Summary: We have discontinued our investigation of this complaint, about the Council’s handling of the reaggregation of council tax collection from houses in multiple occupation. This is because there is not enough evidence of fault by the Council to justify investigation.

The complaint

1. I will refer to the complainant as Mr H.
2. Mr H is the landlord of a house in multiple occupation (HMO). He complains the Council continued to collect council tax individually from his tenants, despite a change in the law which required it to treat HMOs as a single property for council tax purposes. Mr H says this caused several of his tenants to move out, causing him a loss of rent payments, and he considers the Council should reimburse him for this, compensate him for his time and apologise to him and his tenants.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service, but must use public money carefully. We do not start or continue an investigation if we decide there is not enough evidence of fault to justify investigating. (Local Government Act 1974, section 24A(6), as amended, section 34(B))

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How I considered this complaint

4. I considered evidence provided by Mr H and the Council as well as relevant law, policy and guidance.
5. I also shared a draft copy of this decision with each party for their comments.

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What I found

6. The law previously required tenants in HMOs to pay council tax individually, as they would in separate properties. In December 2023, a change in the law saw most HMOs being ‘aggregated’. This meant they were now considered to be single properties for council tax purposes, with the landlord, rather than the individual tenants, being responsible for payment.
7. On 9 July 2024 Mr H submitted a complaint to the Council. He said he had been in frequent contact with the Council between December and May, but had received little response; and the Council’s most recent response had wrongly informed him his property was a section 257 HMO. Mr H said the Valuation Office Agency (VOA) had now decided the property should be aggregated.
8. Mr H complained the Council had also passed its misleading advice, that the property was a section 257 HMO, to his tenants and two local MPs who had been involved in the case, but had not acknowledged this error.
9. He also complained the Council had continued to issue individual council tax bills after December 2023, despite the change in the law, and had refused to use its discretion to suspend collection while the dispute was settled. Mr H said this had caused several of his tenants to move out of the property, and he complained further the Council had taken enforcement action against some of the tenants for non-payment.
10. Mr H alleged the Council’s decisions were motivated “bias or an improper personal motive” and asked it to investigate on this basis.
11. The Council responded on 29 July. It explained the VOA was responsible for aggregation, and that the Council was required to charge council tax according to the band set by the VOA. It denied having said Mr H’s property was a section 257 HMO – rather, it had said the VOA had advised it had completed its work to aggregate HMOs, but that section 257 HMOs were not affected by the change in law. The Council explained the VOA’s comment concerned a list of properties the Council had sent it when the law changed.
12. The Council also said it had informed Mr H, in May 2024, that he could submit a proposal to the VOA to aggregate the property, but was unaware he had already done this in March. The VOA had then made its decision in May and informed Mr H and the Council a few days later, at which point the Council had updated its records.
13. The Council explained the law required it to continue collecting council tax individually from Mr H’s tenants until the VOA had made its decision. At this point the Council had cancelled a summons it had issued to one tenant for non-payment.
14. After a further complaint from Mr H in August, the Council responded at stage 2 in September. It reiterated its comments from the stage 1 response, and added it had issued the summons to Mr H’s tenant in February, before the VOA’s decision.
15. The Council also repeated it had not said Mr H’s property was a section 257 HMO, but had been attempting to explain why it may not have received a decision from the VOA yet. However, the Council conceded this comment may have been confusing.
16. Mr H approached the Ombudsman with his complaint on 3 February 2025.

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Analysis

17. I am satisfied the Council has given a proper explanation for its actions in this case.
18. As it has explained, although the law changed in December 2023, it was required to wait for the VOA to decide whether Mr H’s property fell into the category of HMO (‘section 257’) unaffected by the change – which are, broadly speaking, buildings converted from a single property into separate, self-contained flats. It is unfortunate it took approximately six months for it to receive the VOA’s decision, but this was not fault by the Council.
19. In the meantime, the Council was required by law to continue collecting council tax from Mr H’s tenants. I acknowledge Mr H says several moved out because of this, but given it was simply continuing the existing practice, I do not consider the Council can reasonably be held responsible for their decisions. This includes the Council’s service of a summons on one of the tenants, which is a normal part of the council tax enforcement process.
20. I note Mr H also complains the Council did not respond promptly to his correspondence during the relevant period, and considers it should compensate him and his management agent for their time.
21. I accept this may have caused Mr H some frustration, but in isolation I do not consider this issue significant enough to warrant investigation. This is because, even accepting the Council may not have dealt with his correspondence adequately, I am satisfied any costs Mr H incurred as a result are a normal part of running a business.

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Decision

22. I have discontinued my investigation.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman