Dublin City Council rates - can't pay - what to do?

Seoda1

Hi

I have a commercial unit which has a tenant but unfortunately the rent coming in is not enough to cover the mortgage never mind the rates.

I'm at my wits end with worry as I've just received a final notice for payment. I've drafted a letter today explaining how the rent has dropped dramatically over the last couple of years etc and am hoping for the best.

Before I send it, I am hoping someone might have some advise on how to deal with issues like this from past experience with Dublin City Council

Also for the record, I am behind in my mortgage repayments with the bank and in the middle of court cases trying to come to some agreement.

Appreciate any advise offerred

Thanking you in advance

Peterdalkey

Unless you are in a position to make some sort of an installment payment proposal, you are heading for the courts again. Given the position with the bank you really need to think about throwing the towel in on this and walk away. The numbers simply don't work.

Seoda1

Yes Peter, I appreciate that but it's worth the fight. The bank will have to settle in the end with some agreement because something coming in is better than nothing and the last thing they want is to be sitting on an empty unit that is worth little or nothing.

And the logic I would have thought should follow through with rates, I.e. rates are based on a value and that value has dropped considerably, so the rates should too. I know rates are there to collect money for the council to pay bills but they can't get blood out of a stone and what's more, no one is talking about it, standing up to them!

Bandara

The bank will settle in the end only if they see a near future in which your situation will change. They will not look past 2 years, and will want firm reasons why in 2 years your circumstances will have improved.

Regarding rates, you simply must pay them, if you go to court the judges attitude will always be 'if you cant pay rates, you should not be in business'. You will simply not win on rates. They are the most important bill that your company receives (in their eyes).

I would second Peter Dalkey, it times to remove the emotion and make the calculated decision, you say its worth the fight but you then say its a unit worth little or nothing.

Hope it works out for you.

Peterdalkey

It would be very unusual for a commercial lease to include rates, they are normally the responsibility of the tenant. Is your attempt to kick the can down the road, to get some breathing space, clouded by having a personal guarantee on the loan? It strikes me that you are facing even further costs by fighting two court cases, one with the bank and another with the council. These will only serve to increase your overall indebtedness and make the ultimate resolution even more difficult.
This whole episode must be taking a serious toll on you personally and it is very difficult in such circumstances to see the wood for the trees. Based on the information you have provided, I would suggest that you seriously consider stopping the legal battle with the bank and sit down with them and ask them what THEY want to do. This will change the dynamic as their automaton response to arrears is to go legal. When you ask them what should be done, they have to deal with the problem rather than just shuffling files between lawyers. You are just one of tens of thousands of cases, it is very personal to you, but not to them.

For your own Heath and sanity, you are better to deal with it rather than prolong it!

Take care of yourself.

Peter

PS there is a 4th party here, the tenant. Could a deal be brokered where the tenant might buy the property at market price financed by the bank, I have seen this done in my pal's case recently. There were losses but it was the best deal for everone and much better than collapsing the whole shebang.

Tigger

i don't understand
rates are levied on the occupier
is the tennant there officially and if so why are they not paying the rates?

lucky john

instead of posting a letter into the council it may be better to meet them in person. even if the value has fallen there is a very slim chance you will get the valuation office to come out to revalue it in the near future. They are snowed under with requests like this plus every council in the country are on to them looking to get extra properties valued to increase their revenue. Councils are now limited to a few properties per year until the back log is cleared. They will have no room to manuver on value so go in before you run into another year and hammer out some kind of payment plan with them. Do your figures before you talk to them though. you will only get one chance with them.

Another thing to remember while doing the figures is the bank. They will consider themselves higher up the pecking order than the council so will be casting an eye over any money you agree to pay in rates. they have bigger teeth than the council so tread carefully.

I admire your intentions to carry on the fight but do the sums. Unless you see something clearly in the future that will change your present situation, the cost of the fight may be to great.

Seoda1

Thanks lucky John

That's a good idea to pop into them, I'll fire off a letter today just yo acknowledge communication in the meantime.

Tigger, you are right, rates are payable by the occupier, in this instance over the years, the occupier paid rent which included rates so that's how my name is on it as a landlord.

Thanks everyone for your replies, it's good to talk to get ideas flowing! I will post an update in a couple of months time from Mountjoy! Only kidding! Thanks!

RATM

I too am wondering why you are paying the rates? I wish my landlord would do the same for my place but as is I have to stump up and I've never heard of it been done any other way.

OP my landlord did tell me there are surveyors out there who will take a no-won no fee case on your behalf to try to reduce rates. The way I heard it was the rateable values are mainly from 2006-7 when rent was sky high but that there is now an opportunity to try to reduce them- I've rounded up a few tenants in my own building and we intend to do this in 2013.

I think it would come a bit late for yourself as there are already court actions underway but it might be something to bear in mind for the future. As would charging the tenant the rates- its a pretty standard modus operandi as far as I know.

ontour2

Seoda1 wrote: »

And the logic I would have thought should follow through with rates, I.e. rates are based on a value and that value has dropped considerably, so the rates should too.

Check out the rates of your neighbours, one of them may have had a recent revaluation which may give a better indication of what a revaluation would achieve for you. http://www.valoff.ie/search/search.asp

domiko

just wondering if the person who didnt pay the commercial rates and closed the business down is chased by city council or the new tenant will take the responsibility of the arrears???

beazee

They'll be chasing the former tenant provided they have his name.
New business starts from new.

domiko

so why they didnt chase the previous tenants as the unit was with arrears when took it????

beazee

I believe you may find the answer there: ratesoffice@dublincity.ie

But in the meantime get yourself familiar with: http://www.dublincity.ie/Business/CommercialRates/Pages/WhoPays.aspx
Especially this part: "Note: When a commercial property is sold or leased, contact Dublin City Council Rates Office to ensure that charges are sent to the right person."