Summary: Mr X complained about how the Council handled his request for a loan to cover rent and deposit under the Council’s rent deposit scheme when he moved into private rented accommodation. Mr X said unclear advice from a housing officer meant he borrowed the money from a friend to cover the payments which the Council subsequently refused to reimburse. There was no fault in how the Council applied its scheme or how it explained the scheme to Mr X. However, the Council was unclear and contradictory in its complaint responses when explaining why it would not reimburse the money. The Council has agreed apologise to Mr X for the confusion it caused him.

The complaint

1. Mr X complained about how the Council handled his request for a loan to cover rent and deposit under the Council’s rent deposit scheme when he moved into private rented accommodation. He said unclear advice from a housing officer meant he borrowed the money from a friend to cover the payments which the Council subsequently refused to reimburse.
2. Mr X said the matter caused him financial difficulties, stress and uncertainty.

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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 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)
4. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
5. 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

6. I spoke to Mr X about his complaint and considered information he provided.
7. I considered information from the Council.
8. Mr X and the Council had an opportunity to comment on this draft decision. I considered comments before making a final decision.

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What I found

Relevant law and guidance

Relief duty

9. Part 7 of the Housing Act 1996 and the Homelessness Code of Guidance for Local Authorities set out councils’ powers and duties to people who are homeless or threatened with homelessness.
10. Councils must take reasonable steps to help to secure suitable accommodation for any eligible homeless person. This is called the ‘relief duty’. When a council decides this duty has come to an end, it must notify the applicant in writing (Housing Act 1996, section 189B).

The Council’s Rent Deposit Scheme

Qualifying for the scheme

11. To qualify for the scheme, you must:
• have family in, or be working in, Bournemouth, Christchurch or Poole; 
• have been assessed by a housing options officer and found statutorily homeless;
• be unable to get funds from anywhere else;
• be able to afford to repay the loan in regular instalments so that it is paid back within 3 years.
12. The Council’s policy says tenants must not give the new landlord any money before the housing options officer has confirmed the tenant on the scheme and has agreed that the property found is affordable and suitable. The policy says the Council will not issue a rent deposit or rent in advance loan to refund any monies already paid.

How the scheme works

13. The Council only fund a deposit or rent loan for a property if:
• the housing options officer says it is affordable;
• the landlord is happy to take part in the scheme.
14. The landlord/letting agent will get the deposit directly. The policy says it will send this to them either by a direct payment into their bank or as a bond guarantee certificate.
15. The deposit is normally equal to 1 month’s rent and is an interest free loan. The loan must be repaid in regular instalments over a maximum of 36 months. If your landlord has not made a claim on the deposit within 28 days of the tenancy ending, the deposit will be returned, and you might receive a full or partial refund depending on the outstanding balance you have with the Council.

The Council’s complaint policy

16. The Council’s complaint policy states it will investigate and respond to a stage one complaint within 20 working days.

What happened

17. Mr X was an asylum seeker whose primary language was not English. He was receiving housing support and residing in a hotel whilst his asylum claim was determined by the Home Office. Mr X received refugee status so the support ended and he had to leave the hotel.
18. In December 2023, Mr X made a homelessness application and the Council accepted the relief duty towards him.
19. A couple of days later Mr X’s housing officer issued him with a personal housing plan. The plan said the Council may be able to use its rent deposit scheme to help Mr X if he cannot raise the funds himself and has exhausted other means. It also said if the Council considers the property to be affordable, it will contact the landlord and transfer them the funds directly.
20. The same day Mr X contacted his housing officer to tell her that him and his friend had found a house. The rent was £1300 and the landlord was requiring four months’ rent upfront. He followed this up with an email to the housing officer saying he had assured the landlord the Council will make payment for deposit and rent within the next couple of working days.
21. The housing officer advised the Council could not provide four months rent to the Landlord.
22. Mr X signed a joint tenancy agreement with his friend for the property and his friend sent the Landlord £2600 to secure the property. Half of this was Mr X’s contribution.
23. The housing officer advised Mr X via email, phone call and in person that the Council will no longer be paying his deposit and rent because he had already paid this directly to the landlord. The housing officer explained to him the relevant parts of the rent deposit scheme.
24. Mr X raised a stage one complaint to the Council. He complained the housing officer agreed to the rent deposit scheme payments and then retracted this. There was a six-week delay in issuing the stage one response which the Council apologised for.
25. The Council partially upheld the stage one complaint because it concluded the language used in the personal housing plan was not simple or easy to understand. As English is not Mr X’s first language, the Council accepted this would be a barrier for Mr X to understand the rent deposit scheme as explained in the plan. The Council said it would pay the landlord one month’s rent and give Mr X a £50 voucher to recognise this. It said it would not be able to pay the deposit as the landlord had already put this in a deposit protection scheme.
26. Mr X remained unhappy as he said he gave the Landlord £1300 and had only received £650 back from the Council. Therefore, he raised a stage two complaint.
27. In the Council’s stage two response, it explained again Mr X no longer qualified for the scheme as he had obtained the funds himself and paid the landlord directly. The Council considered the £650 rent payment and £50 voucher an appropriate remedy as it had partially upheld the complaint at stage one. It offered Mr X a further £50 because of the delay in issuing the stage one response.
28. Mr X was unhappy with the Council’s handling of the matter and complained to us.
29. Mr X told us the Council provided Farsi interpretation during the complaints process at his request. Mr X is not certain if he requested this for his communication with his housing officer as he spoke to her mainly via email.

Council’s response to our enquiries

30. The Council said in the early stages of his housing application Mr X communicated and demonstrated good proficiency in English without the need for an interpreter. It said the Council took the relevant steps to offer Mr X translation services when he requested this during the complaints process.
31. The Council said the rent deposit scheme is discretionary and has conditions attached to it. For example, it will not make payments when the client has paid the deposit themselves to secure the tenancy. Therefore, the Council believed it had administered the scheme appropriately.

My findings

The Council’s application of its Rent Deposit Scheme

32. The rent deposit scheme policy is available on the Council’s website and it sets out how the scheme works and how to qualify for it. It says a person must not be able to get funds from anywhere else and the Council will pay the landlord directly. The scheme also says it will not issue a rent deposit loan to refund someone if they have already paid. Therefore, the Council acted in line with its policy when deciding not to reimburse the money and was not at fault.

The Council’s communication of its Rent Deposit Scheme

33. The housing officer outlined the scheme as set out in paragraph 32 in Mr X’s personal housing plan. The scheme was also available on the Council’s website for Mr X to view. The housing officer said in Mr X’s plan they are happy to explain anything Mr X does not understand and provided contact details to ask any questions. There is no evidence to suggest Mr X raised concerns about the scheme or asked for an interpreter prior to his stage one complaint. Mr X emailed his housing officer after receiving his housing plan and reiterated the terms of the scheme. Mr X said he had reassured the landlord the Council would make payment for the deposit and rent within the next few days. Therefore, this would suggest Mr X was able to process and repeat the information communicated to him by Council. There was no fault in the Council’s communication of its rent deposit scheme with Mr X.

Complaint handling

34. Mr X made a stage one complaint in December 2023 but he did not receive a complaint response until the end of February 2024. The complaint response should have been issued within 20 working days. It was issued 6 weeks out of timescale which was fault. The Council has already apologised for this and paid Mr X £50 to recognise the delays. This is an appropriate remedy for any injustice caused.
35. However, the complaint responses issued by the Council are contradictory and unclear which was fault. The stage one response said it would no longer be able to pay the deposit as the landlord had already put this in a deposit protection scheme. The stage two response said Mr X no longer qualified for the scheme as he had obtained the funds himself and paid the landlord directly. Whilst the stage one response is correct in not reimbursing Mr X for the deposit, its reasoning for this is not. This caused Mr X confusion.

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Agreed action

36. Within one month of the final decision the Council has agreed to take the following action:
1. Apologise to Mr X to recognise the confusion the complaint response letters have caused. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The organisation should consider this guidance in making the apology I have recommended in my findings.
2. Remind relevant complaint officers to ensure both stage one and stage two complaint responses are accurate, consistent and do not contradict each other.
37. The Council should provide us with evidence it has complied with the above actions.

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Final decision

38. I completed this investigation. I found fault and the Council agreed to my recommendations to remedy the injustice caused by the fault.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman