High Court hands Landlords concession on Council Tax

With Local Autorities in the grip of ever tightening budgets, Council's have been pursuing Landlords for the recovery of Council Tax which should have been paid by their tenants.

A recent High Court decision will provide welcome relief to Landlords in these circumstances.  The case decides that Landlords are not responsible for the Council Tax owed by defaulting tenants if the letting does not involve a house in multiple occupation.

It is therefore important, in order to obtain the benefit in this decision for Landlords to ensure that they put all tenants on a single agreement and do not reserve any part of the property for their own use or storage.

Unless these requirements are strictly followed, it will always be open to the Local Authority to argue that the letting is one of a house in multiple occupation, particularly if the terms of the tenancy relate to a group of people who do not constitute a single household and the licence to occupy contemplates that the tenant does not pay rent or a licence fee for the property as a whole.  In those circumstances it is likely that the Local Authority will aggresively pursue the Landlord for any default on the part of the tenant.

With the economic situation continuing to be difficult and the likelihood of tenants defaulting being greater than hitherto Landlords should carefully review their letting arrangements and certainly take the opportunity on any new lettings to ensure that there is no danger any of their properties could inadvertantly constitute a house in multiple occupation where that arrangement was never intended to exist since not only will this expose Landlords to licensing and planning considerations but also potentially result in an unwelcome Council Tax liability.

By taking the simple step of putting all tenants within a building on a single agreement and not reserving any part of the property for the Landlords own use or storage this problem can be overcome.  Further details regarding these arrangements can be provided on request or alternatively speak to Pengillys for further advice.