tenancy agreement dispute - liability for council tax arrears from 5 years ago

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    tenancy agreement dispute - liability for council tax arrears from 5 years ago

    So in 2014/15 I was a tenant in a flat in a house converted into 9 studio flats. The tenancy agreement stated that rent included all bills including council tax. I understand it is not standard for rent to include council tax if it is a single occupant dwelling but at the time I did not question it. It turns out the reason it was included was because the council were not aware of the conversion and the landlord was paying council tax on the house as one single HMO. Eventually the council found out and after having changed the bands and created the individual flats on their system they are now chasing all the lost council tax for the last 6 years.

    My old landlord tried fighting this with her lawyers in the court but lost, now she has given the names of all the residents from the years in question to the council and told them to chase us for the debt, despite the tenancy agreements that were in place.

    The landlord has told me the council "changed the law" when they changed the bandings and it affects everyone. A tenancy agreement is a contract but she says it no longer applies due to the change in the law.

    The council can't and won't intervene in disputes between landlords and tenants over liability for council tax. All they are concerned with is the landlord has now provided proof that I lived there and they are now coming after me for the debt as a resident tenant is always automatically liable above a non-resident owner.

    She has told me to challenge it with the council and/or to ask the council to write it off but I do not want to do anything that is going to affect my credit rating.

    Is the tenancy agreement worth the paper it is printed on here? She is very stubborn I know she will refuse to pay it all the way to courts as she has already with the council. The difference is I cannot afford to fight it. It will probably cost me more in legal fees than if I just pay the damn bill.

    Is there anything else I can do or am I basically screwed?

    #2
    As far as the council cares, you were the resident at the time and thus you are responsible for any council tax owing. It will not matter to them at all what your tenancy agreement said about what bills were included.

    So as it stands right now, you are going to have to speak with the council and come up with an arrangement to pay the outstanding amount.

    However, you then have legal recourse against your landlord. You can use the tenancy agreement to take the landlord to small claims to claim this money back again. This is going to be a pain for you for the next little while.

    Comment


      #3
      Thanks. What beggars belief is the landlord is painting herself as the victim of the council here when she was clearly just dodging council tax for years. My advice to any renters with council tax included in the rent now would be to check on the online council tax valuation list to ensure your property is included.

      Comment


        #4
        You're going to have to work out a deal with the local authority and sue the landlord.
        It might be worth involving a solicitor to try and do a deal with the council and to really go for the landlord.
        Or confirm that there's no point.

        Local firm will usually have a free 10-15 minute session to see what's what without charging anything.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          I feel for you, especially given that this is the almost the flipside of the exact mechanism via which tenants regularly ride roughshod over landlords involving Council Tax.

          Does the landlord have assets still? I cannot see how you will lose if you take it to court (presuming you can prove the tenancy agreement was what it was). But you do need to pay the tax yourself in the interim.

          Comment


            #6
            Originally posted by AndrewDod View Post
            I feel for you, especially given that this is the almost the flipside of the exact mechanism via which tenants regularly ride roughshod over landlords involving Council Tax.

            Does the landlord have assets still? I cannot see how you will lose if you take it to court (presuming you can prove the tenancy agreement was what it was). But you do need to pay the tax yourself in the interim.
            Yes the landlord still owns and lets out the same £2m three-storey Victorian terrace broken up into 9 shoebox studio flats, so I imagine there are 8 other former residents out there getting the same letter from the council.

            Thanks for the advice.

            Comment


              #7
              As many experienced landlords on here will tell you "You cannot contract out of the law".

              Council tax liability is set out in law. Any tenancy agreement including council tax liability in with bills (other than lodgers and HMOs) is going against this. Hind sight is 20/20 but agreeing to any such arrangement even if there wasn't a change to bandings opens tenants up to landlords building up arrears or even claiming refunds after payment as they are not legally liable.

              Did you by any chance inform the council of your move into the property? Preferably by email or other confirmable means? Even when moving into a HMO or lodgings where you would not be liable, you should still be informing council of residency.

              It's a longshot but from experience, if you could prove that you informed them you moved into a flat they should have informed the valuation office agency (responsible for bandings) and billed you much sooner. Council's are required to bill as soon as practicable and not doing so is a strong argument against such a back dated bill but only if you can prove they should have been aware of the situation.

