Bournemouth, Christchurch and Poole Council (19 001 855)

Category : Housing > Private housing

Decision : Not upheld

Decision date : 18 Oct 2019

The Ombudsman's final decision:

Summary: Mr X is a private landlord. He complained the Council misled him when it offered to pay his tenant’s (Ms Y’s) rent arrears. He said this has caused him huge financial loss and the Council should pay Ms Y’s outstanding debt. There is no evidence the Council is liable for the debt. There is no fault with the Council’s decision not to pay Mr X.

The complaint

  1. Mr X complained the Council misled him when it said it would pay his tenant’s rent arrears. This was on the condition he would secure at least a further 6 months on her tenancy. He said he has been left with over £11,000 owed to him. He said the Council should pay this.

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The Ombudsman’s role and powers

  1. 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)
  2. 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

  1. I have considered Mr X’s complaint and supporting information. I have spoken to Mr X about his complaint.
  2. I have also considered the Council’s responses to Mr X’s complaint.
  3. I have written to Mr X and the Council with my draft decision and considered their comments.

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What I found

The Law

The Housing Act

  1. In line with the Housing Act, the Council’s Housing Strategy includes ‘preventing homelessness’ as one of its priorities.
  2. Section 21 of the Housing Act sets out the law for a landlord to recover the possession of a property from a tenant. The landlord can serve a section 21 notice to a tenant to begin court proceedings to recover the property.

Landlord Advice and Preventing Homelessness

  1. The Council’s ‘Landlord Advice’ leaflet identifies ways the Council can help landlords. This includes ‘financial assistance schemes’ where the Council could protect existing tenancies by paying arrears payments in exchange for an extended tenancy.
  2. Another way a Council might consider assisting with arrears payments is in return for nomination rights to the property. This would mean the Council would provide a list of potential tenants for the landlord to choose from. Often, this list would include those tenants who may be threatened with homelessness.

Housing Benefits

  1. Housing benefit rules allow councils to transfer tenants’ payments direct to private landlords to help prevent arrears. Councils are not allowed to get involved in rent payments once the tenant moves to universal credit, which is run by the Department of Work and Pensions (DWP).

What happened

  1. Ms Y had been living in a property owned by Mr X for several years. The Council said during this time, neither Mr X nor Ms Y approached the Council with any issues regarding the tenancy.
  2. In August 2017, Ms Y approached the Council for help with her housing situation. She said Mr X had served an eviction notice. A few days later, the Council contacted Mr X. It advised him the Council could provide help and assistance to prevent Ms Y becoming homeless and to avoid costly enforcement action.
  3. In October 2017, the Council offered to pay Ms Y’s rent arrears (£2,378) on the condition that Mr X would secure Ms Y at least a further 6 months on the tenancy. The Council also said it would work with Ms Y to ensure in the future she made regular rent payments. Mr X agreed to this. I have not seen a signed agreement related to this. It is my understanding this was agreed over the phone.
  4. Mr X said that at the time he thought it was strange that the Council asked him to set up a new contract as Ms Y had been on a rolling contract with him for several years. Mr X did not raise his concerns with the Council.
  5. Ms Y’s new contract started on 1 January 2018.
  6. Mr X contacted the Council in February and March to report Ms Y had not paid her rent. The Council did not respond to Mr X’s phone calls. The Council apologised for failing to return Mr X’s calls.
  7. The Council said that, as per the agreement, officers had been working hard with Ms Y to ensure rent payments were maintained. However, it said that Ms Y would not engage with the services available. The Council said it is not liable for a tenant’s decision not to pay their rent.
  8. In April 2018, Mr X told the Council he would issue a Section 21 eviction notice to Ms Y. The Council said it advised Mr X at this time that it would consider assisting with arrears in return for nomination rights to the property. Mr X did not agree to this.
  9. The Council said Ms Y’s housing benefit was paid directly to Mr X until July 2018. This amount did not cover the full amount of rent and Ms Y was required to make up the shortfall. In July 2018, Ms Y failed to engage with the Housing Benefit team which resulted in the Council suspending her benefits claim.
  10. The Council acknowledged that Mr X had not received any rent from Ms Y since July 2018. It said this is because she refused to engage with the Council when it tried to help her.
  11. Mr X issued a valid Section 21 notice on 26 September 2018. This required Ms Y to leave the property by 26 November 2018. Ms Y left the property on 2 January 2019.

Mr X’s complaint and the Council’s response

  1. In December, Mr X complained to the Council. He said he is owed £11,157.26 in rent arrears plus court and eviction costs.
  2. Mr X said the actions of the Council has caused him significant financial loss. He said, the Council’s offer to pay the arrears in October 2017 left him bound to a tenancy with Ms Y. He said the Council knew of the likelihood that Ms Y would not pay her rent when it made the agreement with Mr X.
  3. Mr X said, because the Council asked him to extend her tenancy, it had a duty of care towards him.
  4. Mr X said that he believes the Council asked him to set up a new contract for Ms Y so her housing benefits could be transferred to universal credit. This transfer would mean the Council could not get involved in direct rent payments or arrears as it is the responsibility of DWP.
  5. The Council said it never agreed to pay Ms Y’s rent or arrears in perpetuity. It said the agreement made over the phone with Mr X in October 2017, was to clear the original arrears, which the Council did.
  6. In its response to Mr X’s complaint, the Council acknowledged the arrangement made in October 2017 was not formalised in a written agreement. It said it would have followed a different process if the Council intended to underwrite any future rent arrears Ms Y incurred. It said, the Council would have been a signatory to the tenancy agreement if it had intended to pay Ms Y’s arrears in perpetuity.
  7. The Council did not uphold Mr X’s complaint. However, it did recognise its processes could be improved to ensure a clear and shared understanding of any actions to be taken and agreements reached in the future. This included:
    • a signed terms and conditions between the Council and landlord;
    • when something is agreed over the phone, an email should be sent to the landlord to confirm what was agreed; and
    • copies of any agreement should be stored in the electronic case file.

My Findings

  1. The Council fulfilled its duty under the Housing Act to prevent Ms Y becoming homeless. The Council demonstrated this when it approached Mr X with the offer to pay Ms Y’s arrears on the condition that Mr X secured a further 6 months on Ms Y’s tenancy.
  2. Despite Mr X’s concerns, there is no evidence this was anything to do with transferring Ms Y’s housing benefit to universal credit.
  3. The Council also tried to work with Ms Y to ensure she paid future rent payments. Unfortunately, Ms Y did not engage. This meant she initially failed to pay the rent amount required to top-up the housing benefit paid directly to Mr X.
  4. After July 2018, when Ms Y failed to engage with the Housing Benefit team, her claim was suspended. This meant that from this date, no housing benefits were paid directly to Mr X.
  5. Mr X is frustrated and annoyed the rent arrears were allowed to build up. However, there is no evidence the Council agreed to pay these arrears. Therefore, there is no evidence the Council is liable for the outstanding debts of approximately £11,000.
  6. The Council’s recommendation to improve its processes regarding Council and landlord agreements is welcome. This should ensure a clear and shared understanding of any agreements in the future.

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Final decision

  1. There is no fault with the Council’s decision not to pay Mr X the money Ms Y owed to him. This was the responsibility of Ms Y. The Council was not acting as her guarantor.

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Investigator's decision on behalf of the Ombudsman

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