Metropolitan Thames Valley Housing (MTV) (202400193)

Background

1. The resident paid advance rent when he moved into the property in 2020 to maintain a credit on his rent account. The landlord adjusted his direct debit on several occasions to reflect rent increases. However, in 2021, it set the resident’s direct debit at an incorrect level. This resulted in the existing credit being reduced and the account falling into arrears. The landlord apologised for this error, offered compensation, and cleared the outstanding arrears in August 2024. However, the resident remains dissatisfied, as he wants the landlord to reinstate the advance rent he paid.

What the complaint is about

2. The complaint is about the landlord’s handling of:
   1. The resident’s rent account.
   2. The associated complaint.

Our decision (determination)

3. We have found that there was reasonable redress in the landlord’s handling of:
   1. The resident’s rent account.
   2. The associated complaint.

Summary of reasons

4. The landlord accepted that it set the resident’s direct debit at an incorrect level, which led to arrears on his rent account. It apologised and offered the resident proportionate compensation for this. After the complaints process concluded, the landlord also cleared the outstanding arrears that had arisen because of its error.
5. The landlord acknowledged that there were errors in its handling of the associated complaint. It has apologised and offered the resident proportionate compensation for this.

Putting things right

Where we find service failure, maladministration or severe maladministration we can make orders for the landlord to put things right. We have the discretion to make recommendations in all other cases within our jurisdiction.

Recommendations

Our recommendations are not binding, and a landlord may decide not to follow them.

Our investigation

The complaint procedure

What we found and why

The circumstances of this complaint are well known by the parties involved, so it is not necessary to detail everything that’s happened or comment on all the information we’ve reviewed. We’ve only included the key information that forms the basis of our decision of whether the landlord is responsible for maladministration.

6. The resident mentioned in his complaint that the landlord’s handling of his rent account had caused him stress and frustration. We have noted the resident’s comments about the impact on his health. However, it would be fairer, more reasonable and more effective for the resident to make a personal injury claim for any injury caused. The courts are best placed to deal with this type of dispute as they will have the benefit of independent medical advice on the cause of any injury and how long it will last. We’ve not investigated this further. We can decide if a landlord should pay compensation for distress and inconvenience. On this occasion we have not awarded additional compensation as the landlord’s earlier offer of compensation was sufficient, as explained in more detail below.
7. Underthe terms of his tenancy agreement, the resident is legally obliged to pay rent. The agreement states that rent is due in advance and tenants must pay their rent every week, on, or before, the day it is due.
8. Prior to the resident’s complaint, the landlord periodically adjusted the resident’s direct debit to reflect changes in his rent. In April 2021,the landlord set the resident’s direct debit at £499.31 instead of £508.91. This created a shortfall of £9.60 per month. As a result, the credit on the resident’s account reduced and the account fell into arrears.We recognise that the landlord set the resident’s direct debit at an incorrect level, which caused frustration and inconvenience. However, the tenancy agreement places responsibility on the resident to ensure that he pays the correct amount of rent.
9. The landlord’s records show that between 25 September 2021 and 20 January 2024 it sent monthly text messages to inform the resident that his account was in arrears. It also sent letters on 28 August 2021 and 30 November 2022. However, it did not begin sending monthly letters until 1 February 2023. The landlord relied only on text messages between 25 September 2021 and October 2022. This was a shortcoming, as it did not use other contact methods and could not be certain that the resident had received the messages. It should have used a range of communication methods, such as letters, during this period. It is positive that the landlord has since introduced measures to contact residents through multiple channels, including telephone, text, email, letter, and home visits, where arrears exceed £40. This shows that it has taken steps to improve how it informs residents about rent arrears.
10. The resident has asked the landlord to reimburse him the £501.40 advance rent he had paid at the start of his tenancy. However, the landlord was not obliged to reinstate the advance payment the resident made as there is no obligation on tenants to be more than a week in credit with their rent account. The advance payment reduced the level of arrears that later accrued on the account. Therefore, the resident has not been left out of pocket by the landlord’s decision not to reimburse the advance.
11. The resident said that the landlord’s handling of his rent account affected his credit rating and his ability to purchase the property. We have no power to investigate complaints which the landlord has not had the chance to put right first and there is no evidence that the resident has raised a complaint about these issues. Therefore, we have not investigated these matters. The resident can raise a separate complaint to the landlord about these issues if he wants to.
12. The landlord apologised to the resident and offered £110 compensation for the time, trouble, and inconvenience caused by its errors in its handling of his rent account. This amount is in-line with our compensation guidance, which suggests awards of £100 to £600 where a landlord’s failures have adversely affected a resident but have not caused a permanent impact. In the circumstances, the landlord’s offer represents reasonable redress for this aspect of the complaint. We have not identified any additional failures that would warrant further compensation.
13. On 29 August 2024, the landlord told us that in addition to the £110 compensation it had offered the resident, it had also cleared the arrears on his account, which at that time amounted to £380. Although the landlord was not required to do this, it was a positive step and showed a commitment to put matters right for the resident. However, it failed to inform the resident that it had done so. This was a shortcoming as it left the resident unaware that it had cleared his arrears.

14. The landlord’s complaint policy at the time of the complaint states that it will acknowledge all complaints within 5 working days. The policy states that it will respond to stage 1 complaints within 10 working days, and stage 2 complaints within 20 working days, of acknowledging the complaint. The policy states if the landlord needs more time to investigate a complaint, any extension should not exceed a further 10 working days at stage 1, or 20 working days, at stage 2.
15. The resident complained to the landlord on 22 January 2024. The landlord did not issue a response to this complaint until 9 March 2024, over a month beyond its stated timescales. This was a failing, as the resident was left without confirmation of when the landlord would respond to his concerns.
16. The resident escalated his complaint to stage 2 of the landlord’s complaint procedure on 25 March 2024. The landlord responded on 26 March 2024 which was within the timescales set out in its complaint policy for responding to stage 2 complaints.
17. The landlord apologised for the delay it responding to the resident’s initial complaint and offered the resident £50 compensation to recognise the inconvenience caused. The compensation offered to the resident complies with the Ombudsman’s remedies guidance, referenced above which suggests awards in this range where there have been errors by the landlord, but the errors may have been of short duration and did not significantly affect the overall outcome of the complaint. The compensation proportionately reflects the impact of the delay on the resident, and it amounts to reasonable redress in this case. The landlord does not need to do anything further regarding its complaint handling.

Learning

General learning

18. It is positive that the landlord has now changed the way it handles direct debits and the way in which it informs residents about any arrears.

Knowledge information management (record keeping)

19. The landlord’s records were sufficient for us to be able to investigate this complaint.

Communication

20. The landlord has acknowledged that it did not inform the resident of its offer of £380 to clear his arrears. This was a shortcoming. The landlord may wish to carry out staff training, or issue relevant staff with a reminder, about ensuring all offers are communicated to residents.