Decision : Upheld
Decision date : 23 Jul 2021
The Ombudsman's final decision:
Summary: Ms Z has made a complaint about the way the Council terminated her business lease. She says the process was handled poorly and the Council instigated hostility by contacting her licencees. Ms Z says this caused loss of reputation, earnings and equipment. However, the Ombudsman has not identified any fault in this respect. We have however found fault in the Council’s complaints process. This caused Ms Z an injustice and so we have recommended a small payment be made to her.
- The complainant, who I refer to as Ms Z, is the owner of a business (the Business). She is making a complaint about how the Council terminated the Business lease. Ms Z says the process was handled unprofessionally.
- In addition, Ms Z says the Council appointed bailiffs which were combined with the licencees of the Business. She says the Council instigated hostility between her and those she had granted a licence to by contacting them that they had to vacate the site. Ms Z also says the Council told her licencees that she did not have permission to create a licence to occupy any part of the land. Ms Z alleges this constitutes a breach of data protection law and the encouragement of violence and harassment against her and her staff.
- Ms Z says the process has been handled poorly and that this resulted in a loss of equipment, reputation and income. As a desired outcome, Ms Z wants the Council to compensate her for the loss she has suffered. She also wants the Council to stop harassing her.
The Ombudsman’s role and powers
- The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate.
- We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word 'fault' to refer to these. If we are satisfied with a council’s actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended).
- We cannot investigate a complaint where the body complained about is not responsible for the issue raised. (Local Government Act 1974, section 24A(1), as amended).
- We normally expect someone to refer the matter to the Information Commissioner’s Office (ICO) if they have a complaint about data protection. However, we may decide to investigate if we think there are good reasons. (Local Government Act 1974, section 24A(6), as amended).
How I considered this complaint
- I have reviewed Ms Z’s complaint to the Ombudsman and Council. I have also had regard to the responses of the Council, the Business’s tenancy agreement and supporting documents. Both Ms Z and the Council received an opportunity to comment on a draft of my decision before I reached a final view.
What I found
- A tenancy is a contract between a tenant and landlord. The tenancy agreement gives certain rights to both parties. For example, the tenant has a right to occupy the site and the landlord has a right to receive rent for letting the site. A subtenancy is created when an existing tenant leases some or all of the site to another tenant, known as the subtenant. In most cases, subletting or any other form of legal interest (such as a licence to occupy) is expressly prohibited and a tenant needs their landlord's permission before they can sublet or transfer possession.
- The tenancy agreement between the Business and Council states at clause 5.2:
“The Tenant must not transfer, sublet, charge or part with possession of the whole or any part of the Property”.
- A tenancy at will arises when a tenant occupies a property, with landlord consent, indefinitely, on the basis that either party can end the arrangement by giving immediate notice at any time. It can be both informal and in writing. A tenancy at will is usually only suitable for temporary, short term use and it does not create a legal interest in the land.
Chronology of events
- The Business entered a lease for the site in November 2017. Under the terms of the tenancy, either party could terminate the lease early by giving six months’ notice. The Business had also granted separate interests over land in material breach of the head tenancy.
- In December 2018, the Council acquired land from Ms Z’s previous landlord (Landlord X) which was subject to a tenancy agreement granted to the Business. The Council sent a letter to Ms Z to explain it was the new landlord for the site.
- In February 2019, Ms Z received a letter from Landlord X stating her site had not been acquired and that it remained the landlord.
- In June 2019, the Council served Ms Z notice to quit the site because it wanted the site to complete a building project.
- In July 2019, the Council held a meeting with Ms Z because of the served notice to quit. The Council explored available options for extending the date for the Business to vacate. It asked Ms Z for a list of persons she had sublet to.
- In October 2019, the Council told Ms Z the deadline to vacate could be extended until January 2020 for a small part of the site. However, it said the remainder of the site would be required after the extension of time lapsed.
- In December 2019, Ms Z’s tenancy agreement expired, but she did not vacate the site on this date. The Council later offered Ms Z a tenancy at will, though Ms Z declined to accept this on the terms offered.
- In January 2020, the Council wrote to Ms Z to confirm the whole site was required in March 2020. The Council had to issue Ms Z several warnings to vacate the site as she continued to trespass.
- In March 2020, the site was repossessed by contractors acting on behalf of the Council, except for the site occupied for residential purposes. However, the Business failed to move its property and equipment from the site.
- Between March and May 2020, the contractor sought to simplify the removal of the Business’s equipment with Ms Z. It offered extensions to the deadline and offered to store the equipment, though at the Business’s expense. In every instance, Ms Z and the Business failed to collect the equipment. The contractor therefore advised equipment would now be disposed of.
- In April 2020, Ms Z made a formal complaint to the Council about the contractors refusing to extend time. She said the contractors were being unreasonable and the Business had faced problems due to the Covid-19 pandemic.
- A few days later, the Council replied to Ms Z. It noted that Ms Z and the Business were given formal notice to quit the site on in June 2019. Despite this, the Council said she had neglected either to make plans to relocate the Business or to tell its licencees. On that basis, the Council did not uphold Ms Z’s complaint.
- In May 2020, a past employee of the Business removed equipment from the site. The Council told Ms Z it would dispose of all other remaining equipment. Between May 2020 and January 2021, Ms Z sought to escalate her complaint through the Council’s formal procedure. She did not give any indication as to when she would remove the equipment from the site. However, the Council failed to respond.
- In February 2021, the Council issued its final response to Ms Z. It apologised for the service failure to respond to her complaint sooner. However, it did not uphold any of Ms Z’s complaints.
Notice to quit the site
- Ms Z has told me her view, at all times, was the Council was going to extend the Business tenancy. She feels the process of terminating her business lease was handled unprofessionally. In my view, the Council correctly served the notice to quit. Further, it met with Ms Z to look at alternatives to affording the Business more time to vacate. First, it told Ms Z the deadline to vacate could be extended until January 2020. It also offered Ms Z a tenancy at will when she failed to vacate, but because this did not include a provision that the Business could sublet, Ms Z opted not to sign it. The Council then issued warnings to Ms Z that the Business was trespassing and that bailiffs would be appointed.
- In my view, there is little room for ambiguity about when the Council wanted vacant possession of the land and for Ms Z and the Business to vacate. I believe the Council afforded many opportunities for Ms Z to leave the site and suggested creative options to be flexible. Ms Z failed to vacate and I see no evidence the Council was going to extend the tenancy beyond the dates it had clearly specified. Further, there is no evidence that Ms Z challenged the notice to quit or the dates given to vacate the site.
- I recognise Ms Z has signposted me to the tenancy at will proposed by the Council as evidence she was therefore not required to vacate. However, I believe this perception was misplaced, primarily due to a misunderstanding of what a tenancy at will is and how it operates. If Ms Z was unsure of her rights or obligations, I consider the Business should have sought legal advice. In any event, Ms Z did not sign the tenancy at will and so the default position was she and the Business was required to vacate by January 2020. For the reasons given, I have not found evidence of fault by the Council over its handling of the process.
- I also note Ms Z has raised that Landlord X confirmed to her that it did not sell the land to the Council. She said this caused her confusion. I have seen a letter from Landlord X which does appear to confirm this. That said, this letter was not the result of an administrative function of the Council. I do not therefore have any jurisdiction to investigate the matter. In any event, the Council confirmed by letter it was the new landlord for the site in December 2018.
Contacting of licencees
- Importantly, Ms Z told me the Business had written consent from Landlord X that she could sublet her site. She says written consent was provided each time the tenancy was renewed, including the latest time in November 2017. For that reason, she believes when the Council purchased the land from Landlord X, this was subject to Landlord X’s written consent that the Business may lawfully sublet. It is therefore Ms Z’s belief that her licencees were legal and that the Council had no business contacting them to suggest the contrary.
