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Shorthold tenancies and council tax liability


If a tenant on a statutory periodic tenancy stops living in the property, but the tenancy is not ended, who is liable for the Council Tax?

CT v Horsham District Council (HB) [2013] UKUT 617 (AAC)

This was an appeal to the Upper Tribunal from the benefits First Tier Tribunal. It was actually an appeal on Council tax Benefit eligibility, but has considerable significance for Council tax liability of (non-resident) tenants.

The Claimant had been an assured shorthold tenant since 1997. By at least February 2008, the tenancy had become a statutory periodic tenancy (probably back in 1997/8 as there do not appear to have been any ‘renewal’ tenancies.) She did not live in the property from August 2008, but the tenancy was not ended until February 2010.

The issue was the period between August 2008 and Feb 2010 when an alleged overpayment of CTB had taken place.

At the UT, the Council argued that th Claimant was ‘the owner’ of the property for the purposes of s.6 Local Government Finance Act 1992 even if not resident:

the interest which the Claimant had under her periodic tenancy was a “material interest”, as it had originally been granted for a term of six months or more. In that case there appears to have been an initial grant of an assured tenancy for a term of six months, followed by a periodic assured tenancy arising under the 1988 Act, followed when the tenant ceased to reside in the property by a periodic tenancy which was not an assured tenancy. The Tribunal held, contrary to the council’s contention in that case, that the periodic tenancies were “a continuation of the original agreement and not three separate and different agreements and it therefore followed that the tenant had a material interest …”

This was in reliance on a Valuation Tribunal decision in Oyston v Leeds City Council (27 July 2011) [Which I think is this one]

However, the Upper Tribunal preferred the argument in found in a summary of MacAttram v London Borough of Camden [2012] EWHC 1033 (I have seen a transcript of judgment in this case, but it doesn’t seem to be generally available and the UT hadn’t seen it).

That case, which also concerned council tax liability, dealt with a contractual tenancy for LB Camden for a period of 3 years, after which Camden continued to use the property to house homeless appliance and continued to pay rent, on a monthly basis, as was originally required under the lease. The High Court accepted that a new monthly periodic tenancy had arisen at the expiry of the fixed term of the contract (though why not a tenancy at will is not clear, but of no relevance).

Section 6 of the Local Government Finance Act 1992 provides for liability for council tax to fall on the first applicable person on the following list:

(2)A person falls within this subsection in relation to any chargeable dwelling and any day if, on that day–
(a)he is a resident of the dwelling and has a freehold interest in the whole or any part of it;
(b)he is such a resident and has a leasehold interest in the whole or any part of the dwelling which is not inferior to another such interest held by another such resident;
(c)he is both such a resident and a statutory or secure or introductory tenant of the whole or any part of the dwelling;
(d)he is such a resident and has a contractual licence to occupy the whole or any part of the dwelling;
(e)he is such a resident; or.
(f)he is the owner of the dwelling.

So, if there is no person resident, liability falls on ‘the owner’.

Sections 5 and 6 provide:

(5)In this Part, unless the context otherwise requires–
‘owner’, in relation to any dwelling, means the person as regards whom the following conditions are fulfilled–
(a)he has a material interest in the whole or any part of the dwelling; and.
(b)at least part of the dwelling or, as the case may be, of the part concerned is not subject to a material interest inferior to his interest;

(6)In this section– …
‘material interest’ means a freehold interest or a leasehold interest which was granted for a term of six months or more.”

Thus for the ‘owner’ to avoid liability, there has to be someone with an inferior material interest to be classed as the ‘owner’. But a material interest has to be effectively a tenancy with a term of 6 months or more.

A monthly periodic, the High Court held, was not a material interest. Therefore Camden were not liable for the council tax for the period after its contractual term. Further the periodic tenancy was a new tenancy and not a ‘continuation’ of the original contractual term:

The whole premise of the inference of a periodic tenancy which arises after expiry of a fixed term by virtue of the payment and acceptance of rent is that by their conduct the parties are taken to have agreed to enter into a tenancy. Although the relationship of landlord and tenant continues, the agreement between them is not one of continuation of a previous fixed term that has expired, rather it is the commencement of a new and different term of years, a monthly periodic tenancy. Although that tenancy is on the same terms and conditions as the previous lease, that again is based on an inference from the party’s conduct. Those previous terms only apply insofar as they are not inconsistent with the terms of the new and different tenancy, namely the monthly periodic tenancy.

(This is in relation to a contractual tenancy, so not on the wording of Housing Act 1988, as in Superstrike)

The principle in Gandy v Jubber (1865) 9 B & S 15, that a yearly periodic tenancy “becomes an entire lease certain for the years past and also for the year so entered on, and that it is not a reletting at the commencement of the third and subsequent years”, did not apply as s.6 of the 1992 Act specified a lease ‘granted’ for more than 6 months, not one granted on a monthly basis that cumulatively became a lease for longer than 6 months.

Thus the High Court in MacAttram. As mentioned above, the Upper Tribunal apparently did not have these details, or the transcript of MacAttram. In fact it isn’t clear whether the UT had appreciated that MacAttram did not concern an assured shorthold tenancy. But given Superstrike, it is unarguable that a statutory periodic is not a new periodic tenancy of less than 6 months.

So, the Upper tribunal held that the tenant is not liable for Council Tax as ‘owner’ if they are on a statutory periodic tenancy (or any tenancy of a term of less than 6 months) and are non-resident. The liability will fall on the next ‘owner’ up the chain with a material interest and a longer than 6 month term. usually, the landlord.

The Claimant in this case was found not to have received an excess of CTB. Unfortunately, that was because she had no council tax liability and should have received no CTB at all.

As far as I can see, this should also apply to any secure or assured social tenant on a weekly or monthly periodic tenancy. Once they are no longer resident, even if the tenancy continues (as a contractual tenancy or otherwise) they are not liable for Council Tax, but the landlord is.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.


  1. John Copeland

    This case deals with direct liability to the Council under the legislation but surely the tenant might still have to pay or refund the Council Tax under an obligation to the landlord contained in the terms of the tenancy. I see the Upper Tribunal made this point in the 1st decision on this matter

    • Giles Peaker

      Maybe, if the tenancy agreement specifies it. But if the agreement simply says T must pay the council tax for which T is liable, or something similar (T must pay all taxes under statute etc.), then no. Depending on the wording of the agreement, it might have to specify T to make payments to indemnify L’s liability for CT.

      • John Copeland

        Agreed it depends on the wording

  2. Peter Barker

    Apart from the substance of the decision, there is another interesting aspect to this case and that is jurisdiction.
    The basic entitlement condition for CTB (until it was abolished last year) was that the claimant was liable to pay Council Tax as the resident of a dwelling, with the term “resident” defined as having the same meaning that it has for local taxation purposes. See s131 of the Social Security Contributions and Benefits Act 1992.
    In this case there is no suggestion that the claimant was resident and so normally as far as the CTB appeal is concerned that would have been that. The separate question whether or not the claimant was liable to pay Council Tax as an owner should, if disputed, have been the subject of an entirely separate appeal to the Valuation Tribunal. Indeed, disputes over whether a landlord or tenant is liable for CT form a very large part of the VT’s work – this would have been a bread and butter case for the VT.
    However, the boundary between the jurisdictions is blurred by the fact that the Council had awarded CTB against liability which it later decided the claimant had in his capacity as an owner – so the claimant was entitled to dispute the excess CTB decision by way of a CTB appeal. In order to decide the CTB appeal, Judge Turnbull stepped into the VT’s shoes and considered liability.
    Presumably the Council will now bill the landlord. Now, suppose the landlord disagrees with this outcome and argues that the tenant should be liable as the owner. Does the landlord have a right to appeal to the VT, and does the VT have jurisdiction to overrule the UT’s view? Surely yes it must – the VT is the proper forum for this kind of dispute. Suppose the VT upholds the landlord’s appeal: where does that leave things?
    It is obviously more efficient if as many issues as possible can be taken care of in one set of Tribunal proceedings, but I think what should have happened in this case was that the UT (or the FtT which originally heard the appeal) should have adjourned so that a VT could determine liability (who was liable, and if so0 in what capacity) and the UT should then have considered itself bound to accept the VT’s decision as fait accompli before proceeding to decide the CTB appeal.
    If anything positive can be said about the new local Council Tax Reduction scheme, it is that entitlement and liability appeals now lie to the same Tribunal so cases can be managed in a way that allows a single hearing to determine both issues at once. But in this appeal I think the UT has over-stepped its jurisdiction.

