Rent increase question, is this fraudulent?

saajan_12

sotonkona wrote: »

So my landlord has now asked whether he can charge the extra rent but cover our council tax in return to make up the balance of the increase!- okay.. some places do have council tax included so not unfathomable, but issue (1) as far as the council are concerned, you're liable and would have to chase the LL if they failed to pay..

The landlord doesn't want to include that 'council tax' will be included in the rent in his contract as the mortgage company won't accept it as then the total rent isn't the full rental value. - correct, its not.

Instead the LL wants to write a separate contract to say that he is covering the council tax! So I would end up with a STA with my liability to pay the council tax and separate contract to say they will cover it - would this even stand up in court if the LL didn't pay our council tax? - Issue (2) so the 2nd 'contract' is basically saying LL pays council tax, Tenant does nothing? A contract generally needs both sides giving something, whereas the 2nd contract standalone would look like a gift from the LL, ie you could struggle to enforce it in court Is there anything wrong with the tenants not paying council tax? ie. would we lose out on anything? - effectively the rent DOES include council tax and the LL is lying to the lender by saying it doesn't. Issue (3) that is fraud. This hoiky setup of 2 contracts reeks of fraud, so you could be expected to see that and implicated in the fraud if you agree.

Any help or advice would be greatly appreciated. seriously thinking of just moving out as I been given an ultimatum which is accept my increase as I need to take equity out of my home or I will sell it and you will have to move out! - you'd have to move out IF they don't sell to another LL and WHEN they serve valid notice + go to court etc. It'll take a while and the LL would suffer a void when sounds like they need to extract money, not lose it, so unlikely IMO.

Issue (1) The LL can pay your council tax, if they actually pay it... if not, the council will still hold you (Tenant) responsible. You then have to go through the hassle of chasing the LL to reimburse you, possibly through court..

Issue (2) The 2nd 'contract' would be the LL paying the council tax for nothing in return. Gifts aren't usually enforceable without further formalities eg executing as a deed.

Issue (3) Its so obvious that its mortgage fraud, you'd find it hard to argue you thought it was all innocent. In the unlikely event the lender comes after LL for fraud, you could be implicated, ie not worth the risk.

sotonkona

Thanks for this, it's very useful. I knew it was fraud but I guess I hadn't appreciated how I could also be implicated in it. The idea of a second contract sounds ridiculous anyway even with my basic understanding of law, it doesn't stack up!

sotonkona

Apparently, the Mortgage Advisor will talk me through it to ease any concerns I have, but surely that makes them complicit in the fraud as well!!

sam_r2d2

There is no amount of explaining the mortgage advisor can do! It is Fraud, plain and simple

Do not agree to anything extra outside your AST

The second "contract" he will set up to pay your money back won't be worth the paper it is written on.

You've already said he is a nightmare to deal with, extremely tight and won't fix things - what makes you think he will send you the £200 back?

sotonkona

I totally agree, either we have proper AST with the correct rent on it (as it currently is) or I am walking away!

sotonkona

Yes, he generally couldn't care less about the tenant. We would probably stay for another few years, giving guaranteed rental income without any issues, so the LL is either going to sell up during a period of great uncertainty or take on the risk of finding new tenants (from abroad), probably paying out agency fees to advertise, either trying to put the rent up a ridiculous amount or trying this whole fraud nonsense again. Ultimately if we leave, he will probably financially worse off if he doesn't sell!

CIS

So I would end up with a STA with my liability to pay the council tax and separate contract to say they will cover it - would this even stand up in court if the LL didn't pay our council tax?

Not with the council it won't. The landlord cannot override legislation.