Kingston upon Thames Council (202104408)

REPORT

COMPLAINT 202104408

Kingston upon Thames Council

10 March 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 decision to apply the resident’s reimbursement to her rent account, rather than making a direct payment to her.

Background and summary of events

Background

2. The resident is a secure tenant.
3. Following a review of water rates previously charged, the landlord undertook a process of reimbursing residents for any overpayments made. It explained that this was done in accordance with the Water Re-Sale Order 2001 / 2006, and in accordance with a court ruling on 29 November 2019.

Summary of events

4. On 28 January 2021, in response to a separate issue, the landlord wrote to the resident. Within this, it responded to the resident’s concerns about its decision to pay any reimbursements due into a tenant’s rent account before a refund could be requested. The landlord explained at this time that as the original water charges were deducted from rent accounts (via the tenants rent), it was required to create a credit back to those accounts. It also noted that a number of tenants were in arrears, and it was its standard policy not to offer a refund where other monies was owed.
5. This Service can see that on 12 April 2021 an amount of £30.75 was paid to the resident’s rent account. At this time, due to other charges, this brought the resident’s rent account to £4.09 in arrears.
6. On 13 April 2021, and again on the following day, the resident wrote to the landlord explaining that on receiving and reviewing her rent statement, she noted that the £30.75 water rate refund had not been credited to her bank account. She requested that the landlord do this as she did not pay the rent, but instead received full Housing Benefit which covered the cost.
7. On 20 April 2021 the landlord responded to the resident’s request. It explained that refunds were always paid into a tenants rent account initially and then a refund could be requested if their account was in credit by the appropriate amount (keeping in mind that the rent needed to be paid in advance too). As the resident did not have sufficient funds in credit, however, a refund could not be made to her bank account. The landlord explained to the resident that the Discretionary Housing Payment (DHP) that she had been receiving had stopped and she had not been paying the resulting shortfall between the weekly rent and the Housing Benefit entitlement. This meant that arrears were accruing on her account. 
8. The resident subsequently advised the landlord on 21 April 2021 that she wished to raise a stage one complaint about this. She re-asserted that this amount should have been paid into her bank account.
9. On 22 April 2021 the landlord wrote to the resident. It highlighted that it had already provided the resident with the reason why it had allocated the water rate refund to her rent account. It advised that it could arrange contact with the relevant team to discuss this issue further, nonetheless, if she wished to do so.
10. On 4 May 2021 the landlord provided the resident with a stage one response. It explained:
    1. All reimbursements made by its Housing department were to be made to a tenant’s rent account firstly, and then if there was sufficient credit, this could be refunded into the tenant’s bank account should they request it. This was the landlord’s standard process.
    2. The same process was followed with her earlier reimbursements, as demonstrated on her rent statement. This included a reimbursement by Thames Water Commission for £358.50 which was paid to her rent account and which she subsequently completed the online refund form for, so that payment could be made to her bank account in December 2020.
11. The landlord advised that on this basis, it would not be upholding the resident’s complaint. It noted, however, that it understood that the resident had made an appeal regarding the cancellation of her DHP, and advised that should this be successful, reinstated and backdated to clear the arrears, the refund request could be reconsidered.
12. On 5 May 2021 the resident advised the landlord that she wished to escalate her complaint to stage two of its complaints process. The landlord acknowledged the resident’s complaint and confirmed that it would do so on the same day.
13. On 11 May 2021 the landlord provided the resident with its final response. It stated:
    1. It had reviewed the stage one response and could confirm that the explanation provided was correct. It reiterated its process for reimbursements. 
    2. As the resident’s account was in arrears, it was inappropriate for it to process a refund which would leave the resident further indebted.
14. The landlord concluded that it subsequently would not uphold the resident’s complaint.

Assessment and findings

15. The Ombudsman has considered the landlord’s decision to refund the resident’s reimbursement amount to her rent account and in the Ombudsman’s view, this was fair.
16. The Ombudsman has been unable to identify any written policy which indicates that the landlord must make payment of any funds owed to a resident’s rent account. On consideration of the landlord’s Corporate Debt Policy, however, where credits are due to be made, it is highlighted that:

“The [landlord] will develop a corporate approach to refunding credits, in that wherever possible checks will be made for other outstanding debts owed by the customer, prior to a refund being made. Credits will be transferred to clear these debts before any refunds will be made”.

17. It was therefore reasonable that the landlord adopted a process of making payments to a resident’s rent account, before offering a direct refund to any bank accounts. This enabled it to consider and cover any outstanding debts owed prior to a refund being made.
18. It was also fair, as the landlord explained to the resident, that as originally water charges had been taken from her rent account, previously paid as part of her rent, the reimbursement needed to return to the said account in the first instance.
19. The Ombudsman can see that the landlord subsequently followed this process and that this resulted in a reduction in the resident’s arrears (following a further charge on the same day). As the resident’s rent account was still in arrears upon receiving her request for a refund on 13 April 2021 however, it would have been inappropriate for the landlord to have increased her debt by drawing further into this amount. It was therefore fair that the landlord explained to the resident that a refund could not be made on 20 April 2020. The Ombudsman can see that the landlord explained that it could not leave the resident further indebted in its final response.
20. The Ombudsman is satisfied that the landlord offered the resident a full explanation of the process its Housing department undertook and the reasons for this on a number of occasions and as early as January 2021, months before her complaint.
21. While the resident did not agree with its approach, the landlord also demonstrated examples in which it had historically employed this process and which the resident had followed. It highlighted that earlier reimbursements had been made to the resident’s rent account, which she subsequently completed a refund form for, to retrieve her funds. This process was therefore not alien to the resident and she was only unable to follow the same steps in this case as her account was in arrears.
22. What’s more, as the rent account arrears resulted from a shortfall created by the loss of the resident’s DHP benefit, it was reasonable that the landlord advised the resident that should this be rectified following her appeal, she could make another request to be refunded to her bank account. This was fair. In light of all of the above, the Ombudsman has been unable to see that there was any maladministration.

Determination (decision)

23. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was no maladministration in respect of the landlord’s decision to apply the resident’s reimbursement to her rent account, rather than making a direct payment to her.

Reasons

24. The above determination has been concluded as in the Ombudsman’s view, the landlord acted appropriately and adopted a process which was in line with the requirements of its Corporate Debt policy. The Ombudsman is satisfied that the landlord’s decision was fair and also accepts that it offered the resident a clear explanation of why it had adopted this approach. Although this Service appreciates that the resident’s inability to subsequently retrieve a refund would have been disappointing, this did not amount to a failure in service.