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Council Tax And Rent Arrears

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2 September 2020

Council tax

Council tax has remained payable throughout the pandemic and there have been no specific measures to allow for payment holidays. Many councils have taken steps to help those most financially affected by the pandemic and some have held back from collecting arrears. Some councils delayed issuing 2020/21 bills until June. Others have allowed at least two missed payments before considering further action.

Council tax is a priority payment and, if you owe arrears, councils will eventually take action to recover these debts. If payment is not made after sending reminder letters and final notices, the council will issue a magistrate's court summons to obtain a liability order (LO).

Once this has been obtained, the council has various means of enforcement available. This could include instructing enforcement officers (bailiffs) or issuing an attachment of earnings order – where payments can be taken direct from wages or salary at set percentages. Ultimately, if the arrears remain unpaid, in England, you could go to prison for non-payment.

If you already owed arrears for previous years, you are particularly at risk of enforcement as it’s likely the council will obtain a liability order.

Earlier this year, enforcement action was put on hold but bailiffs resumed collection activity from 24 August. While there are still some restrictions in place and bailiffs cannot enter properties to remove goods, they will begin to contact you for payment. If you're facing this situation, please contact us for advice.

If you're struggling due to a loss of income, check whether you are entitled to council tax support or discretionary relief. If you're experiencing severe hardship, you can apply for a discretionary reduction (under Section 13A of the Local Government and Finance Act 1992).

We've produced a webinar which includes lots of useful information and advice on council tax and what to do if you're struggling to pay.

Rent arrears

During the pandemic, the Government introduced measures to help protect tenants in rented accommodation from losing their homes.

Court action for possession, including eviction, was placed on hold and the notice period landlords were required to give most tenants before starting court action was temporarily increased from two to three months until 30 September. This has recently been increased from three to six months in England and Wales (already six months in Scotland). The extended notice period applies to new notices and it is in place up to 31 March 2021. The notice period remains three months in Northern Ireland and in cases of anti-social behaviour and criminal activity.

Landlords have been urged to show understanding on rent arrears and to come to a mutual agreement with their tenants, where possible, to prevent court action.

Court action for possession was due to resume on 24 August this year but this has now been pushed back until 20 September. If you owe rent arrears, you could be at risk of losing your home when court action resumes.

Possession procedure

Your landlord cannot force you to leave the property without a court order. Before your landlord can take court action, he or she has to issue a Notice Seeking Possession (Section 21 or Section 8 Notice). This is the first step in the landlord taking action to repossess the property.

Your landlord may have already given notice or started court action prior to, or during, the stay on possession action. In England and Wales, landlords must issue a 'reactivation notice' for claims issued prior to 3 August. Landlords have to provide any knowledge they have about how Covid-19 has affected the tenant and their dependents, and a rent statement showing two years of payment history.

Courts must give at least 21 days’ notice of the court hearing. For claims issued after 3 August and new claims, the claimant (landlord) must bring two copies of a notice providing any knowledge they have about the effect of Covid-19 on the tenant or their dependents. 'Social' landlords (including local authorities and housing associations) must provide a copy of the pre-action protocol and details about how they've complied. The notice must be served on tenants at least 14 days prior to any hearing.

If you're unable to pay the arrears or reach an agreement to clear these debts over time, the court can order outright possession and you'll have to leave the property.

If your landlord had already obtained an outright possession order prior to 27 March 2020, they can apply for a warrant of eviction. You have to be given at least 14 days’ notice of the eviction date. Even at this stage, you still have the right to apply to the court to stop the eviction – get in touch for advice.

So, what can I do if I owe rent arrears?

Rent is a priority payment since owing arrears could lead to the loss of your home. If you're struggling to pay your rent, contact your landlord to discuss your situation and try to reach an agreement to pay. Check whether you can get any help with your rent through housing benefit, Universal Credit or a discretionary housing payment.

If you're unable to reach an agreement or your landlord issues a notice or court claim for possession, seek advice now.

Our Money Advice and Guidance Service team can advise on council tax and rent arrears and discuss your options. They may also be able to consider financial assistance. If you’re worried, don’t wait – apply now. We’re here to help.

Give us a call...

For confidential support and advice call 0800 056 2424 Monday to Friday 9am to 4pm