The Ombudsman's final decision:
Summary: Mr X complains that the Council provided him with inadequate and contradictory information when he applied for a landlord’s licence under the Council’s selective licensing scheme. He says this caused him unnecessary costs. There was no fault in the Council’s actions.
- Mr X complained the Council provided him with inadequate and contradictory information when he applied for a landlord’s licence under the Council’s selective licensing scheme. Mr X says this led to him incurring unnecessary costs.
The Ombudsman’s role and powers
- We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
- 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)
How I considered this complaint
- I considered the information Mr X provided in his complaint.
- I spoke to the Council and considered the information it provided. This included information on its website, its selective licensing handbook for landlords and details of why it made the decision to make amendments to its policy and procedures.
- I considered the relevant law and guidance including the Housing Act 2004 and the government publication ‘A guide to the licensing and management provisions in Parts 2, 3 and 4 of the Housing Act 2004’ (the Guide).
- I have written to Mr X and the Council with my draft decision and considered their comments before I made my final decision.
What I found
- Under the Housing Act 2004, councils have the power to introduce selective licensing schemes for privately rented properties with the aim of improving property conditions and management.
- If a selective licensing scheme is in place, it is a legal requirement for all landlords (subject to certain requirements) to have a licence.
- The Guide says “If the landlord is domiciled outside of the jurisdiction of the British courts the [Local Housing Authority] would not normally grant him the licence as it would be unenforceable against him, unless the manager has in such circumstances agreed to be bound by the licence”.
- Mr X owns four properties which he rents out. He lives abroad.
- In 2018, the City Council decided to introduce a selective licensing scheme in certain areas of the city. This meant landlords in those areas would have to obtain a licence for each property they rented out to ensure it met health and safety standards. Mr X’s four properties are all situated in the selective licensing area. The scheme came into force on 1 August 2018.
- The cost of a licence is £480 a year for landlords with accreditation or £780 for landlords without accreditation. Accreditation is optional. Mr X has accreditation.
- On 20 March 2018, Mr X emailed the Council. In this email, he said he worked abroad and was unable to return to the UK. He said that a local letting agency, Agency B, would be acting as the proposed manager of his properties. Mr X also informed the Council he would apply to be the licence holder for each property.
- The Council replied on 26 March 2018. It told Mr X that because the Housing Act 2004 did not apply outside England, the proposed licence holder had to be someone who was based in the UK. The email said: “As you are based abroad we presume that you have someone close by to the properties who oversees them for you and manages them for you; it would be more appropriate for this person/company to apply to be the licence holder”.
- Mr X replied by email on 20 April 2018. He said that because he had a right to reside in the UK he was, therefore, eligible to be licensed as a landlord for his properties.
- The Council responded on the same day. It said “the Council does not allow those based abroad to be licence holders. This is not dependent on your right to reside in the UK but is because the documents are legal documents and cannot be enforced through the courts if served abroad. Therefore you would need to nominate a person/company in this country to be the licence holder”.
- Mr X replied on 6 May 2018 and said he disagreed with the Council’s viewpoint.
- The Council replied on 9 May 2018. It repeated its assertions that the licence holder must reside in the UK. As a result of this, Mr X asked Agency B to act as the licence holder for each of his properties. Agency B agreed and charged Mr X a £240 administrative fee to do so.
- On 1 June 2018, Mr X made a formal complaint to the Council. His complaints included the following issues:
- the Council had failed to provide a legal basis for its decision that landlords must live in the UK in order to be licensed; and
- if that was the case, the Council had failed to make this clear in its information. As a result, Mr X had wasted money in becoming accredited.
“The Council will accept applications from landlords who are non-domiciled in the UK, however the decision to grant or refuse will be on a case by case basis and will be risk based. Therefore applications received from overseas applicants will require further enquires and assessment, as the Council must be satisfied that the necessary management arrangements are in place”.
- Mr X complained to the Ombudsman. He was unhappy because the response on 9 August 2018 contradicted information previously provided by the Council which said it would not allow overseas landlords to be the licence holder.
- Mr X wants the Council to:
- allow him to be the licensed landlord for his properties which would mean he would be entitled to pay the reduced licensing fee because he is accredited; and
- refund the £240 fee charged by Agency B for acting as his landlord.
Council’s response to my enquiries
- During my investigation, the Council stated that:
- it did not previously have a policy in place for dealing with overseas landlord applications. However, because of Mr X’s and other enquiries, the Council was now developing a policy and processes to respond to and accommodate these types of applications;
- it would now, therefore, accept applications from overseas landlords to be the licence holder under the selective licensing scheme;
- it would allow Mr X to make amendments to his application so that he was personally the applicant instead of Agency B if Mr X wished;
- it missed opportunities to “improve [Mr X’s] customer experience”;
- if the Council refused Mr X’s application to be the licence holder, he had the right to appeal this decision to the First Tier Property Tribunal; and
- it would allocate a senior officer to work with Mr X in relation to his application.
- if the Council granted the licences personally to Mr X, it would compensate him by paying him £240 to cover the costs of the unnecessary administration charges he had paid Agency B. However, the Council would not reimburse Mr X for his accreditation fee because he would have benefited from it; or
- if the Council deemed Mr X not to be a suitable licence holder and granted the licences to Agency B instead, the Council would pay Mr X £100 for the unnecessary accreditation administration costs he occurred because he would not benefit from that accreditation.
- The Council’s original selective licensing scheme did not allow overseas landlords to be licence holders. Following communications from overseas landlords, it reviewed and changed its policy to allow overseas applications which would be determined on a case by case basis. The Council has, therefore, demonstrated it listened to the views of landlords directly affected by its new scheme and made changes. These are appropriate actions for the Council to take.
- The Council could have communicated its reasons why it changed its position regarding overseas landlords more effectively to Mr X. If Mr X had known the Council had made changes to its policy as a direct result of his, and other, complaints and enquiries, this may have avoided a complaint to the Ombudsman. Therefore, there are lessons the Council can learn from this complaint. However, I stop short of making a finding of fault.
- Throughout this complaint, Mr X has continued to be able to rent out his properties. Mr X can amend his applications so that he is the licence holder and the Council will consider his revised applications on their individual facts. It will also reimburse Mr X for any unnecessary financial outgoings, either by repaying his fee to Agency B or his accreditation fees. These are the outcomes Mr X wanted. Therefore, even if I had found fault these would have been suitable actions to remedy any injustice.
- There was no fault in the Council’s actions. Therefore, I have completed my investigation.
Investigator's decision on behalf of the Ombudsman