To occupy or not to occupy It is well reported in the news that shops on the high street are struggling financially and one of the perceived reasons for that is the payment to the local authority of business rates. Business rates are charged on most non-domestic properties, for example: shops offices pubs warehouses factories holiday rental homes or guest houses Business rates are not payable on empty buildings for 3 months. After this time, most businesses must pay full business rates as a non-occupier owner. If a tenant takes up occupation of the property, the tenant usually becomes liable to pay the business rates and if the arrangement lasts for 6 weeks or more, the landlord will be entitled to a further 3 months rate free period when the arrangement with the tenant comes to an end. The key concept is 'occupation' by the tenant and this was considered in a recent case. A company recently challenged a local authority in relation to it's occupation of business premises. The case is interesting because the main purpose of the company is to occupy property (by storing goods) to decease the property owner's liability for business rates. The only purpose of the storage is to amount to 'occupation'. The court held that the lease between the landlord and the tenant was genuine and the fact that avoidance of business rates was the reason for the 'occupation' was irrelevant. It is important to ensure that any arrangement between landlord and tenant is properly recorded and that the terms of any lease are clear. To discuss this or any other commercial landlord and tenant issue, contact us.