Summary: Mrs X complained about how the Council handled an Improvement Notice attached to a property she purchased at auction. Mrs X also complained about the Council’s staff behaviour and how it dealt with her complaint. The Council was at fault for its failure to register an Improvement Notice but this did not cause an injustice to Mrs X. But there was fault with the Council’s complaints handling which caused Mrs X an injustice. The Council has apologised to Mrs X and has agreed to make a financial remedy for the injustice caused.

The complaint

1. Mrs X complained the Council failed to record an existing Improvement Notice at the Land Registry for one of the flats in the property she purchased at auction. She says the Council failed to take enforcement action against the previous owner of the property for breach of the Improvement Notice. Mrs X complained the Council unlawfully transferred the existing Improvement Notice liabilities onto her when she purchased the property.
2. Mrs X also complained about how the Council handled the matter including:

• staff’s aggressive behaviour
• issuing unlawful threats of prosecution
• carrying out unlawful inspections of the property
• breach of statutory powers and legislation by interfering with landlord and tenant matters.

3. Mrs X complained about the Council’s poor handling of her complaint.
4. Mrs X says the Council’s failings caused her financial loss, anxiety and distress.

Back to top

The Ombudsman’s role and powers

5. 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)
6. 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)

Back to top

How I considered this complaint

7. I considered the information Mrs X submitted with her complaint. I considered the information the Council provided in response to my enquiries.
8. I sent Mrs X and the Council a copy of my draft decision and considered all comments received before reaching a final decision.

Back to top

What I found

9. Private tenants can complain to a council about the failure of a landlord to keep their property in good repair. The Housing Act 2004 gives councils powers to inspect and assess the conditions of tenanted properties. The authorised officer must notify the owner, the occupier and any person with a legal interest in the property of the inspection. The officer has a legal right to enter premises for the purposes of an inspection and does not require owner’s consent.
10. The assessment will show the presence of any serious (category 1) hazards and other less serious (category 2) hazards.
11. Councils have powers under the Housing Health and Safety Rating System (introduced by the Housing Act 2004, Part 1) to take enforcement action against private landlords where the council has identified a hazard which puts the health and safety of the tenant at risk. These enforcement actions include serving an improvement notice. An improvement notice sets out the action the landlord is required to take to remove or reduce the hazard.
12. Local Land Charges searches are required in the property-buying process. The search will reveal whether a property is subject to a charge if that charge has been registered.
13. According to The Land Charge Act 1975, a failure to register a local land charge in the local land charge register shall not affect the enforceability of the charge. But where no charge is registered when a person conducts a personal search of the register before the purchase of any land affected by a local land charge, the purchaser shall be entitled to compensation for any loss suffered as a result.
14. Under Section 19 of the Housing Act, an improvement notice transfers to the new owner if the property is sold.
15. Section 14 of the Housing Act 2004 allows councils to suspend improvement notices at their discretion.
16. Councils have powers under the Protection from Eviction Act 1977 to investigate complaints of landlord harassment and illegal eviction of tenants, and to prosecute a landlord where they commit an offence.

Background

17. Mrs X purchased a property at auction.
18. The property has three flats. The three flats were privately rented out to tenants.
19. At the time Mrs X bought the property, Flats 1 and 2 were unoccupied while Flat 3 had a tenant.
20. The Council identified category 1 and category 2 hazards in Flat 2. The Council served an Improvement Notice against the previous owner in January 2019 before the property was put up for sale at auction.

What happened

21. This chronology includes key events in this case and does not cover everything that happened.
22. In July 2019, Mrs X purchased a property at auction.
23. Following the purchase, Mrs X visited the property and issued a new tenancy agreement to the tenant in Flat 3.
24. The Flat 3 tenant informed the Council that Mrs X visited the property unannounced. The tenant complained Mrs X made alterations to the electric meter consumption rates, issued her with a new tenancy agreement, requested a tenancy deposit and increased the rent. The tenant said Mrs X identified some damages within her flat and said the tenant would need to pay for the repairs. The tenant also complained she had no access to her boiler which was in another flat within the property.
25. At the end of July 2019, the Council visited the property to consider the tenant’s complaints and the allegation of illegal rent increment. The Council contacted Mrs X. It informed Mrs X of her legal responsibilities as a private landlord. This included tenants’ rights to receive at least 24 hours’ notice prior to inspections, guidance on rent increment, Deposit Protection Scheme, property maintenance or repairs and tenants’ right of access to amenities. The Council sent Mrs X a rent form to complete. This was to start a written contract between Mrs X and the Flat 3 tenant. The Council also provided Mrs X with information of some landlord support groups.
26. In August 2019, the Council provided Mrs X with a copy of an existing Improvement Notice attached to Flat 2. It explained as Mrs X was the new legal owner of the property, she was liable for the repairs of the identified category 1 and category 2 hazards.
27. In response, Mrs X said she found the Council’s correspondence threatening. Mrs X said she purchased the property with no intention to rent the property out, therefore, she was not interested in the legal issues the Council raised. Mrs X asked the Council to find alternative accommodation for the Flat 3 tenant.
28. Mrs X also questioned why the Council transferred the Improvement Notice liabilities of the previous owner onto her. She asked the Council to provide proof of its enforcement actions against the previous owner. The Council refused to provide Mrs X with the requested information due to the potential breach of general data protection regulation (GDPR). Mrs X asked the Council to revoke the notice.
29. At the end of August 2019, Mrs X informed the Council she was unaware of the existing Improvement Notice attached to the property when she purchased the property. The Council investigated the matter. The Council confirmed it did not submit a request for a Part 1 Land Charge in relation to the Improvement Notice. The Council also checked with land searches and confirmed the last search made on the property was in 2011.
30. Mrs X confirmed her intention to sell the property due to all the legal issues attached to it. She said she would need access to the property for viewings. The Council reminded Mrs X of tenants’ right to have at least 24 hours’ notice prior to entering the property. The Council explained to the Flat 3 tenant the need to allow Mrs X access to the property for inspections and viewings.
31. In September 2019, Mrs X informed the Council that Flats 1 and 2 were not occupied. The Council notified Mrs X of its intention to conduct an inspection of all the three flats in the property. This was to verify the tenancy situation, the complaints it received in relation to lack of tenant’s access to amenities, concerns about excess cold and to review the existing Improvement Notice.
32. Mrs X alleged the Council did not receive complaints about excess cold in the property. The Council explained tenants’ lack of control and access to a room thermostat and the boiler in the property was detrimental to the tenants’ health.
33. The Council conducted the Housing Health and Safety Rating System assessment and considered the excess cold concerns. The outcome was for Mrs X to make the boiler accessible to the Flat 3 tenant. It also issued a Section 59 Building Act notice against Mrs X for identified disrepairs. The Council confirmed Flats 1 and 2 were unoccupied.
34. Mrs X gave the boiler key to the Flat 3 tenant and completed the repairs identified under the Building Act notice.
35. Between October and December 2019, the Flat 3 tenant complained to the Council on several occasions about Mrs X’s management of the property. She said since Mrs X made alterations to the electric meter in July 2019, the electricity consumption rates became higher. The tenant also complained about Mrs X’s refusal to provide her with electricity pre-paid cards, the risk of being left without electricity and energy supply disconnection.
36. Mrs X said the energy rates she adjusted on the meter were provided to her by the energy suppliers. She said it was confirmed the Flat 3 tenant, who was the only tenant in the property, was responsible to deal with and purchase pre-paid electricity cards directly from the suppliers.
37. The Council advised Mrs X she could only adjust the meter under the supervision of the energy suppliers. It also explained the Flat 3 tenant was solely responsible for payments of services within her flat and not for the entire property. The Council said Mrs X must maintain the property and not unreasonably withhold services required for the occupation of the property. The Council told Mrs X it was the landlord’s responsibility to deal directly with the energy suppliers and provide the tenant with pre-paid electricity cards. It explained Mrs X’s failure to ensure the availability of electricity supply would amount to an offence under the Protection from Eviction Act 1977. It advised the Council may take emergency remedial action to reinstate the electrical supply.
38. Mrs X accused the Council of interfering with landlord and tenant matters.
