Since the changes were announced to council tax from 1 April 2013 in particular for unoccupied and unfurnished properties, we changed our advice from suggesting 3 month fixed terms to 6 month fixed terms. We issued emails and also a rare important alert via post.

As it turns out, this was perhaps a little hasty and we’ve had a number of calls from members rightly concerned about having to give fixed terms of longer than 3 months for fear of having a troublesome tenant. During these calls, we’ve dug deeper with individual circumstances and actually it turns out in many of those cases, the landlord will suffer no great harm by continuing with 3 month tenancies mainly because they were paying the council tax anyway.

I am therefore writing this as a little note to clarify when a 3 month fixed term is suitable or not.

Firstly, the only reason for recommending 6 months over 3 months is for council tax purposes and no other reason. With a 3 month tenancy, if a tenant were to abandon, the landlord could be liable to pay council tax for the period of abandonment despite the tenant not giving notice. However, the same situation on a 6 month tenancy and using our latest tenancy (06/13 onwards) would usually mean the tenant would remain liable for council tax until proper notice was given. To see the case law where this is derived, see Trustees of the Berwick Settlement and Shropshire Council, appeal number 3245M131738/176C

Therefore, if the landlord is already paying council tax then the changes don’t really apply. So, if the property is a HMO where each room is let individually, the landlord pays council tax anyway so there is no benefit offering longer than 3 months. Also, if the property is furnished, council tax is payable whilst unoccupied even before the changes so a landlord might as well continue as before.

Students of course are for a year or term and exempt from council tax anyway.

This just leaves properties which are unfurnished where the tenant pays the council tax and these types of lets are where 6 months is recommended. However, even with this type of let, before deciding for certain, first you should check with the local authority to see what they are offering because it varies greatly from council to council. In fact as we get more and more calls, actually, most seem to be offering 100% discount for between 1 and 3 months which means in this case, you could probably carry on with three month terms because even if abandonment takes place, you may well have re-let the property before council tax becomes payable in any event.

We have put together a table of recommendations below and we have also added a new page in our granting an assured shorthold tenancy guidance discussing fixed terms.

Type of tenancy / property Recommended initial fixed term
Students 1 year or the length of a term e.g. 1 September to 31 August or 1 September to 30 June depending on market conditions and normal practices
Furnished House / flat – single person, couple, family or joint sharers 3 months (because council tax is payable between lets on furnished properties regardless)
Unfurnished house / flat – single person, couple, family or joint sharers 6 months (because if the tenant abandons without notice, tenant remains liable for council tax until property is re-let or they give proper notice. Anything less than 6 months, landlord would pay in this scenario).3 months If your local authority has generous exemptions / discounts for unfurnished and unoccupied properties for example many authorities offer 100% discount for up to 3 months empty. This way, even if tenant abandons, you will likely have property re-let again before council tax becomes payable. Check your councils website for individual discounts.
HMO – letting of a room in shared house (except students see above) 3 months (because landlord pays council tax where rooms let individually anyway so no benefit in giving longer fixed term)

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