Summary: A landlord complained about the way the Council dealt with council tax issues relating to his property. But the Ombudsman will not investigate this matter because there is no sign of fault by the Council.

The complaint

1. The complainant, who I shall call Mr B, complained about the way the Council handled council tax (CT) issues relating to a property he had rented out to a tenant it had introduced to him. Mr B said he suffered unnecessary financial hardship as a result. Mr B complained in particular that the Council:

1. unreasonably charged him full CT for the property despite it being unfit to live in due to the extensive damage caused by the tenant;
2. took him to court for CT arrears without notifying him and unreasonably pursued recovery action through Enforcement Agents (EA’s);
3. unreasonably refused to make any concessions about paying off his arrears despite his difficult financial situation; and
4. misled him by setting up two CT accounts in his name and crediting his payments to only one of the accounts.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word ‘fault’ to refer to these. We provide a free service, but must use public money carefully. We may decide not to start an investigation if, for example, we believe it is unlikely we would find fault. (Local Government Act 1974, section 24A(6), as amended)
3. We investigate complaints about councils and certain other bodies. We cannot investigate the actions of the Valuation Office Agency. (Local Government Act 1974, sections 25 and 34A, as amended)

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How I considered this complaint

4. I considered the information Mr B provided with his complaint and his comments in response to a draft version of this decision. I also took account of the Council’s responses to Mr B’s complaint and my enquiries in his case.

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What I found

5. In 2012 Mr B let a flat he owned to a tenant, who had been introduced to him by the Council. The tenant vacated the property around early 2016. Mr B said he left owing him a large amount of rent and having caused serious damage to the flat.
6. In late 2017 the Council sent Mr B a CT bill for the property for the period between January 2016, when the tenant was deemed to have moved out, and the end of the tax year in March 2018.
7. Early in 2018 Mr B wrote to the Council asking for the flat to be exempted from CT. He said it was uninhabitable due to the damage caused by his ex-tenant.
8. The Council advised Mr B it no longer offered a CT exemption where a property was empty and in serious disrepair. But it pointed him to the Valuation Office Agency (VOA) which makes decisions about whether a property should be on the rating list. Mr B went to the VOA but they decided his flat should stay on the list.
9. As Mr B made no payments of CT the Council started court proceedings for a liability order, which was granted in March 2018. But at court the Council also came to a temporary agreement with Mr B to accept reduced payments while he tried to appeal the VOA’s decision. The same month the Council sent Mr B a CT bill for the 2018/2019 tax year, payable in monthly instalments
10. Mr B contacted the Council in June saying the VOA had refused his appeal. The Council told him it would be issuing a court summons for the whole amount of his CT for 2018/2019 the next day because he had missed two instalment payments. Mr B made a new temporary arrangement with the Council to pay increased monthly instalments covering both the previous and the current years’ CT arrears. However the Council still went ahead with the summons, and later in June obtained a second liability order against Mr B.
11. In July Mr B wrote to the Council to query what it had done. He also said he could only afford about half of the monthly payments previously agreed in June.
12. In August the Council withdrew the legal action it had taken in June. But it did not accept Mr B’s offer of reduced payments as these would not even have met his liability for 2018/2019. However the Council invited Mr B to provide details of his financial circumstances in case he was suffering hardship.
13. Later in August the Council sent Mr B a reminder about his outstanding arrears for 2017/2018 and said it would refer the debt to EA’s if this was not paid in 14 days. It also asked Mr B for details of his income and employment.
14. In September 2018 Mr B made a complaint to the Council and queried its calculation of his arrears. In early October the Council responded to Mr B’s complaint explaining its actions in his case. It also invited him again to provide information about his financial circumstances.
15. The Council referred Mr B’s case to its EA’s in late October as it said it had not received any further response from him. Meanwhile Mr B had continued to make payments to the Council at the reduced rate he had offered in July.
16. The Council sent Mr B a further complaint response around November. The Council re-iterated it could not accept Mr B’s reduced offer towards the 2017/2018 arrears and reminded him his payments for 2018/2019 were overdue. It also said he could still provide information to show he was suffering financial hardship.
17. Mr B continued to complain, claiming the Council was acting unfairly given he could not let out his flat because of the damage caused by the tenant it had introduced to him. In early 2019 the Council sent a final response confirming it had dealt with his CT case correctly, and that his issues with it regarding his ex-tenant were a separate matter.
18. Mr B continued to pay reduced instalments to the Council throughout 2019. From June 2019 he also made a series of substantial payments to the EA’s, and by early 2020 he had cleared his debts to the Council.

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Analysis

19. Having considered all of the information provided in Mr B’s case, I have reached the view that we do not have reason to investigate his complaints.

Complaint a)

20. Mr B considered the Council should have given his property an exemption from CT on the basis it was uninhabitable due to the damage caused by his ex-tenant. But the law allows councils discretion about whether to grant exemptions for properties which are uninhabitable or empty and unfurnished. The Council decided in 2013 to charge full CT on all unoccupied properties. But It was fully entitled to make this policy decision, and I see no reason it should not have applied its policy in Mr B’s case.
21. In addition I consider the Council correctly signposted Mr B to the VOA regarding the issue of whether his property should not be subject to CT because its state of repair. This is because the VOA decides which properties are included on the rating list. We have no jurisdiction to deal with complaints about the VOA.

Complaint b)

22. Mr B said the Council took him to court for CT arrears without informing him. But I have not seen evidence to support this claim. I understand the Council issued summons regarding Mr B’s CT arrears for 2017/2018 in February 2018 and for his 2018/2019 arrears in May and June 2018. But the Council records that in all three cases Mr B contacted it to query the summons in the week after they were issued.
23. Mr B also felt it was unreasonable of the Council to refer his case to EA’s. However I am not convinced we would have grounds to fault it in this respect.
24. The Council obtained a liability order against Mr B in March 2018 regarding his arrears for 2017/2018 and before. The Council made a temporary agreement with Mr B to accept low payments while he appealed the VOA’s decision. In June the Council and Mr B made a further agreement for increased payments also taking account of his debt for 2018/2019.
25. However the Council’s records show that Mr B defaulted on both repayment arrangements. In late August the Council sent a reminder to Mr B about his outstanding debt for 2017/2018, and warned him it would refer matters to EA’s if this was not paid. Mr B continued to make payments below the amount previously agreed by the Council, and in October it referred his case to its EA’s.
26. The use of EA’s is one of the methods councils are entitled to use to recover CT arrears, and I do not see any reason to fault the Council for its decision to refer matters to EA’s in Mr B’s case. It also appears to me that the Council followed the correct process in making this referral.

Complaint c)

27. Mr B felt the Council had not taken proper account of his difficult financial circumstances in negotiating an arrears repayment arrangement. But I consider there are insufficient grounds for us to fault the Council regarding this matter.
28. In particular, it is evident the Council accepted low payments at the initial stage while Mr B attempted to get the VOA to remove his flat from the rating list. Later Mr B offered the Council a higher monthly amount, but this would not even have met his normal instalments for 2018/2019 let alone reduce his earlier arrears. In the circumstances I do not see we would be in a position to fault the Council for refusing to accept Mr B’s repayment offer.
29. I also consider the Council acted appropriately in asking Mr B to provide details about his financial situation before it would accept his claim to be suffering hardship and his reduced repayment offer. From the documents I have seen it seems the Council gave Mr B several opportunities to provide more information about his finances but he did not respond. In the circumstances I am not convinced we are likely to find fault with the Council for declining Mr B’s offer and pursuing recovery action instead.

Complaint d)

30. Mr B said the Council misled him by giving him two accounts and only crediting his payments to one. But I am not clear there has been fault by the Council as he claims, and I suggest he may have misunderstood the arrears recovery process.
31. In particular I understand Mr B only has one CT account. But the Council has dealt with his debts separately because they relate to two different tax years.
32. The Council obtained a liability order for Mr B’s arrears from 2017/2018 and before. This was the debt it referred to EA’s to collect. But once a debt is with EA’s they will ask for any payments to made directly to them. They will also deduct any fees they are owed before passing the balance to the Council.
33. However, as regards Mr B’s arrears from 2018/2019, the Council ended up withdrawing the liability order it obtained and did not pursue further recover action. This meant Mr B’s arrears payments for that tax year were collected directly by the Council.
34. The Council has provided a breakdown of the amount of the CT it billed Mr B for, the payments he made to it and the EA’s, and the court costs and EA fees added to his account. I see no reason to doubt the accuracy of its figures.

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Final decision

35. The Ombudsman does not have reason to investigate Mr B’s complaint about the way the Council has dealt with his council tax account for a property he rents out to tenants. This is because there is no sign of fault by the Council.

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Investigator's decision on behalf of the Ombudsman