Metropolitan Thames Valley Housing (202111583)

REPORT

COMPLAINT 202111583

Metropolitan Thames Valley Housing

5 December 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 response to the resident’s reports about:
   1. Her application to transfer to a larger property.
   2. Its handling of her complaint.

Background

2. The resident had an assured shorthold tenancy with the landlord for an intermediate rent property since 25 June 2012. The tenancy agreement was for a fixed term of 12 months. On expiry of the fixed term, the tenancy reverted to a periodic assured shorthold tenancy.
3. The resident lives in the one–bedroom flat with her partner and three children. The flat has been overcrowded since 2013.
4. The resident’s complaint is that following incorrect advice from the landlord, she joined the landlord’s internal transfer scheme (jigsaw). The resident successfully bid on a three–bedroom house, viewed and accepted the property, but the landlord withdrew the offer shortly afterwards. The landlord stated that it withdrew the offer as intermediate rent tenants do not have the right to transfer. The resident questioned this on the basis that this was not stated in the contract and the landlord’s staff appeared to be unaware. The resident considered that the landlord had mis-interpreted the tenancy agreement and its policies about whether intermediate rent tenants can transfer or mutually exchange. The resident complained that the landlord’s incorrect guidance and misleading actions created expectation that her family could move home followed by disappointment which caused anxiety and insomnia. The resident complained that harassment from the landlord’s staff following her complaint caused distress and depression. The resident noted she and her family took the risk of travelling via road to view the property. She also noted that her current property is statutorily overcrowded and according to the tenancy agreement, no more than two people should live there.
5. The landlord accepted an error was made; it is not in dispute that the landlord advised the resident to join the transfer scheme, offered the property and then withdrew that offer when it found that the resident had an assured shorthold tenancy of an intermediate rent property. The landlord offered compensation of £150 for service failure and time and trouble and the landlord increased this offer to £300 after the end of the complaints procedure. The landlord stated it had asked the local authority to expedite the re-assessment of the resident’s application for re-housing due to their change of circumstances so that the resident can resume bidding on properties. The landlord offered the resident an intermediate rent property (with two bedrooms) in the same block which had a lower rent than the resident’s current rent along with a rent-free period to enable the family to move, though this had been declined by the resident. The landlord gave the resident contact details for other landlords with intermediate rent properties to see if a move can be made in this way. The landlord also offered reimbursement for the cost of the resident’s hotel stay and purchase of moving boxes.
6. The resident wanted compensation of £5,000 for the distress caused to her and her family as a result of the landlord’s inaccurate advice. She also wanted the landlord to offer her a similar three-bedroom house in an area outside of London within three months of the date of her stage two complaint. The resident also  wanted the landlord to put in place processes or systems to stop the error being repeated in the future.

