Council tax demand and told every tenant should be on a fixed term AST!

Reply to the comment left by "David Price" at "13/11/2015 - 08:16":

It was a general definition I was looking for. I'm wondering what the pivotal point is that an SPT no longer becomes 'material' to the tenant.

TBH, I don't think councils understand the ins-and-outs of the ruling, just that 'their manager' has told them to quote it and that's that.

For council tax purposes what matter is what the LGFA 1992 says. In the drafting, "material interest" is defined as a "freehold interest or a leasehold interest which was granted for a term of six months or more" (see article I posted a link to above). So that's what it is when working out council tax liability.

A statutory periodic AST has always been a new tenancy. This is clear in the Housing Act, and was mentioned in case law before Superstrike.
What is important, I think, is the period of the tenancy. If it is 6 months or more then it is likely to meet the definition of "material interest" (though I am not aware of any case law as such tenancies are rare).

Thanks Romain for that and for the earlier link to your helpful article. I have learned some useful things from this thread. What a muddle the law is in. It would not have been beyond the wit of Parliament to provide that the tenant remained liable until the expiry of his periodic tenancy. We have the situation where by ceasing to be resident the tenant can throw onto the landlord the obligation to pay the Council Tax until the periodic tenancy ends.

Yes, the landlord may be able to recover from the tenant under a properly-drafted tenancy but why should the Council not have that responsibility and risk? There will be cases when tenants dispute or even lie about when they ceased to be resident and the landlord will have no means of proving precisely when the tenant ceased to reside. It is logical that liability for CT should follow the right to reside. After all the landlord cannot take back the property until the right to reside ends.

Reply to the comment left by "Ian Narbeth" at "13/11/2015 - 10:06":

Great post Romain,

My tenancy agreement templates are now updated to make the tenant and guarantor liable to me, if I am billed for their non payment of their Council Tax.

My agreements now have an automatic minimum rental increase of 5% pa and maximum of 25% increase pa now written in.
This is due to Clause 24, Landlord Licensing costs and now this case law.

I have explained the matter to a new tenant yesterday and the reasons why?
They actually agreed with my reasoning, which surprised me, but might not be so happy if I have to ramp my rents up next year by the maximum.

But it also gave me a bit of stress relief as I think holding back rent rises all these years has set me up for problems down the road, such as now with the arrival of Clause 24.

I wish I had done this rent increase clause years ago.
I anticipate rent controls sooner or later.

Now I have to do section 13's for all my existing periodic tenants.

Reply to the comment left by "Ian Narbeth" at "13/11/2015 - 10:06":

A muddle indeed! Probably not intentional, but it's a happy-accident as far as LAs are concerned because it means they're more likely to get payment out of a landlord...no point altering the law now to make their life more difficult!

As I said in my earlier post, I have even had tenants, clear for the world to see, still living in my property when they have told the Council that they have already moved out weeks earlier. The Council would not send anyone to confirm. The system is broken.

@Gary,

Out of interest, why did you set a maximum and why did you choose 25%?

Reply to the comment left by "Luke P" at "13/11/2015 - 11:12":

I suppose I still feel bad about increasing rents, as I haven't done it for so long. That's why placed a ceiling of 25%.

I have good relationships with my tenants, (well in my head I do), until they rewrite tenancy agreements in their heads, then I'm not so cuddly!.

I was happy with my profits, until Clause 24 was announced.
I'm now wishing I hadn't put off rent increases.

As I'm not used to racking up rents for several years, I wanted to show any new tenant that I have some scruples by setting a limit.

My mental limit appears to be 25% at this moment in time..

Reply to the comment left by "Gary Dully" at "13/11/2015 - 10:58":

Gary don't ever put yourself in the position of being liable for council tax, make sure your fixed term continues as a contractual periodic tenancy.

Reply to the comment left by "David Price" at "13/11/2015 - 12:03":

David, as I understand it, if the original tenancy was for a fixed term then by virtue of s5(2) Housing Act 1988 it becomes a statutory periodic tenancy when the fixed term ends.

Only if the original tenancy was a periodic tenancy - which many landlords will not want - will there be a contractual periodic tenancy.

Reply to the comment left by "David Price" at "13/11/2015 - 12:03":

As I said before, because the various councils likely do not understand the rulings on which they form their liability arguments, I suspect they would not understand a contractual periodic tenancy and dismiss it all the same.

What Ian said.

What Gary Price suggest is to create a single tenancy that begins with a term of say, 6 months, then _continues_ periodically from month to month.

As pointed out previously this is not really a "contractual periodic tenancy" but it does go around this council tax liability issue.