IMPORTANT INFORMATION ABOUT COUNCIL TAX LIABILITYPosted 18.05.17
Historically the tenant is responsible for the Council tax during the fixed term of a tenancy. However, should they leave the property once the tenancy has rolled into periodic , then liability for the payment of the council tax fell on the landlord as soon as the tenant informed the Council Tax Department that they had left the property. This was the case irrespective of whether or not the tenant had given notice or indeed whether the landlord knew the tenant had left or not. Often, the first that the landlord knew that the tenant had gone was when they received a letter from the Council Tax Department informing them that the liability to pay the council tax was now theirs.
However, this has been challenged by a landlord in Leeds and the full Court of Appeal ruled in his favour because of a key phrase which was contained within his tenancy agreement.
The key phrase in the agreement turned the periodic term into a Contractual Periodic. The working of the tenancy was:
Whereas the landlord agrees to let the premises known as…..for a term of [6 or 12] months and thereafter continuing on a monthly basis unless terminated by either party under the provisions of Clause 3
Paying therefor the rent of ….per calendar month….
1. The landlord lets and the tenant takes the property for the term at the rent payable as above.
2. This agreement is intended to create an assured shorthold tenancy under the provisions of the Housing Act 1988.
3. This agreement may be terminated by either party giving to the other one full calendar month’s written notice provided that no such notice may be served during the first [6 or 12 as above] months of the term.
The Court of Appeal held that this wording created a single interest – initially for a fixed-term but periodic thereafter – thus satisfying the requirements of Section 6(6) of The Local Government Act 1992 ie the tenancy agreement provides for the continuation of the original tenancy following the expiry of the initial fixed term. The original tenancy being a “material interest”.
STATUTORY PERIODIC TENANCY = Owner liable for any empty period
CONTRACTUAL PERIODIC TENANCY = Tenant liable for any empty period until the tenancy lawfully brought to an end.
The following wording should now be put into all of your tenancy agreements :-
and thereafter continuing as a contractual periodic tenancy on a monthly basis unless terminated by either party
This means that the tenant must give you one months written notice (which can include email or text) otherwise they will be liable for the Council Tax until they end the tenancy this way.