Summary: Mrs C complains about the Council’s delaying inspecting a property she converted from a house in multiple occupation to separate flats. She says the delay meant the Council billed her for council tax she should not have been liable for. The Ombudsman upholds the complaint due to the Council’s delay in responding to Mrs C’s emails. The Council has agreed to apologise to Mrs C. But the delay was not the reason for Mrs C’s outstanding council tax bill.

The complaint

1. The complainant, whom I shall refer to as Mrs C, complains about enforcement action for council tax debts. She says:
• she continued making payments on a flat she had advised the Council she had converted from a house in multiple occupation to separate flats;
• the Council delayed inspecting the flat;
• the Council lost some of the payments she made.
2. Mrs C says the delay meant she had to pay council tax she would not otherwise have had to pay.

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The Ombudsman’s role and powers

3. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
4. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
6. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
7. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

8. As part of the investigation, I have:
• considered the complaint and the documents provided by Mrs C;
• made enquiries of the Council and considered its responses;
• spoken to Mrs C;
• considered the law around council tax banding;
• sent my draft decision to Mrs C and the Council and invited their comments.

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What I found

Legal and administrative background

Liability for council tax

9. Council tax is a tax made on domestic properties. Councils issue one bill to each household. Residents of dwellings, including tenants, are usually liable for council tax from the date they moved into the property.
10. There are a few situations where liability for the council tax is with the landlord:
• if a rented property is unoccupied;
• houses in multiple occupation (HMO). HMOs are rented properties where tenants share facilities. The rules on what exactly counts as a HMO are different for council tax, when compared to housing and planning law.
11. The Valuation Office Agency (VOA) issues guidance: ‘Council Tax: domestic properties which are in disrepair or are derelict’. This says:
• The main rule is that every property will be banded for council tax, as long as it qualifies as a ‘dwelling’.
• ‘In limited circumstances, the VOA can decide to “delete” a Council Tax band. This means that a property wouldn’t have a Council Tax band at all and the taxpayer wouldn’t pay any Council Tax.’
• One of those circumstances is a property that is being converted into two or more units of living accommodation.
• ‘If a property is actually occupied, it’s generally assumed to be habitable and the VOA won’t delete the band, even if repair or renovation works are on-going.’
12. Decisions on council tax banding are made by the VOA, not the billing authority. There is a right of appeal to the Valuation Tribunal Service (VTS) against a decision by the VOA, about liability for council tax.

The Council’s policy on council tax discounts and exemptions

13. During the early period this statement considers, the Council had a policy of granting a 50% council tax discount on properties that were uninhabitable.
14. From April 2019, the Council changed its policy on discounts and exemptions. It removed the 50% discount for empty properties.

What happened

Background events

15. In 2014 Mrs C converted a property she owns into flats. The Council visited and noted one floor of the property (which I shall call Flat Z) had two tenants, on separate tenancies, sharing facilities. It decided, for council tax purposes, that floor was a HMO. That meant Mrs C, as owner, was liable for the council tax. The Council wrote to Mrs C with its decision. It advised her of her appeal rights.
16. In 2015 and into 2016 Mrs C was in contact with the Council about Flat Z’s status. This culminated in the Council granting Flat Z a 50% discount for a year, from June 2016. This was because Mrs C advised the Council the flat was unoccupied while she carried out work to convert it to two separate flats.
17. During this period the Council had gone to the County Court and obtained liability orders against Mrs C, on council tax debt for Flat Z.

The events I have investigated

18. In May 2017 Mrs C emailed the Council’s officer. She advised she had finished works to Flat Z and had built a second bathroom. She asked for another visit to determine the council tax status of the flat(s). The Council says it did not index this email correctly and so did not respond.
19. In October 2017 Mrs C sent the Council a follow up to her May email. It noted she was about to re-let Flat Z and again asked for a visit. The Council did not respond, as again it did not index it correctly.
20. In August 2018 the Council responded to Mrs C’s 2017 emails. It noted Mrs C’s information that there were now two flats, with tenants. But its records had Flat Z rated as one property. An inspector would shortly contact her to arrange a visit. It asked for copies of tenancy agreements and rent payments. The Council says Mrs C did not provide any information.
21. Next, Mrs C contacted the Council in November and December 2018. She asked if the Council had updated its records to split Flat Z to two flats. The Council’s response was to place a hold on recovery action by enforcement agents (about the debts for which the court had granted liability orders).
22. In January 2019 the Council responded to a complaint from Mrs C about a bill for several thousand pounds for Flat Z. Her view was the flat did not exist as a single address. The Council’s response confirmed the hold on recovery. And that it needed a visit to clarify the situation.
23. In February the Council visited. Its officer recorded Flat Z was empty, after a tenant had left on 31 January. Mrs C was refurbishing Flat Z to split it into two separate flats. So the Council asked the VOA to delete the flat from its ratings list from 1 February – the day after the tenant moved out.
24. In the time after this, Mrs C continued to dispute the council tax debt for Flat Z – the Council was asking her to repay this. She said she had been paying a regular monthly amount for Flat Z since 2014. The Council responded to say it had received some payments, but not the amounts Mrs C said she had paid. It asked her to send it evidence of payments she had made, so it could check its records. Correspondence about this issue continued into 2020, as the Council’s comparison of information Mrs C sent with its own records did not support Mrs C’s view that she had already paid the debt. The Council continued to ask her to provide further information.
25. Mrs C complained to the Ombudsman in November 2019. In response to my enquiries, the Council confirmed it had granted the 50% discount for a full year. And the first it was aware that Flat Z had a new tenant was when it visited in February 2019. I asked Mrs C to supply me with dates Flat Z was occupied by tenants, but she has not responded.

Analysis

Jurisdiction

26. We will not usually investigate matters about events occurring more than 12 months before a complaint to the Ombudsman. Mrs C complained to us in November 2019, which means anything before November 2018 is usually out of time.
27. I will not investigate the events from 2014 to May 2017, as my view is Mrs C could have complained to us earlier. Anyway, decisions from then – such as the original banding decision and the 50% discount decision – carried rights of appeal. So we would not normally consider those.
28. But Mrs C was contacting the Council asking for an assessment from May 2017, with follow up emails in the time after that. As the delay in the Council deciding on Flat Z’s status was due to it not responding, I have used my discretion to investigate matters back to May 2017.
29. Miss C had appeal rights about the February 2019 decision on the flat’s status. My view it is reasonable for her to have used the right if she disputed the decision on the banding decision. But between May 2017 and February 2019 there was no decision for Mrs C to appeal. So I have investigated that period.

The Council delayed inspecting the flat

30. The Council delayed in responding to Mrs C emails of May and October 2017. That delay was fault. In August 2018 when the Council did respond, it asked Mrs C for information. She did not respond. But the Council again delayed contacting Mrs C about an inspection after this, which was again fault.
31. In Mrs C’s 2017 emails, she advised she had finished conversion of Flat Z. But when the Council visited, in February 2019, its view was the works to convert Flat Z were ongoing, which is why it advised the VOA to delete the banding. It also found a tenant had just left the flat.
32. What would the Council have found if it had not delayed and visited earlier?
• Given what the Council found when it did visit, it seems unlikely:
• it would have earlier deleted the banding (as one or more tenants was or were likely in occupation);
• to have concluded Mrs C had finished converting the flat (as it did not take this view when it later visited).
• So, more likely than not, the Council would have found Flat Z to have been (still) a HMO.

That means the injustice the delay caused Mrs C is limited.

The Council has lost payments Mrs C made.

33. The Council’s information conflicts with what Mrs C says she has paid. The only records I have seen are the Council’s. So I do not have the evidence to uphold this part of the complaint.

Agreed action

34. The Council delayed dealing with Mrs C’s request to visit. That was fault and the Council has agreed to apologise to Mrs C for those delays.
35. But, given my analysis about what would have happened if the Council had visited earlier, any injustice to Mrs C is not significant enough to warrant the Ombudsman recommending a further remedy beyond an apology. Specifically, I cannot say the delay is the reason Mrs C has a debt with the Council.

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Final decision

36. I uphold the complaint. The Council has agreed to my recommendation. So I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman