Summary: A Ltd, a lettings agent, says the Council was at fault for a failure to ensure a tenant, Ms T was eligible for housing benefit or universal credit and for a failure to inform A Ltd if she was not eligible before asking A Ltd to let a property to her. The Council was not at fault. Ms T found the property herself and was eligible for benefits when the Council paid her deposit. She later lost eligibility. This was not the Council’s responsibility.

The complaint

1. A Ltd, the agent to the complainant, Mr C, says the Council is at fault for failures around the letting of a property owned by Mr C to a tenant, Ms T. It says the Council was at fault for:
1. Failure to inform A Ltd of Ms T’s ineligibility for benefit when she moved in;
2. Delay in responding to A Ltd’s contacts after Ms T moved into the property;
3. Failure to respond to requests from A Ltd to help Ms T get benefits;
4. Failure to provide the support Ms T needed;
5. Refusal to provide detail in response to A Ltd’s complaint citing GDPR when Ms T had signed consent form;
6. Inconsistencies in Council responses to A Ltd’s complaints.
2. A Ltd is seeking information as to:
1. What lessons the Council has learned from these events;
2. What practices the Council will adopt in future to prevent a recurrence; and
3. Whether the Council will compensate Mr C for his loss.

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The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), 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. I spoke to Ms A, who works for Mr C’s agent, A Ltd. I wrote an enquiry letter to the Council. I considered its response alongside the relevant law and guidance.
6. I sent a copy of my draft to the Council and A Ltd and invited their comments.

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What I found

7. A section 21 eviction notice enables a landlord to evict a tenant without cause. The s.21 notice must allow a tenant two months’ notice.

Exercising treaty rights

8. At the relevant time, EU citizens were entitled to remain in the UK providing they were exercising their ‘treaty rights’. These are, working or looking for work, studying or being self-sufficient with health insurance. While exercising treaty rights, EU citizens are eligible for all UK benefits. If an EU citizen ceases to exercise treaty rights, they are no longer eligible for benefits.

Housing Benefits/Universal credit

9. British citizens and EU citizens who are in receipt of benefits may be eligible for financial assistance with their housing. This can be paid either by housing benefits (‘HB’) or universal credit (‘UC’), a new single benefit which replaces other benefits and has an element to cover housing costs.
10. The government intends UC to replace housing benefit nationwide. It has so far been introduced in certain areas including the Council’s in November 2017. The government has now stopped the rollout.

Discretionary Housing Payments

11. Local authorities may make discretionary housing payments (‘DHPs’) to those eligible for HB or the housing element of UC if they have pressing housing needs. Only those in receipt of housing benefit qualify.

Council’s guidance for landlords on HB

12. The Council issued guidance; A Landlord’s Guide to Housing Benefit in 2011. It says, on page 6, ‘You and your tenant should not assume that we will pay benefit or how much we will pay until we tell them our decision in writing’.

What happened

13. Mr C is a buy-to-let landlord with a property, Property P, in the Council’s area. He employs A Ltd to manage the property.
14. In September 2017, Ms T was a tenant of another property in the Council’s area. She was served with a s.21 eviction notice. She approached the Council on 7 September 2017 to inform it she was in danger of homelessness.
15. Ms T is an EU citizen who had been exercising her treaty right to work in the UK but had taken maternity leave. She was, as someone lawfully exercising EU treaty rights, eligible for all benefits to which UK citizens are eligible.
16. Ms T said she would prefer public sector housing. The Council explained that there was a waiting list for this and told she should look for private sector housing.
17. In November 2017, universal credit (UC) was introduced in the area.
18. On 4 December 2017, Ms T attended the Council’s housing service and said she had found Property P and asked for help in securing it. A housing officer phoned A Ltd which stated it would not accept a paper bond as a deposit. The officer helped Ms T apply for a discretionary housing payment (DHP). The officer checked Ms T’s eligibility for benefits with the Council’s revenue and benefits team. Having found she was eligible, he successfully applied for the discretionary payment.
19. The officer also applied to the Council’s private renter team for a payment of the first month’s rent. He sent both payments to A Ltd in January 2018.
20. A Ltd conducted its own background checks on Ms T, charging her £150 to do so, and applied for HB on her behalf. She signed a rental contract and moved into Property P on 16 January 2018.
21. Ms A of A Ltd phoned the Council in March 2018 to tell it A Ltd intended to apply for backdated UC for Ms T. On 9 April 2018, Ms A contacted the Council and said she had learned that Ms T was not eligible for UC and that A Ltd would apply for a notice to terminate the tenancy.
22. A Ltd complained to the Council on 30 July 2018. It said:
1. The Council approached A Ltd and asked it to rent a property to Ms T. It said it would pay the deposit and the first month’s rent. Ms T moved in. A Ltd then applied for housing benefit only to find Ms T was not eligible. It contacted the Council. After a delay, an officer agreed to look into it but did not do so.
2. The Council failed to respond to an email A Ltd sent in June 2018;
3. The Council should have ensured Ms T was eligible for HB or UC before presenting her to A Ltd as a tenant; and
4. After A Ltd told the Council about the situation, it did nothing to help Ms T.
23. In response, the Council said:
1. Ms T had found the property herself. The Council did not direct her to it. The Council had paid her deposit and first month’s rent because of her circumstances at the time. It could not have done so if she was not eligible for HB or UC at the time, which she was.
2. The Council did respond to the June email;
3. The Council paid Ms T’s deposit and one month’s rent because of her circumstances. She was eligible for benefits at the time or she could not have received a DHP. A Ltd charged Ms T £150 for a background check and suitability assessment which should have revealed her status.
4. Ms T was not eligible for UK benefits as she was not working. Therefore, the Council could not help her.
24. The Council rejected A Ltd’s complaint. A Ltd complained to the Ombudsman.

Was there fault causing injustice?

Introduction

25. Mr C is a private landlord who took on a tenant whom he believed was eligible for HB in good faith. In the event, Ms T was not eligible for HB or UC when A Ltd applied for those benefits on her behalf. A Ltd blames the Council.
26. It is not in dispute that Mr C has lost income. However, the Ombudsman can only recommend that the Council should recompense Mr C if we find it at fault and find that its fault caused Mr C to suffer loss.
27. I have considered A Ltd’s complaint below using headings taken from its complaint letter.

Failure to inform A Ltd of Ms T’s ineligibility for HB

28. I do not uphold A Ltd’s claim that the council should have informed it of Ms T’s ineligibility for HB for the following reasons:
1. It was not the Council’s responsibility do so;
2. She was eligible for HB when the Council contacted A Ltd and paid her fist month’s rent and deposit;
3. The Council’s guidance says landlords should not assume the Council will pay benefit until they receive a decision in writing. From this, it is clear that the risk of non-payment rests with the landlord and not the council;
4. A Ltd made the application for HB. It is a professional agent which should have known the risks involved and the fact that UC had been introduced in the area;
5. A Ltd carried out its own checks on Ms T before accepting her as a tenant; and
6. Ms T lost eligibility due to no fault of the Council.

Delay

29. There was no unacceptable delay on the Council’s part at any material time. It is true that, in June 2018, a Council officer was off sick which resulted in a gap in communication but this had no bearing on any material issues.

Failure to respond to requests to help Ms T get HB and UC

30. As the Council says, it could not help Ms T get HB or UC because she was not eligible for it. This was because she had not returned to work after finishing maternity leave and was, therefore, not eligible for benefits.

Failure to provide the support Ms T needed

31. As stated above, the Council could not do so but, in addition, A Ltd is not a suitable entity to complain on Ms T’s behalf about any loss.

References to GDPR

32. The Ombudsman has discretion to consider data protection issues if they form part of a complaint but, as we do not find fault, this should be considered by the Information Commissioner.

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Final decision

33. I have investigated the complaint fully and considered comments made on my draft decision. I have decided the Council was not at fault and closed my investigation.

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Investigator's decision on behalf of the Ombudsman