Summary: Ms X rented her property to the Council. She complained the Council failed to give the property back in good condition and delayed giving vacant possession. This caused Ms X financial and emotional distress. The Council is at fault for failing to communicate effectively with Ms X and delay in returning the terminated property.

The complaint

1. Ms X rented her property to the Council. She complained the Council failed to inspect the property to ensure the tenants complied with their terms and conditions and delayed in giving vacant possession. This caused Ms X financial loss as it cost money to make the property good and ready to relet. She also lost a tenant because of the delay which caused financial loss. Ms X would like the Council to compensate her for the loss of rent and damage to the property.

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The Ombudsman’s role and powers

2. 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
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(i), as amended)

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What I have and have not investigated

4. I am only investigating the recent issues raised by Ms X about ending the tenancy agreement and what happened after this. Any information provided before this time, is for background information only.

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How I considered this complaint

5. As part of the investigation, I have considered the complaint and the documents provided by the complainant. I have also considered information provided on the Council’s website, the documents provided by the Council and its comments in response to my enquiries.
6. Ms X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

The Council’s policies and procedures

7. The Council’s webpage explains its Private Sector Leasing (PSL) scheme. Through the scheme, the Council manages the property and the tenant for the property owner and guarantees the rent for the duration of the lease agreement.
8. The Council deals with repair issues because of the tenant’s use of the property.

What happened

9. I have summarised below the key events; this is not intended to be a detailed account.
10. Ms X has let her property to the Council from around 2005. Before the first sub-tenants moved into the property, the Council produced a condition survey which Ms X signed as a true reflection of the condition of the property in 2005. It describes the condition of the property and provides photographs. It says the garage is the landlord’s responsibility.
11. Ms X continued to let the property to the Council for several years. The Council inspected the property throughout this time. It could not inspect during the COVID-19 pandemic due to lockdown restrictions.
12. Ms X and the Council signed a new lease agreement in April 2020 for a three-year period. The document strongly suggests signatories get independent legal advice before signing.
13. The document says the lessee agrees to keep the premises in good and tenantable condition.
14. At clause 3.01, it says the lessor (Ms X), is responsible for the maintenance of the boundary walls, fences, hedges and trees as well as sheds and garages.
15. At clause 4.15.1 it says if the ‘Lessor requires possession of the premises; the Lessor is to give three (3) months written notice to the Lessee. The Lessee will endeavour to grant vacant possession at the earliest possible date…’
16. The lease was due to expire in the middle of April 2023. Ms X was not happy with the Council’s offer for a new lease. She gave the Council three months’ notice and expected the property to be returned to her by the middle of July. The Council accepted the email as three months’ notice and said it would endeavour to grant vacant possession as soon as possible. It requested Ms X did ‘…not make any arrangement with any contractors or vendors before receiving vacant possession of the above property’ and explained she would receive rent until the date the Council returns the keys to her.
17. In early July, Ms X contacted the Council and asked the Council to confirm it would hand the property back at the end of the three-month period. She was told the property was not yet vacant. This was the first contact Ms X had with the Council during the notice period.
18. Ms X complained to the Council in the middle of July.
19. The Council emailed Ms X at the beginning of August and said the sub-tenants were looking for a new home.
20. The sub-tenants returned the keys to the Council in the middle of September. It told Ms X the property was empty.
21. The following day the Council inspected the property and made a list of work to be done to put the property back into good condition. This included removing screws, filling holes and painting amongst other tasks. It also included clearing the garden of debris and clearing the garage of all items and replacing the garage side door. This Council did the work at a cost of around £1,500.
22. The Council responded to Ms X’s complaint in the middle of October. It referenced the lease agreement and explained it ‘endeavours’ to grant vacant possession as soon as possible and cannot confirm an exact date. The following day, Ms X asked for a review of her complaint.
23. The Council met with Ms X at the property to return the keys and conduct a joint assessment of the property in mid-late November. There were several actions for the Council and Ms X to complete before the property was in good condition.
24. At the end of November, the Council issued its stage two complaint response. It did not uphold Ms X’s complaint.
25. Ms X complained to the Ombudsman at the beginning of January 2024. She said the Council did not vacate the property on time, had not compensated her for the loss of rent. She said the Council did not inspect the property which caused issues with the condition. She wanted the Council to compensate her for the loss of rent and to make good the damage caused by the tenant.
26. In late February 2024, the Council offered a compensation award for damage caused to the property by the sub-tenant. This included missing keys, plug sockets and door handles covered with paint, markings on bricks and removal of rubbish. The Council said it did not agree it had responsibility to maintain the garage and this was excluded from the offer. The total amount of compensation was just under £1,500. Ms X accepted the offer of compensation for damage to the property but said she would continue with her complaint to the Ombudsman about how long it took to return the property.

Analysis – is there fault causing injustice?

Damage caused by the sub-tenants

27. The Council completed work to the property to put it back into a good condition after the sub-tenants left. It also made an offer for damage caused by the sub-tenants which Ms X accepted. I am satisfied the Council has provided a suitable outcome for Ms X.
28. The lease document states the garage is Ms X’s responsibility. The Council completed some works to the garage even though it considers it was not required to do so, which Ms X accepted. It advised Ms X to report any criminal damage to the police. I am satisfied the Council is not at fault.

Not vacating the property and subsequent loss of rent

29. The lease document says the lessor, Ms X, must give three months' notice to end the agreement. It says the Council will endeavour to grant vacant possession as soon as possible. The Council explained this is flexible to accommodate delay returning the property to the owner and opportunity to return the property earlier.
30. When the Council accepted Ms X’s notice to terminate the agreement, it told her not to make arrangements for the property until she received vacant possession. Ms X did not follow this, and instead arranged to rent the property to a new tenant after the three-month notice period. This was against the instructions of the Council. The Council is not at fault.
31. Ms X gave notice in the middle of April and expected the Council to return the property in the middle of July. The sub-tenant returned the keys to the Council in the middle of September, two months later. The Council inspected the property the following day and completed the works within two months. It handed the property back to Ms X in the middle of November. There was a four-month period between when Ms X thought she would receive her property back, and when she did. The Council explained the initial two-month delay was related to the difficulty rehoming the sub-tenants. The following two months was to complete the remedial work. In response to my enquiries, the Council said it considered three months a reasonable time to hand back terminated PSL properties. It took four. This is a delay of one month, this is fault.
32. During the initial three-month notice period, there was no communication from the Council to Ms X. It did not provide updates about when Ms X could expect the property to be returned. It was only when Ms X emailed to confirm the return of the property, she discovered the sub-tenants were still residing in it. The Council explained in response to my enquiries that finding an alternative housing solution for the sub-tenants and the extent of the remedial work at the property were both unknown factors and it was not possible to give an exact date to hand the property over. While I understand the difficulties predicting when the Council can return a property, it is reasonable to expect the Council keeps the landlord updated, especially as it considers three months is a reasonable time to return terminated PSL properties. The Council could have told Ms X about the three-month timeframe to return the terminated property and could have told her the sub-tenants were still in the property in July. I consider it reasonable for the Council to have updated Ms X, it did not. This is fault.
33. I understand a new tenant offered Ms X a higher rent from July, when she thought the Council would return the property. This was delayed until the property was empty. The Council advised Ms X not to arrange to make arrangements with vendors until she had received vacant possession of the property. It cannot be at fault for Ms X not following this advice.
34. Ms X was paid rent by the Council until she received the keys back and the property was empty. She has not suffered any financial injustice.

Summary of fault causing injustice

35. The Council is at fault for failing to communicate effectively with Ms X during the three-month notice period and failing to manage her expectations about when she would receive the property back. The Council raised Ms X’s expectations by failing to explain how long the process would take during the notice period, and then uncertainty, by not suggesting how long it would take after then notice period expired. This is distress.
36. The Council is also at fault for delay returning the property to Ms X, one month after what it considers a reasonable time to hand back terminated properties. This caused Ms X distress and frustration.

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Agreed action

37. Within four weeks of the Final Decision, the Council agreed to:
• Apologise to Ms X and pay her £200 for failing to communicate effectively and the delay handing back the terminated property.
• Consider and plan how it can better communicate with landlords and manage their expectations about when they might receive their empty property back.
38. The Council should provide us with evidence it has complied with the above actions.

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Final decision

39. I have completed my investigation. The Council is at fault for failing to communicate effectively with Ms X and delay in returning the terminated property.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman