Decision : Not upheld
Decision date : 06 Mar 2020
The Ombudsman's final decision:
Summary: Mr X complained about how the Council dealt with his tenancy of a retail business. He said it delayed issuing a lease and made his business unviable. We will not investigate Mr X’s complaint because it is unlikely further investigation will lead to a different outcome, we cannot achieve the outcome he wants, and he had an alternative, available legal remedy.
- Mr X complains about how the Council dealt with his tenancy of a retail business. He says it mismanaged and delayed issuing him with a lease and failed to answer questions about this.
- Mr X says the Council’s actions and inactions made his business unviable, so he had to close. He wants the Council to explain why it took so long to offer him a lease, offer him a new lease and compensate his loss of business.
The Ombudsman’s role and powers
- 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’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe:
- it is unlikely we would find fault, or
- it is unlikely further investigation will lead to a different outcome, or
- we cannot achieve the outcome someone wants, or
- there is another body better placed to consider this complaint, or
(Local Government Act 1974, section 24A(6), as amended)
- We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
- The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)
How I considered this complaint
- I spoke to Mr X about his complaint.
- I considered the Council’s responses to Mr X’s complaint.
- I gave the Council and Mr X the opportunity to comment on my draft decision. I considered any comments received before making a final decision.
What I found
- Mr X started operating a retail business in 2013, with a lease from the Council. The period covered by this lease ended in 2016. The Council says Mr X then accepted a two-year lease. The Council offered this on a time-limited basis because it was considering redevelopment options for the area so did not want to commit to a longer period. The Council said the time-limited lease did not give Mr X automatic rights to a new lease when it ended.
- The lease finished at the end of March 2018. The Council was still considering redevelopment options for the area. It put all lease renewals on hold in case it needed to clear the properties as part of the redevelopment. It says it had kept Mr X and other affected tenants updated about this during 2017, 2018 and 2019.
- The Council says it decided its plans for the redevelopment of the area in early 2019 but needed more time to work out the impact this would have on existing businesses. It decided the area needed refurbishment. It offered Mr X a new two-year lease in June 2019. This offer comprised an ongoing annual fee plus a one-off amount to cover Mr X’s use of the property since the previous lease period ended.
- Mr X disagreed with this new arrangement and involved a solicitor to renegotiate with the Council. The Council corresponded with Mr X’s solicitor who proposed a compromise. The Council rejected this proposal. It gave notice it would take action to recover the property. After further correspondence, in August 2019, it says it offered Mr X a reduced rental for the rest of the season. Mr X did not respond. The Council began action to recover possession of the unit.
- Mr X left the property in September 2019 because, in his view, the Council’s decisions made the business unviable.
Mr X’s complaint to the Council
- Meanwhile, in August 2019 Mr X had complained to the Council that the delay in finalising the lease was impacting on his business.
- The Council replied in September. It explained the basis on which it had offered leases and that, at each stage, Mr X had the opportunity to seek legal advice. It clarified the status of its latest lease offer.
- Mr X then asked for the Council to consider his complaint at stage two. The Council replied at stage two in October. It repeated the summary of events including the lease offers it had made, and its final offer. It referred Mr X to the Ombudsman.
- Mr X told us the Council had failed to communicate with him about his lease before making an unviable offer. He said the Council had treated him unfairly compared with other businesses.
- In October 2019 the Council’s solicitors sent Mr X a pre-action protocol letter for collection of outstanding debts, requiring repayment.
- Mr X’s concerns about the adequacy of the Council’s lease arrangements before 2019 are about events more than 12 months before he came to the Ombudsman. The law says we cannot normally investigate such matters unless there are good reasons. If Mr X had concerns about the adequacy of the lease arrangements for his business, he could have complained about them to the Council and then to us sooner. There are no good reasons for me to exercise discretion to investigate these earlier matters.
- The Ombudsman cannot say what the arrangements should have been for Mr X’s lease with the Council. We cannot say whether the Council should have extended Mr X’s lease or imposed different conditions. We cannot say what would have been a fair lease or compare Mr X’s experience with that of other tenants. The Council has wide discretion to carry out commercial activities such as leases of this kind. It is unlikely further investigation of these matters would lead to a finding of fault.
- Where there are disputes about renewing or extending leases, the Landlord and Tenant Act 1954 provides a way of resolving them by asking the county court to decide what should happen. It was reasonable for Mr X to have raised his concerns through that means.
- We could consider whether the Council took too long to finalise a lease during 2019, and if this delay caused Mr X significant personal injustice. The Council has explained that, as part of its economic development responsibilities, it was reviewing plans for the area over the years covered by the complaint. It says this was why it took time to agree a lease. It kept Mr X informed about its general plans for the area and why these meant it was only offering him short term leases. It proposed further shorter-term lease arrangements for him to consider. It is unlikely any further investigation of these matters would lead to a different outcome. We could not say what, if any, impact the time taken had on Mr X’s business compared with the many other factors affecting its success.
- The Council has issued a pre-action protocol letter against Mr X to recover what it considers are outstanding debts. Whilst court action has, apparently, not started on this matter, Mr X can challenge the Council’s decision to recover debt through that route. For these reasons we will not investigate Mr X’s complaint.
- We will not investigate Mr X's complaint. This is because parts of his complaint are out of time, he had an alternative legal remedy that was available and reasonable for him to use and our investigation cannot achieve the outcome Mr X wants.
Investigator's decision on behalf of the Ombudsman