Who is liable for business rates after a lease has been disclaimed? Despite a valiant attempt by the landlord in Schroder Exempt Property Unit Trust & Anor v Birmingham City Council [2014] EWHC 2207 (Admin) to persuade the court to the contrary view, the effect of a disclaimer of a lease by a liquidator is to end the lease, so that the landlord’s reversion is accelerated, the landlord becomes the person entitled to immediate possession, and is therefore the person liable for business rates.
The fact that a former tenant remains liable for rent after disclaimer under the terms of an AGA, under the principles applied in Hindcastle Ltd v Barbara Attenborough Associates Ltd [1996] UKHL 19 (i.e. the “deemed continuation” of the lease for the purposes of preserving rights and liabilities of others) , does not take away from the fact that the disclaimer has, as a matter of property law, ended the lease. The property right in the lease has been determined, albeit that the contractual right of enforcing former tenants’ liabilities may continue.