Council Tax and Rolling contracts

by Readers Question

21:18 PM, 18th November 2014
About 4 years ago

Council Tax and Rolling contracts

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Council Tax and Rolling contracts

I use a rolling contract for all my properties as my tenants are all local and tend to be long term, I have a 2 months notice period after the 6 month period and let the lease run on a rolling basis never had a problem doing it this way for 10 years.

However a word of warning, I have just found out that due to the changes in council tax law making us liable to pay the council tax from when the tenancy is up this only goes up until the end of the 6 month short Hold Tenancy agreement.

Believe it or not if the Tenant gives you notice at the end of the tenancy and does not pay the council tax it is the landlords responsibility because the tenant no longer has a Material Interest in the dwelling and if they do a runner even having given notice you are liable for council tax but you are not able to take control of the property until the notice period is up.

RayCouncil Tax



Comments

Neil Patterson

21:22 PM, 18th November 2014
About 4 years ago

Hi Ray,

I thought an individual/tenant was responsible for their council tax at their place of residence for the dates they resided there?

Rob Crawford

22:55 PM, 18th November 2014
About 4 years ago

There may be some variation between Local Authorities (LA). My understanding is that the tenant is responsible for paying Council Tax until the end of their tenancy term or when they no longer occupy the property (assuming they remain in occupation after completion of the notice period) which ever is the latter. A good point on which to seek clarification on with your LA though.

Ray Doyle

9:21 AM, 19th November 2014
About 4 years ago

Reply to the comment left by "Rob Crawford" at "18/11/2014 - 22:55":

Hi
The Tenant is responsible for the council Tax as long as they have aMaterial Interest in the property, unfortunately this is defines by case law as the 6 months of the Tenancy and does NOT apple to rolling Tenancy contracts.
Case law
Macattram v London Borough of Camden (2012). It was ruled that the periodic tenancy that arose after the fixed period was a new Tenancy or leasehold interest rather than a continuation,therefor Tenant does not hold Material Interest from that start date

Romain Garcin

9:54 AM, 19th November 2014
About 4 years ago

The tenant is liable to the council if he is a resident of the property, whatever the tenancy. So as long as he lives at the property all is fine.

But if the tenancy is monthly periodic, as soon as the tenant moves out he ceases to be liable to the council (that's what was clarified by case law above) even if the tenancy continues.
In such case liability for CT falls back onto the landlord.

It's therefore quite important to have clause making the tenant liable to the landlord for the whole duration of the tenancy in the tenancy agreement.

Ray Davison

10:52 AM, 19th November 2014
About 4 years ago

@Romain

Once again we discuss this. If a tenant advised the council that they have moved out when they have not or have maybe partly moved out - maybe to a girlfriends or another property,, how do you convince the council that it is still there main residence?

LVW4

10:54 AM, 19th November 2014
About 4 years ago

I have heard of this problem, and agree with Romain.

I have an additional clause in my AST where I am managing the property, but that does not mean they will pay the CT. It just means I can take whatever they owe from their deposit, or try to take them to court. However, where I have agents, it is another matter to get them to put in additional clauses to their AST, so when they ask if I want to renew the tenancy or move to periodic, I will state periodic, but only on condition the tenant remains responsible for the CT for the duration.

matchmade

12:43 PM, 19th November 2014
About 4 years ago

Reply to the comment left by "Lou Valdini" at "19/11/2014 - 10:54":

Would Lou or Romain like to contribute here the exact wording of their clauses, so we can compare and consider using them ourselves?

LVW4

12:54 PM, 19th November 2014
About 4 years ago

Reply to the comment left by "Tony Atkins" at "19/11/2014 - 12:43":

This is what I've added to my AST, but (fortunately) haven't had it challenged:

"4.2.1. If, at the end of the Term, the Landlord grants to the Tenant a contractual Periodic Tenancy, the Tenant agrees to continue to pay the Council Tax or any tax replacing it payable in respect of the Property. For the avoidance of doubt, this means the Tenant remains liable for paying the Council Tax or any tax replacing it payable in respect of the Property, until such time as the Tenant vacates the Property at the end of the required notice period for the Periodic Tenancy.

I hope it's useful, but would welcome anyone who can offer a view of its legal standing.

Recardo Knights

13:38 PM, 19th November 2014
About 4 years ago

Is this another loophole in favour of the tenant. It's bad enough that most councils demand the LL pays c.tax on a void although no services are received on empty property. Everyone wants LLs to provide nice homes but spend 3,4,5,weeks refurbishing and they want their council tax while the property is empty.

I always understood that when rolling on to a periodic, the terms of the ORIGINAL AST remained. The terms of the AST states the tenant is responsible to pay Council Tax, and all utility bills while living in the property.

matchmade

14:00 PM, 19th November 2014
About 4 years ago

Reply to the comment left by "Lou Valdini" at "19/11/2014 - 12:54":

Lou, my only comment is that this doesn't over you for the eventuality raised above by Rob Crawford, i.e. if the tenant remains in occupation after the end of a notice period, having refused to vacate. Arguably your clause should stop at "vacates the property" and make no mention of a notice period.

The wording I came up with before seeing Lou's version is "The tenant agrees he or she is liable for council tax for the whole period of their occupation of the property, whether this is during this tenancy's fixed time period, or if the tenant continues in occupation and moves to a Periodic Tenancy, or if the tenant remains in occupation after the completion of a notice period."

I didn't bother with any wording regarding a possible replacement for council tax because there's no sign of the Government introducing one and I could always insist at a later date that the tenant takes out a new AST with revised wording if a change were made.

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