A landlord with four properties in York has been before the magistrates accused of running up seven years of council tax arrears totaling over £40,000. As well as that, he had already been banned from renting out a room because the property failed to meet HMO standards. Despite this ban he took on a tenant for the room.

He now faces having to pay off the debt by finding a lump sum of £22,000 and paying £200 per week. He plans to re-mortgage a property to raise some cash. He was told by the magistrates that he would receive a jail sentence but this would be suspended for three months. This means that if he does not pay the lump sum and weekly installments he could go to prison.

It is surprising to see how many landlords get themselves into trouble with houses in multiple occupation (HMO’s). Any landlord insurance client thinking about this area of the market should research all the rules and regulations that govern the letting out of a property to multiple occupiers. Typically this might be a large house divided up into bed-sits with some shared facilities. The first place to look for advice would be the website of your local council. Another thing to bear in mind is that landlords are responsible for council tax on HMOs so this needs to be budgeted for.
Even if your let property is not an HMO you may still end up having to pay council tax if it is empty for more than a few months- once again check with your local authority. If you have a long period with no tenant you may find yourself having to pay all kinds of running costs with no income coming in. All the more reason to invest in a property that is likely to find a tenant quickly and to advertise it at a realistic rent.