              Another note (although I'd recommend against not paying) council tax arrears are not reported to credit reference agencies, even after a liability order is granted and bailiffs appointed. The only time Ctax liability affects credit ratings is through forced insolvency and this is incredibly rare due to costs involved Vs benefit to the council.

              Another point, what did the tenancy agreement say (if anything) regarding the property? I assume it was for a 'property/ flat' rather than a room with communal area access?


              Edit: there has been no change in the law / hierarchy of liability for council tax in the last year. This argument is bull and is not a reason that could void the contract.

              Comment


                #8
                Originally posted by Finalv View Post
                Another note (although I'd recommend against not paying) council tax arrears are not reported to credit reference agencies, even after a liability order is granted and bailiffs appointed.
                That's all very well, other than the slight issue that non-payment of council tax is something one can be imprision for.
                I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                I do not answer questions through private messages which should be posted publicly on the forum.

                Comment


                  #9
                  Originally posted by KTC View Post

                  That's all very well, other than the slight issue that non-payment of council tax is something one can be imprision for.
                  Correct, again I don't recommend not paying. Just pointing out credit file is unlikely to be immediately impacted.

                  Imprisonment for council tax takes some serious effort for a debtor.

                  Council's don't want to take that route for non-payment, it's expensive, bad for publicity and still leaves the debt outstanding. It does happen but it's absolutely the last resort. My experience ( although limited to one local authority) of six years in ratings was one or two cases we considered it but never proceeded. Forced insolvency is usually cheaper and gets rid of the problem for the council.

                  Comment


                    #10
                    Originally posted by Finalv View Post
                    As many experienced landlords on here will tell you "You cannot contract out of the law".

                    Council tax liability is set out in law. Any tenancy agreement including council tax liability in with bills (other than lodgers and HMOs) is going against this. Hind sight is 20/20 but agreeing to any such arrangement even if there wasn't a change to bandings opens tenants up to landlords building up arrears or even claiming refunds after payment as they are not legally liable.
                    That's just not true. You can have a contract that says tenant owes council tax for a period. They still owe it for that period, although not to the council per rules, but under contract.

                    So no, the tenancy agreement is not "going against" anything, and this is not an example of "contracting out of the law".

                    It it completely appropriate to make tenant liable for payment of Council tax.

                    Comment


                      #11
                      Originally posted by AndrewDod View Post

                      That's just not true. You can have a contract that says tenant owes council tax for a period. They still owe it for that period, although not to the council per rules, but under contract.

                      So no, the tenancy agreement is not "going against" anything, and this is not an example of "contracting out of the law".

                      It it completely appropriate to make tenant liable for payment of Council tax.

                      I have to disagree.

                      As a landlord you have no authority to charge council tax to anyone. The local government finance act gives that power only to authorised billing authorities (which is not even all council's).

                      You might be able to make a contract with the tenant that they will pay your council tax liability to you but not that they will be liable to the council. Therefore they are paying a contracted amount to you that you have deemed as a contribution to council tax. This is not a tax, you are not a tax authority and cannot levy a tax.

                      The council does not get to chose who is liable, they are required to follow the legislature on who to bill.

                      An interest in a property through a tenancy agreement can make a tenant liable to the billing authority, but not the wording in the agreement that "the tenant will be liable for council tax".

                      Comment


                        #12
                        That's just wrong sorry. You don't know what you are saying. It is evident that a tenant can be made contractually liable to reimburse council tax. But yes, the wording may or may not be important.

                        You can disagree all you like but it is still not the case.

                        Comment


                          #13
                          Out of curiosity if a person is living in a shared accomodation that include all bills which most of us usually be able to find from gumtree or the ads pasted outside the off licence shops. In that case whether the tenant still be liable for council tax?

                          Comment


                            #14
                            If you're sharing someone else's property, you don't normally become involved in council tax.

                            If several people share a property with the owner living elsewhere, they only become liable for the council tax if they're all on the same single agreement.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              Define 'liable'.

                              If the Council tax is not paid the Council will be able to prosecute the tenants.

                              The tenants will in turn sue the landlord.

                              If the tenants are lodgers then the order of sueing will be the other way around.

                              Comment

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