Durham County Council at fault for failing to regularly inspect the property it had Deputyship over and make appropriate repairs

Decision Date: 24/03/2020

What Happened

Mr X complained on behalf of his late father, Mr Y.

The Council had been Mr Y’s deputy for financial affairs since 2016. Mr Y owned a retail business property which was let to Mr Z.

Mr Y lived in a care home, as a self-funder (judging from the report), paid for by using the income from renting the business property out. Rent was paid into Mr Y’s deputyship bank account, managed by the Council, until April 2019.

When the Council became Mr Y’s deputy in 2016, the Council sought legal advice about the rental agreement, and whether the lease had expired. It was identified that the lease would not end until Mr Z or Mr Y served notice. Neither had done so.

In May 2018 the Council was alerted to a water leak in the premises. It inspected the property for the first time since it gained Deputyship. It recorded damage, but then did not arrange for any repairs to be made. The Council, acting as Mr Y’s deputy were responsible for repairs and upkeep of the property.

In late 2018 Mr Z the tenant wanted to transfer his lease to Ms B. The Council Deputyship team sought further legal advice, and discussed the matter with Mr Z’s solicitors.

In January 2019, Mr Z left the business, intending to hand it over to Ms B. Mr Z remained leaseholder until the Council decided what should happen.

The Council made a best interests decision about what should happen to the lease under the Mental Capacity Act. In doing so it considered:

  • Mr Y’s earlier wish to rent out the property.
  • How important continued rental income was to meet Mr Y’s care costs.
  • The risk of not transferring the lease, meaning Mr Y losing rental income

It concluded (on a date unknown) that it was in Mr Y’s best interests to allow Mr Z to continue as the leaseholder, but that Ms B would occupy on some or other basis. Ms B would pay rent to Mr Z, and Mr Z would continue to pay rent into Mr Y’s deputyship bank account.

The Council ‘understood’ that this would be the arrangement until a new lease was drawn up under Ms B’s name. It continued to work with solicitors to arrange a new lease.

It is unclear from the report what Mr Z’s views were, so we can only assume that all parties agreed to the Council’s proposal on behalf of Mr Y.

The Council discussed repairs with Ms B, and inspected the property in February 2019, for the second time.

Unfortunately, Mr Y passed away in March 2019, by which time the new lease had not been finished and the Council had not arranged for any repairs. We do not know whether Mr X’s interest was as executor of a will or as a beneficiary as well.

Mr X complained to the Council that it had let Ms B take over the property without a lease or payment plan in place. He said the business had been let go into disrepair. Mr X says he is now having to go to avoidable effort to remove the new occupier so he could sell the property.

The Council replied to Mr X acknowledging that he was seeking legal advice about the council’s failures.

It also explained that as Mr Y was paying the full cost of his care, (either as a full cost charge or because he was well over the capital threshold, one cannot tell) it had taken the best interests decision as his Deputy to allow the premises to continue to be let. This was so that rental income could contribute towards his care costs.

On Mr Y’s death, the Council reimbursed Mr X with the balance of Mr Y’s estate.

What was found

The LGO stated that the legality of Mr Z’s tenancy and its transfer to Ms B was for the courts to decide. However, the investigator found that the Council sought the correct legal advice in regards to the lease, and based on that advice it found that Mr Z did have a continued right and obligations as a tenant.

There was no fault in how the Council made its decision in principle to transfer the lease to Ms B; it made a best interest decision about the lease, having regard to relevant information, its understanding of Mr Y’s previous wishes, and of his financial circumstances. Although Mr X disagreed with the decision, there was no fault in how the Council made it, in terms of the Mental Capacity Act.

However, the Council was at fault for failing to regularly check the property and make appropriate repairs. As Mr Y’s deputy for property, the Council only went inside the business twice during the three-year period of its deputyship. Any reasonable person would have done so more regularly. It did not promptly arrange repairs, and did not visit the property when Mr Z left (to check on its condition).

The LGO highlighted that these were important actions that should have been taken in order to protect Mr Y’s interests. They were actions any responsible person would have taken about their property. The Council’s failure to take these actions was fault.

The LGO said that the Council could have considered using a property manager to undertake tasks the Council considered it was unable to do.

Remedies

The LGO recommended that the Council pay Mr X £500 in recognition of the distress, time and trouble caused by the fault.

Points for the public, service users, hospital leavers, family and peer supporters, advocates, and councils etc

One cannot possibly discharge the fiduciary duties of a deputy in such a casual fashion. One is appointed on the basis that is fit and proper to be given the role, and one makes declarations about one’s approach the person’s property. The Council would have been aware that Mr Y held a property which was on lease to another party. It would have known that the arrangements required the Council to ensure that the property was maintained and at the very least inspected.

We can’t understand why the council thought that a factor for the MCA balance sheet was the risk of loss of rental income if the lease was not transferred, because Mr Z would have continued to be liable – as appears to have been the conclusion of all.

Logically, what should have happened was that the lease should have been assigned, and one needs the permission of the freehold owner to do that in most cases, but it cannot ever be unreasonably refused. That would have left Mr Z with the responsibility of sorting the assignment out in order to be personally free of the ongoing rental obligation. We wonder whether this permission was not given by the Council because of ignorance, or because of having to pay out of Mr Y’s assets for legal advice, but that makes no sense because they could have got advice from the council itself regarding that business tenancy.

We cannot tell from the report whether the gentleman was a self funder paying care charges directly, or a council placed person on a full cost charge based on his capital assets, and incapacity, which assets would have been depleted by having to sort out legal advice about the assignment; but it may be that there was a perception on the part of the council that he really needed to be able to keep on paying his care charges, in order to save the council from so doing; we simply cannot tell from the report.

What we can point out is that the Office of the Public Guardian (2015) sets out responsibilities for Councils in its Deputy Standards. These can be accessed here:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/504368/SD6-Deputy-standards-public-authority-deputies.pdf

The Standards specifically recognise where a person may own a property they do not live in and at paragraph 1(d) advises Councils to ensure that the property is secured and maintained properly which would include keeping a record of regular inspection visits.

The Standards also refer officers to the need (at 3b (6)) to ‘Ensure that all decisions taken are free from any conflict of interest, be it personal or organisational.’

This Council clearly failed to follow this guidance and had to pay for the distress this caused Mr Y’s son. It needed to understand its role as more than just a decision-maker about finances, and recognise that if individuals own property then all the legal responsibilities sit with the Deputy including visits and maintenance. Councils often pay an outside agent for the actual day to day work involved in deputyship and appointeeship, so why this was not done we do not know. It may indicates a general dumbing down of local authority officers’ culture regarding these very important duties, in our view, which would be of grave concern.

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The full Local Government Ombudsman report of Durham County Council’s actions can be found here

https://www.lgo.org.uk/decisions/adult-care-services/other/19-008-136

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