The majority of tenants are good and reliable citizens. But as a landlord, on occasion, you might find yourself faced with some nasty surprises once your tenant has vacated the property – and we’re not just talking about a collection of Victorian taxidermy in the wardrobe.
Sometimes tenants leave behind unpaid utility and council tax bills, which can find their way to the landlord’s door. Given the difficult financial circumstances that have faced many tenants over the past two years, this issue is certainly one to look out for. If you’re a landlord in Cambridgeshire, Wisbech, Rushden, Corby, Boston or beyond, you should have a clear idea of what you need to do should this situation arise.
So if you’re wondering what to do about your previous tenant’s unpaid council tax, then keep reading.
What is council tax?
People living in domestic properties across the UK need to pay council tax to their local authority. The money collected helps pay for local services such as social care, waste and recycling collections, education and planning. It also includes a precept to pay for local police and fire services.
Council tax was introduced in 1993 and the amount paid is based on the value of each property. Homes in England were last valued in 1991 and placed within valuation bands from A to H.
With increased pressure on finances, especially during the coronavirus pandemic, local councils depend on the money they receive to deliver services and will be quick to pursue anyone who falls into arrears.
Council tax can be paid annually or in instalments – most people opt for a monthly direct debit. If someone defaults on their monthly payments, they may become liable for the full amount.
Who is responsible for paying the council tax bill – tenant or landlord?
Council tax is payable on all residential properties across the UK. It must be paid by residents over the age of 18 and responsibility for the tax usually falls on the property’s occupier. This means that, in most cases, tenants, not landlords are responsible for paying the tax.
Council tax & HMOs
However, there are some circumstances when the landlord is liable for council tax. These include houses in multiple occupation (HMOs) where a number of unrelated tenants live in a property, sharing communal areas. Landlords of HMOs will often pay the council tax on the property and build it into the rent due.
Other occasions when landlords pay council tax
Landlords are also responsible for paying the tax in other, rarer cases, such as if all their tenants are:
- under 18,
- asylum seekers,
- or renting the home for a short-term emergency period.
Void periods & council tax
Landlords are also responsible for council tax during void periods – be aware too that while previously there were discounts for empty properties, concern about second homes standing empty has led to full or even higher rates of the tax being charged by some local councils.
What should landlords do to ensure they aren’t liable for council tax?
While responsibility for paying falls to the occupier of the property, you should also make it clear in the tenancy agreement, that the charge must be paid by the tenant.
In addition, you should contact the council when a new tenant moves in, to let them know who will be living in the property. When a tenant moves out, you should also inform the council of their forwarding address.
What happens if a tenant doesn’t pay the council tax?
If your tenant doesn’t pay their council tax, the council will send out reminders. If these are ignored, they will attempt to reclaim the debt by an attachment of earnings or taking bailiff action.
However, they may also take a different route – of trying to pursue the landlord for the debt. This is most likely to happen if you didn’t inform the council that your tenant was moving in, but it could also be the result of an error.
If this happens to you, contact the council immediately – the demands won’t just go away and the quicker you correct the error the better. If the tenant is still living in the property, let the council know this.
You may, also receive a demand for unpaid council tax relating to a previous tenant. If this happens, you will need to give the council all the details you have for the former tenant including the dates they occupied the property and their new contact details.
If you’re a new landlord, just getting to grips with the difficulties renting out homes can present, talk to us. We’d be pleased to tell you more about how we work with landlords and the full range of services we offer.
