UK Landlord Forum / Life

Hi All,

I had tenants who had a contract up to the end of January 31st of this year. The property was then empty/unlet for six weeks until the new tenants moved in.

I made the assumption that I would only owe council tax on the period the house was not tenanted.

However, the local authority are also charging me for the period 23/01/18 to 31/01/18. This reason for this I was told is because the previous tenants had declared they were no longer living at the property after the 23rd, even though their tenancy ended on the 31st. It doesn't matter that they left before the agreement ended. That means I am liable to pay the council tax for that week in question.

My gripe though is that when I met the tenants on the 31st for a key handover and inventory check, they were still in the process the last of their possessions from the property. So, in my view, their possessions being at the house means that they were still effectively occupying the house, even though they might have declared it was no longer their primary residence.

I have written to the local authority with the details of the tenancy and timelines, etc. They wrote back saying they would contact the previous tenants for their side of the story. So the issue is currently in the air.

Has anyone else been hit by council tax liability in similar circumstances?

Thanks.

Yes, I had one very unpleasant council  official who tried to force me  to pay tenant's debts.I sent the council copies  of the lease,and correspondence with the tenant,to no avail.When they then added the debt onto my own personal home council tax I wrote to my M.P.No further contact.Unless you have an unusual contract,the tenant owes the rent and the council tax until the lease ends.This is between the council and the tenant,they are trying it on.

Thanks for that.

I spoke to a couple of letting agencies for their view and they reckon it's something of a grey area. Even the council guy I spoke to seemed a little vague when it's comes to a yes or no answer. But anyway, the ball's in the council's court now and I'm in no rush to pay out just yet. It's not a huge amount but there is a principle at stake 

It's not a grey area. The Tenant is liable for Council Tax until the tenancy ends via normal means or they surrender the property (key handover). What has been described here by both posters is not right... but it sometimes is easy!

Assuming the property is not HMO for council tax purposes. If 31 January was when a fixed term tenancy of at least 6 months ended, or it was a contractual periodic tenancy likewise of at least 6 months initial definite term, then without question the liability in law remained with the tenant until the end of the tenancy on 31 January.

If the tenancy was not that, e.g. it was a statutory periodic tenancy that was ending, then liability depends on whether the tenant was resident for the purpose of council tax.

Quote from: LGFA 1992 s6"resident", in relation to any dwelling, means an individual who has attained the age of 18 years and has his sole or main residence in the dwelling.

Depending on facts of your case, the council may be right charging you.

I am not sure I follow this last entry correctly. If a tenancy exists, then the Tenant is responsible for Council Tax - whether resident or not. If a tenancy does not exist, then the Landlord is.

It cannot be true - as some Council's will try and have you believe - that a Tenant cannot be responsible for 2 Council Tax bills (if there was overlap of some kind)... because that would be a nonsense, as clearly a Landlord can be... and a home owner (second home scenario) can be.

Who is legally liable to pay council the council tax is determined by legislations. Any contractual agreement saying who would pay is merely an agreement between the parties. If left unpaid, the council would chase the legally liable party, and it is then up to this party to sue anyone for breach of contract.

If the property is inter alia a council tax HMO, then the owner is liable per the Council Tax (Liability for Owners) Regulations 1992 as amended. A council tax HMO is a property that was originally constructed, or subsequently adapted, for occupation by persons who do not constitute a single household; or the occupiers are on individual tenancy or licenses for only part of the property (i.e. room lets).

For the normal cases, the person liable is set out in s6(2) of the Local Government Finance Act 1992 as amended. The hierarchy basically boils down to who is the adult resident with the greatest legal interest in the property. If there is no adult resident, then the "owner" is liable.

A resident is defined as someone who has his sole or main residence in the dwelling. So a tenant who has moved their possessions out to a new house and is sleeping at the new place having started a new tenancy elsewhere but is merely holding onto the keys to the old place until the end of the old tenancy is not a resident at the old place for the purpose of council tax.

The owner is the person with the most inferior "material interest" in the property.

Material interest are limited to freehold, or leasehold with a term of six months or more.

A weekly, fortnightly, four weekly, monthly, or quarterly periodic tenancy has a term of less than six months. A contractual periodic tenancy with an initial definite term of at least six months which continued periodically constitute a material interest of over 6 months: Leeds City Council v Broadley [2016] EWCA Civ 1213. A statutory periodic tenancy (with a period less than six months) being a separate tenancy to the fixed term preceding it does not.

The council is responsible for determining liability in accordance with the law. Appeal of liability determination in the first instance is to the Valuation Tribunal. The county court is specifically excluded from having the power to make such determination.

This feels like complicating this matter, unnecessarily - the OP made the comment that a tenancy was running up until 31 Jan 2018, but the Tenants told the Council they had stopped residing there earlier (23 Jan 2018)... the decision being based on 'residence' is almost crazy in this day and age, plenty of people would consider themselves being resident at more than one place, but the vibe of the text quoted appears to be implying a person can only be resident at one place at a time. Now, we all realise that a person can only be located in a single place at a time... onmi-presence notwithstanding... but a person can certainly run two tenancies (I have done it), own two homes (I have done it), obviously let out multiple properties (I do it). In this case it appears clear-cut to me that the Tenant had a tenancy that ran until 31 Jan 2018 but claimed they were not resident at the property until that time - the Council, I believe, has either made a mistake or is trying to pull a fast one. If the Council is correct then this opens every Landlord up to Tenants just saying they're not resident at a property, even though the Landlord doesn't have their full access back (to enter, to work, to view, to re-let - because the Tenant is, say, holding onto keys) to make use of the property. I find Councils are often willing to accept a Tenant's word that they went and left a property, but will always ask a Landlord for proof that a tenancy existed - AST or suchlike - why Councils do not say to departing Tenants "can we have a copy of your AST, or some other documentation that shows your departure date" is not a surprise to me, but things could be made more efficient and less of a grey area. I think Councils are adept at pressing Landlords for things like this, as it's an easier target. I have experienced it myself. You can't get in touch with Councils properly. They make you wait 30 minutes in a phone queue, they cut you off, when you get through they ask you to write a letter - a letter! - and then they backtrack when they accept you're correct. It's just a giant waste of time and resources... Council people are very stupid, the role attracts the stupid.

A landlord can avoid any such issues re. council tax by granting tenancies of at least six months that continued periodically on a contractual basis, rather than just a fixed term which then give rise to statutory periodic tenancies if the tenant stays beyond the fixed term. Whether CPT vs SPT potentially brings up other issues such as relating to notices is a different consideration.

Like I said in my first reply. If 31 January 2018 was when a fixed term or CPT of at least six months ended, then the tenant is liable for council tax in law as the "owner". If that was when a monthly SPT ended, and the tenant wasn't actually resident, then the council is correct that the landlord is liable for that last week.

Yes, practical determination by the council of whether someone is a resident can be problematic, but it is nevertheless the law as it stand.

Quote from: KTC on August 06, 2018, 08:49:23 AMWhether CPT vs SPT potentially brings up other issues such as relating to notices is a different consideration.

Indeed.