Summary: Mr X complained on behalf of Miss Y about the way the Council dealt with a House in Multiple Occupation licence application. The Council was at fault for adopting a blanket or uniform approach to the situation, failing to consider the circumstances of the case and failing to properly consider all information and explain its reasoning for not starting legal proceedings. This caused Mr X and Miss Y uncertainty. The Council agreed to apologise and make service improvements.

The complaint

1. Mr X complains on behalf of his daughter, Miss Y, about the way the Council dealt with a House in Multiple Occupation licence application. He says the Council failed to prevent a private landlord from renting an illegally sized room to Miss Y and refused to start legal proceedings against the private landlord.
2. Mr X said that this caused Miss Y to live in an illegally sized room for 12 months.

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The Ombudsman’s role and powers

3. 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(1), as amended)
4. An organisation should not adopt a blanket or uniform approach or policy that prevents it from considering the circumstances of a particular case. We may find fault in the actions of organisations that ‘fetter their discretion’ in this way.
5. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. 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
6. We investigate 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 continue an investigation if we decide further investigation would not lead to a different outcome or we cannot achieve the outcome someone wants. (Local Government Act 1974, section 24A(6), as amended, section 34(B))

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How I considered this complaint

7. I considered evidence provided by Mr X and the Council as well as relevant law, policy and guidance.
8. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Legislation and guidance

Licensing of houses in multiple occupation (HMOs)

9. An HMO is a property rented out by at least three people who are not from one household but share facilities like the bathroom and kitchen. Private landlords must obtain a licence to rent out a large HMO (all buildings or parts of buildings housing 5 or more people in two or more households). 

HMO applications

10. Section 72 of the Housing Act, 1996 says a landlord has a defence from prosecution of an unlicensed HMO if they have duly made an application.

The Licensing of Houses Occupation Regulations 2018

11. ‘The regulations’ came into effect on 1 October 2018. From this date, a room for a person aged over 10 years must not be less than 6.51 square metres. Before this, there was no legal minimum bedroom size.

The Council’s policy

12. The policy says if the Council has not decided an application for an HMO licence in 52 weeks from receipt of a full and complete application (application and accompanying required documentation) and initial payment, the property will be able to be operated as though the Council has granted the licence unconditionally.
13. To assist existing licence holders, the Council will send a reminder to the licence holder approximately 3 months before the expiry of the licence. The Council is not obliged to do this and its failure to do so does not provide the licence holder with an excuse to not make a valid re-application. Failure to renew a licence within 1 month of the licence expiring will forfeit the right to relicense at the renewal fee rate. Each case will be considered on its merits and subsequent licence applications will be charged at either the new licence or unlicensed fee rate. In addition, formal action will be considered, which may include, prosecution, applying for a Rent Repayment Order or issuing a Civil Penalty.
14. The Council may provide tenants with information and advice on how and when they can claim back the rent they paid whilst the property was unlicensed through the application of a Rent Repayment Order.

Rent repayment order

15. A rent repayment order (RRO) is an order requiring a landlord who has committed certain offences to repay rent. Occupiers and local authorities can apply to the First-tier Tribunal for a rent repayment order.

What happened?

16. Mr G was a landlord for a House in Multiple Occupation. He had an HMO licence from September 2018 to mid-August 2023, for a property he owned. This included the smallest room of the property which was 6.26 square metres.
17. Mr G sent a new licence application to the Council on mid-September 2023.
18. The Council wrote to Mr G in early October 2023. It said it could not process the application because neither Mr G nor his representatives had signed the declaration to say the information was accurate and they agreed to be bound by the conditions of the licence. The letter also noted the this needed to be done by a specific date in late October 2023 and failure to do so would mean the property is not licensed which may lead to enforcement or prosecution action.
19. Miss Y moved into Mr G’s property in early November 2023. She rented the smallest room in the property.
20. In mid-November 2023, the Council sent a reminder to Mr G to send the requested declaration. The Council said he needed to complete this by a specific date in November 2023, as failure to do so would mean the property was unlicenced and may lead to enforcement or prosecution action.
21. Mr G sent the updated application to the Council November 2023, but after the required date. The Council considered the application to be full and complete from this date.
22. Miss Y ended her tenancy at the end of August 2024.
23. In mid-September 2024, the Council sent Mr G a draft licence. This noted that Mr G should not rent the smallest room out because it was too small for occupation, but said it would give Mr G 18 months from the date it issued the final licence to comply with this.
24. Shortly after this, Mr G asked permission from the Council to rent out the smallest room in the HMO if he made changes to the room size.
25. The Council replied the following day. It said it must issue a licence in accordance with how the property currently is. It noted that Mr G could make the necessary changes to enlarge the smallest bedroom and then apply for a variation to the licence with a new floor plan and measurements.
26. In mid-October 2024, the Council sent a final licence to Mr G. This showed that the smallest bedroom was too small for occupation and so was not included in the licence.
27. In early November 2024, the Council issued a variation to Mr G’s licence. This showed changes to the licence for other rooms in the house, but still showed that the small bedroom could not be rented out. The Council told me it gave Mr G 18 months to comply with the licence conditions, including the smallest bedroom being too small to rent out and included this clause in the varied licence.
28. In early January 2025, the Council told Mr X that a landlord discharges their duty when making an application and that Mr G did this before Miss Y moved into the room. The previous licence for the property allowed the small room to be occupied and so Mr G assumed the Council would allow this again. The Council noted that Mr G had not breached any legislation and so would not be taking any legal action against him.
29. In mid-February 2025, Mr X emailed a local councillor. He explained that when Miss Y rented the room, they considered it to be small, but assumed the room was correctly licensed. He explained that builders came to the property to change the layout before she moved out, and this is when he and Miss Y became aware that the room was below legal standards.
30. Mr X made a stage one complaint to the Council in late February 2025. He said the Council failed to review Mr G’s licence application in the required timeframes which meant Mr G let a room below the minimum size requirements to Miss Y. He asked the Council to pay Miss Y compensation.
31. The Council responded to Mr X’s stage one complaint. It explained that it had 52 weeks from the date of a full and complete application to make a decision. It noted that Mr G’s application was full and complete in mid-November 2023 and it granted the licence in mid-October 2024, which was within 52 weeks.
32. The Council also explained that it had given Mr G 18 months to rectify the smallest room being occupied, which was a breach. It noted this was in line with The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018. It did not uphold Mr X’s complaint because it said it processed the licence within 52 weeks, as stated in its enforcement policy.
33. Mr X disagreed with the Council and made a stage two complaint on in March 2025. He complained the Council failed to prevent Mr G from renting out an illegally sized room, refused to start legal proceedings against him and refused to award Miss Y compensation at stage one of the complaint process.
34. The Council responded on in early April 2024, it did not uphold his complaint and said there was no fault in the way the Council had handled the matter. It declined Mr X’s request for compensation.

