Stressed Landlords

The Changing Rules Around Council Tax For Landlords

The responsibility of landlords for paying their council tax on empty rental properties has often been an area of confusion regarding what exactly is payable and where the responsibility lies. Each individual local authority applies its own laws so it’s important to clarify exactly what you, as a landlord, need to pay if your rental property is empty temporarily, for example, while you carry out repairs or wait for new tenants to move in.

The law regarding Council Tax exemption and discounts is very much at the whim of your local council. For landlords who own property in Walsall Council, the rules applying to Council Tax exemption have recently changed.

Payment of your tenant’s outstanding council tax

Redstones understands that due to new rules which came into force on 1st April this year, if a tenant is on a periodic contract (one that rolls on from week to week or month to month after the original fixed term has expired) and leaves the property with an unpaid council tax bill, the landlord is responsible for payment of Council Tax from the date the fixed term tenancy agreement ends, not from the date the tenant leaves.

For example, let’s say your tenant’s contract ends on 1st January but they continue with a periodic contract for three months, serving notice on 1st April and leaving your property on 1st May.

If that tenant hasn’t paid council tax up until the date they leave your property, you, as a landlord must pay all outstanding council tax, irrespective of the fact that your tenant still occupied your property three months after the original fixed term agreement ended.

Council Tax exemption for empty properties

As a landlord, you may be forgiven for believing that you are entitled to a three month exemption on your empty rental property but the rules for Walsall have now changed.

The exemption period is now just one week.

This puts additional pressure on landlords to find a tenant to occupy their property within one week of the previous tenant leaving, regardless of any cleaning, maintenance or repairs that may need to be carried out.

A further point to note is that only dated tenancy agreements can be used in relation to proving responsibility for council tax. In other words, a periodic tenancy agreement will not apply.

At Redstones, we are aware of at least one landlord who has recently been forced to pay two months’ of council tax payments as their tenant was on a periodic contract but had failed to pay council tax for the final two months they lived in the property.

What can landlords do?

Councils can largely apply their own rules so our advice is:-

  • Contact your local council if you know your rental property will be empty and for how long.
  • Confirm when you are liable for Council Tax and what, if any, discounts or periods of exemption are available.
  • Keep vacant periods to a minimum
  • Incorporate council tax into your budget, especially if your property lies in an area where Council Tax exemption periods are limited.
  • Speak to Redstones about your property management options. We provide a range of service and up-to-date advice on the growing number of legal obligations now applied to landlords.

Landlords Must Prepare For Changes To Section 21 Now!

From 1st October significant changes will take place to Section 21 of the Housing Act, 1988, due to The Deregulation Act which will affect all landlords. The main changes are to the rules on serving your tenants notice to quit, commonly known as a Section 21 Notice.

Are all tenancies affected?

No, only new assured shorthold tenancies commencing on or after 1st October 2015 in England.

The new rules will apply to existing tenancy agreements signed before that date from 1st October 2018.

What changes are taking place?

The key changes are as follows:-

  • Landlords must wait for a minimum of four months before serving notice on the tenant. This initiative is to prevent landlords from serving notice immediately after the tenant has taken up residence in the property.
  • The notice will be valid for a maximum of six months from the date of service. If the tenant doesn’t leave, landlords must launch possession proceedings within six months of notice served. The only exception is where the notice period is in excess of two months.
  • Landlords cannot serve notice where they have failed to comply with their existing legal obligations to their tenants. This includes the failure to ensure the safety of all fixtures and fittings, including PAT testing, provision of a valid gas certificate and a current EPC.
  • If a tenant has complained about the state of repair of the property, additional restrictions relating to Section 21 will apply. The tenant will be required to contact their local authorities if landlords fail to respond or act on their complaints. If landlords are then instructed to make improvements to the property, a Section 21 notice cannot be served. This applies for six months from a date of any notice received from local authorities unless the landlord or lettings agent responds within 14 days and all necessary repair work is completed.
  • Some exceptions apply, for instance, if the tenant is in breach of their obligations under the terms of the tenancy agreement, if the property has already been placed on the market for sale of if the owner requires possession of their property.
  • If the tenant decides to vacate the property on receipt of the Section 21 notice all rent paid in advance by the tenant must be refunded.
  • If the landlord fails to protect the tenant’s deposit, a Section 21 Notice cannot be served. This change is already in force and applies to all deposits still held by landlords. If you have failed to protect tenants’ deposits you must protect them with immediate effect and provide the tenant with copies of all relevant information.

You will find a legal viewpoint in this article here.

As landlord obligations increase, it is crucial that you understand your responsibilities and the consequences of failing to meet them.

Are you a landlord concerned about complying with the growing number of legal requirements? Put your mind at rest.  Contact Redstones to find out more about the range of comprehensive property management services we offer.

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