Assessment and findings

Transfer application and information about re-housing

7. According to the terms and conditions of the resident’s tenancy agreement, the property is rented under intermediate rent terms which is usually 80% of the market rent. The terms and conditions state that the expectation is that savings made due to the reduced rent are to be used towards a deposit to enable the purchase of a property at a later date.
8. The resident had been looking to move from the one-bedroom property since 2013 when her first child was born. According to the resident, the landlord advised her to register on the Council’s housing list and bid for properties; register for homeswapper (for mutual exchanges); or consider private renting. According to the resident, she had followed this advice since the property but had not been successful in moving home.
9. According to the resident she found out about the landlord’s transfer scheme (jigsaw) in June 2021 and sought advice from the landlord about her eligibility to join this scheme. The resident noted that the landlord advised her to proceed with her application and to upload documents. The landlord awarded banding for overcrowding and when the resident bid on a three-bedroom property, the bid was accepted, a viewing took place, the resident verbally accepted the property and plans were put in place to sign the tenancy agreement. However, when the landlord undertook checks, it found that the resident should not have been able to join the transfer scheme because she was the tenant of an intermediate rent property and such properties were excluded from the jigsaw scheme; the landlord therefore withdrew the offer of the new tenancy on 18 August 2021.
10. The landlord and resident were in contact by telephone and email on 18 August 2021 where the landlord explained that intermediate rent tenants do not qualify for the landlord’s transfer list. Having made the error, the landlord communicated with the resident on a number of occasions by email and telephone, including by senior members of staff. However, given the resident’s disappointment, this understandably did not mitigate her distress.
11. The resident made a formal complaint to the landlord and the Ombudsman on the same day. The resident was understandably distressed about the withdrawal of the offer and complained about having been given the wrong information by the landlord. The resident noted the stress and negative effects caused by overcrowding over the last eight years on the family’s relationships, health, the children’s education and the resident’s pregnancy. The resident wanted the landlord to accept responsibility for misleading her over this period of time and to rehouse the family.
12. The resident’s email to the landlord the following day queried where in her contract it states that the tenancy does not give the right to transfer. The resident noted that she could not find this information in the jigsaw policy either. The resident noted that her neighbours’ applications (also intermediate rent tenants) on homeswapper had been approved by the landlord. The resident also stated that private renting, shared ownership and outright purchasing were not options for her and her family.
13. The landlord’s stage one complaint response recounted what had happened and the events that led to the complaint are not in dispute. The landlord apologised for any inconvenience caused. The landlord explained that the offer was withdrawn because the resident was accepted on to the landlord’s transfer list in error. The landlord noted that it appeared that in the initial stage of acceptance onto the transfer list, the resident was assessed as high priority due to overcrowding and was able to successfully bid for a three–bedroom house. However, during the pre-offer checks it was established that the resident did not qualify for the transfer due to being an intermediate rental tenant and not a social housing tenant, and therefore the offer had to be retracted.
14. The landlord noted it had contacted the local authority on the resident’s behalf to ask whether her application could be prioritised in view of her housing circumstances as her ability to bid on properties was put on hold as a result of a change of circumstances form needing assessment. The landlord offered the resident another intermediate rental property that had recently become available in the block where she currently lived, as this had an additional bedroom. The resident declined as she wished to move out of the area.  The landlord highlighted other housing options including shared ownership and intermediate rental accommodation in other areas. The landlord had offered to reimburse the cost of the resident’s hotel stay although the resident declined at this time.
15. The landlord acknowledged that due to a misunderstanding by current and previous staff members regarding tenancy type, the resident received inaccurate advice about her eligibility for homeswapper and jigsaw. The landlord stated “please accept our sincerest apology for your tenancy type not being picked up at an earlier stage, when you initially expressed an interest…regarding wanting a transfer. We would also like to apologise for the inconvenience that you have experienced during this time.”
16. The landlord advised that any training needs identified due to the resident’s experience will be acted on and the complaint will be used as a case study to improve services and help better understand root causes behind such failures. The landlord partially upheld the complaint and offered total compensation of £150 calculated on the basis of £50 as redress for the service failure and £100 for time and trouble.
17. Intermediate rent homes are let on an assured shorthold basis according to the landlord’s tenancy procedure.  Whether a tenancy can be assigned (as a result of a transfer) depends on the terms of the tenancy agreement. The terms and conditions of the resident’s assured shorthold tenancy agreement do not give the right to transfer.
