Summary: Mr B says the Council misled him about the checks it had undertaken on a tenant referred to him, failed to pay him a two-year rent guarantee and failed to check the property for damages. There is no fault in how the Council handled this case.

The complaint

1. The complainant, whom I shall refer to as Mr B, complained the Council:
• referred a tenant to him without checking her suitability and misled him about that;
• promised him a two-year rent guarantee and then failed to pay rent to him; and
• agreed to check the property for damages and failed to do so.

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The Ombudsman’s role and powers

2. The Ombudsman investigates complaints of injustice caused by maladministration and service failure. I have used the word fault to refer to these. The Ombudsman cannot question whether a Council’s decision is right or wrong simply because the complainant disagrees with it. He must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3))
3. 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

4. As part of the investigation, I have:
• considered the complaint and Mr B's comments;
• made enquiries of the Council and considered the comments and documents the Council provided;
• considered Mr B’s comments on my draft decision.

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What I found

Background

5. Mr B is a landlord of a private rented property. In 2016 the Council provided Mr B with a list of potential tenants. Mr B selected a tenant from that list. Mr B received an incentive payment of £3,875.68 from the Council when he signed a 24 month rent contract with that tenant. The tenancy agreement began on 22 August 2016. I understand Mr B’s tenant was entitled to housing benefit until the end of April 2018. Until that point the Council paid the housing benefit direct to Mr B. However, Mr B’s tenant had to pay a top up direct to Mr B.
6. In March 2018 Mr B told the Council he was no longer receiving rent payments from his tenant. Mr B reported rent arrears. The Council told Mr B it was his responsibility to manage the property and collect the rent. The Council agreed to try and assist. The Council wrote to Mr B’s tenant and attempted to visit. Mr B’s tenant did not respond to any contacts. The Council advised Mr B to seek legal advice to recover the rent arrears. I understand Mr B took his tenant to court and obtained a County Court judgement in his favour.

Analysis

7. Mr B says the Council referred a tenant to him without checking her suitability and misled him about that. The Council says it does not carry out credit reference or debt checks for temporary accommodation residents. Mr B’s documentary evidence for the period before the tenancy began does not refer to the Council telling him about any checks it had undertaken. In the absence of any documentary evidence showing the Council misled him about the checks it had undertaken I consider it unlikely, on the balance of probability, the Council told Mr B it had undertaken any checks given it generally does not do this.
8. Mr B says the Council set up the tenancy agreement as a rent guarantee scheme. This is the Council’s private sector leasing scheme. Under that scheme the Council is responsible for paying rent to the landlord and for making good any deliberate damage to the property. The Council is also responsible for carrying out the relevant checks. Under that scheme the Council and landlord sign a lease which creates a tenancy for the Council to enable it to provide residential accommodation by way of a nonsecure tenancy agreement under part VII of the Housing Act 1985. The Council also pays an incentive of £500 per year. If Mr B had signed a lease with the Council on that basis the agreement would have been between Mr B and the Council. In those circumstances the Council would have been responsible for paying rent to Mr B. The Council would also have been responsible for making good any deliberate damage to the interior of the property.
9. In this case though Mr B did not sign a lease with the Council. That explains why Mr B received an incentive payment of £3,875.68 rather than the £500 he would have received had he signed the lease agreement which would have guaranteed his rent. I am therefore satisfied Mr B rented the property to a person identified by the Council under an assured short hold tenancy. That is also confirmed by the fact Mr B completed a tenancy agreement direct with his tenant, rather than a lease agreement with the Council. The tenancy is therefore between Mr B and the tenant and not between Mr B and the Council. The Council therefore has no responsibility to make rent payments to Mr B and it is not a rent guarantee scheme. Nor does the Council have any responsibility for making good any deliberate damage to the interior of the property. Management of the property and collection of rent is entirely a matter for Mr B to resolve with his tenant. So, as Mr B did not sign up to the lease scheme there is no responsibility for the Council to guarantee the rent or deal with the tenant’s management of the property. It therefore seems to me Mr B is mistaken about the scheme he signed up for. As there is no evidence Mr B entered a rent guarantee scheme I cannot criticise the Council for not guaranteeing the rent for two years and for not dealing with problems with the interior of the property. That was a matter for Mr B to pursue with his tenant.
10. In reaching that view I am aware Mr B says he received the majority of the rent direct from the Council for 18 months. However, the evidence I have seen satisfies me this was housing benefit paid directly to Mr B. That is not the same as the Council paying Mr B rent under its lease scheme. As I have made clear, there is no evidence Mr B signed a lease with the Council which would have guaranteed the rent and would have involved the Council in managing the property, rather than Mr B.

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Final decision

11. I have completed my investigation and do not uphold the complaint.

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Investigator's decision on behalf of the Ombudsman