Help! Council Tax Final Notice

[runoutofnamechanges]

DS18 is a student living in a student shared house. He's just called me in total meltdown (ASD) because they've arrived back for the new term to find a council tax final notice addressed to all the tenants for thousands of pounds.

When they moved in in September, the letting agent gave their details to the council and notified them that they are all full time students and the council sent them a bill with a form to fill in to apply for student exemption on 28 October. They returned it with proof from the university on 1 November, however, one of the students on the tenancy agreement failed their exams so they didn't move in to the property so they advised the council of this on the form (they were asked to give the move in date for each tenant).

Term finished on 14 December, they all went home for the holidays. On 14 December, the council sent them a letter saying that they hadn't paid any council tax and that if they didn't pay by 28 December, they would lose the right to pay in instalments. Obviously, as they had already left by the time the letter arrived, no one contacted the council to ask why they were being charged council tax as all the occupiers are in full time education. As they didn't pay anything, a final notice for the entire year's bill was sent on 7 January, saying that if they don't pay in full by 24 January they will take them to court.

DS was the first to arrive back for the new term today and find both the letters. He rang the council payment line (the only one where you can speak to a real person) and was told that the advisor could see the application for exemption on the system but there is a problem because there is another person on the tenancy agreement who has not provided proof that they are a student, it hasn't been applied. He then went on to say that even though the person has never moved into the property, they will have to pay council tax for the property as it is not "solely occupied by students" and, because the tenants have a contract that is jointly and severally liable for the whole house (rather than the rooms being let individually), all the tenants are liable for the debt.

The advisor also confirmed that the council has not contacted them to make them aware that there is a problem with their application for student exemption "because there is a backlog". He then told DS that even if there is an outstanding application for exemption that has not been processed by the council (2 months to send the form, 2 months and waiting for them to process it...), until it is processed, they have have to pay council tax in full.

In the absence of being able to get proper legal advice on a Friday night, AIBU to ask the Mumsnet hive mind if any of you know if this is legally correct? I legally own the ex-family home but I don't occupy it and NSTBXH is able to claim the single person discount. Surely being on a tenancy agreement doesn't make the absent ex-student an "occupier" if he doesn't live there. And WTF do we do now? There is no way any of them can pay the bill.

[WhatALearningCurve]

Hi,

Was a new tenancy agreement created with the actual tenants on and omitting the one who didn't move in?

[fiorentina]

Can the landlord verify who the occupants are with the new tenancy agreement with just the actual occupants who are all students?

[fiorentina]

Or presumably the student who didn’t move in gave official notice to the landlord?

[WisdomOfCrowds]

I don't know if they're are legally liable for the CT (although I'd be very surprised, the reasons sound bizarre!) but I have been on the receiving end of a final demand notice so can tell you what comes next. If it ends up going to court they'll be invited to attend and present their case for why they shouldn't have to pay. Hopefully any judge would see reason at this point. If the judge decided that yes they should pay then they'd be issued with a liability order. If they don't attend court a ruling will automatically be made against them and a liability order will be issued. This does not affect anyone's credit rating, it just gives the council the power to enforce repayment. At this point your best bet would be to negotiate a sensible repayment plan with the council and other tenants, and try to put something in writing which would only obligate them to each pay their share of the debt. If after the liability order was granted no one made any repayments then an enforcement officer would be appointed to come collect goods to the value of the debt. This was the point I got to (simply because I'd moved house at this point and didn't realise any of this was going on!) Once the enforcement officer has been appointed you have until the day he visits your property to repay the debt in full, or you become liable for further costs associated with the agent. But hopefully it won't get that far. Go see citizens advice ASAP and hopefully they can advice you better on how to stop it getting as far as court. But if it goes to court you'll hopefully either be cleared or be able to negotiate a manageable repayment plan.

[runoutofnamechanges]

No, a new tenancy agreement wasn't created because the student didn't find a replacement. Nor have they paid any rent... That is another battle they are having to fight.

He did write to the letting agent to tell them but after contracts had been finalised and the other students had moved in. The letting agent told DS they won't confirm that they know he isn't living there. Presumably in case there is a legal battle about the unpaid rent.

[WhatALearningCurve]

Unfortunately then they are liable for council tax. There may be some sort of discount available as the majority of the house are tenants (depends on the council policies) but there will be a balance to pay. They will also be liable for rent if he's causing them to go into arrears if they're jointly and severally liable.

I would recommend asking the agents to draw up a new lease. There will probably be a cost in doing this but it will a hell of a lot less than the council tax costs

[runoutofnamechanges]

Thanks, WisdomOfCrowds. That is reassuring that it would not affect their credit rating. My gut feeling is that a magistrate would be sympathetic that it is unfair because if the council had told them there was an issue, they could have taken action to resolve it ie remove the other tenant from the agreement, although that would then create a further issue with trying to get them pay their share of the rent as they haven't found anyone to replace them. They could have at least put in an application for the single person discount and got legal advice before racking up 4/5 months charges. Hopefully a magistrate would at least give them time to sort things out with the council rather than making them pay now or make the council backdate any exemption/discount as they weren't given an opportunity to appeal/resolve the issues.

Ironically, the name of the non-student, non-occupier is totally wrong on the letters/demands eg his name is MISS John WAlliams, instead of MR John WIlliams. They've notified the council of that too but they still haven't corrected it. I guess that is going to cause more complications if they do get a summons.

[Coronapop]

As far as I can see since all the occupants of the property are students they have nothing to worry about. A non-tenant who never moved in and has never paid rent is a nonsense in terms of a demand for council tax. Take an assertive stance with the council: all occupants have submitted proof of FT student status so no council tax is payable.
I sit as a JP dealing with council tax occasionally and I think it is highly unlikely to go to court given the circumstances.

[Isleepinahedgefund]

I think that as it stands they will continue to pursue the debt, and are correct to do so, as the application/ evidence that they have received so far shows that there would still be a CT liability.

Have you asked them what they need to see to confirm that the person didn’t move in? Do they need to see confirmation that they are registered for CT elsewhere?

I used to deal with applications for housing and council tax benefit back in the days when certain benefits effectively wiped out your liability for CT. The CT department would halt any recovery action if we could confirm that the liable person was on a passport benefit, but they wouldn’t if there was any factor that would leave a residual liability (such as a non dependent in the household or the claimant was working and therefore entitlement would be means tested). They would then adjust the amount being recovered after any benefit award, but they wouldn’t stop the process.

I also once dealt with recovery of a CT debt on a rental property where it was quite clear that the person being pursued (landlord) was not liable. He was a stupid arrogant twat who thought he was above filling in the exemption form and providing the required evidence. The council made him bankrupt, and a £3000 debt he could have wiped out with a form cost him about £30k. (I’m not at all implying your son/housemates are in any way like him, it’s just the best cautionary tale I can think of!)

[MiniMum97]

That doesn't sound right at all. I would go to your local citizens advice.

[WhatALearningCurve]

@Coronapop it's not a "non tenant" through. He is on a tenancy agreement. Just because he chose not to move in doesn't negate the contract that's in place.

@runoutofnamechanges If they can get the contract amended (all occupants would then be liable for the full rent) then the council should hopefully back date the exemption. In my experience they will do this as long as it hasn't got to the point of court charges being added

[Lizadork]

I would get landlord to draw up a new contract ASAP, omitting one who left and back dating to original date.

[Lizadork]

Never mind, I didn't read replies - sorry

[ChrisjenAvasarala]

Hold on. A group of them agreed to move in together. One then dropped out, and the other boys didn't bother increasing their rent contributions to cover the full rent for the flat they chose?

So they havnt been paying their full rent, havnt sorted out the tenancy agreement and are now in trouble with the council. Sort of seems like they've brought it on themselves by not dealing with things.

[runoutofnamechanges]

@WhatALearningCurve That's helpful but not great news! Do you have any legal/council tax expertise? Can you explain why someone who is on a tenancy agreement but is not resident at the address is considered an "occupier" but that is not the case if you are a non-resident owner?

I've found lots of stuff online that says that you can be an occupier for council tax purposes even if you are not a tenant or owner, if you are resident at the property but not what happens if you are a tenant but don't reside at the address. All the info online refers to "resident tenants". The non-student tenant is not resident , the only resident tenants are students. If you own a property but don't live there and someone else resides there, you aren't liable.

Obviously if the person had moved in, they would have to pay council tax.

[Isleepinahedgefund]

Did they tell the Council the person didn't move in? Have they asked what proof they need to see to process the application?

[WhatALearningCurve]

@runoutofnamechanges I work in property management and 90% of my tenants are international students who get told they're exempt from council tax but never get told they have to apply for the exemption. (Obviously not identical to your sons situation but basically I'm used to students and council tax confusion!)

The council have to go off the information provided to them about the occupiers. Currently all there is as evidence is a tenancy agreement with X amount of names on. If there is evidence that the absent tenant is paying council tax elsewhere then that may help in proving the exemption but otherwise there's no actual evidence of him not living there.

With a none resident owner they will more than likely be evidence of them living elsewhere e.g council tax in their name at another address.

In terms of payment - again this may be different council to council but if they ring up and make contact then the monthly instalments should be put back into place. They'll have lost the right to this because of lack of communication but it should be able to be reinstated so at least they're not facing a huge one off payment whilst they're getting the lease amended?

[LetBartletBeBartlet]

Ownership is a red flag, they want to know who lives there.

As far as the paperwork provided shows, this person lives there and is not a student, therefore creating full liability for council tax.

You will need to ask the council what they would need to see to prove that this person does not reside at the property.

[Imstickingwiththisone]

Op I've sent you a private message

[runoutofnamechanges]

No, ChrisjenAvasarala. They have done everything correctly. The only person who brought this on them is the guy who dropped them in it.

He dropped out after after contracts were signed, they had made a separate tenants agreement on how to split the rent/bills between themselves, and the tenancy had begun. If they had all pulled out of the house at that point, they would have had nowhere to live and a bill of £4k for letting agents' fees and the landlord's costs, plus been liable for the rent until the house was relet (potentially £30k in rent if it remained unlet until the contract came to an end). All pretty standard terms for an AST. They have been covering the extra rent for now, tried to find a replacement and taken legal advice on recovering the rent from the guy who pulled out. If they take him off the tenancy agreement, it might solve the council tax issue but they then stand to lose a whole lot more money if they can't take him to court for his share of the rent

[k1233]

Has rent been underpaid the whole time? That needs to be fixed before it becomes a problem. It isn't the landlords problem someone hasnt moved in.

What I think you need to do is:

1. Evidence of missing tenants place of residence. In Australia that can be bills for utilities etc, a statutory declaration, drivers licence
2. Get the lease fixed to relect actual tenants
3. Get the unpaid rent sorted
4. Go to the council with supporting documentation for residency of missing tenant and copy of form submitted for exemption and copy of letter sent to agent re missing tenant not moving in and see if it can be resolved

5 if not contact a legal support organisations and get their help
6 next time everyone leaves the property for jolidays - get the mail forwarded!!

[k1233]

Sorry cross post - good rent is up to date

[FridgeFullOfChocolate]

Unfortunately I think the council is correct. I have been in a similar situation and have been liable for both someone else’s rent and also council tax (even though they weren’t living in the house! They were just on the contract).

When your son and friend’s signed their tenancy agreement they will have signed a joint agreement that would have stated the total amount payable per month, someone should have explained if someone dropped out they have to cover their share. Every student house I lived in had an agreement like this. As the agreement is set up like this and it is a houseshare the entire house is liable for any council tax. This is great if everyone is a student, but if one of you is working you only get a sole occupancy discount, I think it’s 1/4 off.

So your son and friend’s will need to stump up 3/4 of the council tax until they fill the person who dropped out room with another student. The landlord isn’t going to remove this other person off the tenancy as the person is still tied into it, he will have signed a contract.

[Stickmangate]

For council tax there is a hierarchy of who is liable to pay it. Below is copied from a council website.

The hierarchy of liability

To establish who the person is who is liable for the payment of Council Tax, there is a set 'hierarchy'.

This hierarchy is set down below; look down the list and as soon as you reach a description that applies to a person in your home, they will be the person liable for the Council Tax.

A resident freeholder (so 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)
A resident is a person of 18 years or over and lives in the dwelling as their only or main home.

Only properties that are soles occupied by students are exempt from council tax. As the person that didn’t move in is still liable for rent and therefore also council tax as they are not a student the household
Is no longer exempt. It doesn’t matter if they are living there or not. If they all moved out before the tenancy ended they would all still be liable to pay the council tax on the property even if they were paying it somewhere else.

I understand your upset and they council shoildnt have left it so long to sort. However it does seem that they want to pursue him for not paying his share of the rent but don’t think he should be liable for council tax, you can’t have it both ways.

As they are all joint tenants then they are all liable. They only way round it would be to get a new tenancy agreement

[runoutofnamechanges]

Thanks, Coronapop and Imstickingwiththisone! And everyone else!

In answer to everyone's questions, they have told the council he doesn't live there and never has. DS also asked what they need to do to prove that/what are the next steps. Unfortunately the answer was contact the student exemption department. There is no way to do that by phone, it has to be in writing. But as they haven't made responded to the original application in 2 months, I doubt they will get a response to any letter before the deadline to pay

I have had some really helpful professional advice from one poster that gives me hope that if they can prove he is not resident, they should still be exempt. DS has calmed down and hopefully can put it out of his mind until Monday when he can call CAB.

Thank you, Mumsnet!