18. The law gives tenants different occupancy rights depending what type of tenancy they have. The assured shorthold tenancy creates (in some respects) different rights and obligations for tenants and landlords compared to assured tenancy agreements for social rent properties.
19.  Intermediate rent tenants are excluded from the statutory right to mutually exchange in certain circumstances under section 158 of the Localism Act on 1 April 2012. For intermediate rent tenants, a mutual exchange may only take place if each landlord gives permission, for example through a contractual term in the tenancy agreement. In this case there is no contractual term in the tenancy agreement to allow mutual exchange or transfer.
20. The landlord’s transfer procedure states that applicants may be excluded from consideration or refused at any point in the process if they do not meet the banding criteria and reasons include the customer holding an assured shorthold tenancy agreement. The landlord’s mutual exchange policy (paragraph 5.5) states that there is no right of exchange to be offered to tenants with an assured shorthold tenancy or fixed term tenancy. Therefore, the landlord’s decision not to allow the transfer to go ahead and to remove the resident’s homeswapper application was in line with its policies and the fact that there was no provision in the tenancy agreement to allow for transfer or mutual exchange.
21. That said, the landlord’s explanation contained in its complaint responses as to why the resident was not eligible for a transfer was misleading and potentially confusing.  The landlord stated that the resident was ineligible because she was not a social housing tenant. The resident had questioned this explanation noting that she was a social housing tenant. Intermediate rent falls within the definition of social housing and so the resident was a social housing tenant. The landlord’s explanation was therefore inaccurate as whilst the resident was ineligible to join the transfer scheme, it was because she had an assured shorthold tenancy as an intermediate rent tenant, not because she was not a social housing tenant.
22. Intermediate rent (80% of market rent) is different from social rent (a low-cost rent set by government formula). The resident was not a social rent tenant and therefore did not have the same rights to move home as an assured tenant paying a social rent. Using the terms “social housing” and “social rent” interchangeably in policies and other communications is a potential source of confusion for landlord staff and residents. In this case it is apparent that the landlord’s use of language has contributed to the resident’s distress in relation to the complaint.
23. As to the compensation offered by the landlord as a result of its error in the resident joining the transfer scheme, the Ombudsman must consider whether the landlord’s offer was reasonable in the circumstances of this case. This includes considering whether it was consistent with the landlord’s policy and whether the sum being offered was proportionate to the shortfalls in service received and the impact this had on the resident and her family.
24. The landlord’s policy and guidance documents on compensation payments states a service failure in the ‘low’ range would amount to a minor inconvenience or a short delay and redress would range from an apology up to a payment of £50. In making an offer of compensation of £50 for service failure, the landlord had not fully taken into account the distress and inconvenience caused to the resident and her family by the landlord’s error. The redress offered at this point was not proportionate to the service failing identified. It is evident from the resident’s complaint correspondence that the impact on the resident and her family amounted to more than a minor inconvenience. It is also not clear why the landlord only partially upheld the complaint when the landlord had acknowledged the error made.
25. The time and trouble payment is to compensate the resident for the time taken to complain which would not have happened except for the service failure having occurred. A failure in the “medium” range amounts to compensation of between £51 and £150. The landlord’s offer of a payment of £100 in this regard was appropriate as whilst the resident had expended time and effort on the complaint by compiling a number of clear and comprehensive accounts of what had happened and the reasons for her dissatisfaction which she had followed up with phone calls, the landlord had overall been responsive to the complaint.
26. According to the landlord’s policy, where the resident has been financially disadvantaged, the landlord will consider reimbursement costs. Therefore, it was appropriate that the landlord offered reimbursement for the hotel stay, the cost of which would not have been incurred but for the landlord having arranged the property viewing.
27. The landlord’s offer of an alternative intermediate rent property in the same block was a reasonable attempt to alleviate some of the family’s issues with overcrowding though it is acknowledged that the family were entitled to a three–bedroom property. It is understandable that the resident wanted to move out of London (including within her reasoning that there had been a murder of a neighbour’s son) so did not accept this offer. The resident was concerned that this offer (at a reduced rent and with a rent-free period) was more of a ‘bribe’ than an offer. This investigation has not had sight of any policies concerning intermediate rent and so cannot comment on whether the landlord was allowed under its policy to make this sort of offer. That said, intermediate rent properties are not allocated in the same way as social rent properties via the Council’s housing register and therefore were not part of a choice-based lettings scheme.
