Summary: Ms X complained the Council’s website contained inaccurate information which told her she did not need an HMO license. Ms X also complained the Council denied her the opportunity to get a Temporary Exemption Notice. We found fault with the Council. The Council has agreed to our recommendations to confirm in writing it will cover the cost of any rent rebate decided through the tribunal from 4 January 2022 until 31 March 2022. The Council also agreed to provide Ms X with an apology, ensure it refunds her HMO license application fee and provide a payment of £250 for the inconvenience, frustration and distress experienced. The Council has also agreed to consider updating its web-form to provide clarity to potential HMO applicants about individual self-contained flats.

The complaint

1. Ms X complained the Council’s website contained inaccurate information which told her she did not need an HMO license.
2. Ms X says that when she found out she needed an HMO license the Council at first denied her the opportunity to get a Temporary Exemption Notice delaying her in getting one.
3. Ms X says because of these issues her former tenants are claiming she was running an unlicensed HMO. Ms X says her former tenants are trying to reclaim rent from her and this matter has impacted her ability to rent out the property again.
4. Ms X also complained the Council failed to address her complaint in the correct timescales.

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The Ombudsman’s role and powers

5. 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)
6. If we are satisfied with an organisation’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

7. I have considered all the information Ms X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
8. Ms X and the Council provided comments on my draft decision which I considered before making my final decision.

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What I found

HMO and TEN

9. A property is a house in multiple occupation (HMO) if the property has at least three tenants living in the property. These tenants must form more than one household and share a toilet, bathroom or kitchen facilities.
10. The Council’s website provides information about HMO licenses. On the Council’s website it has a section which details what HMO properties do not need a license. One exemption to the need of an HMO license is for purpose-built blocks of flats. The Council’s website says a property will not need an HMO license if “it's a purpose-built block of flats (although individual flats that are HMOs will need to be licensed)”.
11. The Housing Act 2004 allows a landlord who, through no fault of their own, find themselves falling foul of a property licensing scheme to apply for a Temporary Exemption Notice (TEN).
12. A TEN provides an exemption to a landlord of the need to licence a property for a temporary period of up to three months. A TEN is intended to allow the landlord to put the situation right by putting the property into a situation where it no longer needs a license.

Council’s complaint handling process

13. The Council says when a person makes a complaint to it, it will provide a response within 15 working days at Stage 1 of its process.
14. If a person is dissatisfied with the Stage 1 complaint response, they can ask for a review from a more senior manager. The Council says it will provide this Stage 2 review response within 20 working days of request.

What happened

15. Ms X filled out an HMO license form on the Council’s website. Ms X says she did not know if she did this at the end of October 2021 or start of November 2021. Ms X stated her property was a “purpose-built flat” within the form. The Council’s form told Ms X she did not need an HMO license based on the information she provided.
16. In November 2021, Ms X rented out the property to two individual tenants with a third joining in December 2021.
17. The Council contacted Ms X on 1 December 2021 and told her she needed an HMO license.
18. Ms X applied for an HMO license on 9 December 2021. Ms X also asked the Council if she could apply for a TEN. The Council told Ms X it could not accept her HMO license application because she had not provided a gas safety certificate. The Council also said it would ask a senior environmental health officer to advise Ms X if she could apply for a TEN.
19. On 4 January 2022, Ms X provided the Council with a gas safety certificate for the property, but this did not include checks of the boiler.
20. Ms X complained to the Council on 5 January 2022 about the misinformation provided by the Council’s web-form.
21. The Council attended Ms X’s property on 10 January 2022 following a complaint from the tenants about the boiler not working. The Council told Ms X she needed to get the boiler checked and a gas safety certificate for this before it could issue an HMO license. The Council also confirmed with Ms X on this date that she could make a TEN application and apologised for the delay in responding to this query.
22. On 16 January 2022, Ms X made a TEN application. The Council told Ms X she needed to provide a gas safety certificate for the TEN application.
23. Ms X spoke with the Council on 21 January 2022 about the information on its web-form. The Council agreed the information on the web-form was confusing.
24. The Council provided its Stage 1 complaint response on 31 January 2022. The Council said:
• Its web-form provides answers about whether someone needs an HMO license based on the information a person inputs. It believed Ms X out the wrong information into the form.
• The first page of the form provides information about properties that are exempt from licensing and states that individual flats that are HMOs will need a license.
• It would grant a TEN to Ms X on receiving a valid gas safety certificate.
25. On 22 February 2022, Ms X provided the Council with a copy of a gas safety certificate for the boiler. Ms X asked the Council to confirm that it would grant a TEN for the property.
26. Ms X sought a response at Stage 2 of the Council’s complaints process on 24 February 2022. The Council promised to respond to Ms X’s complaint by 25 March 2022.
27. Ms X’s HMO tenants left the property on 31 March 2022. Ms X says her former tenants have made a claim to the tribunal for rent repayments from 1 November 2021 until 31 March 2022 because Ms X did not have a HMO license or TEN.
28. On 4 April 2022, the Council granted Ms X’s TEN and made this valid for three months. The Council told Ms X this would give her opportunity to stop using the property as a HMO or to get an HMO license.
29. The Council has confirmed it only received a full and completed HMO license application, with all relevant documents, on 4 April 2022.
30. On 11 April 2022, Ms X rented out the property to two lodgers.
31. Since the Council did not provide a Stage 2 complaint response to Ms X, she approached the Local Government and Social Care Ombudsman, the Ombudsman, in July 2022. The Ombudsman asked the Council to provide a Stage 2 complaint response.
32. On 30 August 2022, the Council provided its Stage 2 complaint response to Ms X. The Council said:
• It did not uphold Ms X’s complaint about the information on its web-form about HMO licenses.
• It mistakenly told Ms X she could not apply for a TEN as an alternative to applying for an HMO license. It should not have delayed in issuing the TEN application while awaiting submission of the gas safety certificate which it needed for the HMO license application.
• It would refund the HMO license application fees to Ms X if she was no longer using the property as an HMO.
33. On 1 December 2022, the Council confirmed Ms X’s property was no longer occupied as an HMO following a visit to the property.

