Who’s Responsible for council tax

Tenant gave notice but left 3 weeks early, and gave me back keys.
Contract was statutory periodic.
Who’s responsible for the council tax from the day they left until the last day of the tenancy?
New tenant didn’t move in until after that time.

Found the answer…

Council Tax and Periodic Tenancies

For a tenancy with a fixed-term of at least 6 months, the tenant will be liable for the council tax for the entire time they are in that contract.

If, upon expiration of the fixed-term of the contract, the tenancy continues as a contractual periodic tenancy, then the same rule as above applies and tenant will be liable to pay the council tax until the end of their notice period (even if they leave the property before the end of the notice period). This is because they are still in that original contract which is at least 6 months long.

For a statutory periodic tenancy, because a new contract is created upon the renewal of each period, which if rent is payable monthly as is most commonly the case would result in a term of less than the required 6 month rule set out above, the council can pursue the Landlord directly for unpaid council tax.

The landlord will become legally liable for the Council tax if a tenant under an SPT leaves the property to live elsewhere.

The tenancy agreement usually makes the tenant contractually liable for the CT for the duration of the tenancy, so if a tenant abandons the property, the landlord can normally sue them for the unpaid CT or deduct it from their deposit. However, from what youve said its not clear whether you accepted the keys as an early surrender of the tenancy, in which case the tenancy would have ended and the tenant would have no further liability unless you both specifically agreed otherwise.

Thank you David.

In regards to the surrender, it was a case of “wanting them gone”, so I basically accepted the keys when they offered them and took that opportunity. I didn’t want to put up any blocks. (Problem tenant).

So looks like I effectively agreed an early surrender? Nothing was discussed or agreed.

when you get the keys back you are liable

You may be able to argue that you just took the keys for safe keeping if you left the property as it is and didnt “re-take possession”. However, the loss of rent for the intervening period is probably more than the value of the Council Tax, so I wouldnt recommend that.

“Think back Mark” when they offered you the keys you refused to take them as there could be outstanding debt but they became very rude and threw the keys at you and you had no option but to pick them up.
If you explain this to Council Tax and provide them with a forwarding address if you have one then they will probably come down in your favour.

1 Like

No, the Council is bound by the legislation hierarchy of responsibility and have to charge the landlord. The landlords only option is to get it back from the tenant through the contract.

the landlord is the easiest person for the council to get at.

This is the first time I haven’t informed council of tenant leaving and new one moving in. I know new tenant has advised of their move in date. I’m curious to see if they bill me If I say nothing. (I’m sure they will!). I wouldn’t be that surprised if previous tenant didn’t inform them, they barely paid council tax and were being chased for arrears.

That’s uncanny, were you there?! :grin:

It depends on the council. Derby give a 100% discount for up to 28 days empty and then charge 100% after that. I suspect it is not worth their while setting up and account, raising a bill and chasing payment for a week’s worth of council tax between tenancies.

Hope you find this interesting.
New Council Tax Liability Judgement
The judgement on the Leeds City Council V Broadley EWHC 2016 case was released last week. This High Court decision relates to the “person” deemed liable for council tax, when the property is physically unoccupied but a periodic tenancy still remains in force. The court decision clarifies the position about which party, either landlord or tenant, holds the ‘material interest’ and is therefore liable for council tax.

The Judge agreed with the reasoning behind the landlords defence and held that the ‘wording’ of the agreement still allowed for the council to pursue the tenants for council tax even though they were no longer resident. The importance of the fixed term then continuing as a monthly periodic was the key to the landlord succeeding. Unlike a statutory periodic tenancy, a ‘continuation’ periodic tenancy after the initial fixed removes the risk of a landlord being liable for council tax when a tenant leaves physically earlier than the legal ending of the tenancy itself.

We are pleased to confirm that our landlord agreement meet the above term and as such our landlords should be able to counter any claim for council tax liability made in the above situation. Obviously the council may still try to challenge any refusal to which we suggest a reference be made to the above High Court Case. Unfortunately as with all cases of this type there is the potential for it to be escalated to European High Court of Appeal for a final judgement, so it is advisable to keep up to date with the latest judicial changes and seek the relevant legal support to fully back up and challenge if not accepted by your local council.

2 Likes

This is in our agreement hope it helps.
3. The Tenant HEREBY AGREES with the Landlords as follows:,

3.1 To pay the rent at the times and in manner specified and in the event of vacating the Premises before the expiry of the Term the Tenant will be liable for the rental costs for the remainder of the Term.

3.2 (a) To pay any Council Tax levied on the occupier or owner of the premises.
(b) To pay as and when they fall due all charges for the telephone and for electric light and power and water and gas (where applicable) which shall be consumed on or supplied to the Premises during the Tenancy.

I’m not aware of any recent judgement in the case of Leeds v Broadley. As you say, it was concluded, at least for the time being in 2016 and the crux of the matter was that a contactual periodic tenancy, where the periodic element is continuous with the initial term, was held to satisfy the requirement for a term of at least 6 months and hence make the tenant legally liable in absentia. A statutory periodic tenancy doesnt achieve this because it is a new tenancy when it arises and each month is effectively a new term.

For this reason, most of the template tenancies now available from the likes of the NRLA, Tessa Shepperson and even Openrent, (I understand) are now Contractual Periodic by default.

1 Like

Lucky Derby, although at 28 days, it’s still far less than the old 6 months vacant allowance at zero tax.
Yet another easy money making hit on the PRS by the Councils.

1 Like