Councl Tax

suso

Just been told by the landlord that he's looking at putting the rent up.

Fine no problem, been here 18 months with no increase.

When asked why he's putting it up, the reply was, he thinks the council is onto him, it turns out that he hasn't told the council he is renting out the house.

Its a terraced house, split into two, I live upstairs, someone else lives downstairs, he's kept the bills in his name while he lives elsewhere. The rent is all inclusive.

As he has been claiming the single person discount for the property, I've 2 questions,

What is likely to happen to the council tax now. The house is in band C, how will the council work out the new tax,

Secondly - the backdated council tax, will the landlord be chased or will it fall on myself and the other tenant.

Thanks in advance for any info.

G_M

1) council tax is charged to the occupant - you. However if the LL pays it the council will be happy. The problem would be if he did not. The council would then come after you.
2) Do you live alone? ie - is a single person discount still relevant? Is the property charged as a single property or as two properties (up and downstairs flats?)
3) if he has not declared the rental to the council my gues is he also
a) has not got permission from his mortgage lender (if he has a mortgage)
b) is hiding the rent from HMRC and not paying tax
c) may well not have valid insurance
d) etc
4) Rent increase: what tenancy agreement do you have? A fixed term tenancy? Start/end dates? Or is it Periodic (month by month)?
5) if fixed term, he cannot raise the rent. if periodic, he needs to issue a S8 Notice (unless the original TA allows for an increase OR you agree to a rent increase)
6)

What is likely to happen to the council tax now. The house is in band C, how will the council work out the new tax,the banding will not change as a result of renting. But if the 25% single person discount is lost then the appropriate increase will be made.

Secondly - the backdated council tax, will the landlord be chased or will it fall on myself and the other tenant. See 1 above

Does your tenancy agreement state that the landlord will pay the council tax? If so, he is liable. If the council chases you, you can reclaim from the landlord.

Unrelated, but perhaps relevant to you - did you pay a deposit? If so, have you been told whether (and where) it is registered (assuming you are in Eng or Wales)?

suso

Thanks for the answers.

Currently the property is charged as one, but I'm guessing it should be charged as two, there is a kitchen and bathroom on each floor, and the downstairs tenant is kept separate by a lockable door, so apart from the front door and hallway there is no shared areas.

Does that mean that it would be charged at band C for each seperate part with each of us having a 25% discount.

I've checked the tenancy - no mention of landlord paying council tax or other bills, or where the deposit is registered.

As for the crook comment, yep realised that, so I'm looking elsewhere but wondering what is going to be chasing me after I leave.

rpc

It sounds as though the conversion has been done on the sly - perhaps no planning or building regs.

Each property (and it does sound like two properties) would have its own council tax account and band (probably both the same band).

The best thing to do is come clean to the council IMHO. They may seek to recover any unpaid council tax from you, but may prosecute the landlord if he has been playing dodgy. Better to cooperate with them than be chased by them. The alternative would be to quit your tenancy as soon as permitted and then anonymously shop him.

G_M

If the property is reclassified as two properties, no, it will be re-banded (since each property is a flat, not a house, and is smaller than the original property.

If each property then has only one occupant, then yes, each will be eligible for the 25% discount.

Does the TA say anything about utilities/council tax? Does it say the tenant is liable for 'bills' or similar?

If not, then relying on the precedent (for 18 months the LL has been paying) the LL seems to be liable.

If you get grief bear in mind the LL would not be likely to want
* HMRC to find out he's receiving rent (http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/ContactOrDealWithHMRC/DG_10010579)
* his mortgage lender to find out he's renting his property out (£4 to the land registry - see S3 Charges Register: http://eservices.landregistry.gov.uk/www/wps/portal/!ut/p/b1/04_Sj9CPykssy0xPLMnMz0vMAfGjzOKNjSxMDA1NjDwsjM3MDTxN3dyNDUNMjQ1MjPWDU_P0C7IdFQG9k5Tz/)

Not that I'm suggesting you threaten him or anything.....

CIS

A it stands at the moment:

1) council tax is charged to the occupant - you. However if the LL pays it the council will be happy. The problem would be if he did not.

It should be in the occupiers name though, any arrangement for the LL to pay is purely between the occupier and the LL. The next issue is that there should be no single person discount - I have a feeling the landlord wont want to pay the extra when its removed and its the occupier who is liable for this.

The other problem is that the landlords account will be closed and he will be refunded. A new account then needs to be created for the occupiers. IF the landlord refuses to transfer he monies to this acct (and Ive dealt in cases where it has happened) the occupiers get stiffed for the who amount back to the start of the tenancy.

If the property is split and re-banded then to some extend the same applies - the occupiers are liable for the charge and there's even less chance of him moving the monies to the tenants account.

Does the TA say anything about utilities/council tax? Does it say the tenant is liable for 'bills' or similar?

It cant overrule legislation , the landlord would be liable only if its a HMO however it would give rise to a civil case for breech of contract is the LL refused to pay.

RobertoMoir

CIS wrote: »

The other problem is that the landlords account will be closed and he will be refunded. A new account then needs to be created for the occupiers. IF the landlord refuses to transfer he monies to this acct (and Ive dealt in cases where it has happened) the occupiers get stiffed for the who amount back to the start of the tenancy.

Can open, worms all over the place, basically. Back in the day I think I saw a few messes like this myself, where the tenant, not entirely unreasonably from their point of view, refused to pay as they'd already paid the LL and the council still pressed ahead with enforcing the debt against the tenant. Not good.

CIS

I've seen cases totalling 10's of thousands of pounds over the last few years.

The last case I dealt with was slightly different - lodgers paid and resident L/L did not - A £3.5K + bill went to the L/L as the lodger kept the refund.

FireWyrm

RobertoMoir wrote: »

Can open, worms all over the place, basically. Back in the day I think I saw a few messes like this myself, where the tenant, not entirely unreasonably from their point of view, refused to pay as they'd already paid the LL and the council still pressed ahead with enforcing the debt against the tenant. Not good.

Oh my god! That's disgusting. How on earth did they get away with that in court? Surely it's not the tenants fault, they paid in good faith and could not have known that the landlord was dishonest.

DVardysShadow

This is one where, even though the LL is a crook, it might be better to stay in the property, rack up rent arrears and use the money to pay off the council tax. Particularly if there is any evidence that the LL was supposed to pay - because the evidence is more useful to defend against the LL coming for rent than it is to fend the council off.

RobertoMoir

FireWyrm wrote: »

Oh my god! That's disgusting. How on earth did they get away with that in court? Surely it's not the tenants fault, they paid in good faith and could not have known that the landlord was dishonest.

It is disgusting, but the disgust should be reserved for the LL. There are two separate issues:

The person living at the house is liable for the tax, end of (except for cases like HMOs).

In a case like this, the tenant could and should recover the payments they made to the LL in good faith through the courts if needs be. But what happens in the meantime?

The problem is that there's no way to draw a line connecting those two things. The councils are pretty much legally obliged to collect the council tax from the person legally held to be liable in as effective manner as possible.