Renting and Council Tax

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    Renting and Council Tax

    Hi everyone, I really need some advice!

    My patner and I have been looking for somewhere to rent, and we wanted to rent privately (reasons being we are temping and recently my partner has been doing freelance work and only has accounts for the last 5 months so on paper our incomes dont look great so agencies are put off...) I found a house for rent that the owner was renting out on a room by room basis (3 bed) while he works abroad, now we have said that we would like it for a minimum of 6 months which he is fine with. He said he only wants £400 a month (to cover his costs abroad, which he told us he isn't planning on returning to the UK and that us renting for a longer term would be benificial to him) and that he will pay the council tax. Now this I am wondering if it is ok to do and is it in fact legal?!

    It seems that its a really good deal for a couple looking for their first place to rent but I am not sure if its going to be 'above board'? He said something about keeping everything in his name (council tax, utilities) to avoid being taxed on rental income. Which is fair enough, but is it legal and would we be likely to get into any sort of trouble?

    Any advice would be much appreciated!

    Originally posted by cazlrx View Post
    He said something about keeping everything in his name (council tax, utilities) to avoid being taxed on rental income. Which is fair enough, but is it legal and would we be likely to get into any sort of trouble?
    No, he has to pay tax on his rental income and by keeping everything in his name all he is trying to do is avoid a paper trail which would indicate that he is letting his property. Doubtless he won't be telling his mortgage lender or insurance company either.

    You'd need something concrete from him that he's paying your council tax, otherwise if he didn't pay it you would be responsible; otherwise I can't think of any specific comeback which there might be on you - others here may well; but whatever, clearly he's an unprofessional landlord who's not interested in doing things properly so that might indicate to you what sort of a landlord he'll be. Caveat emptor, and all that.


      Yes I see what you mean, he did mention the following though:

      He said he would stay at his sisters if he were to come home at any point, as apparetly he has stayed there in the past before. He originally bought the house to rent out and lived with his girlfriend. He had tenants in, presumably as let out properly as he said he charged them £500pcm..(I am presuming he doesn't have a mortgage as he only wants £400 pcm to cover his costs abroad - he admitted that he just wants a bit of extra cash, not an income.)

      They then split up and he moved into his sisters until the tenancy was up and then moved into the house. He then got work abroad and decided to rent the house out on a room by room basis (but now we said we wanted to rent the whole house for 6 months+ which he agreed to) and is planning to stay abroad for the forseeable future. So from all this, he seems geniune, he just wants some cash and the house looked after by someone or am I being totally naive?!

      It seemed like such a good deal at the start as we seemed to be helping each other out but now I am worried and confused about the amount of questions raised! I am thinking the only real problem is the fact that we wont be able to prove our residency once we leave, say we buy a house, what would happen there?


        Originally posted by cazlrx View Post
        I am thinking the only real problem is the fact that we wont be able to prove our residency once we leave, say we buy a house, what would happen there?
        Well if you apply for a mortgage you'll just be asked on the application form where you were living, you'll write down the address. Nobody's going to ask for 'proof'. All that will happen is that during the credit checks the lender will compare any addresses you've given against the electroral roll for those addresses, and you'll score lower if you don't appear there (plenty of people don't, although they are supposed to). So if you have a borderline credit rating it might affect you - however, is the LL saying that you wouldn't be allowed to put your name on the electoral roll? That's separate from council tax - the council aren't going to be bothered about it providing the CT is paid.

        One other point about council tax I thought about - presumably the LL gets a single person occupancy discount if he 'lives' there alone. But if you and your partner move in you won't be due that, so if he takes the correct amount for CT from you, then your LL would be defrauding the council as well as the Inland Revenue. Another reason to ensure you've got everything in writing, or the council will be after you by default.


          I think what your position would be, is that of lodgers - so if you pay him through a bank (cheque or bank transfer) and thus in case of problems you can show that you HAVE paid rent to him, you should not need to worry.

          lodgers' rent normally covers council tax too, and as long as he does not claim single occupant discount there is no increase to council tax... to be honest it sounds odd but not bad.


