Council Tax Query

As far as the council is concerned, the tax is payable by the occupier or, if none, the owner. That means the tenant up to the day he moves out, and the landlord thereafter until he finds a new tenant.

As far as the landlord is concerned, if the old tenant can be traced, he can be sued both for rent and council tax until the earlier of when the tenancy would have expired and when a new tenant moved in.

If the property stays unoccupied for some period, the landlord can be exempt from council tax for this property (normally 6-12 months). It would be better to check with the council in question, they might have a web site.

Vadim

In message , Take a Walk writes

Firstly, do you know that they have done a runner, and have you taken possession of the property back - this, in itself, is fraught with pitfalls because, if you take possession without taking the proper legal steps, i.e. obtain a court order, the tenant could return and cause you all kinds of difficulty if they know what they are doing.

However, it sounds like they are not coming back so, the date you take, or took, possession, is the date from which you are liable for the tax.

You may get the 6 months free for an empty property, but I think it has to be empty of furniture as well as occupants.

In the past, where it has suited me, if a tenant has done a runner, I have not taken possession on the basis that they may come back. I have then taken possession when it suited me, within reason, and told the council at the time.

Good Luck

Indeed. Normally the exemption is given for a maximum period of 6 months since last occupied, but only if it's unfurnished. Thereafter, and otherwise, the owner pays 50% of full whack.

Hmm Im not so sure thats the case down here. The tenant is responsible while he is the tenant. If he moves out before the end of the tenancy then he is still responsible but he may get relief if hes left the place completely empty. When possession reverts to the landlord then the LL becomes responsible but he may get relief on the same basis.

But if the tenant hands back the keys before the end of the tenancy, it could be argued that the landlord does have possession.

In message , Jonathan Bryce writes

Dont follow that. By giving the keys back you do not revoke the rights of the tenancy, you are still responsible for your obligations under the tenancy agreement and still retain your rights of occupation. The fact that you choose not to live there is irrelevant.

Hi,

This is a retrospective thing.... I rented out a flat for a number of years and then my main business got into trouble (so I didn't take too much notice of the flat) and went bankrupt, the flat getting repossessed in the process.

The tenant left some time around my bankrupcy (but I don't know exactly when because I told him that the receivers were now in charge and he could stay until someone told him otherwise). As it was the Building Society officially repossessed the flat some 5 months after I gave them permission to (I handed some keys back)(the date of my bankrupcy)

Now the council wants 50% (empty charge) of council tax due for the period between handing the keys back and the official reposssession date.

If I'd known it was still 'mine' till that time I obv would have continued charging rent!

In message , Take a Walk writes

You made some mistakes here as I think you now realise.

Handing keys back does not mean that you are giving them the permission to repossess or that they are taking possession.

If you are bankrupt then surely the council are merely creditors to your bankrupt estate?

Correct.

In message , john boyle writes

Handing over keys is quite a significant event in terms of the landlord getting possession. He can the pursue the ex tenant for any loss incurred, provided he mitigates the loss by reletting the place as soon as is reasonably possible. Part of the loss could be council tax due, but the LL would be liable, and would have to pursue the tenant - which would generally be a waste of time.

In message , Take a Walk writes

This is a bit confusing - if you had not taken possession of the flat, either lawfully, or unlawfully, then you are not liable for the tax, and the council should pursue the tenant. The only date when you can be certain that the tenant had left, given that he had not handed the keys to you, was the date of possession by the building society, after which you are obviously not liable. If you had taken possession prior to the building societies possession, this would have been unlawful without a court order, and not something that you seem to have done.

Tell the council this in writing, and suggest that you will be quite happy to explain the situation to a judge if they wish to take you to court.

If they dont back down, you can then tell the judge that the council seem to be suggesting that you had neither a court order for possession, nor had the tenant handed the keys back to you, nor had you taken unlawful possession. You could suggest that it is somewhat defamatory of the council to suggest that you did, and that you felt as if you were being harassed and bullied into paying a tax owed by someone else because they couldn't be bothered to pursue the right person..

I cant guarantee that you will win, but I think a judge would favour the poor unsuspecting bankrupt over the mighty, al-powerful council.

In message , john boyle writes

In my experience, handing the keys to a building society is known as a voluntary possession, and is quite common.

I wondered about this but, as the alleged debt was incurred after bankruptcy, is it possible that it is due, and an allowable payment from the bankrupts income?

Otherwise, we could all go bankrupt, and then avoid any debts incurred after our bankruptcy - forever??

Yes you do

Indeed you are

You retain your rights until you cease to be entitled to them *or* until you explicitly revoke them. It is generally understood that handing back the keys is a symbolic gesture of revocation of your right to occupation, of *giving back* possession. The only other thing it could mean would be to say "I'm going away for a while, please look after the place until I return". Such a request would not normally need to be accompanied by a returning of keys anyway, since it is assumed the landlord will have his own set.

You're right, of course, that the tenant can't just revoke his obligations as easily as his rights. So if the tenant is not permitted to bugger off with zero notice, then returning the keys is both the implicit giving of notice of termination and a formal admission that he is breaching the terms of the rental agreement, specifically by not giving enough notice, and also, where relevant, by violating the clause which says he mut not leave the property unattended for more than X weeks. He still remains liable for the rent in respect of the notice period, but because the right to occupy has been given up, the landlord is surely now under an obligation to mitigate his losses, to minimise the amount for which he could sue the tenant, by seeking to install a replacement tenant.

So, erm, "where it has suited you" you have not taken possession, and "where it has suited you" you have. Any chance of being a bit more specific? What is "within reason"? Is it based on a "not to be left unoccupied for more than X weeks" or notice clauses?

In the absence of a handing back of keys, how did you know they'd done a runner? Just when the rent had stopped coming in?

I think this is a popular misconception based on stories of people using the expression 'giving the keys back' when they meant 'we got chucked out'. During the last property crash when people were in negative equity some people sent the keys back to the mortgagee mistakenly thinking this was all that was needed for them to get out of the mortgage.

He needs more than possession of the keys to reclaim the property. He needs the authority of the courts to do that before the end of the tenancy agreement.

Quite. The misconception was that by giving back the house their obligations would cease. But what I'm saying is that giving back the keys *means* giving up the (right to occupy) house.

But there is no misconception in saying that whilst an obligation cannot be unilaterally revoked by a person who owes it, a right can.

If he already has the property back, he no longer needs to reclaim it.

He only needs authority of the courts to take possession from the tenant by force or stealth against the tenant's will. But if the tenant gives it up voluntarily, that is a completely different matter - the landlord then *has* possession without ever having needed to *take* it.

Did you tell the council you had subsequently been made bankrupt?

Not having to pay your debts is one of the main effects of bankruptcy!

Sometimes you have a "feeling" that someone has done a runner, i.e. haven't seen them for a while, (couple of months say), but you cannot just take possession, in case they return and have you for unlawful possession.

There then comes a point where you are reasonably certain that they have done a runner, but feel that you would still need a court order to be sure of taking possession lawfully. e.g. no sign of them for 3/4 months, fridge full of rotting stuff, girlfriend says "I've left him, but dont know what he's doing" etc.

There then comes a point where you are happy to take the risk that they are not coming back, and take possession without a court order.

I cant be precise about the timings, and circumstances, as they are purely judgement. What I can say is that I have never taken possession and a tenant has returned.

I have sometimes taken no action against tenants in arrears as, as soon as I obtain possession, I have to pay water rates and council tax. If I have to refurbish before reletting, and am not ready, so it sometimes suits me not to have possession.

The rent can often stop well in advance of the "runner", so is not a factor which affects my decision to any great degree. Clearly, if rent was still being paid directly by a tenant, rather than by Housing Benefit, then the runner has not been done.