Lease Option on my Property

siopa

I own a house (with a mortgage). I decided to offer it on 5 year Lease Option to a property company. They took it over, but after three and a half years, handed the keys back to me, saying they had had enough, and didn't want anything to do with it anymore because of problem tenants.
I recently found out that the property had been empty for 16 months, and no council tax had been paid during that time. According to the agreement, council tax had to be paid by the company we gave the Lease Option to during the 5 year period (which doesn't end until May this year). The council, after looking at the agreement and the land registry, say that the debt has to be paid jointly between myself and the company, because their name was on the land registry as well as ours at that time, so we are joint owners. Even though the contract states the company has to pay, the council are threatening me with legal action. I try to explain the conditions on the contract, but they are adamant I must pay half. Who is right?

The_Real_Cheddar_Bob

do i smell a hint of troll?

G_M

What's a 5 year lease option? How does it differ from a 5 year lease? What are the terms?

xylophone

Do you mean that (presumably with your lender's permission), you granted a property company a five year lease on your house with an option to renew?

The property company as lessee had the obligation to pay the council tax?

The property company then rented out the property and would have recouped the CT it paid as part of the rent charged?

I would have thought that the council should be chasing the property company which was in effect your tenant?

How did the property company get registered as joint owner at the Land Registry?

G_M

xylophone wrote: »

How did the property company get registered as joint owner at the Land Registry?

Indeed. Leases of 7 years or longer must be registered at the LR.

but 5 years.....?

There is so much unexplained in this query that it's pointless speculating till the OP clarifies.

CIS

The council, after looking at the agreement and the land registry, say that the debt has to be paid jointly between myself and the company, because their name was on the land registry as well as ours at that time, so we are joint owners.

As it stands on the 'evidence' then I would say they are right in what they say. Interestingly, for the purposes of occupation resident freeholder trumps resident leasehold for liability but on an unoccupied property the wording of the legislation does not make a clear distinction.

According to the agreement, council tax had to be paid by the company we gave the Lease Option to during the 5 year period (which doesn't end until May this year).

Terms in the agreements over council tax payments are only a matter between the parties involved, they have no bearing on who legislation makes liable for the council tax charge, and this who the council pursue.

More to this than first meets the eye I think.

siopa

A hint ot troll? What do you mean??

siopa

It was a 5 year lease, with the option to purchase the property, or renew the lease for a further 2 years. I have no idea how or why they ended up on the Land Registry.

CIS

siopa wrote: »

It was a 5 year lease, with the option to purchase the property, or renew the lease for a further 2 years. I have no idea how or why they ended up on the Land Registry.

Have you contacted the land registry to ask why ?

At the moment the joint liability is arguable but I can see why the council have made the decision they have on the information at hand. Whilst the council made the decision of a joint liability then each party is 100% responsible for full payment in council tax legislation - how does the lease word it regarding payment though....

Clauses in the lease cannot change who the council would bill under council tax legislation but between yourselves it can be a valid contractual agreement for one party or the other to ensure payment is made.

If the lease states that they will pay any council tax charge due for the period and there's no get out clause I would say the lease holders are on to a loser pursuing you in any case (it would be a contractual agreement for which the county court would have to be used by the leaseholder).

xylophone

It was a 5 year lease, with the option to purchase the property, or renew the lease for a further 2 years. I have no idea how or why they ended up on the Land Registry.

Did you use a solicitor?

siopa

Yes, a solicitor drew up the contract. I have contacted them but as yet they have not got back to me.

The contract states: The Buyer will pay and indemnify the Seller against; all rates taxes assessments duties charges impositions and outgoings which are now or during the option period are charges assessed or imposed on the property.