Can I change the tenancy terms after finding out tenants are not students and paying Council Tax?

by Readers Question

14:05 PM, 16th May 2017
About 2 years ago

Can I change the tenancy terms after finding out tenants are not students and paying Council Tax?

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Can I change the tenancy terms after finding out tenants are not students and paying Council Tax?

I own a 3 bed flat which I rent out to University students on a single 12 month AST (the tenancy agreement asks for each person’s student id and place of study). On this basis the agreement states that council tax (along with other utilities) is the ‘Landlord’s responsibility’ as the property will be exempt from council tax provided all 3 tenants are full time students for the duration of the tenancy agreement.

This has never caused a problem as each year the different tenants have been given the exemption by the council. However for this year (the tenancy agreement runs from 25th July ’16 – 24th July ’17) I was notified only half through the tenancy agreement that not all 3 tenants were students, in fact only one of them was a part time student, one other did not start their course at all and the final one graduated in December.

None of this was made clear to me as the landlord until well into their tenancy agreement. Therefore the property is no longer exempt from council tax and as it is classed as a HMO from the Local Authority this liability falls on me as the landlord.

Obviously with the property and tenancy agreement being aimed specifically at students I have not factored in the cost of council tax into their rent. I have therefore had to foot the cost of the council tax for the duration of their tenancy agreement whilst asking them to reimburse me this cost (and to no avail at present).

Bearing in mind that the wording of the tenancy agreement is not ideal (there is no mention of notifying the landlord of change of circumstances and no longer being students), is there any way I could pass this cost onto the tenants e.g. amending the contract in light of their change of the status to non-students and increasing the rent due or deducting an amount from their deposits?

It is also worth mentioning that they have now paid in full for the whole tenancy period (ending 24th July 2016).

Josh



Comments

Romain Garcin

10:33 AM, 21st May 2017
About 2 years ago

There is a difference between the property and the tenancy/tenants.

Even if the property is let on a single tenancy to a single household the landlord may still be liable for council tax because the property itself "was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household" (to quote the exact wording of the law as quoted by Craig).

So, as mentioned by Craig, if that is what the council is relying on then Josh has to show the council that the property does not in fact meet that condition.

Steve Hards

15:21 PM, 22nd May 2017
About 2 years ago

Hi Josh, did you really believe what you wrote in your first sentence of the post "the property will be exempt from council tax provided all 3 tenants are full time students"? If so, no wonder you got into a tangle with the wording of the tenancy agreement.

ALL properties are subject to council tax, but it's the students who, individually, have exemption from paying it for the duration of their courses. The day they finish, for whatever reason, they become liable to pay. In addition, if only one of several students ends their course, he or she becomes liable for the full amount due on the house, less any 'sole occupier' discount, while the others remain exempt. Of course they will be up in arms about suddenly having to pay unless you have made the situation clear to them from the begining.

It then gets more complicated if the tenants are not on a shared agreement and the landlord's responsibility for council tax room-by-room in an HMO kicks in, but that has been well covered by other commenters here.

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