39. Mrs X supplied the tenant with electricity pre-paid cards. Mrs X complained the Flat 3 tenant refused her access to the property so she was unable to reset the energy rates on the meter. She also complained of the tenant’s refusal to sign the tenancy agreement and pay the rent arrears. Mrs X asked the Council to pay the tenant’s rent arrears and be a guarantor for the tenant in relation to the pre-paid cards’ payments.
40. The Council replied to Mrs X. It said it does not involve itself in rent disputes between landlords and tenants and it could not stand as a guarantor for the tenant for the payments of the pre-paid cards. It advised Mrs X to consider engaging accredited agents to manage the property on her behalf as a new landlord. The Council also advised Mrs X to seek independent legal advice in relation to her complaints about the tenant.
41. In October, November and December 2019, the Council conducted inspections to establish the electrical meter allegations made by the tenant. It notified both parties of the inspections. The Council contacted the energy supplier on behalf of the tenant about the concerns. The energy supplier said there was a difference between the standard energy rates and the adjusted rates Mrs X set on the meter. The Council notified trading standards of potential fraud. It was established the electrical supply to Flat 3 had been disconnected due to outstanding electrical debt. The Council advised Mrs X to supply her tenant with sufficient pre-paid cards to clear the debt on the electric meter.
42. At the end of October 2019, Mrs X made a formal complaint to the Council. Mrs X complained the Council failed to register the Improvement Notice attached to Flat 2 at the Land Registry, so she was unaware of it before she purchased the property. She also complained the Council failed to take enforcement action against the previous owner and it passed the existing liabilities onto her. She complained of the Council’s staff behaviour and alleged the Council unlawfully carried out inspections on her property. Mrs X asked for compensation for the distress caused and requested the Council undertake the scheduled work in the Improvement Notice and reclaim the costs from the previous owner.
43. In November 2019, the Council revoked the Improvement Notice. This was because Flat 2 was unoccupied and the imminent risk posed to any occupier was removed. The Council informed Mrs X it would reissue the notice once Flat 2 was reoccupied.
44. In mid-November 2019, the Council issued Mrs X with its stage 1 response. The Council confirmed it did not register the Flat 2 Improvement Notice at the Land Registry. But the Council explained Mrs X did not undertake a search on the property before she bought it at auction, therefore, the Council’s error did not cause Mrs X any financial loss. The Council also stated its staff acted according to statutory guidance when they dealt with Mrs X’s property matters. It explained the Council’s option to undertake the works in Flat 2 was not considered essential because the flat was unoccupied. The Council said the hazards in Flat 2 were still present despite the revocation of the notice and if the flat was rented out, the notice would take effect once again. The Council did not uphold Mrs X’s complaint.
45. Mrs X disagreed with the Council’s stage 1 complaint response. The Council referred Mrs X to the Ombudsman.
46. The Flat 3 tenant informed the Council the emergency electricity credit in her flat ran out. On 20 November 2019, during a telephone call to Mrs X a council officer told her to provide pre-paid electricity cards to the tenant to avoid interruption of electricity supply. Mrs X asked the officer to act as the tenant’s guarantor as regards the pre-paid card payments. The officer explained the Council could not act as tenants’ guarantor because that was not within its powers. Mrs X alleged the officer was aggressive towards her and he demanded she supplied the cards to the tenant under threat of prosecution.
47. At the end of November 2019, Mrs X adjusted the inflated electrical rates on the meter with the support of Trading Standard staff. The Council’s complaint of potential fraud was closed by Trading Standards. This was because it was satisfied the meter had been set at the standard rates and it believed Mrs X made an error when she initially adjusted the rates.
48. In January 2020, the Council conducted a voluntary interview under caution with Mrs X. This was for alleged offences relating to illegal eviction and persistent withholding of services. It was decided no further enforcement action was required against Mrs X.
49. In February 2020, Mrs X complained to the Ombudsman. Mrs X sold the property at auction.
50. In March 2020, the Council confirmed it failed to inform Mrs X of her review right of its stage 1 complaint process. The Council apologised to Mrs X for its error and confirmed it would consider the complaint at stage 2 of its process.
51. Mrs X chased the Council on several occasions for its stage 2 complaint response. The Council issued its final complaint response on 1 October 2020. It accepted it did not correctly follow its complaints process and apologised for its delay in dealing with her complaint.
52. The Council again accepted it had failed to record the existing Improvement Notice attached to Mrs X’s property. The Council explained, there was no outstanding appeal attached to the notice, therefore it should have registered it at the Local Land Charge. It stated its failure to register a local land charge did not affect the enforceability of the charge to the subsequent owner of the property. The Council added when it made an enquiry at the Local Land Charge in relation to Mrs X’s property, it found the only search carried out by Mrs X was in September 2019. This was after Mrs X purchased the property at auction in July 2019. The Council said it was satisfied its failure to register the notice did not lead to Mrs X suffering financial loss.
53. The Council did not uphold Mrs X’s complaint. She remained dissatisfied and resubmitted her complaint to the Ombudsman.

