London Borough of Hackney (19 003 081)

Category : Environment and regulation > Licensing

Decision : Upheld

Decision date : 05 Feb 2021

The Ombudsman's final decision:

Summary: Mr X, a landlord, complains the Council’s selective licensing scheme terms were wrong. He said he was put to time and trouble, the Council delayed responding and did not alter its terms. We find the Council was at fault. It has agreed a remedy.

The complaint

  1. The complainant, whom I shall refer to as Mr X, complains that the Council delayed responding to his request that it changed its selective property licensing terms and conditions after it had agreed the terms were wrong. When it finally replied, he says it contradicted itself and has refused to modify the terms and conditions. He says this has caused him time and trouble.

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The Ombudsman’s role and powers

  1. 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)
  2. 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

  1. I have discussed the complaint with the complainant and considered the complaint and the copy correspondence provided by the complainant. I have made enquiries of the Council and considered the comments and documents the Council provided. I have also invited Mr X and the Council to comment on my draft decision. I will consider their comments before making a final decision.

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What I found

  1. The Council introduced its selective licensing scheme for private landlords in 2018 after carrying out consultation in 2017. The intention was to improve housing conditions and housing management standards. The selective licensing scheme applied to landlords letting any residential properties in three wards within the Council’s area.
  2. The selective scheme was in addition to the government’s statutory Houses in Multiple Occupation (HMO) licensing scheme which requires landlords to obtain a licence from the Council for properties occupied by 3 or more unrelated persons in two or more households, sharing amenities such as a kitchen or bathroom.
  3. Mr X applied for a selective property licence in November 2018. He emailed the Council questioning the terms and conditions. He considered that the terms were poorly drafted, unclear and potentially illegal. He said, amongst other things that the terms:
    • referred to “placing tenancy deposits in a statutory deposit scheme” but did not refer to landlords protecting deposits in an insured deposit scheme.
    • Required the landlord to provide a 24 hour emergency contact number. Mr X asked if this must be manned at all times or if a voicemail with a call back within 24 hours was sufficient.
    • Referred to landlords providing a gas safety certificate at the start of the tenancy when the legislation required certificates to be provided before the tenancy.
    • Said landlords must provide an electrical appliance test report (PAT), but the Council’s website also listed documents landlords must have which included an electrical safety certificate. Mr X asked which of these were required as they were different.
    • Referred to the landlord providing a copy of the Energy Performance Certificate (EPC) at the start of the tenancy when Mr X believed it should be provided before the tenancy.
    • Required a landlord to state which tenant occupied each room. Mr X said he did not know which tenant occupied each room and this could change in any case.
  4. Mr X said he could not apply to the Council for a licence until his concerns were responded to.
  5. The Council replied in December 2018. It stated that:
    • As long as the deposits were secured in an appropriate recognised deposit scheme, that would be sufficient.
    • Landlords could use a voicemail facility for the 24 hour emergency contacts condition and did not need to cover it at all times.
    • It was a legal requirement to provide a gas safety certificate, and this must be provided at the beginning of the tenancy.
    • Landlords must upload an up to date copy of their Electrical Installation Condition Report (EICR). If a landlord provided electrical appliances they should make a visual check of their condition and test to make sure they were in working order.
    • Regarding Mr X’s query about providing an EPC before the tenancy, rather than “at the start”, the Council replied, “that is correct”.
    • Regarding Mr X’s query about being unable to say which tenant occupied which room, the Council replied, “that is correct”.
    • The Council said that it would pass Mr X’s comments on to the developers.
  6. Mr X emailed the Council on 12 December 2018 and stated that in view of the fact the Council had accepted it had made mistakes, it should alter its terms and conditions. Mr X chased a response on 11 February 2019. But the Council did not reply.
  7. On 27 February 2019 Mr X made a formal complaint about the Council’s lack of response. He said he could not apply for a licence until the terms were correct. Mr X chased a response in April 2019. The Council replied it was still waiting for a response from the developers.
  8. Mr X then complained to the Ombudsman. As the complaint had not completed the Council’s complaints procedure, we passed it back to the Council.
  9. In May 2019 Mr X sent his application and paid the selective licensing fee. But he did not receive a copy of the licence.
  10. In July 2019 the Council responded to Mr X. It apologised for its lack of response and poor communication. It explained that the officer who had replied in December 2019 had left the Council and some of Mr X’s emails were not received. It said that it had reviewed the complaint procedure and would need to implement measures to prevent the problem reoccurring. With regard to Mr X’s complaint, it said that:
    • it was a legal requirement to place the deposit in one of the government-backed tenancy deposit schemes or insurance schemes.
    • It was not a requirement to staff the emergency contact number 24 hours a day, but a voicemail facility should be provided and responded to the following working day.
