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So the Landlord wants to charge rates, even though no rates were payable - have I understood correctly?
The Landlord claims that our client owes a sum of money in business rates. They say they have taken legal advice. Under the lease the tenant is responsible to pay the business rates and there is no provision in the Lease allowing the tenant to claim rates relief if the property is empty. Is this correct. It seems harsh! If the tenant had a period of 3 months to geo and new the property would be empty for this period - surely they would have the right to a rates rebate
Has the free rebate period been exhausted?
Were the keys given back?
The Council would normally give the Landlord a 3 month window to re let the premises. But, the Tenant has claimed the 3 month rate free relief as they vacated 3 months earlier then when the lease would normally have terminated.. The Keys were handed back. The tenant is owed money for the overpayment of service charges and it is only when they tried to get this money back, did the Landlord try and get the equivalent of three months rates from our client.
Ok - so there would be no free period available to the Landlord in any event?
That's it, and they feel that the Tenant had no right to claim the rate free period from the council, there is nothing in the lease that says they can make such a claim. Equally there is nothing in the Lease to say that they cant!
If the Landlord is responsible for the rates and these are payable then the tenant is responsible
If the tenant has handed the keys back then the lease ends
The tenant is not then able to claim back a relief
There would be no obligation on the Landlord to make any claim for rate relief
Sadly therefore based on what you have said the tenant is responsible for the sums due
The Landlord has a duty to mitigate loss
Therefore if there is relief available to the Landlord then he should apply for it
But any sums due to the Council by the Landlord are recoverable from the tenant
I am not sure if this is necessarily the answer you are after and it is not the one I want to give you, but I have a duty to be honest
Can I clarify anything for you about this today please?
The Tenant is responsible for the rates all the time that they are the lease holders. If they terminate 3 months early and leave the building are they still responsible for the rates for that period? Can they not claim for rate relief for the period.
Our client says :-
You will see from my previous response to them in October (copy attached) we do not owe them any money. This was discussed with our Legal team at the time and they are certain we do not owe for business rates as we vacated the building in June 2013 and paid the rates for the new premises. The Council advised us at the time that we could claim empty building relief and therefore not have to pay for the final 3 months of our tenure as the floor was vacant.
Our landlords then tried to claim the 3 month relief when our Lease ended in September and were told they couldn’t make the claim as we had already exercised that right.
The tenants can;t claim it - the lease has ended.
The tenants do not have occupation and can't claim relief
This means if there are debts owing according to the lease the tenant has to pay it
If the lease was broken early and payments are due under the contract
Thanks Alex, It doe's not help our case. But, I needed to know the correct position.
I am sorry but I have to be truthful
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