Analysis

Council’s failure to record an Improvement Notice at the Land Registry

54. A search at the Land Registry shows the ownership of land or property while the Local Land Charge search shows whether a property is subject to a charge if that charge has been registered.
55. It is the responsibility of buyers to undertake searches about the properties they wish to buy prior to the date of purchase. This is to find out any information about the property including any liabilities attached to the property.
56. According to legislation, a buyer will be entitled to compensation for any loss suffered as a result of councils’ failure to register a local land charge if the buyer conducted a search on the property prior to the purchase at auction.
57. In this case, although the Council confirmed it failed to register an existing Improvement Notice attached to Mrs X’s property at the Local Land Charge when the property was put up for sale, I do not find that its error caused an injustice to Mrs X. This is because evidence shows Mrs X did not conduct a local land charge search prior to when she purchased the property at auction in July 2019.

Council’s failure to take enforcement action against the previous owner of the property

58. The Council issued an Improvement Notice against the previous owner for Flat 2. Evidence shows Flat 2 became unoccupied and the property was put up for sale before the date for the completion of the remedial works. The Council was therefore unable to conduct a compliance check. It was also unable to commence any enforcement action against the previous owner because there was no imminent risk posed to any occupier. This was not fault.
59. Even if the Council considered taking enforcement action against the previous owner, the next step was likely to be prosecution. The Council would not have guaranteed the previous owner would have completed the remedial works before Mrs X bought the property.

Council unlawfully transferred liabilities of an existing Improvement Notice onto Mrs X when she purchased the property

60. The Local Charge Act 1975 states the Council’s failure to register a charge at the Local Land Register does not affect the enforceability of the charge on a new owner of the property. I do not find fault by the Council when it transferred liabilities of an existing Improvement Notice onto Mrs X when she purchased the property. Also, Mrs X would have had a right to appeal against the Improvement Notice when the Council served it on her.
61. I find the Council took reasonable steps in considering the suitability of the Improvement Notice after Mrs X purchased the property. The Council reviewed and revoked the notice in November 2019, when it confirmed Flat 2 remained unoccupied. This was because the was no imminent risk posed to occupiers. The Council explained it would restore the improvement notice if the Flat was rented out.

Council’s unlawful threats of prosecution and staff’s aggressive behaviour towards Mrs X

62. I note Mrs X considered the Council’s correspondences as threatening and its staff behaviour as aggressive. The Council’s notices, advice, communications (including verbal) and actions it took when it dealt with Mrs X’s property matters were appropriate and in line with statutory guidance.
63. Councils have powers to investigate concerns relating to potential eviction of tenants such as deliberate acts by landlords to interfere with their tenants’ enjoyment of the property. Councils can also prosecute landlords where they commit an offence.
64. There is no recording of the telephone call between Mrs X and a Council officer on 20 November 2019. Mrs X perceived the contact as aggressive but the Council denies this was the case. The Council admitted tensions were evident and the staff manager intervened to prevent further escalation of the discussion.
65. Although I am satisfied written correspondence was appropriate in the circumstances, I cannot on the balance of probabilities, reach a finding on Mrs X’s allegation the Council acted in an aggressive manner towards her during telephone calls.

Council’s unlawful inspections of Mrs X’s property and its interference with landlord and tenant matters

66. Due to the nature of concerns raised by the tenant in relation to rent increment, rent deposit, inflated electricity consumption rates, refusal to provide electricity pre-paid cards, the Council was concerned that potential offences were being committed under the Protection from Eviction Act 1977.
67. The Council carried out several inspections to consider the concerns raised. It took reasonable steps in providing advice to Mrs X and the tenant to resolve issues in line with statutory guidance. The Council did not carry out unlawful inspections or act outside its statutory remit.

Council’s poor handling of Mrs X’s complaint

68. The Council’s complaint policy states it aims to respond to complaints within 10 working days at stage 1. And its stage 2 investigation is usually completed with 25 working days of the review request being acknowledged. Once the Council’s complaint process is completed and the complainant remains dissatisfied, the complainant can contact the Ombudsman.
69. The Council failed to put Mrs X’s complaint through its correct complaint process. It failed to inform Mrs X of her review rights at its stage 1 complaints process. The Council referred Mrs X to the Ombudsman before it completed its complaint process. Mrs X chased the Council on several occasions for updates and a response to her complaint when it was being considered at stage 2 of the process. The Council was at fault in how it handled Mrs X’s complaint.
70. It also took the Council almost a year to complete and issue Mrs X with a final response to her complaint. This was a significant delay which caused Mrs X time and trouble chasing an outcome to her complaint. This was fault by the Council.
71. The Council accepts the delays and how it handled Mrs X’s complaint was unacceptable and has apologised to Mrs X.

Back to top

Agreed action

72. To remedy the injustice caused by the faults identified, I recommend and the Council has agreed within one month of the final decision to pay Mrs X £250. This is in recognition of the time and trouble caused to Mrs X chasing an outcome for her complaint.

Back to top

Final decision

73. I find the Council was at fault for the delay in handling Mrs X’s complaint. The Council has agreed to take action to remedy the injustice.

Back to top

Investigator's decision on behalf of the Ombudsman