Summary: We will not investigate this complaint about the Council’s refusal to refund rent to Mr X from a tenant whom he housed as homeless under a rent guarantee scheme. There is insufficient evidence of fault by the Council and it is reasonable for Mr X to pursue the rent arrears by way of the courts.

The complaint

1. Mr X complained about the Council’s failure to pay him four months’ rent for a tenant whom he rented a property to under the Council’s accommodation finding service. He says he could not get the Council to take action against the tenant who was on benefits and the rent guarantee insurance refused to pay his claim.

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The Ombudsman’s role and powers

2. The Ombudsman investigates complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service but must use public money carefully. We do not start or may decide not to continue with an investigation if we decide:

• there is not enough evidence of fault to justify investigating, or
• we could not add to any previous investigation by the organisation, or
• further investigation would not lead to a different outcome.

(Local Government Act 1974, section 24A(6), as amended, section 34(B))

3. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)

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How I considered this complaint

4. I considered the information provided by the complainant and the Council.
5. I considered the Ombudsman’s Assessment Code.

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My assessment

6. Mr X is a private landlord and he let a property to a tenant who was matched from a list by the Council’s accommodation finding team. The tenancy was a standard assured shorthold tenancy agreement between Mr X and the tenant. The tenant subsequently fell into arrears as they did not pay the universal credit housing payment to him. Mr X complained to the Council after his tenant left with four months in arrears.
7. The Council told Mr X that it was not responsible for the tenant’s universal credit benefits. It could not make direct payment from the tenant’s universal credit and Mr X was advised about the procedure for making direct payment arrangements with the benefits agency.
8. Mr X took out payment guarantee insurance with a private provider at the start of the tenancy. He did not make a claim within the 45 days required by the policy terms. The Council asked the insurers on his behalf if anything could be done, but the company insisted that he complied with the terms and they were not liable to pay.
9. The Council advised Mr X to seek recovery of the arrears from the tenant by way of the courts which is the normal remedy for breaches of assured tenancy agreements.
10. There is insufficient evidence of fault by the Council which would warrant an investigation. it was not responsible for the tenant’s failure to make rent payments and direct payments were a matter between the landlord and the benefits agency. Mr X has instructed solicitors to recover the debt through legal action.

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Final decision

11. We will not investigate this complaint about the Council’s refusal to refund rent to Mr X from a tenant whom he housed as homeless under a rent guarantee scheme. There is insufficient evidence of fault by the Council and it is reasonable for Mr X to pursue the rent arrears by way of the courts.

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Investigator's decision on behalf of the Ombudsman