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View Full Version : HMO and Council Tax Dilema.



dwrights
03-06-2005, 21:43 PM
Hello Everybody,

Thought I would try and pick your brains. I have a property in Nottingham that I rent out to three students. They have lived there for two years now. The trouble is is that the council, out of the blue has decided that the house comes under the new multilple occupancy rules. They have just sent me a council tax bill for nearly 2 grand saying that I must pay it because the students have seperate tenancy agreements.

I have explained that the house is a shared student house and that it is excempt but they are still persueing me.
I even have letters from the students saying that they share the house equally and they share the bills.
The council just says that the tenancy agreements are the wrong type and I must pay!!!! No if's or buts!!!

Has anybody here had anything like this happen to them? I am not paying it and I am apealing against the desicion, but I fear if it goes to court it will cost me money I havn't got.

Any Ideas?

Thanks,
David.

PaulF
04-06-2005, 10:52 AM
What do you mean the tenancies are the "wrong type"? You will have to give a much more detailed scenario! Tell us as much as possible - we're not clairvoyant! :confused:

davidjohnbutton
04-06-2005, 13:04 PM
You can of course pass on the charge equally between the three students (who might be exempt anyway???) as they will not be paying anything in their own right separately.

My own feeling is that if you have created three separate individual tenancies of three different persons, not being related as part of the same family, then you have created a HMO (House in Multiple Occupation) - that being the case, then yes you are liable for Council tax as the landlord of a HMO. You cannot get around the regulations by saying it is three people sharing as obviously then everybody who operates a HMO would say this.

Also, as the owner of a HMO you may have other duties as to fire safety/alarms, fire doors etc. as laid down by the local authority - some LA's have introduced a fee and compulsory registration for HMO's.

On the basis of the sparese info you have given - I dont think you have grounds for appeal - you should instead seek to quickly get reimbursed by the tenants before they move and for future tenants, include the Council Tax element in their overall rent.

ourlol
04-06-2005, 18:00 PM
Oh damn... I have that horrible sinking feeling again! :eek:

I am the landlady to 4 students sharing a house in Liverpool. Each have their own individual tenancy agreement and at the start of their tenancy in 2004 the Council requested that they visit the Town Hall and take with them a copy of their student certificate and their tenancy agreement(s). Having done that, the house was duly deemed exempt from Council Tax.

BTW one reason why I issued separate tenancies was because they all pay me by different methods i.e. one pays by standing order every 4 weeks, two pay termly and the other is somewhat luckier... he doesn't actually pay anything... the landlady does... his mum!!

All have just signed new (individual) tenancy agreements for the period 08/05 to 07/06.

Can I assume from the above that Liverpool City Council 'could' come to me at some point in the future looking for council tax and could even backdate it! I'm wondering if there is anything I can do to pre-empt the scenerio that David is faced with.

Is there anyway round it? Could I speak to the lads and explain what may happen and issue a new (single) joint tenancy agreement which encompasses them all. Would the household (occupied solely by full-time students) under those circumstances be exempt from council tax?

That said, I feel I could be digging myself into a deeper hole than I am already. If the boys agree to it, could I draw up a replacement tenancy agreement just like that. The new ones they have in their possession haven't even started yet. Would the fact that they have different payment schedules matter for the purposes of a joint tenancy agreement.

Even worse, Liverpool City Council, are already aware that there were 4 agreements... would they then view the single tenancy as having been drawn up to specifically avoid paying the tax? If I am honest, that would be the only reason I would be doing it, as I really would struggle to pay the tax myself and the students themselves are likely to leave the property on the basis they could probably rent elsewhere and not be charged.

Your advice, as always, would be much appreciated. Thank you.

PS: Sorry it's a bit wordy... it's a woman thing I think. What a man could say in 10 words we can only seem to manage in 100.

dwrights
04-06-2005, 19:08 PM
What do you mean the tenancies are the "wrong type"? You will have to give a much more detailed scenario! Tell us as much as possible - we're not clairvoyant! :confused:

The tenancy agreements are individual 6 months AST's. Sorry to confuse you.

davidjohnbutton
04-06-2005, 19:10 PM
A lot depends on the local authority and their perception of what a HMO is - I gave the definitiion above, but your local authority ourlol seems to regard student shares as non-HMO so having made a statement that the house attracts no Council Tax with 4 exempt students in it, they are unlikely to change that view unless the situation itself alters (i.e. a non student shares)

You really need to talk to the tenancy relations officer at your local council for a difinitive answer.

ourlol
04-06-2005, 19:14 PM
You really need to talk to the tenancy relations officer at your local council for a difinitive answer.

Thank you. I'll give them a call on Monday.

dwrights
04-06-2005, 19:39 PM
You can of course pass on the charge equally between the three students (who might be exempt anyway???) as they will not be paying anything in their own right separately.

My own feeling is that if you have created three separate individual tenancies of three different persons, not being related as part of the same family, then you have created a HMO (House in Multiple Occupation) - that being the case, then yes you are liable for Council tax as the landlord of a HMO. You cannot get around the regulations by saying it is three people sharing as obviously then everybody who operates a HMO would say this.

Also, as the owner of a HMO you may have other duties as to fire safety/alarms, fire doors etc. as laid down by the local authority - some LA's have introduced a fee and compulsory registration for HMO's.

On the basis of the sparese info you have given - I dont think you have grounds for appeal - you should instead seek to quickly get reimbursed by the tenants before they move and for future tenants, include the Council Tax element in their overall rent.

Thanks for the reply David. The students are moving out next week so I could hold there deposits until the matter is sorted. I think it's just my inexperience with the new HMO rules. I am refurbishing the property over the next few months and renting it out to one family because the student rental market in Nottingham is saturated so not worried about HMO rules for the future.
The thing is though the students have there exempt certs so the bill will probably come back to me. I will let you know the outcome. :)

Regards.
David.

Muse
05-06-2005, 11:28 AM
My brother had exactly the same thing happen to him. 4 students sharing a house all with seperate tenancy agreements but sharing all facilities, he took it right through the whole appeals procedure and was still forced to pay, they had wanted to back date the bill for 3 years (ouch) but eventually settled for 2 years. Baiscally it was the seperate tenancy agreements that caught him out, the council's view was that they weren't sharing as family unit would on 1 tenacy agreeement thus making the house a house in multiple occupation.

ourlol
08-06-2005, 09:46 AM
Thanks Simon,


A word of warning - the council will ask for original ASTs. Never send these as you will never see them again!!! The council are dire when it comes to paperwork.
The lads were able to take them down to one of the council's walk-in centres (at Wavertree Library - which was nearest to my house in Allerton) where council staff took photocopies of the student certificates and tenancy agreements for their records. That way, the originals were never out of the student's possession for more than the few minutes it took to copy them.


They have not raised any questions so far about the multiple ASTs
... and long may it continue!


I am still getting started (8 student houses so far, in 2 yrs)
If you want another in summer 2008 - when I plan on selling mine, a 4/5 bed ~ 2 bathroom - I'll give you a call ;)

Laura