Council Pursuing Business Rates

[auzzie]

We left a commercial unit in March giving one month's notice to the Landlord stating that he was in breach of the lease and the situation we were in could not be tolerated. I won't go in to the ins and outs of that but the council are saying that we are liable for the rates on the empty property as we are the leaseholders.
The lease that we did have says that the rates will be charged on a pro rata basis subject to any change on council revaluations etc by the Landlord and will be £xxx per month or thereabouts. The council have been told that we vacated the property and that we are no longer responsible under the terms of the lease. They accepted this at first but when they contacted the landlord he told them we had changed our mind and was staying. After that they said that as per the lease we were liable. We sent them the lease which showed that the rates were not our responsibility. They wouldn't accept this either but would not give a reason why. They said that it is a civil matter between us and landlord. Then we questioned it again and then they have just said if you occupy the building you are liable!! We don't and they know that! We just seem to be going round in circles. How do the council work out who is liable for business rates? We have not heard from the Landlord since we left 6 months ago. All his units are empty, we know he was having financial difficulties, we know he was desperate to sell the units but couldn't. If the council have to accept the terms of the lease even though we have disputed that, the lease clearly says that the rates are paid by the landlord. Surely the council can go after the landlord and if he feels it necessary, then he can pursue us through the courts? Any help would be appreciated. I know we should be talking to a solicitor but at the moment funds won't allow and we are trying to do what we can first.

[factor-fiction]

A key issue here is whether the lease has been properly terminated. Was there a provision to give only a month's notice, and did the landlord ever accept it?

[themas]

As f-f says, does the lease still exist? If it gave you the right to terminate on 1 month's notice & you did so in writing & can prove that, then - providing there is nothing else in the lease which contradicts it - it has been terminated & you cannot then have any liability under it.

However, if the lease has not been terminated it appears you are still liable - but from what you say that liability is to pay the landlord not the council. If you are still liable to pay the rates then it is reasonable to assume you are also liable to go on paying rent. Has the landlord demanded any rent or rates from you since you moved out? How were you paying them before you moved out? Did the landlord invoice you each month or did you pay automatically without an invoice?

[Peter Pedant]

I can understand Auzzie - you didnt terminate the lease - the Landlord breached it.

So have you divested yourselves of all your duties under the lease ?
Depending on the facts I think you probably have.

BUT
it is nt so much a matter of Law but of fact - where you say he has lied about you re-occupying, and thereby confirming the lease. Does he have any grounds for this ?

If he is short of money he may well lie in the short term.

I think the council may well have said, we cant sort it out, just blap them with a bill and let them sort it out. - not really a question of law if you see what I mean.

Go on telling the council you are not responsible....

[auzzie]

We terminated the lease early giving the landlord several reasons why we find him in breach of the lease. We could not continue the business in the conditions we were subjected to and we made this very clear to him. We paid the rent by standing order direct to his account but there were other bills, we were aware that we were liable for, and paid it to him separately each month, but we later found out that he didn't actually pay the bills he should have. We were not aware of this until the bailiffs came knocking not once but twice. The problem is not the landlord but the council. We just can't seem to reason with them. The landlord told them that we still hold the lease and therefore we are liable. It seems that they are just acting on his words and not taking into account the evidence we sent them. When I read the clause about the landlord charging us an amount for rates and therefore he is liable, we were told it says chargeable but doesn't mean he is liable!! We are really lost now. I'm beginning to wonder if he has "friends" in the council! We have not heard anything from the landlord or his solicitor since vacating the premises.

[buildersmate]

This is a bit out of my regular area of expertise, but I'll try and provide some pointers. Under s65(1) of the Local Government Finance Act1988, it is the person "entitled to possession" who is legally responsible for the business rates.
Until you vacated the premises and wrote to the landlord to tell him you regarded him in breach of the lease agreement, it seems pretty clear you were responsible. So if you were paying the landlord and he failed to pass the monies over, that's unfortunately your problem. They will still come after you and that is why the council are saying it is a civil matter between you and the landlord - to get the monies back from him.
After you left, it is a bit muddier. The issue is whether you are entitled to possession. I'd be inclined to write back to them stating you are not, and use this terminology, and see what happens. It strikes me this landlord is not going to accept to the council that the lease is terminated, even if he has no intention of pursuing the matter with you.

[auzzie]

Thank you everyone for giving this your attention it is much appreciated.

[themas]

BM is generally right on these things, but I would add a query. When you were occupying & paying money to the landlord for the business rates, were you being invoiced for the rates by the Council? If not, it seems to me you could validly ask the Council who they were invoicing. If it was the landlord then I would suggest the Council might be estopped from insisting that you have to pay the rates which the landlord didn't pass on to them. If the Council didn't invoice anyone then they would appear to be guilty of maladministration.

You need to raise the whole issue as a formal complaint with the Council (ask them for their complaints procedure) with a view to going to the Local Gov't Ombudsman if not satisfied.

[auzzie]

Thank you Themas, another email has gone off to the council today reiterating everything that has gone on and asking why they can't answer our questions in full. They have all the evidence that suggests it's the landlords responsibility but for some reason won't accept it. Why side with a landlord that has shown himself to be a liar? I have also asked them for copies of all forms submitted for the property and a copy of their complaints procedure.

[buildersmate]

Themas. I did say this was a bit out of my knowledge area. I defer to your greater knowledge on matters leasing, and stick with employment and property law.