Calls in Northern Ireland to penalise commercial landlords over empty properties

A Northern Ireland assembly member has called for commercial landlords to be penalised if they leave city centre premises vacant for long periods of time. What are the reasons behind this proposal, and are there potential financial implications for commercial landlords?

Ó Muilleoir’s proposal: rates paid on a sliding scale

Máirtín Ó Muilleoir, a Member of the Legislative Assembly (MLA) for South Belfast told the Belfast Telegraph that developers in the Northern Irish capital need to be encouraged “to bring the [empty] sites back into use”. He suggested the problem lies in the fact that some developers don’t pay rates on properties that “have been lying vacant for seven or eight years”.

The MLA has said that developers should have to pay business rates on properties that remain vacant, and that these should increase the longer a premises remains empty. If the plans go ahead, the current business rates relief for buildings with removed roofing tiles would no longer apply.

“It’s my conviction that by levying rates on derelict commercial premises and building sites, we can spur economic activity”, Mr Ó Muilleoir explained to the newspaper. He was speaking after news came that Belfast’s Carryduff Shopping Centre, which has had part of its roof removed, may be set for closure.

The parliamentarian also expressed his belief that banks, many of which assume control of derelict buildings following a company’s administration, “should be sharing the rates burden” with private enterprises.

Is the proposal likely to take effect?

Business rates in Northern Ireland are currently being scrutinised by the Department of Finance and Personnel. Mr Ó Muilleoir said he hopes its review “can start the process” of landlords paying rates on empty and derelict properties.

Landlords are yet to comment on Mr Ó Muilleoir's proposal, but one point of contention may be that many feel compelled to take on tenants – who may not be financially secure in the long term – to avoid paying rates on vacant premises. Rent defaults may therefore be a real possibility if the MLA’s proposal is drafted into commercial property law. Landlords can safeguard against this uncertainty by ensuring they have professional and ethical procedures in place to recover rent arrears.