Analysis

Council information about HMO license

34. The Council’s website provides information to landlords that “purpose-built” blocks of flats will not need an HMO license. The Council’s website also makes it clear than landlords using individual flats as HMOs will need a license.
35. Ms X’s property is an individual flat, within a block of flats, meaning that she needed an HMO license. This is consistent with the information held on the Council’s website and I do not find fault with the Council.
36. However, the Council’s web-form only asks if the property is a “purpose-built” or “conversion flat”. The web-form says that a “conversion flat” is any building built initially for a different purpose and later converted into self-contained flats. Based on this information, Ms X answered that her property was a “purpose-built” flat because the property had always been a flat and had not been converted.
37. Because of this answer, the Council’s web-form told Ms X she did not need an HMO license. This was the correct answer for the web-form to give based on the Council’s description of what a “purpose-built” block of flats is on its website.
38. However, the information contained within the web-form is misleading because Ms X’s property has always been a flat. But, Ms X has an individual flat as opposed to a block of flats. This is a position shared by the Council Officer who spoke with Ms X on 21 January 2022. This misleading information from the Council was fault and the Council should consider correcting this in its web-form.
39. While this misleading information in the web-form was fault, I do not consider this justifies the Council covering any potential lost rent for Ms X. This is because:
• The Council’s website, on the page linking to the application form, contains the correct information about Ms X’s individual flat needing a HMO license.
• As a landlord, Ms X is responsible for ensuring she has the correct licenses needed for renting out her property.
• Ms X would not have been able to get a HMO license until the earliest of 4 January 2022 in any event. This is because it took Ms X 63 days to get a gas safety certificate for her boiler, from 21 December 2021 until 22 February 2022. If Ms X had applied for an HMO license on 1 November 2021, the earliest she would have been able to get an HMO license would have been 4 January 2022, given boiler certification delays.
40. Ms X is responsible for any potential rent repayments owed to her tenants, as decided by the tribunal, from 1 November 2021 until 3 January 2022.

TEN application

41. Ms X contacted the Council and discussed about a TEN application on 21 December 2021. Despite promising to provide advice about the TEN application, the Council failed to do so until 10 January 2022. This was fault by the Council causing a delay of 20 days in Ms X being able to apply for a TEN.
42. Ms X made a TEN application six days after the Council told her she could on 10 January 2022. If the Council had responded to Ms X as promised on 22 December 2021, Ms X would likely have applied for a TEN six days after this date on 28 December 2021.
43. Following Ms X’s application, the Council told her it could not issue a TEN because she had provided a gas safety certificate for her boiler. This information was wrong and was fault. Ms X did not need a gas safety certificate for her TEN application, Ms X only needed this for her HMO application. This meant the Council failed to progress Ms X’s TEN application and delayed in issuing this until 4 April 2022. This was fault.
44. Had the Council taken the correct stance and progressed with Ms X’s TEN application, it is fitting to assume the Council could have granted Ms X with her TEN within one week of her application. Given that Ms X could have applied for her TEN application on 28 December 2021, if not for the Council’s fault, the Council could have granted Ms X’s TEN as early as 4 January 2022.
45. The Council’s fault has resulted in Ms X having an unlicensed HMO which she could not rectify from 4 January 2022 until 31 March 2022. Had the Council issued the TEN in a suitable timescale, Ms X could have removed the HMO tenants.

