretion allows elected members to respond to the differing characteristics of the local commercial property markets. The amendment does not make any change to the eligibility or otherwise of refunds currently provided for in relevant legislation, (Section 14 of Local Government Act 1946), but does amend that legislation to provide for the new reserved authority. This new reserved function will be provided to the newly elected Councils and as such will be commenced to take effect on 1st June 2014.