Findings

35. In making these findings, I considered the actions of the Council. Mr G is not the body in jurisdiction and so I cannot make findings specific to him, nor make any recommendations on actions he should take.

Timeframes

36. The guidance does not specify a timeframe in which a council should consider an HMO application, but we would expect this to be within a reasonable timeframe. The Council’s policy is clear that it has 52 weeks from the time an application is ‘full and complete’ to make a decision.
37. Our role is not to ask whether an organisation could have done things better, or whether we agree or disagree with what it did. Instead, we look at whether there was fault in how it made its decisions. If we decide there was no fault in how it did so, we cannot ask whether it should have made a particular decision or say it should have reached a different outcome.
38. Although a year is a considerable amount of time to consider an application, the Council has decided this is the timeframe it has given itself. This was a decision the Council was entitled to make and one made without fault.
39. In this case, Mr G submitted a full and complete application in mid-November 2023, and the Council issued a licence in mid-October 2024. This was within the 52-week timeframe and so there was no fault in the actions of the Council.
40. The Council decided, when issuing the licence, that the small bedroom could not be licensed because it was too small and recognised this as a breach that this had been rented out. It then gave Mr X 18 months to rectify the room being occupied. The Council relied on the regulations to support its decision making. This legislation gives a council discretion over the period of time it gives an applicant/licence holder, up to 18 months to rectify a breach.
41. Although the timeframe to comply must not exceed 18 months, it can be less. Based on current evidence, the Council has applied the maximum 18 months to comply, without providing evidence of its consideration or reasoning for giving the maximum amount of time. Here, the Council has adopted a blanket or uniform approach to the situation, that failed to consider the circumstances of this case. For this reason, we find fault with the actions of the Council for fettering its discretion.
42. This has not caused a direct injustice to Miss Y, because she had ended her tenancy by the time the Council issued the licence. But, there could be potential injustice to other tenants living in Mr G’s property or other similar properties within the Council area if it had made similar decisions with other cases. For this reason, I will suggest service improvements.

Legal proceedings

43. Mr X also complained the Council refused to start legal proceedings against Mr G. The Ombudsman is not an appeal body. This means we do not take a second look at a decision to decide if it was wrong. Instead, we look at the processes an organisation followed to make its decision. If we consider it followed those processes correctly, we cannot question whether the decision was right or wrong, regardless of whether you disagree with the decision the organisation made.
44. What that means in this particular case is that it is not for me to make my own judgement about whether the Council should have started legal proceedings against Mr G. But, I can consider whether the Council properly made and explained its decision about this.
45. The Council decided that it would not start legal proceedings against Mr G because he did not breach any legislation. But, the Council wrote to Mr G in October 2023 and November 2023 asking for information to complete his application. Both times, it noted that if Mr G did not send the requested information within a certain timeframe, his property would be unlicenced and this may lead to enforcement or prosecution action. Mr G failed to respond within those specific timeframes both times and so I consider that the property was unlicenced.
46. I also note the Council decided that Mr G’s application was full and complete from mid-November 2023, when he submitted the declaration. This questions whether the property was licensed from August 2023 when the licence expired, to November 2023 when the Council said it considered Mr G’s application to be full and complete.
47. The Council failed to show any consideration of these points when deciding it would not start legal proceedings against Mr G and when explaining its reasoning for deciding not to do so to Mr X. This was fault. This caused Mr X and Miss Y uncertainty about what might have happened if they had considered all of the information. As there are strict timeframes in place to apply for a rent repayment order, which have now passed, I will not ask the Council to consider this point again. But, I will ask the Council to apologise for the uncertainty it caused Mr X and Miss Y by failing to show full consideration and explain its reasoning.
48. Mr X asked us to recommend that the Council reimburse the rent payments Miss Y made to Mr G. We cannot do this. If Mr X is still unhappy with the rent payments Miss Y made to Mr G, he has the option of seeking legal advice himself.

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Action

49. Within four weeks of our final decision, the Council has agreed to:
• apologise to Mr X for the failing to properly explain its decision to not start legal proceedings against Mr G. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The Council should consider this guidance in making its apology; and
• remind staff dealing with House in Multiple Occupation licence applications of the importance of using its discretion to set timeframes for complying with a licence, up to 18 months and recording reasons for the decision on the timeframe given.
50. The Council should provide us with evidence it has complied with the above actions.

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Investigator's decision on behalf of the Ombudsman