Clarion Housing Association Limited (202016220)

REPORT

COMPLAINT 202016220

Clarion Housing Association Limited

5 September 2023

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

The complaint is about:
1. The landlord’s management of the service charge account for the property.
2. The landlord’s handling of the resident’s complaint.

Background and summary of events

The resident is the leaseholder of the property, a one bedroom first floor flat in a building managed by the landlord. She sublets the property to a tenant. For the purposes of this report, the leaseholder will be referred to as ‘the resident.’
In January 2021 the resident wrote to the landlord, to ask for clarifications on the direct debits on her rent account. Her six queries were regarding:
1. A discrepancy between the schedule of charges and the actual sums taken for the period.
2. An explanation of two £10 payments for ground rent, for the same period.
3. Why the administration fee is taken as a separate payment from the remainder of the service charge.
4. Why payments for some months were not listed on the account.
5. What the payment should have been for one of the missing months.
6. Which payments were the correct ones, as it appeared to her that there were two separate payment schedules.

The resident received no response, thus she chased the landlord in February 2021 then raised a formal complaint in March 2021. The grounds for the complaint were inadequate and conflicting account statements, and also on the lack of responses for her requests for information.

The stage one response from the landlord, dated 9 April 2021, addressed the six questions that the resident was seeking clarification on. Two of the questions required further investigation, which the landlord explained had been passed to the appropriate team. The letter then advised that stage one of the complaints process was complete and advised on next steps.
The resident felt that not all of the questions had been fully answered by the landlord, and sent a further letter on 12 April 2021, asking for more information. On 11 May 2021 the resident received a second stage one response letter. The landlord answered her six questions again but found no service failure relating to the accounts. It did find a service failure regarding the lack of responses to her complaint and initial queries. It apologised for the inconvenience and offered £100 in compensation. The landlord also sent an acknowledgement of the resident’s request to escalate the complaint to the second stage on the same day. However, it sent a third stage one response letter on 26 May 2021, with another new reference number.
Following contact by this Service for assistance the landlord issued a stage two response letter on 15 March 2022, which dealt with all of the individual complaint references. It provided detailed explanations for the resident’s six initial queries, including the further sub-questions that she had raised in her responses to the stage one letters. The landlord upheld the complaint about the complaint handling and gave an apology. It awarded £350 in compensation for this element of the complaint.
The resident remained dissatisfied and contacted the Service to escalate the complaint. She felt that the landlord’s answers to her questions, still did not provide detailed enough explanations.

