Council Tax Liability on a single shared/joint tenancy - tenant or landlord?

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I have a 5-bed student house, normally let to students on a single shared tenancy agreement. All 5 of them sign the same single agreement. The agreement states the share of rent that each student pays, although makes it clear that it is a "whole of house" agreement and that there is "joint and several liability" - ie. they are all equally responsible for the whole rent and damages, etc., etc. - all normal stuff.

It also states that they are responsible for any Council Tax that becomes liable on the property. Normally it is exempt as they are all full-time students, but as we all know, circumstances can change.

In this case, one student "dropped-out" due to illness at Christmas - halfway through the academic year, but continued to live at the house and pay rent until the end of the contract, in June.

Obviously, Council Tax was payable on the house between January and June - that is not in dispute.

The Council sent me the bill (first I had knew of it!) after the students has all left. I managed to track down the former student and he agreed to pay the Council Tax, as per the Tenancy Agreement, etc.

I contacted the Council, told them that the tenant had agreed to pay the bill as it was his responsibility and so asked them to cancel my bill and issue him with it instead, and he would pay it. They asked me to send in a copy of the Tenancy Agreement to check things out - it also had the tenants' contact details on it, which they would need, so I did.

All fine and dandy - or so I thought.

The next thing I get is a letter from the Council informing me that in their opinion, my Tenancy Agreement constitutes an HMO - because ........"the five tenants paid individual rents either quarterly or monthly and therefore they do not constitute a single household". The liability for Council Tax therefore remains with the non-resident owners ......"

I dis-agreed and pointed out the following:

1. The first page has spaces for all tenants to put their names on this single document – ie. It is a single shared Tenancy Agreement, not 5 individual tenancies.

2. On page 2, it shows rental payments, both quarterly and monthly options available, and underneath it clearly states “All payments are per person and based on 5 tenants occupying the house” Therefore, obviously, the amounts could be different if, say, there were only 4 tenants – but the total rent due for the property would remain the same – because it is a single tenancy, a single household.

3. One Council’s statement was.. “The Tenancy Agreement states that each tenant is responsible for their own rent payments…” – Actually, it does not. What it does state is “The total rent due is the equal responsibility of all tenants within”.
The Council’s statement continues “This indicates that each tenant is not liable (whether alone or jointly with other persons) to pay the rent in respect of the dwelling as a whole” - well, actually, it states they ARE liable, as I’ve just explained above.

4. Still on Page 2, it also clearly states “This is a whole house agreement”.

The rest of “Page 2” consists of more financial information, purely to make everything clear and easier to understand for the students, especially as we combine a “bills included” package as part of our offering and as part of the contract for the (single) household!

The total rent on the house is broken down into “per person” purely for convenience, and certainly does not relate to individual rooms. The students meet me as a single group, they sign the contract as a single group, and they all move into the house as a single group, all under a single contract as a single household.

IF I was renting individual rooms as an HMO, do you think the student with the small single bedroom at the back of the house would be happy to pay the same rate as the student with the large double bedroom at the front? If it was an HMO, the rates would be different for different rooms or I would never fill the little one! The point is – I don’t rent out the rooms – I rent the complete house to a single group of students.

They are free to decide who sleeps where – they can sleep in the kitchen for all I care – it is not my concern – they are renting the whole house.

5. Back to the Agreement, The Terms and Conditions. At the top of the page it clearly states “The term “Tenant” applies to each tenant both jointly and individually. Each tenant enjoys the rights granted by this agreement and is wholly responsible for the obligations set out in it”. This statement further emphasises the “whole of house” joint liability in all aspects of the agreement (including the rent!).

6.Under, Tenants Promises - The tenant now promises that he will……. “ pay such Council Tax as is due in respect of the Property, even if he/she is not in actual occupation; “

7. We also use a Parental Guarantee: This document is required and makes up part of the overall Tenancy Agreement and each tenant in the group will be asked to provide one – partly as security as we no longer ask for deposits, but the point is that this document again re-emphasises the facts that the Tenancy Agreement is a whole of house agreement, because although it only holds the guarantor responsible for an equal “share” of the liability, it also states quite clearly that the individual tenant still retains” joint and several liability” over the whole rent due and regarding damages, etc.

(I would like to attach a blank copy of the agreement, but I'm not sure I can on here. Ask me if you would like to see it, I can send one separately.)

So, after all that my question is - Am I right, or are the Council right?

The council still insist I am responsible, so I have taken this to the Valuation Tribunal as I think they are wrong (and it also has other implications if they are right, regarding HMO status).

I would gladly welcome any advice.

Thank you.








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15/04/2015 17:07

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