Who pays business rates after a liquidator has disclaimed a lease?

What was thought to be the situation has recently been confirmed in the High Court, when a landlord was told to pay up £0.6m to Birmingham Council for business rates accruing after a tenant went into liquidation and disclaimed the lease – click here to read the judgement.

Thus any uncertainty there was that payment of business rates post disclaimer was the landlord’s problem has now evaporated.

This is a mixture of good and bad news…

Good for local authorities …

Bad for landlords who now know that unless they have the benefit of a strong covenant or strong Authorised Guarantee Agreement could end up with a big rates bill at a time when a property is earning no income …

Good for prospective tenants of empty properties as they could be in a better negotiating position when it comes to rent free periods or other ‘perks’…

Good for tenants of tertiary properties who could go to the wall unless they can renegotiate leases and rent payment dates with the landlord.

In fact it’s good news for everyone but landlords and people who’ve signed an authorised guarantee agreement!

If you’re a tenant who has massive problems because of their rent bill, and you’d like some help renegotiating it, call me on 01902 672323.

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