    • It was a statutory requirement of the Housing Act 2004 for landlords to provide an in date gas safety certificate. The landlord should provide this to the tenant prior to or at the start of the tenancy.
    • It was not a requirement to provide a EICR a report as part of a selective licence application. The licence condition only requires a written statement as to the safety of electrical appliances that are supplied by the landlord if the Council demands it.
    • It was not a requirement of the selective licence application to identify which tenants occupy which rooms. However, the Council may require this information in certain circumstances during the period of the licence.
    • Landlords must show potential renters a copy of the EPC for the property prior to them accepting a tenancy.
  11. The Council said that it would welcome a meeting to discuss the points raised. However, the Council did not refer to altering any of the terms and conditions.
  12. Mr X replied the next day and escalating his complaint to the next stage. He said that the Council contradicted its earlier response which agreed to his points and now stated some things which were not correct in legislation. He said the Council was still wrong to say that deposits needed to be “placed” in a scheme. It should refer to insurance schemes where the landlord could hold the deposit.
  13. He asked the Council to correct the terms and conditions, as the Council had agreed, but had not changed the following:
    • 24 hour emergency contact number - this could be a voicemail facility.
    • Gas safety certificate - this needed to be provided before the tenancy.
    • Electrical Installation Condition Reports - the Council said these were not a requirement, but the terms and conditions still asked for this. Mr X stated the Council was wrong in any case, as it was still a requirement to provide an EICR.
    • Room occupation– the Council said this was not a requirement for a selective licence application. But it was still showing as a requirement of the terms and conditions.
  14. Mr X emailed a few days later that he had checked, and the government did not require landlords to provide an EICR. His previous understanding had been incorrect. Therefore, the Council had incorrectly stated in its website advice regarding applying, if not in its terms and conditions, that this document was required. He considered the Council had unlawfully requested this and that it should reimburse landlords who had paid for a report when this was not necessary.
  15. In August 2019 the Council responded at the final stage of its complaints procedure and accepted it had not responded to all Mr X’s emails, and there was delay. It apologised and said it had put in place procedures to better manage correspondence and complaints. It explained that it could not amend all the terms and conditions he requested as the wording reflected current legislation. However, where it could make changes the Council had revised the wording.
  16. Referring to Mr X’s specific points, the Council responded:
    • Tenancy deposits – the Council considered information on gov.uk and its terms were in line with this. While it accepted that deposits could be protected in either a custodial scheme or an insurance backed scheme it was not for the Council to advise which scheme the landlord should use. Therefore, it would not change the terms and conditions.
    • 24 hour emergency contact number – the Council said it was not for the Council to advise potential licence holders but for to them to implement the arrangements that best suited their needs. Therefore, it would not change the terms and conditions.
    • Gas safety certificate – the Council said that this condition was mandatory in accordance with the Housing Act 2004 section 90 (4) and schedule 4. Therefore, it would not change the terms and conditions.
    • Electrical Installation Condition Reports. Mr X said the terms and conditions still asked for this, despite agreeing it was not required. However, Mr X now stated the Council was wrong in any case, as it was in fact a requirement to provide an EICR. - The Council responded the wording of this condition was wrong. It apologised and said it would amend the condition to state “The licence holder shall keep electrical appliances made available by him in the house in a safe condition and supply the Council, on demand, with a declaration by him as to the safety of such appliances (an electrical appliance safety report).” The Council explained this condition was a mandatory condition under section 90(4) and schedule 4 of the Housing Act 2004.
    • Room occupation – the Council said it had previously explained that the landlord “shall if required, provide the Council with the following particulars” but it was not a mandatory requirement and could be provided in certain circumstances during the period of the tenancy. Therefore, it would not change its terms and conditions.
  17. Mr X replied to the Council’s final response. The Council had originally agreed that he was right and so he expected the Council to revise the terms. But it was now saying it would not and tried to justify this by referring to legislation. Mr X said the Council was not adhering to legislation or considering guidance and caselaw. The Council could fine a landlord up to £30,000 for failing to comply. He noted the Council had agreed to change its terms regarding Electrical Installation Condition Reports. But he pointed out that he was wrong to complain the terms referred to landlord’s providing an EICR. They did not. However, the Council responded regarding Electrical Appliance Test Reports, or portable appliance testing (PAT testing) which was something completely different. Mr X said that Councils had no power to require an EICR, due to the government disallowing this, but the Council was still asking landlords to provide EICRs as one of the documents required for a licence application. He raised this in July 2019 suggesting the Council reimbursed landlords. But the Council had not replied.
  18. The Council replied that it had completed its complaint procedure and signposted Mr X to the Ombudsman.

Analysis

  1. The Council has not provided a copy of the original terms and conditions and advised us in its response to our enquiries that it does not keep these. It is difficult therefore to see how the terms changed over time. I have seen the current terms and conditions, which is not dated but the Council provided it to the Ombudsman in June 2020. The Council says it changed its terms in response to Mr X’s comments.
  2. Mr X has explained his concerns regarding certain licensing terms and conditions, as he says they may not be lawful. The Council has explained it sought legal advice regarding the terms and conditions. It made some changes following Mr X’s comments, but it considers the current terms and conditions are correct.
  3. I note Mr X’s concerns regarding the terms and conditions. However, it is not the Ombudsman’s role to decide whether the Council’s terms and conditions are lawful. That is a matter for a court.
  4. I have considered how the Council has dealt with this matter. There was significant delay by the Council in responding between December 2018 and July 2019. This delay was fault. I note the Council has apologised. It says it has put in place measures to prevent the delay in dealing with correspondence and complaints. I consider this remedies the administrative fault here.
  5. I consider the Council’s response in December 2018 was unclear and gave Mr X the impression that the Council agreed it was at fault. The Council’s final view was that aside from one issue, its terms were correct. This lack of clarity led to Mr X having an expectation the terms would be changed as he suggested. The Council’s communication was poor and was fault.
  6. The Council explained its reasoning in its responses in July and August 2019. It agreed it would change the terms and conditions regarding electrical appliance test reports. It is not clear what precisely it changed and whether this was significant. However, Mr X had headed his point EICR. Therefore, it appears the Council responded to the wrong issue. This was fault.
  7. Based on what Mr X has said it appears the Council asked landlords for an EICR in the advice for applicants on its website when this was not necessary from November 2018. I do not know when the Council removed this request. The current website advice includes the EICR under the section “Required information to help with processing your application.” But it also says “However, the absence of any of this information won’t prevent an application being made.”
  8. According to Mr X, the Council still requested an EICR by June or July 2019. Therefore, the incorrect request for this may have continued for at least 9 months. Mr X says landlords may have paid for an EICR when this was not necessary. I have considered this. In my view Mr X was caused personal injustice because the Council did not properly consider this point and appears to have confused the appliance test reports with the EICR. The Council ended the complaint process without having responded to this point. While I consider there was some personal injustice to Mr X due to the lack of response, it does not appear he was personally affected as he has not stated he paid for an EICR due to misleading advice. I do not know if other landlords were affected as we have not received any other complaints regarding this issue. I must also take into account that landlords must now provide an EICR to new tenants from June 2020, in accordance with amendments to the Housing Act 2004.
  9. Mr X paid for the licence in May 2019, but the Council accepts that it did not issue a paper licence or emailed version until June 2020 due to the legal challenge and a backlog of applications. This delay was fault.

Agreed action

  1. I recommended that within 6 weeks of my decision the Council
    • Apologises to Mr X for its poor communication, delays, and regarding its incorrect response about the EICR.
    • Reviews its terms and conditions in view of amendments to requirements of the Housing Act 2004 regarding the EICR from 1 June 2020.
    • Pays Mr X £150 as a remedy for its delays, poor communication and failure to issue a licence promptly.
  2. The Council has agreed.

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Final decision

  1. I have found fault causing injustice. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman

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