HMO application after provision of TEN

46. Ms X has rented out her property to two individual lodgers since 12 April 2022. Ms X says she has done this while awaiting the Council’s decision on her HMO license application.
47. By 4 April 2022 Ms X had completed her HMO license application and provided the Council with all the relevant information it needed to consider granting her HMO license.
48. The Council says it has not granted Ms X with an HMO license for her property because she had a TEN in place until 3 July 2022. This is correct as a landlord should use a TEN to put a property into a situation where it no longer needs a license. As such, the Council would not need to progress with Ms X’s HMO application.
49. However, this contradicts the information the Council provided Ms X on 4 April 2022 when it granted the TEN. On this date, the Council told Ms X granting the TEN gave Ms X opportunity to stop using the property as an HMO or to get an HMO license. The information the Council provided implied it would continue to consider Ms X’s HMO application while the TEN was in place. This was misleading and was fault.
50. The Council has also failed to complete Ms X’s application since 3 July 2022, when the TEN expired. This was also fault. While this was fault, Ms X has contributed towards this by failing to respond to the Council’s contact in July 2022.
51. Ms X has been waiting on the Council’s decision about her HMO license application since 4 April 2022, but the Council has not progressed this or communicated with Ms X about this. Overall, this was a delay of about eight months. While Ms X has contributed to this delay, the Council has also contributed and this was fault.
52. The Council’s contribution towards the delay has caused Ms X stress, inconvenience and frustration which the Council should acknowledge. However, Ms X has still been able to rent out her property. As such, I do not consider the Council should provide an award for potential lost rent.

Refund of HMO license fees

53. When Ms X applied for the HMO license, she paid £613 to the Council.
54. In the Council’s Stage 2 complaint response it promised to refund Ms X with her HMO license fee should the property no longer used as an HMO. The Council says it did not refund the HMO license fee because it was unaware that Ms X was no longer using the property as an HMO. The Council says it only confirmed the property was no longer an HMO on 1 December 2022.
55. There is no evidence Ms X contacted the Council following the Stage 2 complaint response to confirm she was no longer using the property as an HMO. As such, I do not find fault with the Council failing to provide a refund of the HMO license fee as promised in the Stage 2 response.
56. However, I do find fault with the Council for failing to provide a refund of the HMO license application when it was not progressing Ms X’s HMO license application. As detailed in paragraphs 48 to 51, the Council was not considering Ms X’s HMO license application. The Council should either have refunded Ms X her HMO license application fee or completed the process of deciding on Ms X’s application. Failing to consider the application while keeping the application fee was fault.
57. The Council should provide a refund of Ms X’s HMO license fee application. The Council has told the Ombudsman that Ms X cannot rent her property as an HMO because of the terms of her lease. The Council should confirm this in writing to Ms X.

Complaint handling

58. Ms X complained to the Council on 5 January 2022. The Council provided its Stage 1 complaint response on 31 January 2022. This is three working days outside the Council’s complaint timescales and is fault.
59. Ms X requested a Stage 2 complaint response on 24 February 2022. The Council promised a response by 25 March 2022 which was in line with the Council’s complaint procedure.
60. The Council failed to provide Ms X with a Stage 2 complaint response until 30 August 2022. This was 22 weeks and two working days outside the Council’s complaint response timescales. The Council also failed to provide a response to Ms X’s complaint without the intervention of the Ombudsman.
61. The Council delayed by 23 weeks in providing a response to Ms X’s complaints outside its complaint timescale; this was fault. This fault caused Ms X inconvenience and frustration.

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Agreed action

62. Within one month of the Ombudsman’s final decision the Council should:
• Confirm in writing it will provide a payment equal to all rent repayment costs incurred from 4 January 2022 to 31 March 2022 as decided by the tribunal. The complainant will need to provide the Council with a copy of the tribunal’s decision detailing any rent repayment it considers is owed to the tenants during this time period. Any rent repayments outside this time period are not the responsibility of the Council.
• Provide an apology and a payment of £250 to reflect the inconvenience, frustration and stress caused through the Council’s contribution towards the eight months delay in progressing the HMO license application without confirmation that it was not progressing this and for the 23 weeks delay in handling of the complaint.
• Ensure it provides a refund of the HMO application fee paid of £613.
• Confirm in writing that the complainant cannot rent the property as an HMO and explain why this is the case.
63. Within three months of the Ombudsman’s final decision the Council should:
• Consider updating its HMO license web-form to provide clarity on the question relating to different kinds of flats so that owners of individual self-contained, but purpose-built, flats can input the correct information without confusion.
64. The Council should provide us with evidence it has complied with the above actions.

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Final decision

65. There was fault by the Council as the Council has agreed to my recommendations, I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman