Legal advice: Improving the neighbourhood
By the Publican's team of legal experts from London solicitors Joelson Wilson>
Do you want your neighbourhood improved? Who doesn't? But do you want to pay extra for it - more than the rates you already pay?
The Local Government Act, which comes into force in April, includes provisions for the setting-up of business improvement districts (BIDs). The purpose is mainly to give councils the ability to set up the funding for BID schemes. Projects will be financed by a levy imposed on non-domestic ratepayers in the relevant district.
Proposals for the BID arrangements cannot come into force unless approved by a ballot of non-domestic ratepayers who will be liable to pay the levy. Only if the total of the rateable values of the properties of those voting in favour of the BID exceeds that of those voting against will the BID come into existence.
The details of each scheme will be decided by its members, subject to guidelines. All ratepayers enjoying the benefit of the scheme will be bound to pay the levy, whether or not they participate directly. But what of non-occupying landlords, who don't pay rates but whose properties should increase in value as a result of the schemes? The government did not make it compulsory for property owners to be levied for BID costs. This means they may either contribute voluntarily, enter into a contractual obligation to pay the levy or contribute to their tenants' payments.
In any case the owners will want to enjoy some influence over decisions, either by having a seat on the BID committee or through the representations of their tenants.
BIDs will terminate after five years. Their renewal will depend on their practical results and financial performance. They may have served their purpose in that time. As they may take as long as two years to set up and prepare for operations, it must be in the interests of all to make BIDs successful and worth renewing.