- I requested, on several occasions, Ms Z provide me with the documents from Landlord X which showed it had given written consent the Business may sublet. To date, I have not been provided with these. I have however been provided with correspondence between Ms Z and Landlord X that it would consider consenting to subletting, but the correspondence was always subject to contract. For that reason, there is no evidence to suggest the Business had written consent. I therefore intend to make my findings on the basis of the tenancy agreement, in that subletting is prohibited.
- In summary, there is no evidence that Ms Z or the Business challenged the Council’s notice to quit the site. As mentioned, the Council offered a tenancy at will to the Business, but this was not signed by Ms Z. Further, Ms Z failed to provide the Council a list of the licencees she had granted an interest in the land to. As the deadline to vacate was approaching, Council officers contacted Ms Z’s licencees and made them aware of the position formally. It also warned them that the Council would be instructing bailiffs to clear the site.
- In my view, had meaningful engagement from Ms Z been forthcoming on the subject of the licencees, this course of action could have been avoided. But in any event, I consider the Council’s conduct to be reasonable and proportionate to the circumstances. Further, I have not seen any evidence the Council encouraged violence and harassment against Ms Z or her staff. For the reasons given, I have not found any evidence of fault by the Council.
- Separately, Ms Z said that by contacting her licencees the Council acted against data protection laws. Data protection laws are regulated by the Information Commissioner’s Office (ICO). So where we receive complaints about data protection, we normally consider it reasonable to expect the person to refer the matter to the ICO. In my view, the ICO is the body best placed to properly consider such matters. This is because any decision by the ICO would likely carry greater weight on the subject of compliance with data protection laws.
Removal and loss of equipment
- Ms Z has said the way in which the eviction process was handled resulted in loss of equipment belonging to the Business. As established already, the Council gave many opportunities for Ms Z and the Business to vacate the site. In March 2020, the site was repossessed by contractors acting on behalf of the Council as the Business had failed to move its property and equipment from the site.
- I have reviewed the correspondence between Ms Z, the Council and appointed bailiffs. In my view, Ms Z was given many chances and deadlines to remove the equipment belonging to the Business. As one final effort, the Council offered April 2020 as a final deadline to remove equipment. It also offered to store the equipment at the Business’s expenses. Ms Z did not give a response. Eventually, a member of staff collected some equipment belonging to the Business. However, Ms Z said this staff member did not have authority to remove any equipment.
- Ms Z said the Covid-19 pandemic delayed her ability to move equipment belonging to the Business. However, I do not consider this to be plausible. The Council gave the Business notice to quit in June 2019 and issued her warnings before the pandemic began. It also offered to store the equipment on her behalf. In my view, Ms Z had every opportunity to remove equipment and yet failed to do so. With respect to the staff member who removed equipment, as this person is known to Ms Z, she is free to resolve any ownership disputes with them directly. I see no evidence of fault by the Council in this respect.
- There was a significant delay between Ms Z escalating her complaint with the Council to stage two of its process in April 2020 and the Council responding in February 2021. This is fault by the Council and I believe it caused Ms Z uncertainty and delayed the resolution of her complaint. In my view, this caused Ms Z an injustice and the I am recommending a remedy.
- To remedy the injustice identified above, I recommend the Council, within one month of a final decision, take the following actions:
- apologise to Ms Z for the significant delay in the complaints process and pay her £150 to acknowledge the uncertainty caused.
- I have not found any evidence of fault the Council poorly handled the termination of Ms Z’s business lease. In my view, the Council acted reasonably in all the circumstances and gave Ms Z many opportunities to leave and remove equipment belonging to the Business. There was fault in the handling of Ms Z’s complaint which caused her an injustice. I have recommended a small financial payment be made to remedy this.
Investigator's decision on behalf of the Ombudsman