Council Tax legal advice – they say I owe £5,000!

Council Tax legal advice – they say I owe £5,000!

10:30 AM, 14th April 2015, About 7 years ago 10

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I have a Victorian terraced house that I let. It is a large two storey house with 4 tenants in individual rooms. They are all unrelated and have individual tenancy agreements.

Last December I received a call from one of my current tenants to say bailiffs had attended the property for an unpaid council tax bill. The name on the account was of a previous tenant who left a few years ago. I was confused as I currently had another tenant living in the property who had been in charge of paying the council for the house (or at least told me they had). I called the council to find out what was going on.

It turns out that no council tax had been paid for the last 4 years and the debt is around £5000. It also came to light that the tenant who told me they were paying the council tax had actually removed themselves from the account 4 years ago after briefly paying council tax for a few months. Apparently this was because another tenant moved in and had applied for housing benefit and a single persons discount. Apparently it all got confused and everyone forgot about sorting it out (I find that hard to believe). I couldn’t understand why or how the council had been chasing the previous tenant for 4 years without once contacting the property owner, me.

I was then informed that because I rent the rooms out individually, the council deems the property as an HMO in regards to council tax, and that I was liable to pay the bill in the first place. I was shocked as I had no idea. Prior to this situation, I had 4 students renting the property who were all exempt from paying council tax. They gave the council the exemption forms and my contact details etc, and it all was accepted without issue. This current situation began when one of the students moved out and a non-exempt tenant moved in.

Anyway, I appealed twice (it’s not worth going into) but the council rejected everything and now I have to pay back the £5000. Not nice at all. The council would still be chasing this guy if I hadn’t gotten in touch with them. Silly me?

I apologise for the length of this post so here is my question….

Would I be able to claim the money back from my previous tenants (just their individual share) for the duration of their tenancies? I spoke with a family friend who works in property law who told me I can because of the tenancy agreements all of my the tenants sign. I do also have the initial emails with new tenants and the adverts I’ve posted stating that I didn’t pay council tax. But I am still unsure.

The Tenancy Agreements I use are Assured Shorthold Tenancy Agreements. In them they state:

“The Tenant Agrees with the Landord:

To pay promptly to the authorities any share of monies due for water, gas, electricity, council tax (or any other tax that replaces council tax, sewerage and telephone.”

Do I have a case here or not? Any thought would be greatly appreciated.

Many thanks



by don haley

13:45 PM, 14th April 2015, About 7 years ago

knowing the law but the costs involved in enforcing it is another you could even be more out of pocket with legal costs now it was that the occupier was responsible for utility bills but that is changing and all council are not the same and can change things without notice that houses HMO the owner would be responsible thats why a lot of landlords include in the rent an amount for utility bills. unless you are sure you can get the money if awarded by the court the tenant would pay and if they on benefit that is most unlikely if they working then you would be able to get an order for a deduction of earning of there wages. and if you do proceed to go to court make sure all paperwork is in order else it will get thrown out and you will be at a disadvantage to if they get legal aid and you are not.

by Michael Holmes

20:17 PM, 14th April 2015, About 7 years ago

I think you are onto a loser here. The best course of action is to talk to somebody in the council who shows some semblance of common sense and try and work out a compromise agreement about the amount of council tax you will have to come up with. I am afraid they are right about the landlord being the responsible person liable for unpaid council tax, but with the circumstances being as you describe, you should be able to argue the sum down quite considerabley. Going after the ex-tenants through the Courts will be time consuming and if they put up a defence, quite probably futile. Another thing you have to consider, in the event of a court hearing. They are held in the jurisdiction of the tenant, not the landlord, so you will have additional expenses associated with any travel and accommodation. The judge or JP who deals with the case will in all probabilty not allow these against the defendant. Sorry to be the bearer of bad news, but it is better to cut your losses in some cases and I fear this is one of them.

by Kulasmiley

9:18 AM, 15th April 2015, About 7 years ago

I have fought and won the council on same issue. When you rented out the property on your tenancy it states that tenant is responsible so you can go after the tenant. That council you deal with may not have had the HMO rules in when your latest tenants moved in? The person on HBenefit would have had their ctax paid for by council so how come that wasn't sorted. The council made a mistake and there should be some discount for you. For ctax purposes councils use a different criteria so I think you do may have to pay BUT it's more like they're coming for you "after the fact" and after they billed the other tenant. I have been paying at £30 a month for similar problem, SO, go into council and negotiate, explain that you have limited funds and pay that amount. THEN you can claim all your ctax back as an allowable expense OFF your taxes at year end tax year, so it is all not lost. (It might even bring your tax bracket down).

by D F

14:08 PM, 15th April 2015, About 7 years ago

Thanks for your input guys.

To AA Properties, the council offered me nothing and wouldn't take any responsibility. They said I could appeal to the Valuation Tribunal but that can take months and no guarantee. How did you manage to convince them?

by Kulasmiley

15:56 PM, 15th April 2015, About 7 years ago

What you have to do is send a letter market Appeal. Then state your case based on what you regard as your tenants bill for ctax and the services your tenant received for paying his ctax. Wait for their reply. Do not admit.anything in letter. In their reply they should explain why they are charging you, ie HMO. That gives you the basis to fight their assumption. I did the same and explained that the tenant signed the tenancy to be responsible for ctax, but I had no HMO. You have to delay conciliation and by putting in official appeal letter they should stop everything. Then I would start going after the previous tenants for payment. Your main concern is when did council perceive your property as HMO and when can they apply to a that ctax??
Start an application this will put all a action on hold as well.

by D F

16:51 PM, 15th April 2015, About 7 years ago

Hi, it's too late for that. I did all of that and had it all rejected. I have already started a payment plan.

The council also said that any tribunal action wouldn't stop their request for the money until a decision was made and would only run alongside it.

I am looking into this as we speak but it could take months.

by Romain Garcin

17:16 PM, 15th April 2015, About 7 years ago

Hi DF,

"It is a large two storey house with 4 tenants in individual rooms. . They are all unrelated and have individual tenancy agreements."

This makes it beyond doubt that the property is a HMO for council tax purposes. Therefore the landlord is liable for council tax.

As you are the person liable in law, AND the easy target it is not surprising that the council behaves the way it does.
A payment plan would be the best you could get, IMHO. Unfortunately I think that this is completely discretionary.

You could in turn go after you tenants and ex-tenants for the money. However I think that your clause is rather weak, so the outcome would be far from guaranteed.

by Renovate To let

6:38 AM, 16th April 2015, About 7 years ago

Given you seem surprised that you have been running an HMO, do you have all the HMO legal and safety requirements covered, including planning and licencing if applicable in your area?

The council tax could be the least of your worries if not. Fines for HMO breaches can be large and lay you open to tenants' rent repayment orders.

by D F

13:09 PM, 16th April 2015, About 7 years ago

I was only surprised about the council tax. I have an HMO that doesn't require licensing in my area. Thanks

by Puzzler

12:23 PM, 18th April 2015, About 7 years ago

DF, it's so easy to be caught out, and I feel for you. However to all readers this is a salutary lesson - so often posters put on here that an agent is a waste of money (I'm not an agent and I know there are dodgy ones) but if you manage yourself, you really have to do a lot of homework. You have been caught out because you didn't know what you didn't know. There are websites and courses which explain everything.

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