HMO's and council tax indemnity in contracts?

jockthespok

I live in a HMO which contains students. My rent does not include council tax. I have suspended my university registration on health grounds and have claimed incapacity benefit. I have an assured shorthold tenancy agreement for 10 months.

because I live in a HMO, my landlord is liable for council tax on the property. I have a single tenency and should not be liable.

However, my non-student status for this academic year changes the class of the property from 'all student occupiers' to another class where the landlord only gets a 25% discount on council tax;

Unfortunately there is a clause in the contract which states under 'Tenants Obligations' that;

"Perform and observe any obligations on the part of the Tenent arising under the Local Government Finance Act 1992 or regulations made thereunder to pay council tax and indemnify the Landlord against such obligation which the Landlord/lady may incur during the tenancy by reason of the Tenent(s) ceasing to be resident in the Property"

I have been told by the council that under that Act, I'm not obliged to pay council tax or indemnify the landlord against such obligation because I live in a HMO and have a single tenancy agreement.

The last part of the statement above seems very ambiguous, as it states that this must be "by reason of me ceasing to be resident in the property". I take this as me being liable for the council tax in the property if I choose to move out of the property and that changes the status of the house?

I'm worried that this statement obliges me to pay the landlord council tax on the whole property even though by law I'm not liable for it. It's avoiding liability by the backdoor. If I'm on benefits surely I shouldn't be using those benefits to pay the landlord's council tax bill? Because I live in a HMO and the landlord is liable for council tax, I can't get council tax benefit yet get charged an £800 to pay the council tax, how can that be right, I'm only occupying my room with four other people living in the house as it's a HMO anyway, that's one of the reasons residents of HMOs aren't supposed to pay council tax on the whole property.

CIS

Iam a council tax officer and we recently covered this sort of thing in training.

The law requires that the tenant is liable for the entire council tax on the property they rent until the end of the tenancy, but the issue is different on a house in multiple occupation, on a HIMO the landlord is responsible for the council tax on the property (liability by prescription) - your contract may state that you pay so much to the landlord to cover the council tax, but that doesnt hold any water with the council - we will alsways pursue the landlord as he is legally liable for the council tax na not tenants in a HIMO.

If you refused to pay, the landlord would have to take you on in a civil case, the landlord would have to pay the council tax - but I suggest that you consult a solicitor or CAB over the contract.

jockthespok

Thank you ever so much for your response, which is exactly what I was after and will serve as a resource for those in similar situations in the future, looking for advice on this forum.

I will defiantely consult a solicitor. It appears to be a contractual legal matter. My gut feeling is that, I cannot sign away these rights in a contract those that are guaranteed under all 'Assured Shorthold Tenancy Agreements". However the contract is drawn up by the university, so I will query them and post a response on this site.

Astaroth

To be honest I think you are miss understanding the rules.... though I will be pleased to be corrected.

My understanding of the rules are such that the landlord is liable to pay the council tax and he cannot pass the buck and say to the council that they must claim the money from the actual tenants. It does not stop the contract which the tenant signs from allowing the landlord to recover these monies from the tenants.

I recently had a series of arguements with my previous local council about council tax when I was in a HIMO and lost my student status with the remainder of the occupants still being students.

jockthespok

Effectively what you're saying is that the Landlord can create a contract which requires the tenent(s) to pay for the cost incurred to the landlord paying these charges (council tax).

However, as far as I read it that is not what my contract states,

"Perform and observe any obligations on the part of the Tenent arising under the Local Government Finance Act 1992 or regulations made thereunder to pay council tax and indemnify the Landlord against such obligation which the Landlord/lady may incur during the tenancy by reason of the Tenent(s) ceasing to be resident in the Property"

There are no obligations in the Act or regulations made thereunder for me to pay council tax or indemnify the landlord against such obligation. it's very specific, it refers to obligations within the act or regulations made thereunder. What are these regulations made thereunder?

It's even more specific, in that it states that this is where "the Landlord may incur during the tenancy by reason of the tenants ceasing to be resident in the property". In my case the status does not change because I leave the property, it changes because I'm not registered as a student at the university this academic year. There is no recourse for this scenario in the contract so the obligations would not apply anyway.

Out of interest, what was the outcome of your ordeal? Did the landlord commence civil proceedings against you to recover the cost? If so do you know how much this cost him to do so?

jockthespok

It has become clear to me the quoted section of my contract above means I'm (as the occupier stated in the act) liable for council tax on the property.

The next questions are predictable,

Can I put the council tax bill in my name? Forget what the council say about HMOs, as being the sole occupier of the property liable for council tax (ie n ot exempt) can I put the bill in my name?

In civil court proceedings, if the terms of the Act prove that I'm the sole occupier liable for council tax surely that would prove I should have been recieving council tax benefit?

Is it true that I can only claim council tax benefit whilst it's in my name? I will claim it anyway and try and get the bill into my name, however can they pay it without the bill being in my name i.e if the landlord intiates civil court proceedings against me can I show that I'm eligible for council tax benefit if the bill isn't in my name?

Astaroth

In my recent escapades with the council the council tax was put into the names of all the occupants of the residence and they were noted as students and I as a non-student. I then successfully claimed council tax benefit - this was all in Scotland so I dont know if they have different laws on this aspect

mac123

if you live in a HMO, you are not liable for Council Tax whether the property is made up of 1 student and 4 non, or in fact any combination.

The main factor that classifies a property as HMO is that you do not have exclusive use of the whole property and you do not rent the property as 'one household'.

The fact that you are not liable tells you one thing, you can't claim Council Tax benefit as you're not liable. Housing benefit is different as you're liable for your share of the rent.

What your landlord has told you, and Council Tax legislation (law) are two completely different things.

jockthespok

Hi,

Disregarding that it's Scotland, are you sure you were in a properly registered HMO, rather than just a shared house with students who have single tenency agreements?

It's quite standard practice for the council to treat a single tenancy as though it was a joint if the property is not properly registered as a HMO. I know it's not legal but I know that it happens all the time.

jockthespok

What your landlord has told you, and Council Tax legislation (law) are two completely different things.

Thank you for your response.

The problem is, the landlord will take me to court, where he will prove that it's my obligation under the Local Finance Act 1992 to pay council tax ie;

"Perform and observe any obligations on the part of the Tenent arising under the Local Government Finance Act 1992 or regulations made thereunder to pay council tax"

There are clearly obligations for the occupiers of the property to pay council tax under the above Act, otherwise the above would not be in the contract. My point is, if that is the case and it's proved in court, then it would prove that I am liable to pay a charge for the council tax not just to the landlord but to the council. This is because the above states that I pay this charge to the landlord by observing obligations arising under the above act. The only obligation that would force me to pay this charge was if I was liable under that act. However that act is about liability for council tax to the council. As you rightly put it's legislation inregards to my commitment to pay council tax to the local authority. Therefore if it were proved in court that I must pay the landlord this charge, it's also proved that I'm liable to pay council tax to the council and should therefore be eligible for council tax benefit.

I'm sorry to say it again but, I'm confused by the below,

"indemnify the Landlord against such obligation which the Landlord/lady may incur during the tenancy by reason of the Tenent(s) ceasing to be resident in the Property"

Does the above state that I have agreed to pay the council tax for the landlord, ie to compensate for loss (indemnify) incurred due to me not being exempt from paying council tax ( ie - being a student). It only refers to me ceasing to be resident in the property leading to that indemnity, there is nothing about my change in status as a student leading to indemnity. Or is there?

jockthespok

Just to update.

I have seen a solicitor today and she has said that the clause in the contract is legal and it means I do have an obligation to pay the landlord costs incurred for his obligations to pay council tax under the said act. She said, she was pretty much 100% certain that were it to go to court the Judge would rule in favour of the landlord.

My only option is to get out of the contract by having a student move in to take my place.

It's a shame as I'm eligible for council tax benefit but as the bill CANNOT! :-) be put in my name I end up paying for it, in an underhand way through contractual agreements and using income support money to do this.