Council tax payments

Fairjs8

Some one I know went bankrupt in December 2018, with 3 properties previously owned reverting to a major building society.Tenants remained in two of the properties until July 2019 and July 2020 respectively.The other property was sold immediately the bankruptcy was completed.The local council is now demanding council tax on both properties whilst they were unoccupied,saying that liability rests not with the building society ,but with the previous owner who went bankrupt over 18 months previously.

This situation appears totally unjust.The building society and their agents have had total control of the properties and have dragged their feet in taking so long to dispose of the properties, and they could rack up further costs without incurring any liabilities.
Can anyone please help and advise.

Minkym00

Worth talking to the OR and see what was done in terms of these properties I.e. were they disclaimed? Were they revested?

Fairjs8

The properties are vested in the bankruptcy estate.The council are claiming council tax post bankruptcy.Thanks for your input,would appreciate any further advice.Will be in touch with OR.

Minkym00

I’ll do some digging and thinking on this one. Logic says that your friend can’t be responsible, but I appreciate you'll need more than that!

What are the building society saying? Your friend needs to ensure they are dealing with the insolvency teams at both the building society and the council. I imagine that the council are taking a typical “computer says no” stance and just saying that your friend’s name is still on the deeds, ergo they will claim from them. A trip to the CAB would be a good idea.

CIS

This is well outside the council tax side for CAB as it can get quite technical.

Post bankruptcy council tax becomes due but it may be covered by an exemption.

If the property has been taken in to the control of the trustee in bankruptcy then a Class Q exemption would apply whilst that was the case and the property was unoccupied.

Repossession is a different matter technically as there's legislation that has never been implemented. In simple terms though a Class L exemption would apply although liability would still rest in the actual owner not the bank.

Fairjs8

Thanks for your reply. The council are saying that the exemption doesn’t apply because the properties were passed back to the Building Society who appointed their own receivers and is therefore no longer in the hands of the Trustee. My friend has spoken to the Insolvency Service who confirm this, but that they are still the Trustee of the estate. The council have said my friend can appeal but since this is not independent, he anticipates the same response. How does he stand legally and what should he do next?

CIS

Thanks for your reply. The council are saying that the exemption doesn’t apply because the properties were passed back to the Building Society who appointed their own receivers and is therefore no longer in the hands of the Trustee.

Without seeing the paperwork I couldn't say for certain but if that happened then the council are correct, if it was handed to the building society and they appointed a LPA receiver (for various, technical reasons under council tax legislation).

The council have said my friend can appeal but since this is not independent, he anticipates the same response. How does he stand legally and what should he do next?

There's a formal, statutory route of appeal. You must ensure that the route is fully complied with otherwise the ultimate appeal, to the tribunal, would be rejected.