Contractual Periodic Tenancies - Council tax liability

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    Contractual Periodic Tenancies - Council tax liability

    From a blog this morning:

    Landlords have welcomed an Appeal Court judgement that they are not responsible for paying the council tax on a property after a tenant has moved out before a tenancy agreement has expired.

    The appeal was brought by Leeds City Council which had demanded that council tax be paid by a landlord for five properties for periods when the homes were empty but where the tenancies had not been formally ended by either a landlord or his tenants.

    The tenancies in question were contractual periodic tenancies following a fixed term, and the council’s argument was based on the claim that a single tenancy cannot be both a fixed term and periodic.

    The landlord argued that the contract created a single tenancy whose term was six months and thereafter continuing as a monthly tenancy. This would have the same effect as a fixed term Assured Shorthold Tenancy.

    The Council appealed against a High Court rejection of its claim, saying there was no uncertainty of term and that the council tax liability remained with the tenant and not the landlord.

    David Smith, policy director for the Residential Landlords Association which intervened in the case on behalf of landlords, said: “The RLA is very pleased with this decision which upholds the basic principles of tenure.”
    It looks like there is finally a clear position on council tax liability for tenants vs landlords after the fixed term.

    What is the best way of setting out in the initial AST that the periodic tenancy which will follow is a contractual periodic tenancy?

    #2
    The situation was already quite clear. Once again someone wasted time and money on a case that they were near-certain to lose.

    You should be very careful, this applies to the case whereby a single tenancy is created, not when a periodic tenancy follows a fixed term tenancy.

    Comment


      #3
      What isn't clear to me is what wording is required to cause a tenancy to be a contractual periodic tenancy as opposed to a fixed term followed by a periodic tenancy.
      Pretty much every tenancy agreement I've ever seen says something along the lines of "The tenancy will start on xx/xx/xx and continue for six months until yy/yy/yy and will then continur monthly/from month to month"

      Is the continuation of the tenancy beyond the fixed term sufficient - because I'd imagine that the majority of tenancies would fit that pattern?

      Or does the wording have to be stronger or contain specific terms?
      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


        #4
        Would wording along the lines of below be sufficient to establish that the periodic tenancy is part of the same tenancy?

        ... the tenancy will continue on a monthly basis on expiry of the initial fixed term until proper notice is given by either landlord or tenant...

        Do we think there are any potential drawbacks to doing it this way rather than letting tenancy run as a statutory periodic tenancy?

        Final Q - would an extra clause stating tenant is responsible for council tax until the end of the tenancy be enforceable?

        Comment


          #5
          Always seems to me that whilst there is clarity on what creates an SPT (nothing on paper or, gov.uk free tenancy agreement - e.g.) there is, as your question shows, no similar clarity for contractual tenancy.

          Do you can write what you like but if (say) council disagree or tenant disagrees as sayd it's an SPT would you....
          a) win if you take it to court ( F K ....)
          b) bother to take it to court (probably not...)

          Easier to stick to standard
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            That is a good point TAF - almost certainly not to b. What are your thoughts on the extra clause?

            Comment


              #7
              Whatever this legal judgement if the AST says CT is tenants responsibility until the tenancy is ended it is their responsibility.

              The judgement has to do with who the council can chase, but either way tenant is responsible (whether chased by landlord OR council). It is all an utter nonsense.

              Comment


                #8
                The liability to pay council tax to the council is defined by law. The council can only chase the person liable by law.

                A clause in the tenancy agreement will not change that. It is useful to make the tenant liable to the landlord: If the landlord becomes liable by law to pay council tax to the council he can then demand that the tenant refund him.

                Comment


                  #9
                  Originally posted by jjlandlord View Post
                  The liability to pay council tax to the council is defined by law. The council can only chase the person liable by law.

                  A clause in the tenancy agreement will not change that. It is useful to make the tenant liable to the landlord: If the landlord becomes liable by law to pay council tax to the council he can then demand that the tenant refund him.
                  Yes, but you think such a clause would be enforceable in a small claims court?

                  Comment


                    #10
                    Originally posted by section21 View Post
                    Yes, but you think such a clause would be enforceable in a small claims court?
                    Any extra clauses like that could be - they'd be part of a personal agreement with the landlord that is potentially enforceable by the landlord.

                    I've had to deal in the past in cases where tenants had paid on what should have been a Council Tax HMO (landlord had told the tenants they were liable and to pay). It was £3K ( 2 years worth of charges) that went back to the tenants by the time I'd finished correcting the Council Tax account and the landlord then got a backdated demand notice.

                    Craig
                    Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

                    If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

                    Comment


                      #11
                      Originally posted by jjlandlord View Post
                      The situation was already quite clear. Once again someone wasted time and money on a case that they were near-certain to lose.

                      You should be very careful, this applies to the case whereby a single tenancy is created, not when a periodic tenancy follows a fixed term tenancy.

                      I agree - I was surprised by how much Leeds decided to push the case. I wonder how much it cost the tax payers of Leeds ?

                      Craig
                      Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

                      If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

                      Comment


                        #12
                        Originally posted by section21 View Post
                        Yes, but you think such a clause would be enforceable in a small claims court?
                        Yes of course it would. Which is why this whole case is a nonsense.

                        Comment


                          #13
                          Originally posted by AndrewDod View Post
                          Yes of course it would. Which is why this whole case is a nonsense.
                          This case is about who has to pay council tax (i.e. pay the council), tenant or landlord. Any clause in the tenancy agreement is irrelevant.

                          A tenancy term will allow the landlord to seek a refund from the tenant for any council tax he has has to pay to the council.

                          Comment


                            #14
                            Thanks for the help everyone.

                            It is a total farce that there is this much confusion/debate over something that should be so simple.

                            Comment


                              #15
                              Originally posted by jjlandlord View Post
                              You should be very careful, this applies to the case whereby a single tenancy is created, not when a periodic tenancy follows a fixed term tenancy.
                              What is the distinction here? I've got a feeling I'm going to have another council tax liability tussle soon so be good to be in possession of the updated facts. Is it any different for statutory periodic tenancies?

                              Comment

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