Summary: During an Ombudsman investigation into a different complaint, it came to our attention that the Council unlawfully required landlords to provide Electrical Installation Condition Reports as a condition of granting selective licences. This was fault. The Council should write to all affected landlords to tell them of the error and provide an opportunity to seek redress.

The complaint

1. During an Ombudsman investigation into a different complaint., it came to our attention that from October 2018 the Council unlawfully required landlords to provide Electrical Installation Condition Reports as a condition of granting selective licences.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. We may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
4. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
5. 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

6. I wrote to the Council with my enquiries and considered its response along with relevant law and guidance.
7. 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

8. In October 2018 the Council introduced a selective licensing scheme for private landlords in its area.
9. The licence required landlords to provide an Electrical Installation Condition Report (EICR) within 28 days.
10. In February 2018 the courts decided Councils could not require a landlord to provide an EICR as a condition of licence under existing legislation. (Brown v. Hyndburn Borough Council (2018) EWCA 242)
11. In September 2019, a landlord complained to the Council about the requirement to provide an EICR as a licence condition. In its stage two response to the complaint, the Council said:

“The Council had been asking for electrical condition (EICR) reports under Section 90 and Schedule 4 of the Housing Act 2004. We have looked into this further and have noted recent case law establishes the Council is unable to ask for an EICR under these powers. The Council will no longer be including this requirement as a condition on its selective licences.”

12. In response to my enquiries, the Council says it has not taken any action to contact any other landlords who might have been affected by the policy. However, it stopped requiring an EICR as a licence condition from 7 November 2019.
13. Landlords have a right of appeal to the First Tier Tribunal about licence conditions. However, to exercise it a landlord must have reason to believe the licence conditions are unlawful and must appeal within 28 days of the decision. The Ombudsman does not consider it was reasonable to expect all landlords affected by the policy to have known the condition requiring an EICR was unlawful and has therefore exercised discretion to investigate.
14. The Council says that no landlords were refused a licence for failure to provide an EICR and that therefore there was no injustice. However, this does not consider the cost to the landlord of getting the EICR.
15. From 1 July 2020, all landlords are required to have an EICR to rent out residential properties. This means any landlord already licensed under the Council’s selective licensing scheme will not have to get a report. However, the EICR is only valid for five years. Therefore, a landlord who applied to the Council’s scheme in 2018 will have to pay for a new report two years earlier than if the Council’s scheme had not unlawfully required it. This is a potential financial injustice to landlords.

Agreed action

16. To remedy this injustice, the Council should write to all the landlords who applied for a licence before 7 November 2019. The letter should:
• tell landlords of the policy’s unlawfulness at the point they were granted a licence;
• explain that an EICR is now required;
• offer the opportunity for landlords to recover part of the cost of the EICR, in proportion to how much earlier it was obtained than necessary; and
• advise landlords to approach the Council within 12 months of the letter.
17. In considering any representations from landlords, the Council can seek reasonable proof of the cost incurred by the licence condition.
18. The Council should provide the Ombudsman evidence it has taken this action within eight weeks of my final decision.
19. By no later than 1 April 2021, the Council should tell the Ombudsman how many landlords approached and what remedies the Council made.

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Final decision

20. I have completed my investigation as I have found fault by the Council. The action I have recommended is a suitable remedy for the injustice caused.

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Investigator's decision on behalf of the Ombudsman