28. From the evidence provided for this investigation, the landlord sent an email asking that the resident’s change of circumstance form be processed as a priority so that she could bid for properties. However, the email was sent to an organisation which is a federation of GP practices and it is not clear that this organisation had any role in processing applications for the local authority’s housing register. It is possible that an additional email was sent to the local authority although this investigation has not had sight of it.
29. Following the landlord’s stage one response, the resident remained dissatisfied. On 20 September 2021 the resident asked to escalate her complaint on the basis that she had been expecting to move home due to the landlord’s actions and had made preparations to do so by buying packing boxes, arranging flooring installation and informing the children’s schools. The resident also noted that £150 was insufficient given the financial, physical, emotional, and psychological trauma caused and she would consider £5,000 to be a suitable payment. The resident also considered that the landlord’s interpretation of the tenancy agreement and its polices was wrong, her current property was statutorily overcrowded and she wanted to be moved to a similar three–bedroom property to the one they were offered.
30. The landlord’s stage two response noted that the resident wanted to escalate her complaint as she considered the compensation offered to be insufficient. The landlord noted this was not one of the reasons stated in its policy to warrant for further investigation of a complaint. The landlord confirmed its decision at stage one to offer compensation of £150 and advised that no additional redress would be offered. However, the landlord had reimbursed the cost of the hotel stay and it offered additional reimbursement of £35 for the storage boxes.
31. The compensation offered at stage one and confirmed at stage two did not fully reflect the distress and inconvenience caused to the resident and her family by the landlord’s error. The Ombudsman’s compensation calculations are always based on what is considered to be fair in the particular circumstances of the case. The amount of compensation decided upon does not reflect a definitive loss, as the Ombudsman is not able to quantify this, but it is a recognition of the overall distress and inconvenience caused to the resident by the particular circumstances of the complaint. 
32. In this case, the payment offered by the landlord needed to recognise the impact of the landlord’s actions and to acknowledge how the resident had been affected.  This is a relevant consideration as the resident had experienced an emotional impact as a result of the landlord’s error. The resident told the landlord and the Ombudsman about how she and her family felt as a result of the situation that led to their complaint. This included stress, anxiety and inconvenience as well as raised expectations in so far as the landlord’s error resulted in the resident reasonably believing that the move to the three bedroom house would take place when in fact it did not. 
33. The stage two complaint was an opportunity to reconsider the redress offered. Although the landlord eventually increased the offer of compensation, this was nine months after the end of the complaints process.  On 4 July 2022 the landlord noted that it had recently compiled information requested by the Ombudsman and identified further compensation was due because the time and trouble expended by the resident in chasing the matter was not fully recognised. The landlord also noted that its service failing had more of an impact on the resident than the landlord had initially recognised. The landlord therefore increased the offer of compensation to £300. This was calculated on the basis of £150 to recognise the service failure of the incorrect advice and the impact on the resident and her family and £150 for time and trouble to recognise the distress and inconvenience that the matter caused and for any difficulties in chasing the matter with the landlord.
34. Whilst this amount came closer to reflecting the distress and inconvenience caused to the resident and her family, the increased compensation offer should have been made as part of the complaints procedure rather than approximately nine months later. Where an offer of increased compensation is made long after the end of the complaints procedure and after being made aware that the Ombudsman was to investigate the complaint, it may not be in the spirit of the Dispute Resolution Principles and the Complaint Handling Code. Taken altogether therefore, the Ombudsman will make a remedy which recognises the overall distress and inconvenience caused to the resident and her family by the actions of the landlord.
35. In terms of the Ombudsman’s Dispute Resolution Principles, it is important that the landlord looks beyond the circumstances of the individual complaint and considers whether anything needs to be ‘put right’ in terms of wider processes. A landlord should consider what it could do to reduce the likelihood of a similar situation arising in the future for other residents. The landlord stated in its final complaint response that it would address training needs and look at the root causes of the complaint but did not expand on specifically what this would involve. The Ombudsman has therefore considered the landlord’s policies and information about moving home below.
36. It must be noted that the resident was keen to check her own eligibility to join the jigsaw transfer scheme and made efforts to do so by asking the landlord before she applied. None of the information about moving house that is on the landlord’s website indicates that intermediate rent tenants are ineligible for transfers and mutual exchanges. The landlord’s transfer policy is available online and whilst it states applicants can be excluded from the transfer list, it does not state the criteria for this.  Since there is no specific information on the landlord’s website about intermediate rent and options for moving, the resident was therefore reliant on advice from the landlord.
37. Had the jigsaw scheme stated who was eligible to join, it is possible this would have alerted the resident to the eligibility requirements before she made the application. Having reviewed the jigsaw website along with the instructions for how to create a jigsaw account and how to upload documents, there is no indication in these documents that would have alerted the resident to the fact that some tenants are not eligible to join. One of the screenshots of the jigsaw system states that “…you must be a current legal tenant…or left in occupation..” of a property belonging to the landlord. It went on to state that “if you do not meet the requirements your application will be rejected” but there is no indication that certain tenancy types would be excluded.
38. On the face of it, it does not appear to have been well-known amongst landlord staff that intermediate rent tenants are not eligible to join the transfer list. The resident had contact with more than one staff member whilst enquiring about the transfer scheme, applying, bidding and then viewing the property and no one had noted the issue of being an intermediate rent tenant and applying for a transfer. After the landlord withdrew the offer, internal emails indicate that some staff did note that the resident was an intermediate rent tenant, but it appears that they did not know that the consequence of this was that she was not eligible to join the landlord’s transfer list.  That said, internal emails show that there were staff members who knew that intermediate rent tenants are not eligible to join the transfer list although they were not the staff members who had had direct contact with the resident.
39. The landlord has noted training needs will be addressed but the landlord may also wish to consider reviewing the information contained in its policies for clarity. As noted previously, the transfer procedure states that tenants with an assured shorthold tenancy are excluded from the transfer scheme. However, the other policies which include (in part) information on transfer and rehousing are not explicit on this point. The landlord’s lettings policy (para 3.3) states that tenants can register for a transfer if they are able to demonstrate a need to move in accordance with the transfer policy but does not refer to any exclusions. According to the landlord’s transfer policy (3.1) all eligible applicants can register on the landlord’s internal transfer list. The policy states that the landlord can exclude applicants from the transfer list in accordance with criteria in its transfer procedure. However, only the landlord’s transfer policy is available on its website. The overall result is that to understand their eligibility, an intermediate tenant would need to know that they have an assured shorthold tenancy and then piece together information from more than one policy document.
40. The resident considered that the landlord needed to offer an alternative property because her tenancy agreement stated that not more than two people should live there. Whilst understanding that overcrowding is a difficult situation which impacts the family in negative ways, it is not within the Ombudsman’s powers under the Housing Ombudsman Scheme to order a landlord to offer a tenancy in this way, even where service failures have been identified and acknowledged.
41. In cases where such service failures have been identified, the Ombudsman will look for what actions the landlord has taken in order to attempt to put the matter right. Whilst it is understandable that the resolution to the complaint that the resident wanted was for the landlord to allocate a similar three bedroom home outside of London, this was not an action that was within the landlord’s policies and procedures. Internal emails indicate that senior staff had tried to consider all options but concluded there was no route by which the landlord could make a direct offer of a property outside of its usual lettings procedures. Intermediate rent housing is subject to specific qualification criteria including affordability criteria along with a process for being allocated such properties. Therefore there are no grounds to criticise the landlord’s decision not to offer a property outside of its lettings procedures and this is not something that the Ombudsman could order the landlord to do.
42. In all the circumstances of the case, the landlord’s response to the complaint amounts to maladministration. It was appropriate for the landlord to identify its error and apologise for allowing the resident to register for the transfer process and to then progress as far as a tenancy offer, given that her tenancy status did not permit such a transfer. The level of compensation it offered, though increased following the completion of the complaints process, did not offer the resident a reasonable nor proportionate sum, given the extent of her distress and inconvenience over the lost opportunity to relocate to a preferred location. In addition, the landlord’s communication with her on this issue did not help the situation, exacerbating her feelings of distress. A further amount of compensation has therefore been ordered, together with a set of recommendations intended to provide the resident with clarity and reassurance as to her current position and to ensure that the landlord’s procedures are sufficiently robust that such a scenario as that experienced by the resident is unlikely to reoccur.