  3. Michael Watney

    I am a property manager. Our standard agreement allows for a period from x to y and thereafter continueing from month to month. We also have a clause that states “unless the tenant wishes to terminate the tenancy at the end of the fixed term (by giving notice) the tenancy hereby created shall continue as a contractual periodic tenancy from month to month until terminated… I therefore believe our term never expires and provide the from and to is more than six month our landlords are not liable to council tax until the tenancy ends. We are having difficulty where a tenant leaves say two weeks before his termination date and registers at another house. The council are trying to charge the landlord for the period between when the tenant registers at his new house and the end of the tenancy. Any views

    • Giles Peaker

      Michael, this is teetering into the kind of advice we get paid for, I’m afraid.

      • Michael Watney

        Ok let me put it this way. Your article (which is excellent and very topical) ends suggesting that a tenancy that is for a contractual periodic means the tenant is not liable for council tax. I think that a tenancy that is for a term of more than six month and then contractualy periodic as a continuation of the same agreement means that the tenant remains liable for council tax even if they are no longer resident. I believe this is a useful way in which landlords can avoid this particular nasty.

        • Giles Peaker

          The downside is that, if it worked, you then almost certainly can’t use a s.21(1) notice, despite Spencer v Taylor, and would have to sue a s.21(4) notice instead. See the comments to this post.

          Swings and roundabouts…

        • Michael Watney

          My arguments have now been tested with the Valuation Tribunal (Appeal no 3245M131738/176C). Your article formed part of the Council’s case. The VTE held for me in that in a contractual periodic following an initial term of six months or more the tenant remains liable for council tax as “owner” until the last day of his tenancy. Can I suggest in light of this your article might need changing.

        • Giles Peaker

          Michael, thanks for the info. The article doesn’t suggest that the landlord would be liable for council tax on a contractual periodic following an initial fixed term. It is very interesting, though not entirely surprising, to see that you won on that point, but it is a tenancy of over six months term, whether it has become periodic or not. If I can find the decision, I’ll add a note on it.

          Did the council really use the post above in the proceedings? That amuses me greatly.

        • Michael Watney

          If you cannot find the decision send me your email address and i will email it to you. Yes your article was used in the Council evidence including my earlier postings. The Council was argueing that in light of MacAttram for all periodic agreements once the initial term ended the landlord was responsible for council tax if the tenant were no longer resident. The key issue is the difference between a stututory periodic agreement being deemed to have been a new grant and a contractual periodic following a fixed term where the tenant continues to occupy under the terms of the agreement.

        • Martin O'Hearne

          Hi Michael,
          I came across this thread whilst researching the same subject as I am considering taking Leeds Council to task over this matter, based mainly on the items you have raised.

          I have tried to search for your appeal at the Valuation Tribunal using the reference you have quoted as I think it will be very helpful for my case but the search as drawn a blank, is the reference correct or do you have any other criteria which I can search by?



        • Michael Watney

          Go and look at Nearly legal’s article “Missing tenants and missing sentences: Council tax and periodic tenancies”. There is a link to the judgement in my case

  4. Steve Bradley

    If at the end of the initial six month assured shorthold tenancy agreement, the tenancy agreement is renewed for a new 6 month term, does this protect the landlord from council tax liability? If for example the tenant leaves without giving notice which means they are no longer “resident”, within the 6 month term of the renewed tenancy, are they still the “material” person, as the tenancy is a term of 6 months or more, or does the liability still pass to the landlord as the tenant is no longer “resident”?

    • Giles Peaker

      That is a whole other question. And it would depend on the facts. But if the tenant has completely gone, living elsewhere with no intention to return, then they probably aren’t resident for CT purposes.


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