Summary: Miss X complains about issues concerning the renewal of their business lease and rent arrears. We have concluded our investigation without a finding of fault. While there were some communication issues, these do not alter Miss X’s contractual obligation to pay the arrears. The Council has discretion over lease renewals, and its decision to withhold renewal until arrears are cleared is not fault.

The complaint

1. Miss X complains about issues concerning the renewal of their business lease and rent arrears. Despite attempts to engage, Miss X says the Council have been unable to secure a lease extension or set up direct debit payments due to unresponsiveness and lack of clarity. Miss X says these delays have caused disruptions in their payment process and created disputes over arrears. Miss X seeks prompt resolution to finalise the lease renewal, establish a reliable rent payment system and to correct the rent arrears balance.

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The Ombudsman’s role and powers

2. 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(i), as amended)

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How I considered this complaint

3. I considered evidence provided by Miss X and the Council as well as relevant law, policy and guidance.
4. Miss X and the Council were offered an opportunity to comment on my draft decision. I considered all comments submitted before making a final decision.

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What happened

5. I have included a summary of some of the key events in this complaint. This is not intended to be a comprehensive account of everything that took place.

Background

6. Miss X runs a business from a commercial unit that she rents from the Council.

Events thereafter

7. In April 2024, Miss X contacted the Council expressing her intention for a lease renewal. The Council responded, advising that a lease extension could not take place until all appears were paid.
8. In correspondence provided by the Council, it appears Miss X contacted the Council in February 2024 to request it set up a direct debit to begin paying the arrears which she stated had not been actioned in October 2024.
9. The Council responded in October 2024, advising that notification was received from Miss X’s bank that the instruction had been cancelled. The Council said its procedure is to cancel the Direct Debit instruction on its system. The Council also said that it had migrated to a new system, resulting in no reminders being produced, but that in any event, Miss X’s commercial rent was a contractual agreement which should be paid in the absence of invoice or reminders. The Council proposed a repayment plan to Miss X over the following six months.
10. Miss X responded in October 2024 that she had been assured she was up to date with payments and expressed dissatisfaction at the break down in communication and billing. Miss X advised she was willing to work with the Council on a repayment plan, but requested it reduce the arrears, which she attributed partially to a lack of communication from the Council.
11. The Council responded in November 2024, advising that all payments made to date had been applied and allocated to the account, leaving an outstanding balance at the time of approximately £10,640. The Council said that as a gesture of goodwill, it would extend the repayment plan over the following 12 months.
12. In response to our enquiries, the Council says that Miss X has not responded to its proposal to either agree or disagree with the payment plan.

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Analysis

Rent Arrears

13. Miss X disputes the sum of arrears stated by the Council. However, the Council has provided clear and detailed evidence to support its calculations, including records of missed rent payments and service charges accrued between January 2023 and December 2024, which total approximately £18,600.
14. The Council has also provided a breakdown of payments made by Miss X, covering the period from June 2023 to June 2024. These payments amount to approximately £6,000.
15. Based on the evidence provided, this leaves an outstanding arrears balance of approximately £12,600 as of the Council’s response in March 2025.
16. Miss X has raised concerns about communication issues, particularly regarding the setup of a direct debit in February 2024, which she stated had not been actioned. The Council later confirmed in October 2024 that the direct debit instruction had been cancelled following notification from Miss X’s bank, in line with its standard procedures. The Council also acknowledged that its transition to a new system resulted in no reminders being issued. However, it has correctly noted that commercial rent remains a contractual obligation, and tenants are expected to make payments irrespective of invoicing or reminders. While the breakdown in communication may have caused some confusion, I have not seen evidence that this directly led to financial detriment that would warrant a finding of fault.
17. Furthermore, Miss X has asked the Council to reduce the arrears, citing the communication issues as a contributing factor. However, the arrears are based on rent and service charges that have accrued under the terms of the lease, and there is no basis for the Ombudsman to recommend that the Council reduce them. Miss X has a contractual obligation to pay these arrears, and on this point, I have not made a finding of fault.

Lease Renewal

18. In April 2024, Miss X informed the Council of her intention to renew her lease. In response, the Council advised that a lease extension would not be possible until the outstanding arrears had been paid in full.
19. The Council has maintained that it will not approve a lease renewal while arrears remain unpaid. This decision falls entirely within the Council’s discretion, and I have not identified a basis to criticise its position. As noted in paragraph 15, Miss X currently has outstanding arrears of approximately £12,600. While I acknowledge that Miss X has expressed concerns regarding communication and billing issues, this does not override the Council’s right to refuse a lease renewal in circumstances where arrears remain outstanding. On this point, I have not made a finding of fault.

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Final decision

20. We have concluded our investigation without a finding of fault. While there were some communication issues, these do not alter Miss X’s contractual obligation to pay the arrears. The Council has discretion over lease renewals, and its decision to withhold renewal until arrears are cleared is not fault.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman