Lambeth Council (202210645)

REPORT

COMPLAINT 202210645

Lambeth Council

8 June 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

1. The complaint is about the landlord’s handling of the resident’s queries regarding her rent account and her request for a refund.
2. This Service has also considered the landlord’s complaint handling.

Background

1. The resident is a secure tenant of the landlord. The resident’s property is managed by a tenancy management organisation (TMO) on behalf of the landlord. The landlord is ultimately responsible for the actions of the TMO, and the resident retains the same rights as if the property was managed by the landlord.

2. The resident was paid £1080.70 compensation on 8 April 2021 due to a Thames Water reimbursement, and on 3 June 2021 she requested a £500 refund as her rent account was in credit. The TMO initially advised the refund had been processed, but later stated it had been rejected as the Thames Water reimbursement had been incorrectly applied twice, so her account was not in “true credit”. On 13 July 2021, the resident queried why £1223.91 had been taken from her account with no explanation.
3. The resident raised a complaint on 9 September 2021 as she had not received the rent refund or an explanation regarding the £1223.91 charge.
4. In the landlord’s final response, it said that it had rejected the resident’s refund request, as both the TMO and the landlord had processed the Thames Water reimbursement, so the payment was incorrectly added to her rent account twice. It apologised for the miscommunication and said she was still entitled to a refund.
5. In the resident’s complaint to this Service, she said she remained dissatisfied, as she had not received an explanation regarding the £1223.91 charge. She also said the landlord’s communication was poor and she spent significant time and effort pursuing the issue.

Assessment and findings

6. The landlord’s website outlines that refunds for the overpayment of Thames Water charges would be automatically applied to residents’ rent accounts and it could refund residents if there was credit on their account. The landlord has provided evidence that the resident was due a £1080.07 Thames Water reimbursement. The landlord was therefore obliged to ensure the refund was correctly processed, and it would be expected to accurately respond to any queries regarding the resident’s rent account.
7. The resident’s Thames Water refund was processed on 8 April 2021 and the resident requested the refund on 3 June 2021, at which time she had sufficient credit to be eligible for the refund. There were subsequently numerous transactions on her rent account including an additional Thames Water refund of £1024.11, a “journal transfer” charge of £1223.91 and the £500 refund was added to her account despite not being paid to her (thus reducing the balance). As a result, the resident’s rent account was left with insufficient credit to process the refund. Although the erroneous charges on the rent account would not necessarily constitute a failing, the landlord would be expected to promptly rectify any identified issues to prevent causing a detrimental impact on the resident.
8. The second Thames Water refund was reversed on 28 June 2021, which was within a reasonable timeframe. The landlord acknowledged that it should have communicated better with the TMO to avoid the duplication. However, there is no evidence that the landlord has taken steps of learning to improve its communication and prevent a recurrence of a similar issue.
9. The resident queried on several occasions what the £1223.91 journal transfer charge on 24 June 2021 was for. The payment was credited back to the resident’s rent account on 29 June 2021, so it did not have a prolonged net impact on the account balance. It was appropriate that the TMO promptly responded to the resident’s concerns and provided evidence to show the charge had been reimbursed.
10. The resident raised concerns to this Service that the landlord had not provided a sufficient explanation regarding the journal transfer charge. The TMO advised the resident on 10 August 2021, that the charge was to pay “other debt with the council”. The resident informed this Service she was subsequently advised the charge was for council tax, but she stated such payments are not made through her rent account. The landlord failed to provide a reasonable explanation regarding the charge, which caused distress and confusion to the resident, particularly as the charge was a significant amount. The landlord should therefore review the payment and provide a clear explanation regarding the reason for the charge or acknowledge if it was an error.
11. The resident’s rent statement shows that the incorrect credits and charges were rectified on 26 July 2021 and the account had £703.88 credit. The landlord should have recognised its errors in handling her rent account and confirmed the resident had sufficient credit for it to process the refund at this stage, but it maintained that it was unable to for several months. The resident requested the rent refund on numerous occasions between June 2021 and February 2022, causing her additional time and trouble. The landlord paid the resident’s refund on 6 May 2022, 11 months after she had initially requested it, which was an unreasonable delay and constitutes a service failure.
12. The resident paid £400 to her rent account on 8 April 2021, which she stated was on the instruction of the landlord. She advised the landlord that she borrowed the money to make the payment, hence why she had requested a refund once her account was in credit. The landlord’s failure to properly consider the merits of her refund request, meant the resident experienced prolonged financial implications. There is no evidence that the landlord acknowledged her concerns or apologised for the impact caused.
13. The landlord demonstrated poor communication throughout its handling of the issue. It failed to address the resident’s concerns in full or provide clear or accurate responses to her queries. It incorrectly advised the resident on numerous occasions that the refund had been processed, thus failing to appropriately manage her expectations. Furthermore, the resident advised this Service that the TMO had arranged meetings on three occasions, but it failed to attend without notifying her.
14. As the landlord failed to reasonably consider the resident’s refund request, there was a significant delay in granting the refund, which caused the resident significant time, effort, and distress in pursuing the issue, in addition to the outlined financial implications. The landlord failed to take accountability for its actions when it identified the mistake or offer any redress to the resident, so compensation is warranted. In line with this Service’s remedies guidance (published on our website), compensation of £250 is appropriate in this case as the landlord “has failed to acknowledge its failings and/or has made no attempt to put things right”.

Complaint handling

15. In accordance with the landlord’s complaint handling policy, it has a two-stage process and both responses should be issued within 20 working days. The TMO’s website states that it will issue stage one responses (it does not provide a timeframe) and it will refer complaint escalations to the landlord, which will be responded to within 25 working days. The landlord should ensure that both complaint policies are in line with this Service’s complaint handling code, which states that stage one complaints should be responded to within ten working days and stage two complaints within 20 working days.
16. The resident raised her complaint on 9 September 2021; however, there is no evidence that she received a stage one response. This was not in line with either complaint handling policy. The landlord then issued its final response on 25 March 2022, six months after the complaint was raised, which was a significant delay. The delays in responding to the complaint meant that there was a missed opportunity for the landlord to identify its failures in its handling of the resident’s rent refund request at an earlier date, which caused a prolonged impact on her.
17. As the landlord failed to follow a two-stage complaint process, the resident did not have the opportunity to respond to the landlord’s position or raise additional concerns. In this case, only issuing one complaint response meant that several aspects of the complaint were overlooked including the resident’s concerns regarding the £400 payment and the £1223.91 charge to her account. The landlord’s omission meant that the complaint was not addressed in full during the complaints process, which ultimately meant the resident had to pursue her complaint with this Service.
18. As a result of the failures to respond in line with the complaint response timeframes, follow a two-stage complaint process and address the complaint in full, there was maladministration by the landlord in its handling of the complaint. An order has been made below for the landlord to pay compensation.

Determination

19. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in the way it handled the resident’s queries regarding her rent account and her request for a refund.
20. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in the way it handled the complaint.

Orders and recommendations

Orders

21. The landlord is ordered to pay the resident:
    1. £250 due to its failures in handling the resident’s queries regarding her rent account and her request for a refund.
    2. £150 due to its complaint handling failures.
22. The landlord should investigate the £1223.91 journal charge and provide a clear explanation to the resident regarding why it was added to her rent account.
23. The landlord should provide this Service with evidence that it has complied with the orders within four weeks of the date of this report.

Recommendations

24. The landlord should review both its own and the TMO’s complaint handling policies to ensure they align with this Service’s complaint handling code.
25. The landlord should assess whether further staff training is required to improve communication with the TMO.