Changes to the Rating Act

From 1 July 2003, the new Local Government (Rating) Act 2002 changes the liable ratepayer of a property from the “occupier” to the “registered owner as shown on the title”.

While in the vast majority of cases this will make absolutely no difference, it will have an impact on landlords owning a multi-unit property where the tenants at present receive and pay separate rate demands in respect of their individual units. Under the new Act, the landlord will instead receive a rates demand for the whole property and will have to recover the appropriate proportions from the tenants.

The new Act does not prevent owners and tenants from agreeing between themselves as to who actually pays the rates.  A landlord can therefore still recover rates from a tenant but regardless of whether or not the tenant is obliged to pay rates under the lease, the landlord will be liable to the local authority.

Because most leases in recent years have stipulated a “gross rental”, ie the rental makes allowance for rates and other outgoings being paid by the landlord, this law change is unlikely to affect most people. It will need to be borne in mind however when new leases of multi unit properties are being negotiated.