Complaints Handling

43. The resident’s email to the Ombudsman dated 30 September 2021 stated that she was unhappy with the resolution to her complaint and the manner that the complaint was handled.
44. The resident made a formal complaint on 18 August 2021. The landlord issued the stage one response on 2 September 2021. The landlord’s policy is that it will respond within 10 days of acknowledging the complaint. This investigation has not had sight of the acknowledgement and so it is not possible to calculate if the complaint response was issued within this timescale. However, on the basis of the dates, any delay will have been minimal.
45. Nevertheless, according to the Ombudsman’s Complaint Handling Code (5.1) landlords must respond to the complaint within 10 working days of the complaint being logged. The landlord might therefore wish to consider amending its policy as the date the complaint is acknowledged will not necessarily be the date that the complaint is logged.
46. The landlord responded to the resident’s stage two complaint within four days which was within the policy timescale.
47. The Ombudsman’s Complaint Handling Code (4.14) states that a landlord must not unreasonably refuse to escalate a complaint through all stages of the complaints procedure. Reasons for declining to escalate a complaint must be clearly set out and be in the complaints policy and must be the same as the reasons for not accepting a complaint. In this case, the landlord advised the resident that it would not escalate the complaint because the resident’s complaint was that the compensation was insufficient. The landlord’s complaints policy sets out certain criteria for the escalation of a stage one complaint to stage two and a dispute about compensation was not in itself reason to escalate a complaint. On the basis of the guidance in the Ombudsman’s Complaints Handling Code, the landlord may wish to consider if limiting the escalation of complaints is the most effective way to resolve disputes.
48. At stage two of the complaints process the landlord confirmed the initial decision at stage one and that no additional redress would be offered (apart from reimbursement for boxes). However, in terms of dispute resolution it would have been more effective to review the compensation as part of the complaints procedure rather than review this around nine months later when the landlord advised the resident that it had recently compiled information requested by the Ombudsman and identified further compensation is due. Offering increased compensation after the end of the complaints process and ahead of the Ombudsman’s investigation is not within the spirit of the Dispute Resolution Principles or the Complaint Handling Code which encourage the resolution of complaints at the earliest opportunity.
49. The resident’s request to the landlord to escalate her complaint had noted that after making a formal complaint her and her family had been “barraged” with calls from the landlord to try to negotiate a settlement. The resident states that “this harassment further exacerbated our psychological pain and sent us into depression.” It is not inappropriate in itself for the landlord to discuss the complaint with the resident in an effort to resolve the matter. Talking about the issues can potentially be a more effective way to do this than exchanging extensive emails. The emails noting the content of phone calls between the landlord and resident do not record that the resident did not wish to speak. Nonetheless, communication needs to take into account the preferences of the resident.
50. Taken altogether, given that the landlord did respond to the resident’s complaint, there was no maladministration by the landlord in its handling of the complaint. However, the landlord may wish to consider whether its timescales and approach to the escalation of complaints is in line with the Ombudsman’s Complaint Handling Code.

Determination

51. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration by the landlord in respect of the complaint about the handling of the transfer application and information given in relation to re-housing.
52. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was no maladministration by the landlord in its handling of the resident’s complaint.

Orders and recommendations

Orders

1. The landlord is ordered within four weeks of the date of this report to pay the resident compensation of £500 in recognition of the distress and inconvenience caused by its handling of the resident’s transfer application. This amount includes the landlord’s previous offers.

Recommendations

2. That the landlord contacts the Council to check if the change of circumstances form has been processed and that the resident is in a position to bid for properties (unless the landlord has already done so).
3. That the landlord checks whether other intermediate rent tenants have joined the landlord’s internal transfer list (jigsaw) and takes steps to remedy this if so.
4. That the landlord checks whether the landlord has approved homeswapper application for other intermediate rent tenants and takes steps to check the terms of their tenancy agreements if so to confirm eligibility.
5. That the landlord reviews the information presented via the jigsaw application form and in the guidance documents so that tenants are aware that eligibility depends on factors including the type of tenancy agreement that they hold.
6. That the landlord checks the process for approving homeswapper and jigsaw applications to confirm that it includes a check on the applicant’s tenancy status to confirm eligibility.
7. That the landlord consider reviewing the wording in its policy and procedure documents on lettings and transfers to include a specific statement about intermediate rent tenants eligibility to transfer and mutually exchange.
8. That the landlord reviews the timescales in its complaints policy and the circumstances in which it will escalate a complaint, taking into account guidance in the Ombudsman’s Complaint Handling Code.