The Ombudsman's final decision
Summary: Ms X complained the Council allowed her to live as a property guardian in a property it owned in the knowledge there were serious disrepair issues. She also complained that when she reported her concerns, the Council ended its agreement with the property guardian company, which then started eviction proceedings. Some of aspects of the complaint were made too late and some were outside our remit. The Council was not at fault for those aspects investigated.
The complaint
Ms X complained the Council: Allowed the property where she lives to be occupied by property guardians from 2015 without doing sufficient structural and safety assessments, and knowing there were underlying serious disrepair issues, including the presence of asbestos in the building; Failed to ensure the property, which she occupies as a “property guardian”, was kept in good repair and complied with relevant health and safety, including fire safety, requirements; and Ended the agreement with the property guardian company when she raised concerns about health and safety, was not open in response to her enquiries, and did not respond properly to her freedom of information (FOI) requests.
As a result, Ms X was living in a property subject to serious disrepair issues and which she considered unsafe. She also said the Council’s failure to respond properly to her safety concerns and requests for information, led to worry and uncertainty about the risks she and other residents may have been exposed to.
What I have investigated I have not investigated the complaint about the Council’s response to FOI requests, for reasons I explain at paragraph 56. I have restricted my investigation of the other complaints, as I will explain in the body of the decision statement.
The Ombudsman’s role and powers
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) 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’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended) 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) When considering complaints, if there is a conflict of evidence, we make findings based on the balance of probabilities. This means that we will weigh up the available relevant evidence and base our findings on what we think was more likely to have happened.
We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, 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) The Information Commissioner's Office considers complaints about freedom of information. Its decision notices may be appealed to the First Tier Tribunal (Information Rights). So where we receive complaints about freedom of information, we normally consider it reasonable to expect the person to refer the matter to the Information Commissioner.
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)
How I considered this complaint
I considered: The information Ms X provided; and The information the Council provided in response to our enquiries.
Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
What I found
Relevant law and guidance Property guardians Property guardianship is a way of occupying property where vacant, often commercial premises, are lived in by “property guardians” at below market rent.
The property owner usually grants a licence to a guardian agency, which includes permission for the guardian agency to grant a sub-licence to property guardians. There is no legal relationship between the property owner, the Council in this case, and the property guardians. The property guardians pay a fee to the guardian agency for the right to live in the property.
Houses in multiple occupation (HMO) An HMO is a property rented to at least three people from two or more households who share facilities such as a kitchen or bathroom. Compulsory HMO licensing has been in place since October 2018 for properties rented to five or more people, from two or more households. It is the responsibility of the landlord or their managing agent to apply to the council for a licence. Councils can take action against landlords who are unlicensed but cannot take enforcement action against themselves.
Landlords must satisfy certain conditions before a licence can be granted. The landlord or HMO manager must: Provide the manager’s details to the occupiers; Take all necessary safety measures; Maintain the water supply and drainage; Supply and maintain gas and electricity; Maintain common areas, fixtures, fittings and appliances; Maintain living accommodation; and Provide waste disposal facilities.
Housing Act 2004 The Housing Act 2004 gives councils powers to inspect residential premises in their area and to take enforcement action against landlords where the council has identified a serious hazard which puts the health and safety of the tenant at risk.
The Housing Health and Safety Rating System (HHSRS) provides a risk assessment framework for scoring hazards in a property. Rather than setting a minimum standard of fitness, the system assesses the property for Category 1 hazards (where the council must take action) or Category 2 hazards where it may decide to take action.
A council cannot take enforcement action against itself. This means its environmental health team cannot issue an enforcement notice if the property is owned or managed by the council.
What happened In 2015, the Council, which owns the property A, then an empty commercial building, decided to allow residential use of the building. This was intended as a temporary arrangement whilst long term plans for the building were developed. In August 2015, it contracted with company B, a guardian agency. A subsidiary of Company B gave sub-licenses to property guardians to occupy property A from September 2015. Ms X moved into property A as a property guardian in November 2016.
The Council said that under the contract, company B was to “secure and protect” property A. It said company B was responsible for commissioning fire risk assessments for the premises. It said the process was that, where property guardians had concerns about safety issues or disrepair, they should report them to company B. Company B would either carry out repairs or could raise matters with the Council in accordance with their agreement.
In 2017 property A was flooded. The Council said company B was responsible for arranging repairs. It said works were completed in July 2017.
The Council renewed its agreement with company B in 2018. The terms of the new agreement were different in some respects, including about which of them was responsible for repairs and ensuring the safety of the building.
In 2020, following further floods, the Council sought to end the agreement with company B. Company B asked the property guardians to leave property A due to concerns it may be unsafe. Company B offered to assist the property guardians to move to other buildings they managed and to assist them with the costs of moving. Some of the residents, including Ms X, did not leave so company B issued a Notice to Quit. This is a formal notice to end the licence. Following this, company B took court action to evict the property guardians. This was concluded in December 2021 when the Court of Appeal granted an order for vacant possession of property A. The Council ended its agreement with company B in early February 2022 and all the property guardians have now left the building.
Ms X made formal complaint in September 2020. The Council responded on 12 May 2021. It apologised for the delay in responding, which it said was due to the Covid-19 pandemic and a cyber-attack in October 2020. It responded to the concerns she raised.
Analysis and my findings Initial structural and safety checks Ms X complained that a survey carried out in 2015 showed serious problems with property A, which meant it was not habitable when the property guardians moved in. In particular, she noted the surveyor’s report was dated September 2015, which was after the Council agreed the licence to company B. Ms X was also concerned about the way the Council reached agreement with company B and whether it applied a proper tendering process.
In response to Ms X’s complaint and our enquiries, the Council said: The initial survey was carried out in May 2015 and the final report was produced in September 2015; Company B agreed to carry out any essential repairs to the premises as well as some refurbishment, to ensure the building was habitable and safe for occupation. That work was completed in July 2015; All relevant assessments and reports were obtained in line with regulations prior to property A being occupied; and The contract was not subject to a formal tendering process because the Council was not paying money to company B. However, it carried out an open process by issuing a request for bids.
I have seen the agreement with company B, which said company B would ensure the building is brought up to a standard that is suitable for habitation and would carry out monthly inspections.
I have considered whether I should investigate this further. Ms X complained about this in February 2021. We would usually only investigate complaints about events up to 12 months before the complaint to us, unless there are good reasons to exercise discretion to investigate a longer period and it is likely we can achieve a worthwhile outcome by doing so.
I have not exercised discretion to consider this part of the complaint further. This is because: From the documents I have seen, there is no evidence of fault by the Council; It is unlikely I will be able to obtain full information about what happened in 2015 given the lapse of time since then, particularly in view of the fact that the Council was the target of a serious cyber-attack in October 2020; It is unlikely I would be able to achieve a worthwhile outcome after investigating this further because it would be difficult to establish Ms X suffered a personal injustice as a result of any fault by the Council in 2015.
Eviction from property A Ms X complained the Council failed to ensure property A was kept in good repair and complied with relevant health and safety requirements. She said when she complained to the Council about this, the Council took steps to end the property guardian arrangement.
Following the second major flood in early July 2020, the Council’s contractor inspected the building and was concerned it was not habitable. On that basis, the Council sought to end its agreement with company B, and company B asked the property guardians to leave.
Company B provided Ms X with details of a number of alternative properties that it managed, which she could move to, and offered assistance with moving costs. Although it was not ideal to move during the COVID-19 pandemic, it was not fault for the Council to ask company B to arrange for the property guardians to move, given the significant safety concerns. Ms X chose not to move and company B issued a Notice to Quit, which started the formal eviction process.
Company B obtained a court order for possession of property A. I cannot investigate matters that have been considered by a court so I will not investigate the eviction of the property guardians further.
In terms of the general duty to keep the property in good repair, this was a contractual matter between the Council and company B. Under their licences, property guardians were required to report any repairs needed to company B. Depending on the nature of the repair, company B would either complete the repair itself or refer the matter to the Council.
There was no contractual relationship between the property guardians and the Council that I can investigate, and the Council was not providing housing using statutory powers under the Housing Act 1996. Therefore, I can only consider whether the Council met its obligations under the Housing Act 2004 and in respect of HMO licensing.
Housing Health and Safety Rating System (HHSRS) inspections As set out at paragraphs 18 and 19, councils can inspect rented properties to check for hazards. This is usually in response to reports from residents, although councils can inspect proactively.
