Clarion Housing Association Limited (202117113)

REPORT

COMPLAINT 202117113

Clarion Housing Association Limited

10 August 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:
   1. Request for a refund of the service charges and details of the costs.
   2. The landlord’s management of the resident’s rent account.
2. The Ombudsman has also considered the landlord’s complaint handling and compensation offered.

Background

3. The resident had been a leaseholder from 18 September 2016 up until 2021, when she sold the property.
4. The resident was decanted from the property between 21 April 2019 and 10 September 2020 due to a fire.
5. On 20 November 2020, the resident complained that the landlord had not refunded the service charge costs that she paid during her decant, as promised, and that she did not understand why she was in rent arrears.
6. In its stage one response, the landlord explained that only a refund of services not used had been issued and that it had reinstated the resident’s rent account. It advised, however, that in recognition of the time taken to resolve the complaint,  the failure to respond to emails and telephone calls, and the inconvenience, an award of £150 would be made.
7. A further offer of £50 compensation was made at stage two on 9 April 2021 in recognition of a further delay in responding to the complaint.  At this time, the landlord explained that in the absence of details on what was agreed, it would provide the resident with a full refund of the service charges with the exception of the monies paid to the sinking fund. This was as this was a contribution to the fund, unlike the other charges.
8. Regarding rent arrears, the landlord explained that payments were due to be made when the resident moved back into the property in September 2020, however the rent account was not set up until December 2020. The outstanding payments subsequently created arrears.
9. The resident remains dissatisfied with the landlord’s overall handling of the complaint and level of compensation offered. She has highlighted that the arrears was not her fault, but rather a result of the landlord’s failure to bill her.

Assessment and findings

Scope

10. After exhausting the landlord’s complaints process, the resident wrote to the landlord commenting on her experience of the fire and decant back in 2019. She advised that she did not hear the alarm, she waited on the street for a significant amount of time, and was not kept informed of the decant situation by the landlord. The resident stated that her neighbour received over £500 compensation in respect of the issues they experienced and compared this to her own offer. 
11. As these issues did not form part of the resident’s original complaint, however, the landlord would not have had the opportunity to respond to these (newly raised) concerns under its complaints process. It would therefore be unreasonable for this Service to comment on the landlord’s response to these issues, and as such this has not been done within this investigation. As paragraph 39 (a) of the Scheme explains, the Ombudsman will not investigate complaints which are brought to this Service prior to having exhausted a member’s complaints procedure. Therefore, if the landlord took the decision to deal with this matter as a new complaint, the resident will need to exhaust the process before it can be considered by this Service.

Service charges

12. Following the resident’s decant from the property on 21 April 2019 due to a fire, she continued to pay service charges.  The resident has said that the landlord advised her to do this, stating that she would be refunded for the monies paid for service charges on her return to the property.  The resident has also said that having returned to the property on 10 September 2020, she chased the landlord on numerous occasions about the said refund but nobody could help her.  Evidence of emails or calls from the resident to the landlord about this have not been provided. The landlord accepted, nonetheless, that it had failed to respond to contact from the resident in its stage one response and offered £50 in recognition of this. This was reasonable.
13. Due to inadequate record keeping, the landlord was unable to establish whether there had been a prior agreement with regards to the resident’s service charges. As the member of staff involved had also left the organisation, the landlord was unable to verify the resident’s assertion that a full refund had been agreed.
14. In light of the lack of evidence, the landlord took the decision to refund the resident in full – with the exception of the monies paid to the sinking fund. This was reasonable. In the Ombudsman’s view, it was unfair that the landlord continued to charge the resident for services she was clearly unable to access during this period, therefore it was appropriate that it used its discretion to offer a refund. As the resident was also returning to the property, it was reasonable that she continued to contribute towards the sinking fund, which the landlord explained was reserved for any future major works.
15. The resident expressed dissatisfaction with the information provided by the landlord, particularly the lack of detail about the services and costs she had been billed for. Before its decision to refund the service charges in full, the landlord had explained in its stage one response that a refund would have only been due for services not used while away, including communal cleaning, electricity, water and window cleaning, but did not set out what she had been charged for.  The Ombudsman appreciates that this would not have been completely helpful and would have resulted in some frustration. 
16. While the landlord stated that the service charges payable had been explained in a letter to the resident dated 25 September 2020, and details of a credit of £330.87 for a partial service charge refund, this Service was not provided with a copy of this letter. The Ombudsman is therefore unable to confirm that the relevant information was shared with the resident, as the landlord has suggested.  
17. In its stage two response to the complaint, nonetheless, the landlord explained that the resident would see a credit made of £630.01 which was a full service charge refund. It explained that there would be a further credit when the actual service charges were worked out for the year 1 April 2020 until 31 March 2021. It was also explained to the resident that she would become liable for the service charges from September 2020, from the point she returned to the property. This was reasonable.
18. Noting that there was also some inconvenience caused to the resident to chase the matter, the landlord offered a compensation payment of £50 for this issue too, bringing it to a total of £100 (excluding the amount offered for complaint handling). This was fair to reflect its omissions at this time.
19. The Ombudsman has therefore concluded that there was no maladministration with regards to the landlord’s handling of this element of the resident’s complaint. While there was some difficulty in its communication and record keeping, the landlord acted reasonably in agreeing to refund the full service charge amount (with the exception of the sinking fund) and took reasonable steps to put things right. The landlord also advised the resident on how it planned to prevent future recurrence of similar issues. In this way, it was able to model this Service’s dispute resolution principles – to be fair, put things right, and learn from outcomes.
20. The resident has stated that she remains unclear as to the service charges she paid over the entire course of her decant and any reimbursements made. The landlord did advised, nevertheless, that it would provide her with a copy of the actual charges which would cover the relevant periods. 

Rent

21. Upon returning to the property on 10 September 2020, the resident became liable for the rent payments. She has said that she instructed the landlord to begin taking the rent payments, however it appears that the landlord had not set up the rent account until December 2020. It subsequently did not charge the resident, and there is no evidence that the resident was advised on an alternative means of paying her rent.
22. In any event, the landlord was within its right to attempt to reclaim the amount that had not been paid. While this Service recognises that the absence of payment, and therefore the arrears, was the result of the landlord’s administrative delay, the resident was still obligated to make rent payments during the time in which the property was occupied. It was not unreasonable that the landlord subsequently applied the outstanding amount to the resident’s rent account, which ultimately placed her in arrears.
23. It is understandable that this caused the resident some distress and frustration. While this was an amount that the landlord was owed, it would have been reasonable for it to have communicated its difficulty setting up the rent account and its intention to recoup the rent (from the period she re-commenced occupancy). This would have enabled the resident to understand the reason for the arrears. This also would have given the resident the opportunity to discuss making payment via an alternative method, or to save the amount until such time that the rent account had been set up.
24. While this communication would have been helpful for the resident, the Ombudsman has not concluded that there was a service failure. The landlord was still entitled to reclaim this amount and it was reasonable that it offered the resident a payment plan to enable her to repay the rent in instalments (over six months), given that she now owed a considerable amount.

Complaint handling and compensation

25. The landlord acknowledged in its responses to the complaint at both stages one and two of the complaints process, that these responses took too long and were delayed.  The landlord’s complaints policy states that the landlord will aim to respond to a complaint at both stages one and two, within 20 working days, which it did not do. It was appropriate that the landlord recognised this, apologising and explaining the delay, as well as offering compensation in accordance with its compensation policy; specifically, £50 on each occasion of delay.
26. This Service notes that in the resident’s later correspondence, she expressed dissatisfaction that the landlord’s original offer of £150 (in total) at stage one, had been “reduced” to £50 at stage two. This caused further dissatisfaction with what she understood the landlord’s remedy to be. It appears, however, that there may have been some misunderstanding here as the landlord’s offer of compensation at stage two was not a replacement, but rather, in addition to its original offer.
27. This Service can see that in the landlord’s stage one letter, it asked the resident to let it know if she accepted the compensation amount, following which, it would make payment. It does not appear that the resident did this, however, and as such the compensation amount was never credited – though it would have been reasonable for the landlord to have reminded the resident of this outstanding amount within its final response.
28. The landlord did explain that the offer of £50 at stage two was in recognition of its delay in offering the complaint response. The absence of further clarity on the outstanding amount to be claimed, however, clearly resulted in frustration and ambiguity for the resident. A recommendation has subsequently been made below for the landlord to improve its future practice.
29. With regards to the level of compensation though, in the Ombudsman’s view, the landlord’s offer of £50 at each complaint handling stage was proportionate. This Service has subsequently concluded that while there was a service failure, the landlord made an offer of redress which resolved the complaint.

Determination

30. In accordance with paragraph 55(b) of the Scheme, with regards to the landlord’s handling of the resident’s request for a refund of the service charges, and details of the costs, the landlord made an offer of redress to the complainant which, in the Ombudsman’s opinion, resolves the complaint satisfactorily. 
31. In accordance with paragraph 54 of the Scheme, there was no maladministration with regards to the landlord’s management of the resident’s rent account.
32. In accordance with paragraph 55(b) of the Scheme, with regards to the landlord’s handling of the resident’s complaints, the landlord made an offer of redress to the complainant which, in the Ombudsman’s opinion, resolves the complaint satisfactorily. 

Recommendations

33. If the landlord has not done so already, it should write to the resident providing a clear breakdown of all monies paid by her during her period of decant towards service charges. The landlord should also provide evidence of the refunded amount which was credited to her account. 
34. If the landlord has not done so already, it should pay the resident the £200 compensation offered at stages one and two of its complaints process. The landlord should also reflect on its communication to ensure that in future cases, it is clear to the resident by the time of the final response, what the full compensation award will be.