Refund or Remission Local Rates Q6

Q.
Under Section 162 of Local Government Act (Act 171), where any building is unoccupied and no rent is payable in respect thereof during a period of not less than one calendar month in any half year in respect of which a rate has been paid the local authority may order the refund or remission, as the case may be, of any part of such rate proportionate to the period during which the building has been unoccupied. Explain the process/procedure as to how the owner or person could apply to obtain back the amount that he has paid.

(25 marks, 2012 Q6)

A.
The same Section 162 also specifies the requirements for claiming against the paid rent. As verbatim from the Local Government Act 1976, S.162 (2, 3, 4) and subsections (5a, 5b, 5c) specifying the types of buildings are:

(2) No refund or remission shall be ordered unless the person claiming the same shall have within seven days from the commencement of the period in respect of which the refund or remission is claimed given written notice to the local authority of such vacancy and in the case of any refund shall have claimed payment thereof in writing not later than one month after the expiration of the half year in respect of which the claim is made.

(3) No refund or remission shall be ordered in respect of any building unless the owner of the holding in question proves to the satisfaction of the local authority—

(a) that such building is in good repair and fit for occupation;

(b) that every reasonable effort to obtain a tenant has been made;

(c) that the rent demanded is a reasonable one;

(d) that the building has been vacant during the whole period for which the refund is claimed:

Provided that when a refund is claimed in respect of a period during which the building has been undergoing repairs for the purpose of rendering it fit for occupation or for bona fide reconstruction it shall not be necessary to prove, in respect of such claims the matters specified in paragraphs (a), (b) and (c).

(4) Claims shall state the dates on which the building was unoccupied and the address to which communications in reference thereto may be sent.

(5) For the purposes of this section the expression “building” includes—

(a) a self-contained flat in a building erected with the approval of the local authority;

(b) any whole floor in a building with separate means of access;

(c) floor space of not less than 1,000 square feet on the same floor of a building which may be let as an office, shop, factory, godown or other similar use.

Brief Summary:

A good reading is from Christopher Chan "Proposed revision of assessment rates explained" in The Star Property.

The claim for paid rent required a written letter indicating of the vacant occupation of the said building to the local authority (council) for the period it is claiming for. It has to be within the time frame of the claim period which is within 7 days from which it has been duly paid. For example, 1st Jan, 2013 the rent is due and paid for the assessment period of Jan-Jun 2013, the date the letter should be submitted is within 7 days from the date ie. 1st - 7th Jan, 2013 to the Local Authority to specify that the building is vacant and not rented out.

In the notice to the Local Authority, the unoccupied building owner should prove that the building is in good condition for rent, and effort had been made to rent out but failed. The period of vacant without rent is appropriate with the period of the claim for refund. For example, since Dec 2012 the tenant had moved out, and the building has never been rented from middle Dec 2012 until August, 2013. Hence, the Annual Rent paid to the Local Authority for the period Jan - Jun, 2013 can be claimed for refund.

This part is able to satisfy the whole period of vacant without rent from Jan-Jun, 2013. For July and August, 2013 it is not able to satisfy the whole Half Year of Jul-Dec 2014, and therefore not able to be refunded.

If however, the timing from Dec, 2012 to Feb, 2013 the building was under reconstruction for future tenant, there is no need to prove that it was unable to get tenant, hence subsections (a), (b) and (c) are not material.

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