Summary: Mr X complained about the Council’s decision to demote his housing application. The Ombudsman found fault causing injustice and the Council agreed to offer a remedy.

The complaint

1. Mr X complained about the Council’s decision to demote his housing application. He said the Council’s review contained factual inaccuracies.
2. Mr X said the Council’s decision means he is stuck in a home where he is in danger and at risk from anti-social behaviour.

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The Ombudsman’s role and powers

3. 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)
4. 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

5. As part of the investigation, I have considered the following:
• The complaint and the documents provided by the complainant.
• Documents provided by the Council and its comments in response to my enquiries.
• The Council’s Lettings Policy.
• The Council’s Statement of Flexibility.
• The Housing Act 1996.
6. Mr X and 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

7. Every local housing authority must publish an allocations scheme that sets out how it prioritises applicants, and its procedures for allocating housing. Councils must follow their published scheme.
8. Councils have some discretion to decide which people deserve priority in their area. However, an allocations scheme must give reasonable preference to applicants in the following categories:
• homeless people;
• people in insanitary, overcrowded or unsatisfactory housing;
• people who need to move on medical or welfare grounds;
• people who need to move to avoid hardship to themselves or others.
9. The Council’s allocations scheme is found in its Lettings Policy. This policy states:

“if you have tenancy related debt or have committed criminal or anti-social behaviour but have not been excluded from the housing register, your application may be demoted”.

10. The policy goes on to say the Council will consider demoting an application if an applicant owes current or former rent, or other tenancy related debt.
11. The Council’s Statement of Flexibility sets a trigger level of £250 for rent arrears, or 10 weeks arrears, whichever is lower. The Council considers tenancy related debt to be unacceptable behaviour under section 166A(5) of the Housing Act 1996.
12. As part of good practice, the Ombudsman expects to see clear allocations policies and clearly written decisions which explain the information considered and the reasons for the decision. We expect to see evidence an applicant’s medical priority has been considered and whether there are any exceptional circumstances. Councils should also tell applicants about their right to ask for a review of the decision.

