Summary: The Council was at fault for failing to tell Mr X that he could appeal to a tribunal about the financial penalty it issued him for making a late application under its selective licensing scheme. The Council has agreed to allow Mr X to appeal the penalty now to remedy the injustice caused. The Council was also at fault for failing to provide information about when landlords must apply for a licence to avoid a penalty. However, this did not cause Mr X an injustice.

The complaint

1. Mr X complained that the Council issued him a £1,000 penalty for making a late application for a licence to rent out a property he owns. He says the information on the Council’s website about selective licensing gave landlords six months to apply when the scheme was introduced. He says it is unfair that new landlords do not get the same amount of time to apply for 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal about the same matter. 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)
4. 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

5. I considered the complaint and the information Mr X and the Council provided.
6. I referred to the Ombudsman’s Guidance on Remedies, a copy of which can be found on our website.
7. Mr X and the organisation 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

Selective licensing

8. The Housing Act 2004 allows councils to introduce selective licensing in their areas. The Council introduced a selective licensing scheme in January 2019. The scheme requires most privately rented housing in the area to have a licence and meet conditions for health and safety and other standards. Not having a licence for a property which needs one is an offence and councils can prosecute landlords and impose a fine of up to £30,000.
9. The Council’s website includes information for landlords about selective licensing. This says the Council applies the following penalties for not having a licence:

10. Landlords can apply to the First Tier Tribunal (Property Chamber – Residential Property) about various matters. Of relevance to this complaint, this includes financial penalties issued by councils and disputes about licences.

What happened

11. Mr X bought a flat in the Council’s area in June 2022. The flat had a tenant living in it and Mr X became the landlord.
12. In August, Mr X contacted the Council to ask about licensing. The Council told him any property rented out to private tenants needed a licence. It told him how to apply and said he had 28 days to do so.
13. Mr X did not apply for a licence. The Council wrote to Mr X in October to say it was aware he owned the flat and it needed a licence. It said Mr X should apply for a licence immediately.
14. Mr X applied for a licence 10 days later. The Council acknowledged the application. It told Mr X that he might be liable for a late application penalty.
15. The Council asked Mr X to provide documents in support of his application at the end of October. It followed this up with Mr X in November. It warned Mr X that he needed to complete his application within 28 days of applying to avoid incurring a penalty. Mr X provided the required information the next day.
16. The Council granted Mr X a licence in early January 2023. A few days later it sent Mr X an invoice for £1,000. The invoice said this was because Mr X had a property “which is required to be licenced under Part 3 of the Housing Act 2004, but which is not so licenced.”
17. Mr X contacted the Council. He asked how he could complain or appeal against the Council’s decision.
18. The Council’s reply said “We allow 28 days from purchasing the property to completing the licence application, which includes making payment.” In response, Mr X asked why he, as a new owner, did not get the same opportunity to apply within six months granted to landlords when the Council introduced the scheme. He said there was nothing in the Council’s information about selective licensing which said landlords had to apply within 28 days.
19. The Council considered Mr X’s complaint in February. It did not uphold his complaint.

My findings

20. The Council’s published information about selective licensing contains no information about the timescales in which new landlords must apply for a licence. From the correspondence in this case, it appears the Council applies a rule that landlords must complete an application within 28 days. However, this is not in its policy or made clear in the details about financial penalties. This is fault.
21. However, I do not consider this fault caused Mr X an injustice. Mr X knew in August 2022 that he needed to apply for a licence. The Council told him then to apply within 28 days. He did not do so until October. His application was therefore late.
22. However, the invoice issued to Mr X seeking payment of £1,000 does not tell him about his right to appeal to the tribunal. This was fault. The Council also failed to tell Mr X about this when he asked how to complain or appeal. This was further fault.
23. This denied Mr X the opportunity to appeal to the Tribunal, which is the body best placed to consider Mr X’s dispute about the penalty. This is an injustice to Mr X.

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Agreed action

24. To remedy the injustice to Mr X from the fault I have identified, the Council has agreed to reissue the penalty, providing Mr X with information about how to appeal it. The Council should take this action within four weeks of my final decision.
25. The Council’s selective licencing scheme has now ended. I have not, therefore, made any service improvement recommendations. The Council says it will consider the findings of this investigation when developing any future schemes.

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Final decision

26. I have completed my investigation. There was fault by the Council. The action I have recommended is a suitable remedy for the injustice caused.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman