Summary: Mr X complains the Council has wrongly taken recovery action in relation to council tax for several properties his company manages. As a result they have incurred unnecessary additional charges and fees. We found there is no evidence of fault in the way the Council has issued bills or in the subsequent recovery action.

The complaint

1. The complainant, Mr X complains the Council has wrongly taken recovery action in relation to council tax for several properties his company manages. Mr X asserts he should not have to pay the additional charges as the Council failed to follow proper process or issue bills in a timely manner.

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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 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. If we are satisfied with an organisation’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

4. As part of the investigation, I have:
• considered the complaint and the documents provided by Mr X;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with Mr X; and
• Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

5. Mr X’s company manages a large number of flats. The tenants are responsible for paying council tax, but when the properties are vacant it is the company’s responsibility. Mr X says they always pay the charges on time when they receive the bills, but they have been receiving the bills two or three weeks late, or in some case not at all. He says the only letters they consistently receive are enforcement notices.
6. Mr X complains the Council’s automated system will issue court summons and begin enforcement action without proper communication with the company. He asserts they should not have to pay the charges incurred this way.
7. In March 2023 Mr X’s company made a formal complaint about the additional charges for nine properties. They noted they had requested clarity regarding the amount due for the vacant periods for several of these properties but the Council had not responded. This had prevented them from making timely payments and led to additional fees which they disputed they should have to pay. In relation to another property the company said it had only received the summons. It again disputed the additional fees.
8. The Council responded providing details of the outstanding charges and any recovery action taken for each of the nine properties. The Council noted it had issued summons on eight of these properties, six of which had then been passed to enforcement agents and incurred additional charges.
9. It said both the tenant and landlord were responsible for informing the Council of changes in tenancy. Where Mr X’s company provided tenancy agreements for new tenants the Council ended the company’s liability and issued closing bills. The Council referred to its automated email acknowledgement which advised the turnaround time for dealing with correspondence was four weeks. And that in the meantime council tax remained payable in line with the most recent notice.
10. The Council noted Mr X’s company had telephoned the Council to ask for details of two accounts on 27 November 2023. Its records show the Council gave details of the liability start date, the overall balance, and the instalments due. As the Council did not receive any payments it issued a summonses and obtained liability orders on both accounts. The accounts were then passed to enforcement agents.
11. Mr X’s company also contacted the Council on 27 and 28 February 2024 and provided new tenancy agreements for five of the properties, including the two properties discussed in November 2023. These tenancy agreements had all started between September and December 2023. The Council updated the accounts, ended the company’s liability, and issued new bills. Although Mr X’s company had since paid the outstanding council tax, the summons fees and enforcement agent’s fees were outstanding on all these accounts.
12. The Council advised Mr X the correct recovery process had been followed. Council tax had not been paid in line with the bills issued resulting in summons being issued. As the summons had been issued before Mr X’s company notified the Council of a new tenant these costs were due. It also noted that further recovery action could have been avoided if Mr X’s company had followed the advice in the summons notice and paid the outstanding balance or set up a payment arrangement.
13. The Council advised Mr X to contact the enforcement agents directly to pay the outstanding costs.
14. During its investigation the Council identified a number of other accounts for Mr X’s company which had outstanding balances and/ or recovery action. It provided a brief overview of each account.
15. Mr X’s company maintained they had contacted the Council promptly in relation to any bills, summons or enforcement notices and asked that the matter be investigated further. They also disputed the accuracy of the Council’s records regarding the additional properties it had identified.
16. The Council’s response advised the notices were printed and sent by second class post the day after the date on the notice. It suggested any delay in receiving the notices was due to the postal delivery service.
17. It confirmed it used the correspondence address provided by the company in June 2023. It asked whether there were any further details that could be included in the address which might aid delivery. Alternatively the company could sign up for an online account and request electronic billing. This would allow it to view all accounts associated with the company.
18. In relation to the accounts sent to enforcement agents the Council confirmed the agents had advised that no notices had been returned to them as undelivered. The enforcement agents confirmed a representative for Mr X’s company had contacted them in January 2024 and that the liability order for one account was settled that day.
19. Four other accounts progressed to enforcement and an agent visited the correspondence address on 27 February 2024 and left a letter. The enforcement agents advised that as the liability orders were in the company’s name, it was liable for the debts and full payment was required to prevent further recovery action.
20. The Council then reiterated the dates of notices and liabilities for each of the disputed accounts and noted any communication with the company in respect of particular accounts. The Council was satisfied that where it had issued summonses and progressed to recovery action it had followed the correct process. In these circumstances it said it was unable to remove the summons costs or recall the account. The Council suggested the company make arrangements to settle the outstanding balances on the accounts.
21. As Mr X was not satisfied he asked for the complaint to be considered further. As part of the stage two investigation the Council identified that council tax reminders for two properties had been returned undelivered. Although these reminders notices should have been withdrawn, this did not happen and recovery action continued. The Council confirmed it would withdraw the liability order and all recovery costs would be removed from these two accounts.
22. It also confirmed that the costs for the remaining accounts that were subject to recovery action would not be removed.
23. In relation to the delivery of notices the Council again said the council tax notices are printed and passed for delivery by second class post. The Council said that once the notices were posted they were no longer within the Council’s control.
24. As Mr X’s company was not satisfied with the Council’s response they have asked the Ombudsman to investigate their concerns. They consider it unfair that they are charged additional fees when they do not receive timely correspondence. The company maintains the Council is responsible for ensuring they receive the letters, not just that they are posted.
25. The Council says it is not responsible for ensuring the notice is delivered. Unless the notice is returned to the Council, it is considered delivered.
26. In response to our enquiries the Council has provided copies of bills, reminders summons and where issued, enforcement notices for the remaining seven disputed accounts.
27. Mr X has responded to the draft decision and maintains the company will always pay the council tax for unoccupied properties as soon as bills are received. He says they make every effort to tell the Council when a tenancy changes and want all bills directed to the new tenants.
28. In addition Mr X says they have had significant issues with mail deliveries, with many bills not being delivered at all or being incorrectly addressed. He says the Council sends bills to the company without indicating which flat the bill relates to. Mr X says this causes delay and confusion. He says they have repeatedly asked the Council to ensure the relevant property number is displayed in the address window.
29. Mr X asserts his company has been unfairly penalised with recovery notices and summons costs for bills they have not received and cannot attribute to the correct property.

Analysis

30. The documentation provided shows the Council has sent bills and reminders for each of the disputed accounts to Mr X’s company’s correspondence address. It has then issued summons and in some cases notices of enforcement to the same address. All of the bills, reminders and notices clearly identify which property they relate to.
31. It is unfortunate that Mr X’s company did not receive all of these notices, but there is no evidence this is due to fault on the part of the Council. The Council has used the correspondence address provided for Mr X’s company and the notices were not returned as undelivered. The Council is therefore entitled to assume they were correctly delivered.
32. Where a new tenant contacts the Council, or Mr X’s company provides details of a new tenant, the Council has amened the liability and issued new bills. However the documentation shows there have been delays in Mr X’s company providing new tenancy details. We would not criticise the Council for pursuing the debt against Mr X's company where it has not been informed of a new tenant. In these cases, while the liability for council tax may pass to the new tenant, the cost of recovery action remains with Mr X’s company.
33. Mr X’s company asserts the Council is required to ensure the bills and notices are correctly delivered rather than just posted, however there is no legal requirement for this.
34. The Local Government Act 1972 and the Council Tax (Administration and Enforcement) Regulations 1992 both say a document may be served on a person by delivering it to them (in person), leaving it at their proper address or sending it by post to their last known address. The Council does not have to keep a copy of the document or send it by registered post or recorded delivery.
35. If a bill is delivered later than would be expected by normal post the taxpayer still has to pay on the due date.
36. The Council can charge costs for the issue of a summons and liability order. And there are set fees for different stages of enforcement action. The Council followed the correct process in pursuing the debts and was legally entitled to add these costs. The Council was not at fault.

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Final decision

37. There is no evidence of fault in the way the Council has issued council tax bills or in the subsequent recovery action.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman