A little known piece of legislation I was recently informed about by Sally Lawson, the previous president of ARLA Propertymark was the 'Leeds City Council vs Broadley' case, a protracted ‘David and Goliath’ battle over council tax payments.
The what vs who case?
Well I’m generally pretty good on the ol’legislative lettings knowledge but even I was stumped. Its clear that this has NOT been widely publicised. Back in 2014 Leeds City Council demanded council tax for five properties from landlord Stephen Broadley, for periods when the homes were empty but the tenancies had not been formally ended by either party. The reason for this was that the Council felt that a statutory periodic tenancy was a new month to month tenancy (the fixed term period being a month) and so the tenant’s interest in the property was only from month to month.
Hang on, aren’t tenants responsible for council tax?
Exactly, Mr Broadley fought back and what followed was a two-and-a-half-year legal skirmish, during which he successfully defended himself in court and against two subsequent appeals. Finally, the Appeal Court upheld the previous rulings, that landlords are not responsible for paying council tax on a property when a tenant moves out. Great.
However, it seems that the one vital saviour for this clever landlord was the fact that the wording stated on all five tenancy agreements was that when the fixed term period came to an end, the tenancy would continue on a CONTRACTUAL periodic tenancy. Now, as you probably know, most Assured Short-hold Tenancy agreements do not state this, instead it is generally written in most AST’s that the agreement will roll onto a STATUTORY periodic tenancy once the fixed term period ends. This one vital word change saved the landlord in this case and means a review of tenancy agreement wording across the country. It seems that for landlords with agreements that follow on a traditional statutory basis (as most do) they could now be held liable for the Council tax should their tenants fail to pay and the Council have the inclination to go after them instead.
But…we’re quite far away from Leeds….
Well, as we’re all aware, these County Council's talk to each other and proceedings on this basis have been brought by others across the country, most recently in Birmingham which indicates this information is moving south. In order to combat this, we have created NEW agreements for all new tenancies and are renewing current periodic tenancies onto these for a fixed term period, they then use this new ‘Contracted’ phrase at the end of the fixed term and therefore protect our landlords interests.
Angharad Trueman – Managing Director
Found this interesting? You’ll love my blog on 3 year tenancies, find it HERE.