Rates: Dealing with demands for payments

The BBC recently reported on an increase in the number of court actions taken by Land & Property Services, (LPS), in response to rates arrears. Housing Rights Service can provide advice to homeowners and private tenants who are having difficulties meeting their rates payments or who are being pursued for non-payment.

Help with rates payments

Some homeowners and tenants may be entitled to receive either housing benefit or rates relief to help with their rates bill.

Discounts on the annual rates bill are also available for

• people with disabilities who are living and paying rates on an adapted property
• people who are living on their own and are aged 70 or over

Recovering rates arrears

LPS should follow a certain process when attempting to recover any outstanding rates.  The first step in this process is to

• send a reminder letter, where a ratepayer has missed a direct debit or
• send a final notice if rates haven’t been paid within 40 days of the bill being issued or, in the case of those paying in instalments, within 7 days of a reminder letter.

Any ratepayer who receives a Final Notice should quickly get in touch with Housing Rights Service or a free, specialist debt advice agency, like Debt Action NI.  Ratepayers who haven’t made payment within 10 days of receiving a final notice may be issued with court papers, signalling LPS’s intention to take the matter to court. 

If the case ends up in court, an order will likely be issued against the ratepayer.  This will affect the ratepayer’s credit rating.  It’s essential that any ratepayer facing legal action get advice as quickly as possible when facing recover action.  When helping clients with rates arrears, Housing Rights Service aims to set up a repayment plan before court in the hope of avoiding expensive legal action.

LPS has issued guidance to its staff outlining how it expects payment arrangements to be established.  The general principles of this guidance state that arrangements “should aim to clear the outstanding debt as quickly as possible”, but also state that any arrangement should be “realistic and affordable” and should not “put the ratepayer under undue financial hardship”.   The default position is to aim to clear the arrears within 24 months; however, the guidance states that the payment term can be extended if this arrangement is likely to cause undue financial hardship.

Rates issues for private tenants

One of the most common complaints we receive about rates concerns tenants being pursued for rates that they have already paid as part of their contractual rent.  We looked at this issue in detail in one of our Adviser columns.  

Land & Property Service is aware of this problem, but it is unable to pursue the landlord for rates arrears where the legislation states that the tenant is liable for the debt.  However, LPS can postpone any recovery action against the tenant, where the tenant can prove that the contractual rent included an amount for rates and can produce a tenancy agreement showing that the landlord has already collected rates.  LPS will postpone action to allow the tenant an opportunity to sue the landlord for repayment of the money due.

Rates issues for landlords

The complexity of rating for the private rented sector can cause concern for landlords too.  Recently, we have been contacted by a few tenants who have issued with a rebate for rates, which they paid as a tenant.  LPS have then issued demands on the landlord for the outstanding rates on the property in question.

In these circumstances, where the tenant was fully aware of his or her responsibility to pay rates and had accepted this responsibility, whether verbally or in a tenancy agreement, it would be correct for the tenant to repay the rebate to the landlord in order to clear the arrear.

If the tenant chose not to repay the money, any landlord who can present evidence to show that the tenant had agreed to accept responsibility for rates could take action through the courts to recover this money.