London & Quadrant H T
23 December 2020
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 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 is about:
- The landlord’s administration of the resident’s rent account
- The landlord’s complaint handling
Background and summary of events
- The resident is an assured tenant of the landlord.
Policies and Procedures
- Point 1.6.2 of the resident’s Tenancy Agreement stipulates that: “the rent is due in advance on the first day of each month by Direct Debit.” Point 1.6.3 states that: “Failure to comply with rent payments may result in legal action and the early termination of the Agreement.”
- The landlord has a two-stage complaints procedure, as stated in its Complaints Policy. At stage one of the complaints procedure, the landlord states that it will: “write within ten working days after we receive a complaint to explain the outcome of our investigation, how we will resolve the complaint and the timescales. If we can’t, we’ll explain why and write again within a further ten working days.” At stage two of the complaints procedure, its states that it will: “make contact within two working days to give complainants the opportunity to explain their side of things. We will write with the outcome and next steps within 20 working days of the request to escalate. If we can’t, we’ll explain why and write again within a further ten working days.”
- The landlord’s Compensation Policy states that the landlord will make a payment of £10.00 for failure to respond to a formal complaint within the timescales published in its Complaints Policy. Moreover, it says it may also offer discretionary payments to residents who have suffered undue distress and upset because of its failure to respond to complaints within specified timescales or done so inadequately.
Summary of Events
- On 23 December 2019 the resident contacted the landlord to ask why he kept receiving threatening letters regarding arrears on his rent account when he had set up a direct debit (DD) and was paying extra each month. The landlord’s records show that the landlord tried to explain that the resident’s DD was set for the 24th of the month and rent was added on the 1st of each month, so he needed to be a month in advance to avoid falling into arrears. It also showed that the landlord tried to explain that the system automatically sent out arrears communication. The landlord offered to set up a payment plan with the resident, but this was refused on the grounds that payment plans were for tenants who were in arrears. The resident requested to raise a formal complaint.
- On 10 January 2020 the resident was made aware that his complaint had been closed. The resident was unhappy to learn this and therefore the complaint was reopened.
- The landlord’s records show that it spoke to the resident again on 16 January 2020 when it repeated that arrears communication was automatically generated due to the resident’s rent payments not being made a month in advance, causing him to go into arrears. The records show the resident was not happy with this explanation and he had received nothing to state he should pay in advance. The resident requested a response to this conversation in writing.
- A letter was sent to the resident, dated 17 January 2020, which informed the resident that a payment plan had been set up for his arrears.
- Meanwhile, the resident called on 17 January 2020 to express his dissatisfaction about the way his complaint was dealt with, stating it was closed without him been contacted.
- On 22 January 2020 the resident contacted the landlord again following receipt of the payment plan letter, as he said he had not agreed to set this up. He explained that this had been going on for months and he was dissatisfied with the way he had been treated. The resident requested a written response to his complaint, and he requested hard copies of the landlord’s Rent Arrears Policy and Complaint’s Policy. The landlord’s records state that the resident was directed to its website, where these policies and procedures could be found.
- The resident completed the landlord’s online complaints form on 16 March 2020 in which he stated:
- That he was dissatisfied to learn that his complaint regarding the receipt of arrears letters had been closed prematurely without receiving a response;
- That on a call with the landlord on 16 January 2020, the landlord had ‘lied’ by saying it had tried to contact him before closing the complaint but could not get through to him.
- That he requested a written response on 16 January 2020, which he said the landlord promised him it would provide, yet instead he received a letter on 22 January 2020 stating he had reached an agreement to clear the rent arrears via a payment plan which he had not agreed to.
- That he had yet to receive hard copies of the landlord’s Complaints Policy and its Rent Arrears Policy.
- The resident requested that his complaint be addressed within five working days, otherwise he would have no option but to contact this Service.
- Having not received a response from the landlord, the resident contacted this Service on 26 May 2020. This Service subsequently contacted the landlord for an update.
- On 17 June 2020, the resident advised this Service that he was still having difficulty escalating the complaint with the landlord. This Service requested a formal response from the landlord be sent to the resident by 8 July 2020.
- The landlord provided a formal complaint response on 2 July 2020 which concluded that it was satisfied that the information regarding the arrears process was accurate, correct and in keeping with its standards and values.
- The landlord also reiterated that it charged rent on the first of each month, and that was when the payment was due and expected. The landlord stated it does request and recommend that residents ‘pay in advance’ to accrue a small credit balance on their rent account. It stated that, because the resident paid 23 days after the first of the month, it was beneficial to build up a credit balance to prevent the rent account lapsing into arrears, prior to his payment being received. This concluded the landlord’s response, stating that if it did not hear from the resident within two weeks, it would consider the matter closed.
- In the resident’s email of 12 July 2020, he expressed his dissatisfaction that not all of his complaint aspects had been addressed. The resident advised that he had not received a response regarding the premature closure of his complaint; nor had he received a response to receiving a payment plan agreement letter when no such agreement was made; and he had not received a response in regard to the non-receipt of a letter he had requested following the phone call with the landlord on 16 January 2020. Furthermore, he stated that he had previously requested that the landlord send him hard copies of the landlord’s Arrears Policy but to date he had not received anything. Lastly, he wanted to know:
a. Why it took the landlord over six months to get a response to his complaint, which included involving the Housing Ombudsman; and
b. Whether his complaint had been escalated to stage two of the landlord’s complaints procedure, as he was dissatisfied with the stage one complaint response.
