Council Tax responsibility

Landlord Discussion Legal
1

I have received the following communication from my local council in reference to the council tax liability I claimed my tenant was responsible for when he failed to give notice to end his tenancy and posted me the keys on the 16th June 2023
As a result I served him with a notice of implied surrender of 08/08/2023 which coincided with the end of his sect 21and sect 8 notice.

As I see it this contradicts the liability for unpaid rent for the same period ?

I will be taking legal advice on this matter, but i’m curious to know how others view this ??

“I am writing regarding the situation at the above property since 16 June 2023 in relation to who is liable for Council Tax purposes from that date.
Thank you for the information and email exchanges you have provided, including the tenancy agreement which is very important for establishing liability under Council Tax legislation.

I have referred to our professional body, the Institute of Revenues Ratings and Valuation, to ensure the account is dealt with in line with Council Tax legislation, namely Section 6 of the Local Government Finance Act 1992.

For Council Tax purposes the issue is when the tenant’s ‘material interest’ ceased. From looking at the tenancy agreement it was a fixed term of 6 months covering 9 April 2022 to 8 October 2022 then continuing as a monthly contractual periodic tenancy. So unless there was a continuation provision in the “Term” in the agreement, it ceased at the end of the Term, 8 October 2022 and thereafter became a rolling periodic tenancy. If this isn’t the case and a further fixed term was agreed please let me know.

Once the tenant no longer has his residence in the dwelling, the landlord becomes liable for Council Tax as he is then the only person with a ‘material interest’. With effect from 16th June 2023, the dwelling had no resident, so it is the liability of the ‘owner’ in accordance with S.6(2)(f), 6(5) and 6(6) of the Local Government Finance Act 1992.

The reason the type of tenancy is so important is that we have case law that establishes who is liable, namely MacAttram v London Borough of Camden (QBD) 2012 and Leeds City Council v Broadley (QBD) 2016. Under Macattram if the tenancy has become a rolling periodic tenancy following a fixed term, then the owner is liable once the property becomes vacant. If a fixed term tenancy is in place, then under Broadley the tenant is liable until the end of the fixed term.

I can see from the communications that you have had with the tenant that things have been very difficult and I realise this isn’t the outcome you were hoping for, but the liability for Council Tax remains with you from 16 June 2023. In order to assist with the amount owing, I have reset the instalments due from 1 October 2023 to 1 March 2024 and a revised bill will be sent out shortly.

If you have any further query please contact the Council Tax department.”

Kind regards

2

A Contractual Periodic Tenancy is generally periodic from the start, although it can have a longer initial period, (eg 6 months continuing monthly). Such tenancies dont end when the initial term is up, but the same tenancy rolls on. In that way, provided the initial term was at least 6 months, the tenancy meets the 6 monthly qualifying condition for the tenant to retain CT liability even if they move out. This was confirmed by the Leeds vs Broadley case. This is in clear contrast to a Statutory Periodic Tenancy, which is a new tenancy, separate from any fixed term that came before it, and usually monthly, so doesnt qualify and the landlord becomes liable if the tenant vacates, whether or not the tenancy has ended.

In another recent post I mentioned the confusion that can arise when a tenancy contract uses the language “fixed term” and “initial term” to describe the same first period of the tenancy. I suspect that this is what the Council are picking up on here. It may not be clear from the language used in the contract that the tenancy satisfies the conditions of the test case I mentioned.

I would write back to them and say that the tenancy clearly states that its a CPT and therefore Leeds vs Broadley applies. They might accept this rather than go through a court case, but if they dont, you would either have to pay the CT yourself or get specialist legal help to fight it.

3

Thanks David,

I will respond as you suggest, it is only two months CT but it is the principle for me that irks and I absolutely intend to challenge it.

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4

You could also try to recover the costs from the tenant if you have to pay it as its likely that they are contractually obliged to pay it until their tenancy ends. Of course this may be more hassle than its worth unless you still have their deposit.

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5

David

Thanks to you I have sent a response to the council in the first instance. I await their response and will make a decision how to proceed on their reply.

The deposit is currently under dispute and with the adjudicator. The tenants rent arrears alone are currently more than the deposit without even taking damages and deductions into account.

Once a have the final debt amount I intend to file a MCOL to recover all outstanding debt.

6

Thanks to your help David 122 My council tax department have just confirmed they were mistaken and my ex tenant is in liable for the two months council tax.

So thank you once again
Lynn.

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7

@Lynn1 you’re very welcome and congratulations on a very good outcome.

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8

Well done @Lynn1 , frustrating and unfortunately typical that the council should try and get the landlord to pay. @David122 , with regard to the renter’s reform Bill proposal to do away with 6 month ASTs , will this mean the Landlord is always liable for CT if a tenant vacates a property in the same circumstances as outlined in this case ? Thanks in advance.

9

i think you are right about the council tax…A good point ,…landlords stitched up again

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10

Yes, thats my reading of the RRB as it stands and its one of the comments I made in my response to the proposals some months ago. I also dont sense any political will to address that issue. Its possible that in the longer term landlords will be forced to charge a rent inclusive of CT and pay it themselves.

11

Thanks for that @David122 I think RRB will have many initially unseen consequences for LLs further down the line. Much food for thought.