Manchester City Council let a property with damp rooms and a rotten floor to a family with young children, the Housing Ombudsman has found.
The ombudsman found three cases of severe maladministration.
It said the council had failed to consider whether the property was fit for habitation and to investigate the underlying cause of the damp and mould before letting it.
When the council did investigate problems, the family was not offered other accommodation and had to stay with relatives in an overcrowded home.
Delays to repairs left the tenant to carry out works herself at the cost of thousands of pounds, which the council did not offer to reimburse.
The ombudsman ordered the council to apologise, pay £5,000 for distress and inconvenience caused and reimburse the tenant for the cost of repairs.
Housing ombudsman Richard Blakeway said: ‘The combined failings led to a young family being left essentially homeless due to an unhabitable home.’
Manchester City Council said: ‘Our actions in managing this home on behalf of our tenant did not match the high standards we expect of our housing service.’
The local authority added: ‘In 2021, the council approved the decision to bring Northwards Housing back in-house, which in large part was to improve standards and management of council-owned social housing.
‘We are already seeing tangible improvements under the guidance of a new leadership team, and we strive to avoid future failings of the kind the resident has experienced.’