In response to my enquiries, the Council said it had taken the view that it did not have a duty to inspect property A because company B was appointed primarily to secure the property not to provide housing. It has since taken legal advice and now accepts it may owe a duty to carry out HHSRS inspections, based on its revised agreement with company B in 2018. The legal advice, which I have seen, says the legal position is unclear.
I have seen no evidence of direct reports from Ms X to the Council prior to the flooding in early July 2020.
The Council did not carry out a HHSRS inspection following the report of the flood in July 2020, but its contractors did inspect the roof and the electrics, following the flooding. It also obtained an asbestos report in response to concerns that damage to the building as a result of the flood may have led to the risk of exposure to asbestos.
On balance, if the Council had carried out an HHSRS inspection in or around July 2020, it would have identified category 1 hazards. It could not have issued an enforcement notice against itself (as owner of the building) but we would expect councils, in such circumstances, to take the same action they would expect a private landlord to take. I have therefore considered whether the Council took appropriate action to remedy the hazards resulting from the flooding in 2020.
The records show that immediately on receiving the report of the flood, the Council asked its contractor to assess the situation. The contractor visited the site the same day and the following day told the Council the leak had been temporarily stopped. It said the gutters needed clearing to prevent further leaks.
On 12 August a surveyor visited and assessed the roof and a representative from company B also carried out an inspection of the building.
The contractor was due to clear out the gutters and drains in late July but did not do so until mid August 2020. Further heavy rain around that time meant the leak had got worse. The property guardians expressed concern about the safety of the building’s electrics and structure. The electrics were inspected on 20 August and confirmed to be safe, and a further inspection of the roof was carried out on 22 August. On 2 October 2020, the Council’s contractor confirmed the roof was watertight and the remedial works were almost complete.
The Council recognised, in its complaint response dated 12 May 2021, that the time taken to investigate and address the repair was “not satisfactory”, for which it apologised. That said, I am satisfied the Council took appropriate action after identifying the hazards and I do not consider the time taken to complete the remedial work amounts to fault.
The Council has also provided records to show that its contractors carried out regular electrical installation testing, legionnaires inspections, and fire safety checks. It has provided evidence that electrical remedial works were carried out between April and August 2021, and that other concerns Ms X reported from July 2020 onwards were addressed. It also worked with the London Fire Brigade (LBF) to review fire safety from April 2021 onwards. LBF provided details of remedial works needed in September 2021, which the Council reviewed. However, the works were not all completed because the legal case was concluded in early December, which meant the remaining property guardians would be evicted soon afterwards so the works were no longer needed.
On balance, I am satisfied the Council carried out sufficient steps to meet its obligation under the Housing Act 2004 and was not at fault.
HMO licensing Ms X complained property B operated an unlicensed HMO and the Council failed to take action to address this or to ensure the building met HMO licensing standards.
As set out in paragraphs 16 and 17 above, most houses in multiple occupation (HMOs) with five or more people, comprising two or more households, will need to have an HMO licence. Under the licence, the landlord or HMO manager, must ensure compliance with certain standards, including safety measures, such as ensuring fire safety within the building.
In response to my enquiries, the Council said this was a temporary arrangement, as reflected by the terms of the licence agreement, which could be terminated on 28 days’ notice, and therefore it did not consider an HMO licence was needed.
Until recently it was unclear whether the HMO licencing scheme applied to buildings occupied by property guardians. The recent case of Global 100 v Jiminez (2022) confirmed that HMO licensing may apply.
Further, there remains some doubt about whether buildings owned by councils need an HMO licence, which depends on the nature of the agreement between the council and property guardian company. In this case, the legal advice referred to above, suggests the legal position is unclear.
Given the legal uncertainty about whether property A should have had an HMO licence, I make no finding about this part of the complaint.
Response to requests for information When reporting safety concerns to the Council, Ms X requested documentation to show it had met its health and safety obligations. She complained the Council did not provide all the information she asked for. The Council said some of its records were not available as a result of the cyber-attach in October 2020.
I have not investigated the Council’s response to her freedom of information (FOI) requests because the Information Commissioner's Office is better placed to consider that complaint.
Final decision
I have completed my investigation. I have not found fault.
Investigator's decision on behalf of the Ombudsman