Is this a HBO? Council tax question

redbooties

My niece recently moved into a house with some friends, they all have their own bedrooms with a lock on the door and share the bathrooms, living room and kitchen. They all pay their their rent separately to the letting a agency.

There are 6 of them all together the rest are students and my niece has a full time job.

My niece has just received a council tax bill for £960 for September (when she moved in) till March. The other tenants are excempt as they are students and this bill is with a 25% single person discount as she is the only eligible person to pay.

I've had a look online and read that if the house is a HMO then the landlord is liable to pay the council tax. If it's not I understand that my niece is responsible for the council tax but this seems very high to me.

HappyMJ

She's the only one working so she'll have to pay the council tax herself whether she pays it direct or the landlord pays and passes the cost on to her.

It's best not move in with a house full of of students as the council tax is unbelievably high. It's highly likely the property is going to be much more expensive than a smaller property. Maybe band E or even band F. She'll have to pay the whole lot less her 25% discount.

G_M

If it's an HMO, the bill should go to the landlord.

So question 1 is, do the council know it's an HMO? Is it registered? Should it be? Cjeck the council website and/or call them.

Question 2 is, even if the LL pays, who acually covers the cost? ie can the LL charge the tenant? To answer that, you need to look at the tenancy agreement between the tenant and landlord.

redbooties

I've rung the council and they are not sure, they are going to ring me back Monday or Tuesday, in the agreements it states that the tenants are responsible for paying the council tax and utility bills.
She was told before she moved in by me to check how much the council tax would be, but I didn't expect it to be so high. Looks like she'll have to learn to budget a bit better.
Thank you for your replies

booksurr

the definition of an HMO under the council tax regulations has nothing whatsoever to do with the Housing Act definition / licence requirements. Whether the council do or don't know is to an extent irrelevant as it is down to what the council tax dept records state not what the licensing dept thinks

OP occupies a shared property under individual tenancy agreement not a joint tenancy agreement. It appears to be a Class C property whetehr the council know that or not
http://www.legislation.gov.uk/uksi/1992/551/regulation/2/made
Therefore it is by definition a Council Tax HMO meaning, legally, the LL is the only liable person
http://www.landlords.org.uk/news-campaigns/news/council-tax

you say the tenancy agreement allows the LL to (directly) pass on the charge to the OP so that is what will happen. She can claim the 25% single person discount if she is the only non student occupant so yes looks like she will face a bill for 75% of the council tax on a rather large building.

dancingfairy

Assuming they all have separate tenancy agreements ( which you implied earlier) then for council tax purposes it's a hmo and therefore liability lies with the landlord. Surely the landlord can't overide the rules by making the tenants pay it?
It might be worth a call to someone like national debtline to clarify this.
Df

dancingfairy

If they were all on a single tenancy then yes, if the others are exempt she would get 25% discount but be liable. If you want to know what band the house is check the VOA website. You can then look up on the councils website how much a band d or whatever is a year and work it out from there. ( I know this is not relevant for you current situation but thought it was worth putting up here in case someone finds it useful).
Df

pmlindyloo

dancingfairy wrote: »

Assuming they all have separate tenancy agreements ( which you implied earlier) then for council tax purposes it's a hmo and therefore liability lies with the landlord. Surely the landlord can't overide the rules by making the tenants pay it?
It might be worth a call to someone like national debtline to clarify this.
Df

I agree with the first part of this.

There are two separate issues here.

From everything you have said this is a HMO (see G_M's post about confirming this with council)

Therefore the liability is with the landlord and therefore the coun cil tax bill has to go to the landlord. As per G_M's post the house does not appear to be 'registered' as an HMO with the council so this is the first part that has to be sorted out.

The liability is separate to what is written in the tenancy agreement.

Whether the clause in the tenancy agreement to make the tenant(s) pay the council tax bill is another matter. I am not totally sure about this. The liability cannot be passed on to the tenant but it may be that the tenant has to pay the landlord.

You need to get the HMO part clarified by the council and you need to take advice about the clause in the tenancy agreement.

datlex

Not to do with council tax, but your niece may be interested in registering for housing. She would be eligible for band 2 as she shares facilities with people not of her household.

booksurr

with the repeated emphasis on asking the council I am unsure if people really understand that council tax liability in the context of an HMO is defined by statute law, not by what the council thinks or knows about the property

wherever anyone is on a single contract with a LL but shares "basic facilities" (kitchen, bathroom) in the property with other people (be they lodgers or tenants) each of whom also has individual contracts then statute law says it is a Council Tax HMO - see my link above to the legislation

that means the occupant has the legal right to refuse to pay any bill the council sends them and to tell the council to invoice the LL instead as the LL is the only person who is legally liable.

what the LL can do when they get such a bill is a separate matter and depends 100% on the wording in the contract between LL and occupant. A sensible LL who knows the law and the fact it is/will be an HMO makes sure their contract includes a clause relating to reimbursement of council tax, eg: the tenant agrees to pay such sum as is charged to the LL by the council in respect of council tax on the property. That allows the LL to effectively pass on the actual costs to the tenant whilst still remaining legally liable for CT top the council as their liability cannot be altered by a contract term since statute law always overrides contract law

if there is no such clause in the contract them the LL must pay the bill themselves out of the rent money they collect. When the CT bill rises each year the LL cannot recover the extra unless they increase the rent charge itself - that obviously must follow the normal process for any rent increase

pmlindyloo

booksurr wrote: »

with the repeated emphasis on asking the council I am unsure if people really understand that council tax liability in the context of an HMO is defined by statute law, not by what the council thinks or knows about the property

wherever anyone is on a single contract with a LL but shares "basic facilities" (kitchen, bathroom) in the property with other people (be they lodgers or tenants) each of whom also has individual contracts then statute law says it is a Council Tax HMO - see my link above to the legislation

that means the occupant has the legal right to refuse to pay any bill the council sends them and to tell the council to invoice the LL instead as the LL is the only person who is legally liable.

what the LL can do when they get such a bill is a separate matter and depends 100% on the wording in the contract between LL and occupant. A sensible LL who knows the law and the fact it is/will be an HMO makes sure their contract includes a clause relating to reimbursement of council tax, eg: the tenant agrees to pay such sum as is charged to the LL by the council in respect of council tax on the property. That allows the LL to effectively pass on the actual costs to the tenant whilst still remaining legally liable for CT top the council as their liability cannot be altered by a contract term since statute law always overrides contract law

if there is no such clause in the contract them the LL must pay the bill themselves out of the rent money they collect. When the CT bill rises each year the LL cannot recover the extra unless they increase the rent charge itself - that obviously must follow the normal process for any rent increase

For my part I totally agree with you and understand that based on what the OP has said this is an HMO and having separate tenancy agreements the landlord is liable for the council tax.

However, based on what the OP has said her niece has received the council tax bill. Therefore the council appears to be unaware of the landlord's liability - maybe because they are unaware that there are separate tenancy agreements.

This is why the council needs to be involved. The bill has gone to the wrong person.

The tenancy agreement clause about the niece being responsible for the council tax is another matter. From my reading there are different 'takes' on this. Some are saying the niece has to pay, others saying the LL should have included the cost in the rent.

In the end the liability for council tax has to be addressed first. How the LL then gets the money from the tenant (the niece) or whether he/she can, is a separate matter.