HMO and Council tax decision has caused an issue with the inclusive AST contract?

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10:30 AM, 16th January 2017, About 8 years ago 13

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I was ‘threatened’ some time ago with my HMO tenants being liable for council tax – or rather their rooms are – this has now come to pass and I’ve been sent council tax demands in my name for all rooms.

I’ve been back to the department and they will now issue them in my tenants’ names. I’ve argued the toss on this, but an interesting point is that the valuation department does not recognise ‘HMO’ and anywhere that someone can live is a dwelling and every dwelling is liable for council tax – so be warned other HMO owners or convertors, you could be captured under this daft decision if your house cannot be used as a family home ‘with no changes’ when the sharers move out.

Anyway my issue now is that the tenant’s contracts have ‘council tax included’ in their contracts – are the council now voiding my contract, how do I now get the tenants to pay if their contract says it is included?

This has come to pass by the way because someone has claimed housing benefit and an inspection was done (unknown to me but it is down on the record that I denied access which is an absolute lie, my first knowledge of this was an email from the council department) and accessed the property without my permission. Interestingly the Valuation Department do not have right of access without my permission and they were surprised that the council gained access without.

Bottom line really is how do I now get out of the clause of inclusive council tax, I’ve written to my tenants informing them that this is about to happen and again that it is now happening and obviously I will return to them the portion of council tax that I pay and have offered to help as much as I can by making a reduction in rent. I’m waiting for their responses and if someone brings up the contract issue. I’m a bit loath to pay all (around £10,000) a year as there is going to be one (at least) who is not paying council tax and dropped the whole house in it in the first place.

I am guessing that I need to give them all notice and reissue new contracts to those who stay.

Elizabeth

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MoodyMolls

8:08 AM, 18th January 2017, About 8 years ago

Reply to the comment left by "jamie jones" at "17/01/2017 - 22:58":

The fuss is that landlords can be charged and they can backdate for up to six years.

So if it says inclusive of council tax the landlord foots the bill and with more and more cuts to councils they will look to grab every penny.

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Harlequin

9:33 AM, 18th January 2017, About 8 years ago

Mine have mini kitchens, the sort that are being heavily advertised on Property 118 at the moment, but we did this in 1998 - it was accepted as an HMO by Lambeth when the HMO licensing came in.

What is unfair is to band the rooms the same as a flat would have cost when the banding was done - this is between £850 and £960 per room - a flat would not be 20 sq m, it would be twice that for the valuation. There is no 'banding' for a room.

No one has an issue in paying for anything but it is the level that is being demanded.

On the other hand the valuation department do not recognise HMO and their guidelines is that the property has to be returned to a 'normal family house' with no changes, if not each room is valued separately. For an HMO with 11 rooms you wouldn't get away with having one kitchen and 1 or 2 bathrooms and it will have various fire reg changes and safety features that are not necessary in a one family house.

If it was reasonable council tax it wouldn't be such an issue - as its good old Lambeth who regularly put your money into a black hole it is an issue. Westminster or Wandsworth would be worth it for the service you get and more affordable.

I've just told my tenants that I'll pay to date and if they stay they stay on another contract, I'll reduce the rent by the amount I pay plus a further reduction and install internet to be used by all - most of them have their own systems, thank you 118 for the introduction.

Poll Tax was the way to go.

I would add that I am not your regular landlord - it all started as a one off early 90's when no one had good clean modern 'bedsits' and developed when we found a real niche market with the travellers (SA/Aussies/NZ travellers) - and this come from the good old days of large properties being converted to bed and breakfast with generous government grants, we took a couple of those when that bubble burst and went with it, all exceptionally high standard - I have a copy of my first rent list and there is probably only a 25% difference to what I am charging now. I couldn't afford to do this at today's property prices in Central London. Tenants stay for years, a stable community - the travellers have moved on long ago to bigger and better things.

Ironically this property was a local authority hostel with a variety of changes to accommodate multiple occupation - always one council tax so the council couldn't even tax itself right.

We also have to remember that peoples' standards change - it is very hard to rent with shared facilities, the rents are low which means that the money available to keep the property to a good modern standard is not there - or to pay massive council tax and various other bills, I decorate most years, the wear on the property with shared facilities is massive and what people do in the bathroom really can't be written about - so tolerant cleaners necessary, all expenses. This is with good 'professional' tenants. Years ago it was the norm to start single life in a bedsit, now no one wants to share a bathroom or kitchen with a stranger.

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Reader

11:23 AM, 18th January 2017, About 8 years ago

There was an expert opinion sometime ago published on I think this site that explained when properties could be divided up into several Countil Tax liabilities. Dont forget you can appeal the assessment of liability to Valuatiuon Office who will determine if it is one or more households.

In my own case my tenants all qualified for Local Housing Allowance, so the situation became I stopped paying any CT and the tenants didnt have to pay either.Now that seemed a fair deal to me.

If your tenants have to pay you can change I think the terms of a periodic tenancy using a notice which I think is something like a S6 notice. However as no one I spoke to including a national landlord body knew how to use one, I negotiated revised rents and new ASTs. Don't forget single occupancy can attract a discount on CT for the tenant.

Good luck

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