What happened

13. Mr X made a housing application to the Council in 2017. As part of its consideration of the application, the Council wrote to Mr X’s former landlord (the landlord) on 16 March 2017 asking for a reference.
14. The landlord said he was a tenant up until November 2016. His rent was £395 per month, with £300 paid by housing benefit and £95 paid by Mr X. The landlord told the Council they kept Mr X’s deposit because there were rent arrears of £1,060. The landlord also said they had to refurbish the house after Mr X left, at a cost of £10,000, and they would not let to Mr X again.
15. Mr X started renting a Council flat on 21 August 2017. He applied for a transfer on 13 June 2018. He said he needed to be rehoused due to harassment and anti-social behaviour.
16. The Council wrote to Mr X on 19 July 2018. It said his application was in the general needs category but was demoted due to rent arrears of £1,060 at his previous home. The Council did not explain how it established his rent arrears. It told him about his right of appeal.
17. Mr X wrote to the Council in October 2018 to appeal its decision to demote his application to move. He said the alleged rent arrears was inaccurate. He had bank statements showing rent payments were made up to the end of June 2016. His rent contribution was £95 a month and he was evicted on 5 November 2016. He calculated he owed £475 rent. He said his partner’s disability living allowance payments were reduced in May 2016, which prevented them from being able to afford paying rent after June 2016.
18. The Council wrote to Mr X on 25 October 2018 to confirm receipt of his review request. It said the request was late, but it could exercise discretion and consider it. It asked Mr X to provide further information, including bank statements for the period of his tenancy and a copy of the tenancy agreement.
19. Mr X provided the Council with some of his bank statements on 7 November 2018. The statements only went back as far as January 2013. Mr X said he could not get statements for 2012 when the tenancy started.
20. The Council contacted the landlord again on 7 November 2018. It asked them to complete a questionnaire about Mr X’s tenancy and rent arrears. This included a request for a rent statement showing rent due and payments made.
21. The landlord confirmed Mr X’s tenancy ran from 15 October 2012 to November 2016 and there was £1,060 rent outstanding at the end of the tenancy. The landlord said they gave Mr X notice to leave the house because there were issues with cleaning and complaints from neighbours about smell. The landlord did not provide a rent statement or confirmation of when rental payments were made.
22. Mr X sent further payment information on 15 November and 13 December 2018.
23. On 17 December 2018, the Council asked Mr X for evidence to prove he agreed to his former landlord keeping his deposit.
24. Mr X told the Council on 3 May 2019 that he did not have proof he agreed for the landlord to keep his deposit to cover rent arrears.
25. The Council sent the result of its review to Mr X on 28 June 2019. Its decision to demote his application remained in place. It said it had established that he former tenant arrears of £1,060. It said it contacted his former landlord to confirm this. It also said the landlord kept Mr X’s deposit and this was used against the rent arrears, which the landlord has confirmed remain at £1,060. The Council said it did its own calculations based on Mr X’s bank statements and reached a figure of £1,040 for rent arrears. It said any dispute over former tenant arrears is not an issue the Council will get involved in and Mr X must take this up with the landlord.
26. Mr X challenged the result of the review on 2 July 2019. He said it contained factual errors and asked for the appeal to be reopened. He re-sent bank statements and provided two new bank statements, from June 2014 to February 2015 inclusive, that he had not sent previously. Mr X said the fact he could not provide evidence of having made all rent payments is not proof of non-payment.
27. The Council cancelled Mr X’s rehousing application on 14 October 2019 because he did not respond to an annual review letter.
28. The Council wrote to Mr X on 14 October 2019. It said his former landlord gave a figure of £1,060 rent arrears, and the Council confirmed this using information the landlord provided as part of the review. It said it reviewed all the bank statements Mr X provided and calculated there were arrears of £1,040, based on missed payments.
29. The Council ended by saying Mr X’s rent arrears are not with the Council. It is his responsibility to provide proof of payments or get his former landlord to confirm no money is owed.
30. Mr X sent an email to the Council on 17 November 2019, attaching copies of bank statements from June 2014 to June 2016. The statements were annotated to show where some rent payments were missed and where Mr X then paid extra in following months to make up the deficit.
31. Shelter, the housing charity, wrote to the Council on Mr X’s behalf on 20 November 2019. It said it was concerned about the Council’s position that bank statements show arrears of £1,040. It said its own calculations come to a different result. It also said the missing data before 2013 is not proof of non-payment. It argued, given Mr X’s bank statements show he paid rent consistently from 2013 onwards, the Council should accept, on balance, there were no arrears for the first few months of the tenancy in 2012.
32. The Council replied to Shelter on 11 December 2019. It said its review decision was based on the information available at the time and made no assumptions. It repeated its view that, because the debt is with the former landlord and not the Council, it is for Mr X to prove he did pay. It said Shelter had disclosed extra pieces of information which were not part of the review. As 6 months had passed since the review, the Council suggested Mr X ask for another review.
33. Mr X complained to the Ombudsman on 17 December 2019.

Response to my enquiries

34. The Council told me Mr X does not have any priority on the housing register. His application is in the general needs category, so the demotion is not negatively affecting any priority award.
35. The Council asked Mr X’s former landlord to provide a rent statement, but they did not do so. The Council determined the months in which Mr X did not pay rent based on the bank statements he provided.
36. The Council did not ask Mr X’s former landlord how much his deposit was. It asked Mr X to provide details of the deposit and of the agreement for the landlord to retain the deposit.
37. Mr X’s former landlord told the Council it cost £10,000 to refurbish the house after Mr X left. The Council told me a deposit is paid to provide protection for the landlord should a tenant cause damage to their property, not to cover any rent arrears which have been accrued. Mr X’s deposit will have been retained by his former landlord as a contribution towards the cost of repairs. Even if the landlord kept Mr X’s deposit due to rent arrears, Mr X would still owe about £645 which is above the trigger level for demotion.

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Analysis

38. It is for the landlord, and the Council, to establish if Mr X is in rent arrears. To do this it needs proof, such as a rent statement showing the months in which payments were missed.
39. If the landlord cannot say how or when the arrears were incurred then he cannot say they exist. The Council asked for evidence, but the landlord did not supply any. The Council cannot simply take the landlord’s word there were rent arrears. The Council failed to make enough enquiries of the landlord to decide whether there were rent arrears. That was fault. The Council should not have made its decision to demote Mr X’s application without clear proof from the landlord.
40. Instead of going back to the landlord to ask for more evidence, the Council unfairly placed the burden on Mr X to prove that he did not owe rent. That was fault.
41. The Council told me it determined how much rent Mr X owed using the bank statements he supplied. Unfortunately, Mr X did not have bank statements dating back to 2012 when his tenancy started. The Council decided that, because Mr X could not prove he paid rent in the early months of his tenancy, he must have failed to pay rent in those months. Mr X argued his online bank statements did not go back that far, but that his later bank statements established he made regular payments.
42. I consider it is reasonable Mr X could not provide bank statements from 2012. There is a limit on how long records are kept. I checked the current policy of the bank Mr X’s statements are from. Transactions are available going back 7 years. The statements from 2012 may no longer be available.
43. The Council does not know for certain that any arrears occurred in the months at the end of 2012. I do not consider the Council was entitled to make that assumption. In fact, I agree with Mr X that, on balance, his later bank statements show he made regular rent payments, and this should have been considered. This point was also made by Shelter, as well as raising issues about Mr X’s deposit being kept, and errors in the Council’s calculations. The Council failed to act on the issues raised by Shelter. It did not correct errors in its calculations, it did not contact the landlord again about evidence of rent arrears or the deposit, and it did not take into account Mr X’s evidence of regular payments.
44. I have seen the Council’s calculations of Mr X’s rent payments, based on his bank statements. I found three errors in the Council’s calculations. It missed a payment of £100 Mr X made on 30 December 2014, and a payment of £95 he made on 19 May 2015. While the Council did record an overpayment of £95 Mr X made on 26 January 2016, it failed to deduct this from the balance. The Council said Mr X owed £1,040 rent. Its errors total £290. This reduces the balance to £750.
45. Mr X provided me with an invoice from the landlord when his tenancy started. This shows his deposit was £592. He was also required to pay a month’s rent in advance. Mr X’s landlord confirmed the deposit was paid. On balance, I also consider the evidence suggests Mr X made his first monthly rental payment of £95. After subtracting the first month’s rent, and the deposit, that leaves only £63 outstanding for all the tenancy.
46. The Council told me the landlord spent £10,000 to refurbish the house after Mr X left. It said a deposit is to protect the landlord in case a tenant causes damage, not to cover rent arrears. That is wrong. A landlord may keep a tenant’s deposit if there are rent arrears.
47. The Council said the landlord will have kept Mr X’s deposit to go towards the refurbishments. That is wrong. The landlord specifically told the Council they kept Mr X’s deposit due to unpaid rent. If the Council intends to establish there has been unacceptable behaviour under section 166A(5) of the Housing Act 1996, it will need further evidence of this from the landlord.
48. The Council cannot apply its policy to demote Mr X’s housing application when it cannot say how much rent is owed or from when. On the evidence seen, the Council has failed to establish Mr X has rent arrears above the threshold of its policy.
49. Since issuing a draft decision on the complaint, the Council told me Mr X’s former landlord decided not to pursue any rent arrears against him. The Council has therefore lifted the demotion from Mr X’s housing application.

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Injustice

50. Mr X’s housing priority is in the general needs category. The Council’s faults have therefore not caused him to suffer any injustice in terms of a loss of any priority award.
51. It was distressing for Mr X when the Council did not properly consider his evidence, and when it made errors and assumptions about what rent had been paid. Mr X was put to significant time and trouble in gathering evidence, stating his case to the Council, and in seeking help from Shelter. This could have been avoided if the Council made sufficient enquiries with the landlord from the outset. That is Mr X’s injustice.

Agreed action

52. Within four weeks of my decision the Council will:
• Apologise.
• Pay Mr X the sum of £200 to recognise the avoidable distress and time and trouble its faults caused.
• Ensure staff in the housing team are aware of the importance of gathering suitable evidence when applying Council policy, and not unfairly placing this burden on applicants.

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Final decision

53. I have completed my investigation. I found there was fault in the Council’s decision to demote Mr X’s housing application and it agreed to offer a remedy.

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Investigator's decision on behalf of the Ombudsman