Appealing valuation from single to five dwellings?

by Readers Question

15:05 PM, 15th March 2019
About 4 months ago

Appealing valuation from single to five dwellings?

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Appealing valuation from single to five dwellings?

We have a small HMO of 5 rooms in Stoke-On-Trent. Recently the Valuation Office has brought our property in as 5 separate hereditaments. The property has been regarded as a single dwelling until 5 months ago, with a tax for the entire property, now 5 times higher.

We have got the HMO license, but 3 out of 5 rooms are on the verge of what can be approved (10m2). 2 rooms are slightly larger about 13m2 and 18m2. All rooms have a minimal en-suite and a small fridge, but no possibility to cook. We have had a hard time renting out due to reduced demand and small rooms and a small shared kitchen. We have had an occupancy of about 3.5 people over time in 5 rooms. The tax must be paid regardless of whether we have tenants, they say. The house has a value of approximately £85,000.

The valuation office made the change without contacting or notifying us, so we had no opportunity to question or give our opinion. We have tried to make contact with them to discuss whether it is reasonable. The Council does not want to discuss or show us the basis for the assessment. They do not allow us to talk to the person responsible. We have submitted, by email, an appeal. They refuse to answer if it is accepted as formally correct, although I have emailed and asked 3 times.

Does anyone have any similar experience or advice on what we can do? Any idea if we have a chance to have our appeal approved?

Ulf



Comments

Neil Patterson

15:08 PM, 15th March 2019
About 4 months ago

Hi Ulf,

I found the Valuation Tribunal Service >> https://www.valuationtribunal.gov.uk/your-appeal-type/council-tax/

Rob Crawford

17:13 PM, 15th March 2019
About 4 months ago

Why fridges in the rooms? I wonder if the fridges were not there, the vo may have left the council tax as was. The fridges and small communal spaces could be considered as encouraging eating in the room.

michaelwgroves

9:12 AM, 16th March 2019
About 4 months ago

This is a worry for all HMO owners. You should research what defines a room as having its own council tax banding. Then consider removing those items to return it back to a room.
Remember it’s got nothing to do with council, you must progress with VOA.
Please post back with your research.

Rob Crawford

23:20 PM, 17th March 2019
About 4 months ago

Hi Ulf, you need to read this VOA page, scroll down to Code of Practice, Visits and Branding of HMO's: https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed also: https://www.landlordlawblog.co.uk/2018/10/25/valuation-office-agency-odds-enforcing-agencies/
Essentially, if you have provided an en-suite and then you added anything else making it seem a self-contained bedsit then it's likely to be CTax banded as such. If you supply a fridge in the room you are encouraging the tenant to maybe provide his/her own kettle and maybe a portable hob (£35 from Ikea!) that can be hidden in a drawer....a kitchenette! I see many purveyors of rent-to-rent who adapt properties to get a maximum return. Heavily adapted houses that were once family homes, they really are pushing the boundaries and VOA are wising up to this.

michaelwgroves

11:24 AM, 18th March 2019
About 4 months ago

Rob, Thanks, some good links. I read these in their entirety, which lead onto further reading. Of particular interest is practice note #5 https://www.gov.uk/guidance/council-tax-manual/council-tax-practice-notes#practice-note-5-disaggregation-of-dwellings
Which reads:
"d) The degree of structural adaptation. This is the only measurable element of the legislation. The greater the degree of adaptation towards self containment, the less likely it would be for discretion to be exercised and vice versa. Adaptation will vary merely from the provision of a separate lockable door to full self containment with kitchen, WC and washing facilities. In judging the degree of structural adaptation, care should be taken in considering whether a ‘kitchen’ exists as a result of significant structural changes or just use of a sink with typical white goods and moveable furniture one may find in a kitchen, which are actually chattels, eg fridge, cooker, microwave, kettle, tables, chairs etc. Imagine the building empty and cleared of furniture and moveables – would the facility clearly constitute a kitchen or kitchenette?"
Test cases typically talk of bricks and mortar, that being the fundamental rule of the legislation. Shared electric and access to other shared facilities appears irrelevant. If the room is self contained it will be banded. In my case I have no on suit, so this is helpful but not definitive. I am in the process of installing kitchenettes', so I will be careful not to infringe above. I'm thinking a kitchen sink, freestanding fridge and microwave. Therefore as above, merely removable white goods, nothing structural. Although this guidance not is not making a statement, more asking a question, so it's still not clear, but at least you know what the Valuation Officer is looking for.

Rob Crawford

12:21 PM, 18th March 2019
About 4 months ago

Reply to the comment left by michaelwgroves at 18/03/2019 - 11:24
Seriously! I would not install a sink, fridge or microwave. Or at least speak to VOA first and confirm your ok before spending money. Also, consider, a sink in a room without a WC! Guess what that will be used for?

michaelwgroves

12:39 PM, 18th March 2019
About 4 months ago

Reply to the comment left by Rob Crawford at 18/03/2019 - 12:21
In a small HMO I would agree completely, but unfortunately in a larger HMO this decision could be taken out of your hands. Suppose a 10 bed HMO with a single kitchen. HMO Licence might limit 5 rooms per kitchen. So do you lose a room for an extra kitchen, or put 5 kitchenettes in. In reality it's never straight forward, so you should consider all options before installing a kitchen, kitchenette or something you hope is not considered either!

Rob Crawford

13:18 PM, 18th March 2019
About 4 months ago

Reply to the comment left by michaelwgroves at 18/03/2019 - 12:39
But the subject question relates to a small HMO - hence my response was for that and not larger ones - in that respect I agree with you.

Heather

16:07 PM, 18th March 2019
About 4 months ago

Hi! I am also in the process of being 'knobbled' by the local authority. For anyone else out there in the same boat, it seems there is someone in the council trawling tho ads, and my letting agent unwittingly advertised one of my bedsits as 'self-contained' As it happens, I had just refurbished a bedsit, with new kitchen area, and by chance, it aquired, what was originally a shared shower room, as it's own, thereby making self-contained. I am happy to hold my hands up and say this is a flat, although it shares gas central heating with the rest of the house and washer/drier in the cellar. However, the inspector who is due to visit from the council this week informs me that not only would this be classed seperately for council tax, but the remaining 7 (small) bedsits, all of which have their own kitchens (when I originally converted the house some 26 years ago I was given a booklet by the council indicating space standards for bedsits; 2 ring hob, a metre of worktop etc etc, which I adhered to) and some now have their own showers, tho all share toilets. Speaking to my local council in Lincoln where I have another HMO (which is not where this HMO in question is) as far as they're concerned it's clear cut; unless it is self contained, i.e. has it's own kitchen , shower or bathroom, including toilet, it's not a flat!
I've had the house 33 years, and still have a way to go on the mortgage. My plan was always to keep it, especially as it was my first house, and to leave each of my 4 children a house a piece, but now it looks like I'll have to sell because it's no longer viable. I charge £350pcm for a small bedsit with kitchenette down one wall and a small shower cubicle off. Can you really see that a tenant would be willing to pay Band A council tax on top, even with single person discount? NO!!! So the landlord takes another hit!!!
My problem is with the way this is being rolled out in a very underhanded way...my agents deal with hundreds of landlords with properties such as mine, and tenants who live in them, and yet they say they have never (yet) come across this problem. Am I the first? Why am I being singled out? My friend down the road has a very similar property and has recently had his HMO inspection. They were happy to renew his licence on the basis there were 7 'bedsits' though 1 was a 'flat', like mine. Why does the Council simply walk across to the Private Sector Housing dept and get a list of all landlords with HMO's and knobble the lot all in one go....probably because it would be in the national press and there'd be uproar!!!
Finally, if this is the way things are going because Councils are skint, I can understand it. However, the definition of a flat or bedsit needs to be more clearly defined across the board, and not this moving of goalposts all the time. Secondly, maybe there should be another tier, or even 2 more tears under band A to take account of bedsits that are nearly but not quite self-contained flats, and also shared houses. As it stands it's simply not fair, and after all this it looks as if I'll have to sell up...very sad. H

Harlequin Garden

16:41 PM, 18th March 2019
About 4 months ago

The bottom line is that if someone can live in there independently then you are liable for council tax. It doesn't matter that it is the size of a postage stamp - it doesn't even have to be fully self contained, I had two valued who shared a bathroom on another floor - the valuation officer came in without my knowledge and the first I heard was when the bills came in for each unit with very odd 'addresses' - 'first from middle' for example when there is only a left and right, when I queried it I was told that they were entitled to come in so tough - they hadn't seen the units, they refused to tell me where they had the information (incase I subjected my tenants to harassment which as it's their bill not mine isn't going to happen and I've never 'harassed' a tenant) and it was a guesstimate to the value so a couple were not even at the lowest level! I argued the case on size, history but the end result is the same, if they decide it is a liveable unit then it is, The valuation officer by her own admission had not visited the 'rooms'. I stopped arguing when she said that she could go back 7 years in back council tax. It is a very hard concept to take on board, I'd listen to it then say 'tell me again?'

Irritatingly I had also just renewed my HMO license at vast cost - I called my HMO man who was as mad as hell saying that they are crying out for low cost housing the in borough then they 'go and do this'. He said that to get it back to HMO status (have to confess it had some changes over the years) - it would be more than taking over one room for a kitchen and disconnecting kitchens in other rooms. It was licensed with room and kitchen, they now had mostly own small showers, not all. But a return trip is tricky, he did explain and it made sense at the time.

It was an absolute nuisance, fortunately the tenants were very good about it, my rents weren't high and I dropped them a little and put a couple of communal routers in - if they can save £25 on their wifi package which most have I felt it would help - the council tax they had to pay for what was essentially a small bedroom was between £80 and £100 as it's a high spending high charging labour London council - this is as much as my own property which is very valuable (because I'm old and worked for it) in a conservative low taxing borough - it is senseless.

During my conversations I brought up the 'victimisation' and was given a long list of other properties that had been hit with this latest tax nearby.

Surely council tax is to pay for your services in the borough, this isn't fair when one house suddenly pays 10 x - bring back the pole tax I say it was the fairest system but didn't appeal to those who had never paid and probably still don't. No one said life was fair.

The annoyance of course is that this debt is yours when the place is empty - tenants are quite vague about filling in forms, or getting around to signing up on line and I found I was paying £20 here, £50 there because they had guessed their tenancy date frankly it is too much trouble to question it and send in their tenancy agreements and because of the way they were named, total confusion over the name of the room - and led astray by the array of names for this one property, with middles/mezzanines/upper/lower. I did suggest that it would have been a lot easier to have called me and we could have done this together but it seems they prefer the awkward way - as does Environment Health by the way, they much prefer to just turn up and have someone call you from the property, they then accuse you of 'denying access' when you suggest an appointment would be much easier as they can then have access to all rooms (another little issue I'm having!)

Don't even think of upgrading now - you'll have building control to contend with.

I've just sold this and the landlord has given it to a housing agency for disadvantaged/problem/previously homeless people, it is now an absolute hellhole - no cleaning, no maintenance, mattresses out the front, drunkenness and worse going on - and the council are not in the slightest bit interested - and he claims maximum rent as they are all on benefits so around 70/80% more than I was charging and perfectly happy with - one rule for one ....

Landlords are being hit now from all sides - we are the new used car dealer it would appear.

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