            Can I ask you what checks the landlord is undertaking to verify that you are good tenants (credit, ID, previous landlord, current employer references, etc?), what deposit you've been asked to provide before moving in and how the landlord expects to manage the repairs to it while he is away (is this responsibility falling to his sister, for example, and have you met her or know her address?). Did you meet the previous tenants when you viewed it?

            Does the house use gas heating or water? If so, has he mentioned his legal requirement to arrange a corgi gas safety certificate. Doubt it.

            I've come across instances on other forums where potential tenants have become suspicious of the person seeking a large deposit and/or rent in advance from them and usually where they claim they are acting on behalf of the landlord who is working abroad.

            When they've downloaded the ownership details of the property (£3 from the land-registry website, you can get the postcode of the property from the Royal Mail postcode finder), they've found that the 'landlord' doesn't actually own the property. They've then been convinced that its been set up by tenants or people who have access to the property in order to fleece tenants of their cash.

            This is not to say that you are being subject to a similar scam - the landlord could well be genuine and just sloppy in his whole management of the letting process rather than bogus.


              It'll end in tears

              Your landlord is very naïve. We get "landlords" like him posting from time to time wondering how to evict people they consider to be lodgers but in reality because of their absence, the lodgers have acquired rights. It'll end in tears if you decide not to leave voluntarily on his return.


                Thank you for your replies

                ericthelobster - Very helpful post, do you know why people dont appear on the electoral role? I did a credit check and have a good score (actually what is classed as good?!) I am not sure about the LL allowing us to put our names on the electoral roll, I would of thought this would be ok to do though? What would he have to do to allow this? And also, as everything is in his name, would there be any problems there? Regarding council tax, if he is paying the discounted rate, and he changes it to the full rate, we give him the extra per month, again, does this cause any problems with everything being in his name?

                Beeber - tbh he hasn't done any checks on us at all, I was wondering if he would, and he just seems very laid back about it all, I think he just wants some cash each month to over his costs abroad! He asked for 2 months rent up front, i.e for 2 months rent not 1 month and £400 deposit...again very laid back! He said that any minor repairs (microwave etc) would be down to us but larger problems like boiler problems we can ask his sister (which we met, seems nice and I have her address) and we met the previous tenant when we viewed - it was just one guy staying there for 3 weeks (this is what he was originally planning to rent the house as, very short term lets). The house has GCH and he shoed me the boiler (I didn't ask about the certificate and checks but I wish I had now!). I don't think this is any sort of scam, it just seems a very simple way to do things, but with all the checks required these days, he does seem a bit sloppy! When we met him he did seem REALLY easy going!

                Poppy - We have agreed an initial 6 month let, he seemed more than happy with this as he said its easier with the same people in he house for a length of time that different people coming and going...He also mentioned that if he were to come home for any reason, he would stay at his sisters as he had to before (which I mentioned above)

                Thanks everyone, still confused about what to do though


                  Renting and Council tax

                  It seems to me that your landlord-to-be is taking all the risks. He is apparently putting a lot of trust in you.You aren't being asked for a lot of money or asked to make untrue statements. Erics point about single occupancy discount for Council Tax is a good one, but again it is the Landlords responsibility.
                  I think he'd do better to play by the rules, charge a realistic rent and off-set his expenses.


                    Originally posted by cazlrx View Post
                    Thanks everyone, still confused about what to do though
                    I agree that it is actually the landlord that is at greater risk than the tenants through not formalising the arrangements (apart from the H&S impact of a faulty boiler). However, it is clear that he doesn't have a good grasp of housing law so the tenants could stand a greater chance of having their rights breached or him failing to adhere to his responsibilities.

                    So Cazlrx has 3 options to tackle the risks from him and

                    1/ Accept the risk that comes from bargain rent from a novice landlord with a verbal contract in place
                    2/ Minimise the risk by persuading the landlord of the benefits for him of a £15 AST that you can buy at a newsagent (Lawpack) and ensuring that his boiler is safe by getting a gas engineer to inspect it and issue a Corgi cert. He can be reassured that the AST does nothing more than detail in black and white the legal responsibilities of both tenants and landlords that are in place whether he issues paperwork or not but makes it much clearer about each others rights and responsibilities. Also, you could sell him the reassurance he will feel through knowing that he could not be prosecuted in the event the boiler is defective and harms the tenants.
                    3/ Eradicate the risk - don't become his tenants.


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