- In the landlord’s email of 20 July 2020, the landlord confirmed that it was happy with its complaint response of 2 July 2020, although it said it could have expanded on the resident’s concerns about the premature closure of the complaint. It confirmed the case should not have been closed and apologised for the distress caused. It explained that the correct process was not followed, and the case should have remained open until he was satisfied matters had been resolved. The landlord added that the member of staff who closed the complaint had received training, to ensure issues such as this did not occur moving forward. The landlord concluded by acknowledging the resident’s wish to escalate the complaint and asked the resident to clarify why he remained dissatisfied and to provide the outcome he desired to resolve the complaint. The landlord advised that if it did not hear back from the resident within two weeks, it would close the complaint.
- In the resident’s email of 2 August 2020, he detailed the reasons for his escalation as follows:
a. The resident was unhappy that he received arrears letters, despite previously communicating to the landlord ‘a long time ago’ that he received his wages on the 24th of each month and, as such, would make the payment then; he could see no justification for sending these letters.
b. The resident wanted an explanation as to why he had received a payment plan letter, dated 17 January 2020, which stated he had agreed to a payment plan and a DD had been set up.
c. The resident requested to know who had supposedly provided him with the policies he had requested, which the landlord said it had provided.
d. The resident was not happy with the response to the landlord’s complaints handling.
- The resident was seeking a full response to his concerns and to be compensated for the distress and inconvenience.
- In the landlord’s final complaint response of 4 August 2020, the landlord reiterated that it charged rent on the first of each month, and that was when the payment was due, which it said was stipulated in the resident’s Tenancy Agreement. It said that it did recommend that tenants pay in advance, so that a small amount of credit was accrued on the rent account, which it contended was beneficial for tenants who made payments towards the end of the month, as it prevented the account going into arrears (The landlord, however, did note the comments about the resident’s date he received his wages).
- The landlord further explained that when an account goes into arrears, prior to payment being received, a tenant would invariably receive automated arrears correspondence notifying of the arrears. The landlord said that it always informed tenants that they may receive arrears communication when paying later in the month. The landlord confirmed that its records showed that this was advised to the resident on 29 May 2018 when he was notified that he would receive arrears communication when paying on the 23rd of each month, if the account was not paid in advance. Its records also showed that on 23 December 2019, following the resident expressing his dissatisfaction about the landlord’s arrears communication, he was informed that, even though he had set up a DD to pay extra each month, due to the rent amount being debited on the 1st of the month, unless the account was a full month’s payment in credit, he would continue to receive arrears communication unless he had accrued enough credit to equal one month’s payment.
- With regard to the dissatisfaction with the landlord’s customer service, particularly in reference to the resident’s December 2019 complaint that was closed prematurely, the landlord confirmed that the complaint should not have been closed and apologised for the distress caused. The landlord explained that it did not follow the correct process and, as such, it should not have been necessary to involve the Housing Ombudsman Service. Moreover, the landlord acknowledged that when the resident had requested a written summary of the conversation he had had with the landlord in December 2019, it should have sent a more personal letter summarising what was discussed rather than sending an automated letter which informed of a payment plan being set up. Furthermore, the landlord agreed that a payment plan should not have been set up, and it should have gained the resident’s permission before doing so (the landlord confirmed that it had sent the policies the resident had requested, and noted this was the first time the policies had been provided).
- The landlord also apologised that the resident’s correspondence, dated 16 March 2020, was not responded to. Again, the landlord acknowledged that had a response been provided, it would have been unnecessary for the resident to have contacted this Service.
- In light of the above, the landlord confirmed it was clear that the level of service the resident had received was not reflective of its standards it aimed to provide and it apologised that it fell short of the acceptable standards. The landlord also offered £50.00 compensation in recognition of the complaint being closed in January 2020 and for the other matters detailed above. To learn from the outcomes, the landlord advised that the staff involved had been interviewed and training had been provided. This concluded the landlord’s complaints procedure.
Assessment and findings
The landlord’s administration of the resident’s rent account
- As per the resident’s Tenancy Agreement (paragraph 3), the resident is expected to make his rent payment before the first of each month, otherwise this may result in legal action and the early termination of his Tenancy Agreement. Because the resident makes his rent payment on the 24th of each month, and he had yet to build up enough credit to cover a full month’s rent, the resident was thereby going to be in arrears for 23 days every month. This invariably triggered the landlord’s automated response to accounts that fall into arrears, with the sending of letters and text messages to remind the resident to make the payment.
- It is reasonable for a landlord to have such a system in place, as part of a process to reduce accounts falling further into arrears. Therefore, this Service is satisfied that the receipt of arrears letters did not constitute a service failure, because the expectation stipulated in the Tenancy agreement was to make the rent payment before the first of each month.
- It is of course noted that the resident’s situation in relation to when he receives his wages means he is not able to make the payment by the first of each month, and it is also noted that he makes the payment each month without fail and has been proactive in trying to resolve the issue by making extra payments each month, to build up credit on his rent account. Nevertheless, until the credit on the rent account reaches a figure that would cover a month’s rent, the resident is likely to continue to receive arrears communication, as detailed above.
- What is more, the resident has been made aware of the potential of arrears communication on numerous occasions, with the landlord also offering potential solutions. For example, the landlord had clearly explained the situation when making his payments late in its stage one and stage two complaint responses. There is also evidence showing the resident was advised of this back in May 2018 and then subsequently in December 2019 and January 2020. Included in the landlord’s information, was also the recommendation to pay in advance, to avoid falling into arrears, albeit for a short period. In fact, the resident has technically heeded this advice by making extra payments each month, although this would not become relevant until the amount of credit built up reflects one month’s rent.
- As set out in paragraphs 27 to 30 the landlord acted in line with the Tenancy Agreement in giving the advice it did to the resident about arrears and its arrears communication is reasonable in circumstances when residents fall into arrears.
- However, the landlord acknowledged its failings in setting up of a payment plan without the resident’s knowledge. When there are failings by a landlord, as is the case here, the Ombudsman’s role is to consider whether the redress offered by the landlord (acknowledgment of failings, an apology, compensation and staff training) put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles; be fair, put things right and learn from outcomes.
- The landlord acted fairly by acknowledging its failings and apologising. It demonstrated that it had learnt from outcomes by interviewing the relevant member of staff and arranging for staff training.
- The landlord’s Compensation Policy does not set out levels of discretionary compensation where a resident has incurred distress and inconvenience. However, compensation of £50 is within the range of compensation set out in the Ombudsman’s Guidance on Remedies for instances of service failure resulting in some impact on the resident.
- The Ombudsman considers that the landlord’s response to this aspect of the complaint was reasonable, and that the landlord has made redress to the resident which, in the Ombudsman’s opinion, resolves the complaint satisfactorily. The measures taken by the landlord to redress what went wrong were proportionate to the impact that its failures had on the resident.
- It is noted that the sum of £50 offered by the landlord also included compensation for the landlord’s failings in its complaints handling and this is addressed in paragraph 38 below.
The landlord’s complaint handling
- As referenced above (paragraph 4), the landlord is expected to provide its stage one complaint response within ten working days. In this instance, the resident raised a formal complaint on 23 December 2019, yet the resident did not receive a stage one complaint response until 2 July 2020, 132 working days after the complaint was raised. In the stage two complaint response, the landlord acknowledged that the initial complaint should not have been closed, that his follow-up email in March 2020 was not responded to, and the involvement of this Service should not have been necessary. Moreover, the landlord recognised further failings when the resident requested a response in writing in December 2019, which it failed to provide.
- Having acknowledged its failings in handling the complaint, the landlord apologised for the distress and inconvenience caused and offered £50.00 compensation. However, as set out in paragraph 36 above the £50 included compensation in respect of the landlord’s failings concerning the setting up of the payment plan.
- As set out in paragraph 37 the landlord’s delays in handling the complaint were significant and caused the resident to incur time and trouble in contacting this Service. Therefore, the landlord’s response to this aspect of the complaint was not proportionate, and the landlord has not made redress to the resident which, in the Ombudsman’s opinion, resolves the complaint satisfactorily. The measures taken by the landlord to redress what went wrong were not proportionate to the impact that its failures had on the resident. A more appropriate amount for the failings identified in the landlord’s handling of the complaint is £100. This is in addition to the £50 compensation already offered by the landlord which was appropriate to compensate for the failings concerning the payment plan.
- In accordance with paragraph 55 (b) of the Housing Ombudsman Scheme, the Ombudsman considers that the landlord has made redress to the resident which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.
- In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in relation to its complaints handling.
- The landlord has clearly explained to the resident that the rent payment is due on the first of each month, which is clearly stated in the resident’s Tenancy Agreement. The arrears communication is reasonable in circumstances when rent accounts fall into arrears, even when, in cases such as this, it is only in arrears for a short period; this too has been relayed to the resident. Furthermore, the landlord has provided information of how to avoid falling into arears by making the payment in advance of the due date. The landlord acknowledged its failings in relation to setting up the payment plan. However, the landlord took appropriate steps to put its failings right by apologising, arranging staff training and paying £50 compensation.
- However, with regard to the landlord’s complaints handling, it was clear that the landlord had not met its specified timeframes for providing a stage one complaint response, with the resident having to pursue the landlord and contact this Service in order to obtain a response. Moreover, the landlord identified further failings in communication, whereby a payment plan was set up without the resident’s consent and a letter was not provided when requested by the resident. The landlord did acknowledge its failings in this regard, but the redress provided did not resolve the complaint satisfactorily. As a result, further compensation is warranted.
Order and recommendations
- The landlord is ordered to pay £100 compensation to the resident within 28 days of the date of this letter.
- It is recommended that within 28 days of this letter the landlord pays to the resident the £50 compensation offered in its final response to the complaint, if it has not already done so.