How Do You Rate This?
The number of court actions started for non-payment of rates is on the rise it has been reported this morning, according to figures provided by Land & Property Services (“LPS”). Legal action was launched almost 49,000 times last year, a rise of 5%.
LPS state in about 50% of cases, notification of court action was enough to result in either payment of arrears in full or by another arrangement. The rest ended up in court. The amount of debt written off in this year alone was £31m.
The real question the Equity Experts want answered, is how much of this £31m could still actually be recovered, if the debt was chased from the right person? In addition how much of the other millions of pounds written off could be recovered for the benefit of the public?
We ask this because Fixed Charge Receivers (“FCR”) may be liable for rates in respect of properties they are appointed on. A FCR is appointed by a bank or other secured creditor when a borrower has defaulted on the debt to them. The FCR acts as agent of the borrower.
The key point to confirm liability is depending on whether the property is occupied and who is receiving (or entitled to receive) the rent. If any recovery action has begun on a rate account, all recovery proceedings can be suspended while LPS await information to determine who has the liability of the rates.
Whilst this will be welcome news for some, for many it has unfortunately came too late. There has been countless Bankruptcy Petitions against borrowers for rates debt by the Crown Solicitor Office on behalf of the Land & Property Services.
Accordingly, some unanswered questions now remain:
- Will LPS explain why this was not publicly announced since recent implementation?
- Will the FCR repay rates to LPS for debts which they are personally liable?
- Will lenders who appointed the FCR return the funds to the FCR to repay LPS?
- How many injustices have passed through the courts where debtors, who were declared bankrupt, may not actually have been liable for the rates?
The LPS are getting more aggressive in their pursuit of unpaid rates.
Year Bankruptcies Companies Total
2008 41 2 43
2009 30 5 35
2010 46 6 52
2011 78 17 95
2012 189 17 206
2013 206 56 262
Stats since the banking collapse from 2008 where LPS was the Petitioning Creditor at the courts and the person/company was then declared bankrupt/insolvent.
Whilst we watch these points with interest, our team of experts will continue to review the assets of our existing client base. We have already saved thousands of pounds in respect of rates they thought they owed
If you have been affected you can contact our team of Equity Experts for professional help and can advise you on your course of action. Our office has and continues to arrive at amicable agreements for debt repayment plans with LPS.