Assessment and findings

Service charges queries for the property

The relevant guidance for residents regarding charges can be found online at https://www.myclarionhousing.com/my-home/payments-rents-and-charges/understanding-your-service-charges. In the guidance there is a separate link to a frequently asked questions (FAQs) document, and a video for residents which shows them how to check their account online. The FAQs booklet explains on page five, about why there is an administration fee for the service charge but does not explain that they are paid as separate transactions. The FAQs booklet also explains on page five, that where an account is in credit, a direct debit can be altered. There is no provision for cancelling the direct debit.
The resident’s complaint originated from the six questions that were raised in January 2021, which they feel were not fully answered. In referring her complaint this Service, the resident focussed on the lack of clarity and the time taken by the landlord to provide a response to her queries.
The resident’s first point related to a small difference in total service charge payments for the 2019-20 period. The landlord stated in its stage two response that one of the totals, covering six transactions, actually related to the 2020-21 period. While this explanation may seem reasonable, it was only after detailed explanation that this became clear. It would have been reasonable in this case for the landlord to inform the resident what charge was for each period.
The resident’s second point related to a direct debit, which she thought had been taken twice. The landlord’s explained that one of the amounts was a returned direct debit, and this amount was shown on the statement as a credit rather than a debit. While this was a fair explanation, it would have been reasonable for the landlord to notify the resident at the time the direct debit was returned, so that she knew the reason why. The landlord also explained that her direct debit was cancelled, due to her account being in a large amount of credit. However, its own guidance requires for the direct debit to be adjusted rather than cancelled. As such the landlord failed to follow its own guidance and its action caused frustration and confusion in the resident.
The resident’s third point concerned administration fees, and confusion over the amounts invoiced versus the amount on the rent statement. The landlord responded that one of the total amounts related to the 2019-20 service charges while the other amount related to the 2020-21 service charges. As with the resident’s first point raised, this may not have been obvious to the resident. She also expressed concern over the administration fee being taken separately from the remainder of the service charge. While the landlord’s explanation clarified the issues, it would have been reasonable for the landlord to do this at an earlier stage and make the resident aware in advance that these would be taken as separate transactions. This was not explained in the previous correspondence or as part of the service charge guidance. So, without the landlord’s explanation the resident would have not known that the payments were separate and would therefore have a reasonable expectation that the amount would be taken as one payment.
The resident’s fourth and fifth points related to payment schedules from the landlord that were missing various months’ payments. The landlord first acknowledged that this was an internal issue in the stage one responses from 9 April 2021 and 11 May 2021, and advised that it was reviewing the system. The stage one response from 25 May 2021 advised that this had been resolved. The landlord suggested that the resident monitors her account online, or contacts it for an explanation of any transactions on the account. This would seem an acceptable solution, however, while accounting systems were reviewed, it is noted that the reason that the resident complained in the first place, was partly due to the fact that she was unable to contact anyone for this information. Thus, she had to wait significantly longer than usual, to get the answers she desired. Additionally, this information was not available for a front-line contact but required someone with specific knowledge in accounts and service charges.
The resident’s final point also covered missing months’ payments and discrepancies between the payment amounts from month to month. The landlord explained that, where an adjustment was made on the account the direct debit was re-calculated. This was consistent with the landlord’s online guidance regarding re-calculating direct debits. The resident asked if notes could be added to the statements in future to provide an explanation, but the landlord said that this was not possible. It also pointed out that the resident could contact it for an explanation. Whilst it may not be possible to add notes to each entry on a statement, it would be reasonable for the landlord to explore options of how to notify the resident in advance of any adjustments, in order to prevent confusion.
Overall, the resident raised various issues over the information provided in the service charge account statements. This Service notes that rent or service charge accounts can often appear complex due to the nature of the way that the information should be presented. However, at the same time, residents need to be able to understand the information on their statements in order to stay on top of their accounts. This report has also noted the landlords delays in providing the requested information to the resident. The stage two response provided the level of depth that she was seeking, yet it took the landlord approximately 14 months to provide this, and only after significant effort by the resident.
While there was no suggestion that the landlord had made the statements intentionally difficult to read, it acknowledged that a review was needed, with the particular aim of resolving why some months were not showing on statements. This was a reasonable action in terms of rectifying the resident’s account and preventing future issues arising. However, a review alone did not address the confusion and frustration experienced by the resident, over the 14 months it took to get a full explanation.
One of the issues raised by the resident was the difficulty in obtaining information about the transactions she did not understand. The landlord’s stage two response said repeatedly that she could contact it for an explanation. However, her experience in this case was that it was not straightforward to do this. As the resident’s questions potentially required complex answers, she needed to be able to speak to someone in the income/accounts team, rather than a customer service representative who was not familiar with the account. Therefore, the landlord’s advice did not provide the resident with the resolution required.
To conclude, the cancellation of the resident’s direct debit without explanation, lack of information about the administration fee, missing months on statements, and the difficulty/time taken in getting information from the landlord, demonstrates a series of service failures. The lack of initial response from the landlord caused further frustration to the resident. Furthermore, the only service failure that the landlord explicitly admitted and addressed as an issue was the resident’s concern over the missing months on statements, and still did not provide a full resolution.
From the foregoing, this Service finds that the shortcomings in the landlord’s response to the resident’s queries on its management of her account were to a degree that the amount of £100 (for the delays and repeated failures to respond to her requests) which it offered in compensation could not adequately redress. Its insufficient offer may have been due to it not recognising the other failings in its actions, which have been detailed in the preceding paragraph. To put things right this Service has ordered the total sum of £250 in compensation for the landlord’s poor handling of the issue. This is in line with the Ombudsman’s remedies guidance for cases where there has been a failure which adversely affected the resident.

Handling of the resident’s complaint

The landlord has a two–stage complaint policy, which follows an initial attempt to resolve the query. If an issue cannot be resolved at the initial attempt stage, only then will the complaint be logged as a formal complaint. The formal stage is co-ordinated by the landlord’s customer solutions team. If the complaint cannot be resolved in 10 working days, the team should update the resident and provide a timescale for how long it will take to resolve the complaint.
The second stage of the procedure is the peer review stage. This is used when residents ask for a review or escalation of the initial complaint and should state what they do not agree with and the resolution they are seeking. This stage should be completed within 20 working days.
The landlord’s compensation policy, at clause 4.21, advises of compensation levels for different issues. Small service failures, which have some impact on the resident can lead to an award of £50 to £250. While the list is not exclusive, repeated failures to respond to residents is one of the examples given in this category. The next category of £250 to £700 is for cases where there has been significant failure, but there has been no permanent impact on the resident. Again, the list of examples is not exclusive, but does cover various aspects of poor complaint handling.
The resident raised her initial complaint on 15 March 2021. The response from the landlord was dated 9 April 2021, with10 working days’ delays of its complaints policy. There is no evidence of the resident receiving any kind of update, given that the landlord could not resolve the complaint within ten working days. Therefore, the landlord did not followed its own policy when responding to the resident’s complaint.
The stage one response letter dated 9 April 2021 attempt to answer the resident’s questions from their initial enquiry. While this was the information that the resident was seeking, this letter appeared to be more of a response to a request for information, as opposed to the decision on a complaint. While brief explanations were provided, there were no indications of what needed to be done to put things right for the resident. The letter did not give a clear outcome, of whether the resident’s complaint had been upheld or not but did advise on next steps in the complaint procedure.
The resident did not accept the explanations and contacted the landlord again on 12 April 2021. The resident did not explicitly ask for escalation, and only stated that they wished to continue with the complaint. However, given the depth of information that the resident was seeking and the fact that they did not agree with the initial response, it would have been appropriate for the landlord to escalate to a stage two complaint. Instead, the landlord provided another stage one response, with a separate complaint reference. The result of this was that the resident still did not have all of the answers she was seeking and was confused about why a new reference was assigned.
The second stage one response dated 11 May 2021 also attempted to answer the resident’s initial queries. This time it did provide a clear outcome. The landlord determined that there was no service failure regarding the account statements but did find a failing regarding the time it took to answer the resident’s query.
On the same date of the second stage one response, the landlord also responded to the resident’s letter dated 12 April 2021. It advised that her request to escalate to stage two had been received. At this point it appeared that two separate staff members were dealing with the issue but were not in clear communication. The resident responded to the second stage one response, commenting about the concurrent complaints covering the same issues.
On 26 May 2021, the landlord provided a third stage one response with another reference number. This was sent by the staff member that sent the first stage one response. On reviewing communications on file, evidence suggests that the stage two team felt that the first stage one response was lacking in depth and sent it back to stage one for a further response. This was not in line with the landlord’s complaints policy. It would have been appropriate for the landlord to investigate the complaint at stage two from the initial escalation on 12 April 2021. This further delayed the complaint process and deprived the resident of the opportunity of an earlier resolution.
The resident asked for assistance from this Service as she stated that the landlord’s handling of the matter was confusing. The landlord only provided its stage two decision after this Service got involved. Its stage two response of 15 March 2022 answered the resident’s questions and did acknowledge that there was an element to the complaint concerning lack of responses. It accepted its communication failures but did not provide a clear outcome for the resident’s concerns over account management. Its compensation offer for the communication errors, of £350, comprised £250 for failing to address all relevant aspects of the complaint, and significant failures to follow the complaint procedure, and £100 for the delay in providing the stage two response.
The fact that three stage one responses were sent, with different complaint references, was inappropriate and was not in line with the landlord’s policy. This caused confusion and frustration for the resident. The impact on the resident was that it took significantly longer to go through the complaint process, thus delaying the resident being able to escalate the complaint to this service. As the failures identified at stage two fall in the middle bracket of the landlord’s compensation policy, it would be reasonable to conclude that errors of this nature would constitute maladministration.
This Service has made an order for the total sum of £500 compensation as it more reasonably redresses the significant failings by the landlord in this case. This includes the £350 already offered by the landlord, if not already paid, plus an additional £150 for the time and trouble experienced by the resident, due to the way her complaint was handled. This is in line with the Ombudsman’s remedies guidance for cases where there has been a failure which adversely affected the resident.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s management of the service charge account for the property.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s complaint handling.

Orders

That within four weeks of the date of this determination, the landlord should:
1. Pay the resident total sum of £750 comprising of:
  1. £100 already offered to the resident at stage one of the complaint (if not already paid).
  2. £350 already offered to the resident at stage two of the complaint (if not already paid).
  3. An additional £150 in recognition of the distress and inconvenience caused to the resident by its failures in its management of her service charge account.
  4. An additional £150 in recognition of time and trouble caused to the resident by the landlord’s poor handling of her complaint.
  5. The compensation to be paid directly to the resident and not offset against rent or service charge account.
2. Carry out a review of how the missing entries on the resident’s account occurred and ensure that the account is corrected.
3. Provide the resident with a point of contact in your organisation, so that she can have any questions regarding her rent statement, answered quickly.
4. Provide the resident with a formal apology for the handling of their service charge account.

Recommendations

It is recommended that the landlord reviews the information provided to residents regarding service charges, so that they have a better understanding of entries on their accounts.
The Ombudsman has recently made a number of orders and recommendations in other investigations to this landlord about reviewing its complaint handling approach / repairs service / record keeping / etc. The Ombudsman has therefore not made further recommendations around these aspects of service in this report, but expects the landlord to take all relevant learning points from this case into account in its overall reviews of complaint handling and its repairs service.