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Hello - Yes this is a nasty way that the council can fine on the basis that you have not kept them up to date.
This is not so much a case of trying to fight a legal battle with them but rather negotiate with them as best you can.
There are many many people whose lives change - partners move in or out. Often this is a very difficult time and also
it is not certain whether the move is permanent at the time. The idea that people should immediately think about contacting the council is ridiculous. However legally that is the position. If you explain and ask for some leeway on the matter they should be kind.