Who is liable for this council tax bill

Section62

Ditzy_Mitzy said:

 

A corporate body may be able to pay council tax if it owns unoccupied residential property, yes, but this situation is slightly different in that we have a suggestion that a commercial entity which is not a person, i.e. the agent, is occupying the property for a non-commercial purpose.  That's the fudge, in my opinion.

The agent (aka tenant) appears to be accepting that the business relationship may result in them becoming liable for CT by virtue of them including the term "The Landlord agrees to reimburse the Tenant for any council tax payable in respect of any void period." within the contract.

I wonder whether we can assume the agent/tenant obtained legal advice when drawing up the contract, including this term?

lincroft1710

If the sub-tenant has paid the rent to the end of October, then they are entitled to occupy the property and thus, in the absence of a physical occupation by another person/entity would be liable for the CT. 


The owner was denied occupation until 1 November, so cannot be liable.


Rental or other agreements do not override the "hierarchy of liability".

Ditzy_Mitzy

Section62 said:

Ditzy_Mitzy said:

 

A corporate body may be able to pay council tax if it owns unoccupied residential property, yes, but this situation is slightly different in that we have a suggestion that a commercial entity which is not a person, i.e. the agent, is occupying the property for a non-commercial purpose.  That's the fudge, in my opinion.

The agent (aka tenant) appears to be accepting that the business relationship may result in them becoming liable for CT by virtue of them including the term "The Landlord agrees to reimburse the Tenant for any council tax payable in respect of any void period." within the contract.

I wonder whether we can assume the agent/tenant obtained legal advice when drawing up the contract, including this term?

Of course we can't; never assume anything.  The only safe assumption is that the answer is anyone's guess.  The letting agent may have sought advice, said advice may have been bunkum; the agent may not have consulted anybody and drawn the agreement up themselves; the agent may have adapted some sort of pro-forma.  I've seen variations of all those things in a previous life...

subjecttocontract

I was under the impression that a tenant is not responsible for CT on two properties at the same time. Although they paid rent for October they had already moved to another property where they would presumably be paying CT.

propertyrental

There are two separate legal issues.

1) who is liable for paying the CT to the council?
2) do the contractual agreements make a different party liable to compensate the party who pays the CT?

Re 1) above, see the 

       Hierarchy of liability

• A resident freeholder (for owner-occupied property the owner is liable)

• A resident leaseholder (this includes assured tenants under the Housing Act 1988)

• A resident statutory or secure tenant

• A resident licensee

• A resident

• The owner (this applies where the dwelling has no residents)

eg here:
https://crawley.gov.uk/council-tax-and-benefits/about-council-tax/council-tax-liability

Slightly further complicated by whether the resident (sub-tenant) was in a fixed term or periodic tenancy.
If fixed term, they are liable till the end of the fixed term.
If periodic, they are liable until they cease to be resident (ie move out/return the keys).

Thereafter, as per the hierarchy above, the owner will be billed by the council.

Re 2) above. There may well be a contractual agreement between the owner and their tenant (the letting agent). If that contractual arrangement makes the tenant (LA) liable, then the owner can claim from the LA whatever he is charged (under 1) above) by the council, based on contract law.

lincroft1710

subjecttocontract said:

I was under the impression that a tenant is not responsible for CT on two properties at the same time. Although they paid rent for October they had already moved to another property where they would presumably be paying CT.

If a person pays rent for a dwelling, they have the right to occupy that dwelling. Having the right to occupy means they are liable for CT whether they occupy or not. Only if a 3rd party is physically occupying would the person paying the rent not be liable for CT.

Jude57

subjecttocontract said:

I was under the impression that a tenant is not responsible for CT on two properties at the same time. Although they paid rent for October they had already moved to another property where they would presumably be paying CT.

Again, not true. A liable party, be they a tenant, owner occupier or business entity, can be liable for any number of properties. They may be able to qualify for discounts on unoccupied properties or may be liable to pay additional premiums on Council Tax for habitable properties which are unoccupied. That's why I suggested the sub-tenant in this case might be able to claim a discount for the relevant period at the property owned by the OP.

It's also correct that contractual terms do not override legislation so whatever a tenancy agreement or lease may say cannot trump the hierarchy of liability for Council Tax.

Boat_to_Bolivia

fatbelly said:

The way I read it is that the tenant is still the tenant through the month of October because of the date of the notice, and has accepted that by paying rent for that period.

The tenant is liable for council tax through that period.

I agree, the (sub) tenant has paid for the month of October and therefore liable for council tax and utilities until November 1st.

theartfullodger

Never do another rent2rent deal.   LOADS of stuff on't t'interweb explaining why this is a risky mistake.

propertyrental

fatbelly said:

The way I read it is that the tenant is still the tenant through the month of October because of the date of the notice, and has accepted that by paying rent for that period.
The tenant is liable for council tax through that period.

Boat_to_Bolivia said:
I agree, the (sub) tenant has paid for the month of October and therefore liable for council tax and utilities until November 1st.

I repeat - depends if in a fixed term or periodic tenancy (actually Statutory Periodic to be precise). See

decision outlined in the High Court, MacAttram v London Borough of Camden (2012) EWHC 1033. In particular, paragraph 24. Which outlines that periodic tenancies make it so the tenants have no "material interest" 
Conclusion If your Six Month periodic tenancy ends, then as the landlord YOU are responsible for the Council Tax. As a periodic tenancy is 1 month rolling so the tenant has no "material interest" if they claim otherwise.

And also

https://www.landlordzone.co.uk/information/tenants-liability-to-pay-council-tax/