Goremsandu, R (on the application of) v London Borough of Harrow

For council tax purposes, a dwelling is not a house in multiple occupation merely because several occupiers pay separate shares of the rent. The statutory question is whether occupiers are tenants or licensees of part only of the dwelling, or whether they occupy the dwelling without liability to pay rent or a licence fee for it as a whole.

The contractual terms of the tenancy must be considered. Occupiers remain tenants of the whole dwelling where their unvaried tenancy gives them exclusive possession of the whole, even if part is inaccessible in practice because the landlord’s furniture is stored there. A landlord is not liable for council tax under the HMO provisions where neither statutory limb is satisfied.

Mrs Katia Goremsandu appealed under regulation 32(1) of the Council Tax (Alteration of Lists and Appeals) Regulations 1993 against the decision of the London (North West) Valuation Tribunal dated 23 June 2009.

The Tribunal had upheld the London Borough of Harrow’s decision that a bungalow owned by Mrs Goremsandu was a house in multiple occupation between 3 April 2002 and 18 February 2008. It considered that the tenants occupied only part of the dwelling because the conservatory was locked and that their separate rent contributions created multiple occupation. The central issues were the proper construction and application of the HMO provisions and the legal effect of the tenants’ shorthold agreements.

1. The appeal was allowed. The court granted declarations that the property was not a house in multiple occupation for the relevant period and that Mrs Goremsandu was not liable for the council tax. The London Borough of Harrow was ordered to repay sums wrongly paid, including related bailiff fees and disbursements, with interest at 6 per cent from the dates of payment.

2. The statutory test was found in section 6 of the Local Government Finance Act 1992 and regulation 2 of the Council Tax (Liability for Owners) Regulations 1992, which prescribed the relevant HMO class for the purposes of section 8(1) of the Act. The first limb required occupation by a person who was a tenant or licensee of part only of the dwelling. The second required occupation by a person who was not liable, alone or jointly, to pay rent or a licence fee for the dwelling as a whole.

3. The Valuation Tribunal had erred by treating separate rent payments as creating multiple occupation. The tenants were jointly liable under successive shorthold tenancies for the entire rent of the bungalow. Their arrangement to pay separate shares was one of convenience and did not alter their legal status or reduce the extent of the premises demised.

4. The Tribunal had also erred in treating the locked conservatory as excluded from the tenancy. The agreements demised the whole bungalow, including the conservatory, and had not been varied. The practical inability to use or readily access that area did not make the tenants tenants of part only. The stored furniture remained part of the furnished tenancy, and the tenants retained their contractual entitlement to call for access and to use or relocate it.

5. Mr Parravani’s occupation likewise did not create an HMO. The evidence showed occupation of the entire bungalow under a sub-tenancy or licence, with payment of rent or a licence fee for the dwelling as a whole. The possible overlap between Mrs Goremsandu’s occupation of the new extension and the tenants’ final occupation was insufficiently proved to establish an HMO.

The parties were directed to agree the order. Mrs Goremsandu was entitled to the costs available to a successful litigant in person.

The appeal was brought as of right from the London (North West) Valuation Tribunal under regulation 32(1) of the Council Tax (Alteration of Lists and Appeals) Regulations 1993. The Administrative Court allowed the appeal and set aside the Tribunal’s conclusion that the property was a house in multiple occupation.