Ashfield District Council (202203316)

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REPORT

COMPLAINT 202203316

Ashfield District Council

18 November 2022

 

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

  1. The complaint is about the landlord’s handling of the resident’s rent arrears.

Background

  1. The resident is a former secured tenant of the landlord. The landlord is a local authority. The tenancy started on 16 July 2020. The property is a bungalow. The landlord was aware of a number of the resident’s vulnerabilities when she moved into the property, which included physical and mental health conditions, and a history of self-harming.
  2. On 3 December 2020, the resident moved out of the property, without leaving a forwarding address and sent the landlord a letter with the keys included. The resident was in receipt of housing benefit but this ended on 3 December as she was no longer residing at the property. The resident’s tenancy agreement included a term requiring four weeks’ notice if terminating the tenancy. As a result, the landlord considered there to be arrears of £168.30.
  3. In January 2021, the resident explained to the landlord that due to certain circumstances, she had had to leave the property. She advised she had police incident numbers in relation to these circumstances. She also advised that she had been informed that she would not be liable for any further rent, however, it is unclear who informed her of this.
  4. Following this advice, the landlord emailed the resident asking for more information about the situation. As the resident did not respond to that email or a further email in March 2021, the landlord sent an arrears letter to the resident’s new address. On receipt of the letter the resident called the landlord and the landlord terminated the call as it considered the resident was “screaming and shouting.” The resident thought the issue had been resolved and the landlord did not contact the resident again until almost a year later, on 1 March 2022 when it sent a second rent arrears letter, requesting payment within seven days.
  5. The resident raised a formal complaint on 9 March 2022. She clarified that she had to leave the property due to domestic violence and she had subsequently received support from Shelter, an adult social worker, and the “council here.” She noted she had spoken to the landlord about the arrears several times and believed the matter had been resolved. She advised she was still struggling with her mental and physical health and felt it was unfair to “hound” someone with mental health difficulties. She felt she had been treated unfairly and would only get a fair hearing in court.
  6. In its formal complaint responses the landlord advised that while it appreciated the reason she had to leave the property would have been distressing and that further contact about the tenancy may have also had an impact on her, it disputed the allegation that she had been unfairly treated or hounded. It advised that the contact it had made had been in line with its processes and procedures. It also advised that tenants were expected to comply with the tenancy agreement and “where tenants end their tenancy and there are outstanding debts, we have to recover this.” It offered the option of paying the arrears by instalments.
  7. The resident subsequently advised the landlord that “the whole thing” was affecting her mental and physical health and that she had been forced to move out of the property and move miles away from friends and family, due to receiving death threats, and had moved to supported accommodation. She also advised that as she was on benefits she could not afford to pay. The landlord responded by reiterating its position and sending a copy of its stage two complaint response.
  8. The resident contacted this service as she thought it was unfair of the landlord to ask for payment of the arrears, and its actions were impacting on her health. She also said that there had been a delay in the landlord escalating her complaint.

Assessment and findings

Scope of investigation

  1. The resident has referenced how the landlord’s actions in pursuing the collection of the arrears has impacted her health. The Ombudsman does not dispute that the resident has been affected by the circumstances of the complaint. The Ombudsman is unable, however, to draw conclusions on the causation of, or liability for, impacts on health and wellbeing. This would be more appropriately dealt with as a personal injury claim through the courts or the landlord’s liability insurer. Consideration has nevertheless been given to the distress and inconvenience the resident experienced as a result of any errors by the landlord as well as the landlord’s response to the resident’s concerns about her health.

Relevant policies and procedures

  1. The resident’s tenancy agreement states “you must provide us with four weeks’ notice, in writing, in order to end your tenancy. You will be liable for payment of rent during this period.”
  2. The landlord’s Rent Arrears and Income Recovery procedure includes the following:

a.     That “a notice to terminate must start on the first Monday on or after receipt of notice. The tenancy will end 28 days thereafter.”

b.     That the landlord will “attempt to trace ‘live’ debtors if they have left their home without leaving a forwarding address, in order that recovery procedures can be followed.”

c.      That the landlord will “use all sources of information held on the Council’s records, for example contacting Next of Kin,” and “will contact former tenants with outstanding rent arrears by letter, telephone, email, or texts.”

d.     That the landlord will review all former tenants’ accounts on a regular basis (monthly as a minimum) to ensure that the case is at the most appropriate recovery stage and to ensure timely action.

e.     That “where repeated attempts have been made to recover the outstanding rent arrears from a former tenant, and they have persistently failed to pay after repeated contact, the debt may be considered as unrecoverable.” In such circumstances it may refer to its Irrecoverable Debts and Write Off procedure for further information.

  1. The landlord’s Rent Arrears and Income Recovery procedure includes a section devoted to its provision for vulnerable customers, which includes the following details:
    1. “…when initial contact with the tenant is made regarding rent arrears, Officers should aim to establish vulnerability and any additional support needs and agree the best method of contact that suits both parties. Consideration should be made on whether the tenant’s circumstances is impacting or could impact on rent arrears or any other breaches.”
    2. “The [landlord] will ensure that the needs of vulnerable tenants are taken into account when taking action to recover rent arrears. This includes liaising with appropriate external agencies and family to provide support with vulnerable residents’ financial affairs.”
    3. “Throughout the rent arrears recovery processes, Officers within the Rents Team should regularly review the needs of tenants’ to ensure that no additional support needs are evident.”
  2. The landlord’s Irrecoverable Debts and Write Off procedure includes the following:
  1. That the landlord will “ensure that all reasonable efforts to recover the debt (as laid down in rent recovery procedures) have been exhausted before writing-off the debt is considered”.
  2. That “it is recognised that substantial resources can be used in attempting to recover bad debts:
    1. where recovery may be uneconomical to pursue;
    2. where the debts are considered to be irrecoverable;
    3. where the cost of recovery exceeds the value.
  1. In these circumstances the Council consider it as good business practice to write off these debts regularly and promptly.”
  2. The write off categories in the Irrecoverable Debts and Write Off procedure include:
    1. “Uneconomical to recover – These types of debt may be unreasonable to collect as the administration cost of recovery is disproportionate to the level of debt. Examples include…The costs of collecting the debt exceeds the likely cost of collection…Debts where investing in a significant capital outlay where there is a low likelihood of a return e.g. an application for a County Court Judgment (CCJ) where we are unable to secure evidence that the debtor has any assets if a CCJ was obtained.”
    2. “Recovery is inappropriate – Examples may include debtors who are deemed to be vulnerable. A full explanation of the recommendation will be provided to the Service Manager – Housing Management & Tenancy Services and Director of Housing & Assets (Deputy CEO), who will then decide on the case.”

The landlord’s handling of the resident’s arrears

  1. As noted above, the resident’s tenancy agreement states that the resident must provide four weeks’ notice when ending the tenancy, and that rent is still payable for the notice period. The tenancy agreement also states that rent is calculated weekly from Monday of each week. It was therefore reasonable for the landlord to consider that rent was payable for the four week period beginning on 7 December 2020 and ending on 3 January 2021.
  2. Given that it was reasonable for the landlord to consider there to be outstanding rent based on the terms of the tenancy agreement, it was also reasonable for the landlord to seek payment of the outstanding rent, which it did through its collections department. The actions the landlord took to write to the resident’s next of kin, trace her forwarding address, and contact her via telephone, email, and letter were all appropriate and in line with its Rent Arrears and Income Recovery Procedure.
  3. On 12 January 2021 the resident advised the landlord during a phone call that she had “had to leave” the property and that she had police incident numbers and had been told she would not be liable to pay any further rent.  As the resident became distressed during the call, the landlord took appropriate steps to contact the resident that day via email to ask for further information about the situation (including police incident numbers). As the resident did not respond to this email, or a further email on 1 March 2022, it was reasonable and in line with its procedure for the landlord to contact her via post on 17 March 2021.
  4. It is not clear whether the resident had explained at this stage that the police incident numbers related to domestic violence. However, the landlord has confirmed to this service that the resident had advised it about several vulnerabilities when she moved into the property. These vulnerabilities included physical and mental health conditions, as well as a history of self-harming. Further, the landlord was aware that the resident was in receipt of means tested benefits.
  5. As the resident’s vulnerabilities did not end at the point her tenancy ended and the landlord was aware that the resident was in receipt of means tested benefits, it would have been appropriate for the landlord to have considered the resident as vulnerable, and acted in line with its Rent Arrears and Income Recovery and Irrecoverable Debt procedures by ensuring that it had considered her needs as a vulnerable person, considered whether her circumstances were impacting on her rent arrears, and regularly reviewed her needs throughout the arrears process to ensure that no additional support needs were evident., as well as undertaking an assessment as to whether in light of the resident’s vulnerabilities and/or individual circumstances, the debt they owed was likely recoverable. However, there is no evidence that the landlord did any of those things.
  6. Though it appears to be more aimed at current tenants rather than former tenants, the Rent Arrears and Income Recovery procedure states that “where a customer has been identified as vulnerable, and has rent arrears” it will “ensure that a referral is made to the MMA ([money management advisor]),” or where appropriate to external support providers, and will “maintain regular liaison with the MMA or external support workers throughout the rent rears recovery process.” Even if it was unable to refer the resident to its MMA, it would have been appropriate for the landlord to have asked the resident whether she had any support from external agencies and considered signposting her to appropriate agencies if she had not. However, there is no evidence of it having done so, either at this point, or in response to her call on 22 March 2021, which it said was terminated due to her “screaming and shouting.”.
  7. Because it is not clear from reading the landlord’s Rent Arrears and Recovery procedure whether the above applies exclusively to current tenants, this investigation will not make a finding based upon the landlord’s failure to have regard for the above section. However, it is the Ombudsman’s position that as a general principle, it is good practice for landlords to consider the vulnerabilities of former residents in the event it needs to correspond with them regarding outstanding matters that are related to the previously held tenancy. However, it is recommended that the landlord considers stating within the document (possibly within the Document Scope section) that ss.1-27 and ss.29-31 are intended to be applied to current tenants only. This is especially relevant as section (s.28) relates to former tenants specifically.
  8. Following it terminating the call on 22 March 2021, it would have been appropriate for the landlord to have contacted the resident either by post or email to clarify what its next steps were going to be regarding the arrears. This would have helped to appropriately manage the resident’s expectations. However, the landlord failed to do so. It also failed to contact the resident for almost a year, despite its Rent Arrears and Income Recovery procedure stating that it will review all former tenants’ accounts on a regular basis (monthly as a minimum) to ensure that the case is at the most appropriate recovery stage and timely action. As the resident believed that the issue had been resolved, when she received a second arrears notice on 1 March 2022, she requested that the landlord call her to discuss this. However, in the summary of events that the landlord provided to this service there is no record of the resident being called back, so it is not clear if any call-back took place. This would have left the resident distressed.
  9. Once the resident raised her complaint on 9 March 2022, she confirmed that the reason she had moved out was due to domestic violence and that the police had documented this, and that she had received help from Shelter, the local authority, and an adult social worker. She also confirmed that she was still suffering from physical and mental health issues and that she felt the council was “hounding” her and treating her unfairly despite knowing of the upheaval she had been through and of her mental health conditions. The council has also confirmed to this service that it was aware that the resident was in receipt of full housing benefit and a disability related benefit when she moved into the property, and that the reason the housing benefit was stopped was because she was no longer residing at the property during the notice period.
  10. The landlord’s Irrecoverable Debt and Write Off procedure allows it to consider writing off debts for a number of reasons, including where recovery action is inappropriate, examples of which it says includes “debtors who are deemed to be vulnerable,” and where the debt is “uneconomical to recover,” examples of which include “debts where investing in a significant capital outlay where there is a low likelihood of a return e.g. an application for a County Court Judgment (CCJ) where we are unable to secure evidence that the debtor has any assets if a CCJ was obtained.”  It also states that all requests for write-off must be submitted in the approved form.
  11. The Ombudsman cannot conclude that the landlord should have written off the resident’s rent arrears based on her individual circumstances and/or vulnerabilities. However, the landlord’s policies require it to have considered whether the debt was recoverable and conduct an assessment of the former resident’s individual circumstances as described within its Irrecoverable Debt and Write Off procedure to decide this. The landlord failed to do this. Additionally, the landlord failed to follow up the terminated telephone call in March 2021 to explain to the resident what the next steps would be in the arrears recovery process, leaving her unclear about its position for a significant period, contrary to its policies. These breaches of its policies amounted to service failure in the circumstances. Given the impact on the resident, an amount of £200 is appropriate to reflect the distress and inconvenience caused to her.
  12. The Ombudsman has noted that the resident raised concerns that there was delay in the landlord escalating her complaint. However, based on the evidence provided to this service, the landlord’s complaint responses were issued in line with the Ombudsman’s guidelines of 10 working days for its stage one complaint response and 20 working days for its stage two response, and there was no evidence of any previous complaints being raised and not actioned.
  13. An order has also been made for the landlord to review this case, with consideration given to its policies regarding vulnerable tenants.
  14. As well as the recommendation to amend its Rent Arrears and Recovery procedure so that it is clear who each section applies to; given that the references to vulnerable residents in the landlord’s Rent Arears and Income Recovery procedure are targeted at current tenants rather than former tenants, a recommendation has also been made that the landlord review this procedure to consider adding details of what steps it will take to ensure that that the needs of vulnerable former tenants are considered.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its handling of the resident’s rent arrears.

Orders and recommendations

Orders

  1. Within four weeks of the date of this decision the landlord is ordered to pay the resident £200 compensation for its maladministration in respect of its handling of the resident’s rent arrears.
  2. Within four weeks of the date of this decision the landlord to complete a review of the case and to report the outcome of its review to this service and to the resident.

Recommendations

  1. The landlord is recommended to consider:
    1. Reviewing its Rent Arrears and Recovery procedure to add more detail of what steps it will take to ensure that the needs of vulnerable former tenants are considered, during its former tenant arrears recovery process.
    2. Stating within its Rent Arrears and Recovery procedure (possibly within the Document Scope section) that ss.1-27 and ss.29-31 are intended to be applied to current tenants only.