Notting Hill Genesis (NHG) (202342805)

REPORT

COMPLAINT 202342805

Notting Hill Genesis (NHG)

15 November 2024

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

The complaint is about the resident’s reports about the landlord’s handling of the recovery of arrears associated with the lease.
The Ombudsman has also considered the landlord’s handling of the associated complaint.

Background

The resident has held a shared ownership lease of a flat with the landlord since 27 February 1998. There is a superior lease between the resident’s landlord the owners of the building. The resident owns 50% share of the flat. He used to have a mortgage to cover his share and he paid this off before the covid pandemic. He informed the landlord that he has physical and mental health problems that sometimes affect his ability to work.
In 2014 major works were done to the resident’s property and the building. The cost of these (totalling £11,767.55) were added to his service charge account. He said that he had an arrangement with the landlord to repay the money after he had paid off his mortgage. However he said he fell into financial difficulty as he was unable to work during the covid pandemic.
The resident asked the landlord if it was able to take back the property in January 2023, he said this would help due to his health issues. However the landlord said that it was unable to do this. In March 2023 the landlord said that the resident owed £19,403.31 in service charge and rent arrears. It asked if the resident could pay half of the arrears and set up a payment plan to pay the remainder. Otherwise it said it would take legal action.
The landlord said it issued a Notice of Seeking Possession (NOSP) to the resident in June 2023. This Service has not seen a copy of this, but it is evident it was issued because of the email conversations between the parties. The resident was dissatisfied that the landlord had begun proceedings to evict him. He said that it had not responded to his last email whereby he had offered a repayment. Following receipt of the notice, he paid a lump sum of £9,000 to clear his rent arrears. He said that he had borrowed this from a friend. He asked the landlord to communicate with him before starting legal action for the remaining service charge arrears.
The resident and the landlord discussed repayment plans between July 2023 and October 2023. However the landlord did not agree to the resident’s offer of repayment. The resident made a complaint to the landlord about its handling of the collection of the arrears, which included the conduct of its staff. He said his previous arrangement to clear the service charge arrears following major works in 2014had been ignored.
The landlord gave its first response to the resident’s complaint on 26 October 2023. It said that it had reviewed the emails and did not find any misconduct. It said it had followed policy and that the resident would need to clear the remaining arrears. It asked the resident to complete an income and expenditure form. It admitted that it had previously delayed in its collection of the arrears and offered the resident £250 in compensation for this.
The resident remained dissatisfied with the landlord’s response. He said that he had an agreement with previous managers to repay the service charge debt. He said that the landlord had been unsympathetic to his situation, in particular his health concerns. He expressed his dissatisfaction that the landlord would not consider buying his share and its unwillingness to accept less than £400 per month, which he could not afford.
In its final complaint response in January 2024, the landlord said that it had followed its policy regarding the income collection. It said it had found no evidence of staff misconduct, but would speak with the employee on their return from leave. It gave the resident an alternative person to contact until it could have this discussion. It admitted that it had delayed in some of its responses to the resident’s emails. It offered the resident a further compensation payment of £125 in recognition of this, resulting in a total compensation offer of £375.
The resident remained dissatisfied with the landlord’s response and asked this Service to investigate. It is noted that in April 2024 the resident told the landlord that he had no option but to sell the property and the landlord had agreed to assist him with this. It is understood that it also stopped further legal proceedings. The resident has reported further issues of dissatisfaction concerning the landlord’s handling of the sale.

Assessment and findings

Scope of the investigation

When escalating his complaint, the resident raised concerns about the fairness of the service charges incurred following major works to his property in 2014. Under paragraph 42.d. of the Scheme we may not consider complaints about the level of Service charges. These matters are better suited to the First Tier Tribunal. The resident is advised to seek advice about challenging the level of the Service charge should he wish to pursue this.
The resident has also raised dissatisfaction about the landlord breaching his data privacy, losing data belonging to him, and not complying with his Freedom of Information Requests. Under paragraph 42.j. of the Scheme the Ombudsman may not consider matters which fall properly within the jurisdiction of another Ombudsman, regulator or complaint-handling body. In this case the resident is advised to contact the Information Commissioners Office about these matters, if he has not already done so.
Under paragraph 42.a. of the Scheme, we may not consider complaints that the resident has made prior to having exhausting the landlord’s complaints procedure. In this case the resident has raised new issues of dissatisfaction concerning his request to sell the property. In the interests of fairness the Ombudsman must allow the landlord an opportunity to put matters right for the resident. As this is a new issue which has been raised after the landlord’s stage 1 complaint response, the resident is advised to pursue this as a new complaint if he remains dissatisfied about this.

The resident’s reports about the landlord’s handling of the recovery of arrears associated with the lease

The resident’s service charge account shows that £11,767.55 was added in 2014 due to major works. In July 2019 the landlord wrote to the resident. It said it was concerned about the level of the debt as at that time the arrears were at £9,783.08. It said the resident’s current repayments would take too long to clear the service charge debt and it asked him to set up a new plan. It suggested that he may want to consider approaching his mortgage lender, if he had one.
It is evident from extracts of the resident’s accounts that he had usually made consistent and regular payments towards his rent and service charges. However the resident said that during the covid pandemic in 2020 he had been unable to make payments. He said he could not work as he was following government guidance, which had advised him to shield and not leave the house due to his health conditions. This was demonstrated in his accounts, which showed that he did not make any payments between April 2020 and August 2022.
In November 2022 the landlord asked the resident for permission to speak with his husband about the arrears. The resident agreed to this. It is noted that the resident’s husband offered to pay an extra £150 towards the rent arrears and £100 towards the service charge arrears per month. The resident also told the landlord that he had a meeting with Citizens Advice to discuss his situation.
It is crucial for leaseholders to seek independent advice to help with managing their debts. This is especially the case of shared owners who are in rent arrears as it is possible they may lose some of their financial equity if their landlord takes court action. There may be debt solutions, such as Breathing Space, that leaseholders can consider to gain respite. It is positive to note that the landlord had signposted the resident to external services and that the resident had said that he was seeking advice.
The resident asked the landlord on 30 January 2023 if it would consider taking over the property. He said that this would help him, due to his health. The landlord replied 11 days later, on 10 February. It said that it would not be able to take over the property due to it being shared ownership. It asked the resident how much he could pay. The resident replied the same day. He said he was disappointed that the landlord would not consider taking over the property. However he said he could pay double his current monthly payments.
In some cases, the provisions of a shared ownership lease will allow the lessee (the resident) to ask the leaseholder (the landlord) to buy back their share of the property. This is known as downward staircasing. In this case the landlord said that neither the lease or the policy allowed for this. This Service has not found any clear provision in the resident’s lease or the landlord’s policy which meant that the landlord needed to agree to this option.
The landlord replied to the resident’s email 18 days later on 28 February 2023. It acknowledged that the resident had said he could pay double and asked the resident to confirm the amount that he would be able to pay so that this could be put forward to a manager. On 2 March the resident suggested that he thought it would be better for him to communicate with a manager. The landlord’s operative replied on 15 March and said that it was its point of contact and that it could discuss whether a repayment plan was acceptable with a manager.
In its email of 15 March 2023 the landlord said that the resident would need to pay at least half of the arrears and then set up a reasonable payment plan for the remainder. It gave details of debt advice agencies and offered to call the resident. The resident said that he preferred email contact so he had a record of what had been discussed. He said that the arrears were mainly accrued due to works to his windows, which he had set up a repayment plan to pay. He said that the landlord was ignoring his explanation and he asked for another person to be his point of contact.
The evidence shows the landlord next contacted the resident 12 days later on 23 March 2023. It said that he now owed £19,403.31 which included both rent and service charge arrears. It reiterated its previous message that the resident would need to pay half of the overall arrears and offer a reasonable repayment plan towards the remainder. Alternatively it said it would consider taking legal action.
On 24 March 2023 the resident expressed his dissatisfaction with the landlord’s response. He said that the response was “unsympathetic” and did not have regard for his health issues and the impact the pandemic had on him. The resident said that he had made what he considered to be a reasonable offer of repayment based on his circumstances. He did not think the landlord had taken this into account. He asked for another operative to take on his case. The operative responded the same day and gave the resident the manager’s details as an alternative contact.
It is appreciated that where residents are struggling to pay their housing costs, landlords may need to pursue legal options to recover the debt. Where this is the case they must ensure that they follow their own policies. In this case it was positive to note that the landlord had signposted the resident to advice agencies, as per its policy. However there were areas where it did not demonstrate it followed its own policy.
The landlord’s policy says that it will establish a leaseholder’s affordability, use its discretion, and offer a supportive environment when collecting debts. In this case the landlord did not demonstrate that it had fully considered the resident’s support needs and affordability. It did not show that it had considered the mitigating factors such as the resident’s health issues. Nor did it demonstrate that it had gathered a full income and expenditure proforma, which is expected to be able to agree an affordable repayment plan. This was against its policy.
It is noted from the resident’s rent account that he increased his payments from £100 to £200 per month on 4 April 2023. During the parties communication on 28 April the resident told the landlord that he had an agreement in place with previous managers that he would clear his service charge arrears after he had paid off his mortgage. However he said that since he has repaid his mortgage he had struggled to meet the repayments during the covid pandemic.
At the end of April 2023 the resident gave the landlord a further explanation of his health conditions, which included mental health conditions and problems with his immune system. He said that he had been in a category of those who had to shield, therefore not leaving the house, during the pandemic. He said that this had meant that he had been unable to work, which had affected his ability to pay his housing costs. At the beginning of May 2023 the landlord said that it would review the resident’s disclosure about his health conditions and decide on whether it would proceed with legal action. It promised to get back to the resident within a week.
This Service has not seen any evidence of the landlord contacting the resident following the disclosure of his health conditions despite its assertion that it would contact him in May 2023. It is noted that the landlord had communicated with its legal team during this time and that they had advised the landlord about starting legal proceedings.
The resident contacted the landlord on 22 June 2023 to say that he had received an email from the landlord’s solicitors. The resident expressed his dissatisfaction with this. He said that since receiving this email (which it is understood contained the NOSP) he had borrowed money from a friend to clear his rent arrears. The resident asked the landlord to communicate with him before starting legal action for the remaining arrears on his service charge account.
Social landlords are obliged to follow the Pre Action Protocol for possession claims. Section 2.2 of the protocol says that the landlord and tenant should try to agree affordable sums for the tenant to pay towards arrears, based upon the tenant’s income and expenditure (where such information has been supplied in response to the landlord’s enquiries). The landlord should clearly set out, in pre-action correspondence, any time limits with which the tenant should comply.
The landlord has an Income and Expenditure policy which says that it aligns with the protocol. The policy says “we understand that circumstances can sometimes make it difficult to make payments, so we will aim to consider an individual situation and work with them to find an affordable and appropriate repayment plan”. It says that there will be situations where it may apply to court however it says that “this will always be a last resort and we will ensure that all actions taken are in accordance with the relevant legal requirements”.
The Ombudsman has found that the landlord was premature in its decision to issue the NOSP on the resident. This was against the aim of the protocol and not in line with its policy. It did not demonstrate that it had fully considered all of the resident’s circumstances prior to issuing the notice. It did not issue an income and expenditure form to establish a realistic plan of what the resident could afford. It did not contact the resident, as it had promised, to show that it had paid due regard to his health issues prior to serving the notice.
The Equality Act 2010 (the Act) provides a legislative framework to protect the rights of individuals with protected characteristics, including those who have a disability, from unfair treatment. Part 149 of the Act also created the ‘Public Sector Equality Duty’ which requires that public bodies must have ‘due regard’ to equality. This includes meeting the needs of those who share a protected characteristic, to alleviate disadvantage and foster good relations between its residents.
In this case, it is appreciated that the landlord had given the resident an opportunity to put forward a payment plan. It had also asked the resident to pay off half of the arrears and to offer a reasonable payment towards the remainder. However it is the Ombudsman’s opinion that it did not allow the resident a reasonable opportunity to put forward a reasonable plan prior to issuing the notice. It was not until its first complaint response in October 2023 that it gave the resident an income and expenditure form to consider his affordability. Nor did it communicate with the resident about the impact his health issues might have on its decision making, prior to issuing the notice.
It is expected that prior to issuing a NOSP that the landlord will fully consider the resident’s income and expenditure to come to an affordable repayment plan. It is also expected that landlords will have due regard to a resident’s vulnerabilities when making a decision on whether to begin legal action. In this case the landlord did not fulfil its promise in getting back to the resident as it promised in early May 2023 and instead it issued a NOSP without prior warning to the resident.
It is positive to note that within its first complaint response on 26 October 2023, the landlord acknowledged that it had delayed in its collection of the arrears historically. It said that the level of debt was unacceptable and it should have communicated this sooner. It offered £250 in recognition of this, which this Service considers to have been reasonable in relation to this issue.
However, in its first complaint response the landlord failed to acknowledge that it had been somewhat premature in its decision to start legal proceedings against the resident. This was despite the resident communicating with the landlord regarding his position. The Ombudsman has found service failure in the landlord’s handling of this as it was not in line with its policy and went against the legal guidance.
In his complaint the resident said he was dissatisfied that the landlord had not abided by a former repayment arrangement regarding service charges following major works in 2014. In its first response the landlord said that it had no evidence of this agreement but asked the resident to confirm if he had anything in writing regarding this. This Service has found that as the landlord said it had no evidence of the former agreement, this was a reasonable response.
The resident remained dissatisfied with the landlord’s first complaint response. He said that he had an agreement with previous managers about repaying the service charge debt. He also said that the landlord had been unsympathetic to his situation, in particular his health concerns. He said he was dissatisfied that the landlord would not consider buying his share and had been unwilling to accept less than £400 per month, which he could not afford.
In its second complaint response, the landlord said that the resident was responsible for paying the service charge in line with the terms of his lease. It said that it had followed its policy regarding the repayment of the arrears. It said that it had offered support, and looked at acceptable payment terms. It said that the resident had not provided proof of the historical repayment agreement he had with the landlord. Nonetheless it said that as the resident had not paid any rent or service charges for a 2 year period subsequent to the agreement, then it was reasonable to conclude that any prior agreement would have been breached by now.
This Service has found that the landlord’s response to the resident’s complaint about it not adhering to the old repayment arrangement to have been reasonable under the circumstances. This Service appreciates that it must have been difficult for the resident as he had experienced financial hardship during the pandemic. However it was fair for landlord to conclude that any existing payment arrangement would most likely have been breached during this period. This was because the resident had unfortunately been unable to meet his existing liabilities, in addition to repayments towards the arrears, during this 2 year period.
The resident raised concerns about staff misconduct in relation to the collection of the arrears. Where issues of staff misconduct are raised, this Service expects landlords to investigate the issue by reviewing its communications, listening to call recordings (where available) and if necessary to interview its staff members. If possible it should arrange an alternative person to handle the resident’s issues whilst it investigates the allegations.
In this case this Service has found that the landlord acted appropriately in its response to the allegation of staff misconduct. It said it had reviewed the call notes and the email responses its staff member had sent to the resident. It said that it found no evidence of staff misconduct and its staff member had acted in line with its policy. It is noted in earlier communications that the landlord did not record its calls. As such, evidence of any misconduct via verbal communication would not have been available to the landlord.
The resident asked for his case to be handled by someone else on 15 and 24 March 2023. It was positive to note that the landlord acknowledged that he wanted to deal with another person and on 24 March, advised the resident to contact the manager instead. It was positive to note that the landlord acknowledged the resident’s dissatisfaction in regards to its staff conduct. In its final complaint response the landlord asked the resident to provide more specific dates and times of alleged comments. It said that upon receipt of this information it would speak with the staff member about the allegations.
After the first complaint response the resident said a staff member had previously said “it’s because of people like you our job is so hard”. However when the landlord asked when this comment had been made the resident said that it had been some time ago. As such the landlord said that it would be unable to take any action due to the time that had elapsed. The Ombudsman has found that the landlord’s overall response to this matter was appropriate.
In his complaint the resident said that the landlord had delayed in its email responses. This Service found this to be the case. Examples of this include during February, March, May and July 2023 when it had taken between 10 and 14 days to reply. It was positive to note that the landlord acknowledged this, and it offered the resident a further compensation payment of £150 within its final complaint response. The Ombudsman considers this award to have been reasonable in recognising its failures in respect of the delays.
Overall the Ombudsman has found service failure in the landlord’s handling of the collection of the arrears. This was because it was premature in its issue of the NOSP, it delayed in its responses to the resident and it failed to have full due regard to the extent of the resident’s vulnerabilities when managing its collection of the debt. This went against its policy which says that it will offer a supportive environment, and will ensure that the leaseholder’s repayments are affordable.
It is positive to note that the landlord acknowledged some of its failures during its complaint responses and it awarded compensation for this. However the Ombudsman does not consider its final complaint response and offer of compensation to be proportionate in acknowledging all of its failures and the detriment to the resident in this case.
It is appreciated that landlords have a difficult role to play when recovering debts and if an amicable payment plan cannot be reached it may inevitably lead to court action. However these situations must be carefully and sensitively managed to ensure that residents feel fully supported throughout the process. This is especially the case where the resident may be considered vulnerable.
It is positive to note that since June 2024 the landlord introduced a policy with regard to managing the risk of vulnerable persons. It says that it will consider the impact that a housing issue might have on a person, and the consequence the issue could have on their mental health, or exacerbate a person’s existing mental health condition. In this case it is evident that the resident’s housing situation was having a serious impact on his mental health.
The landlord is therefore ordered to apologise to the resident for the distress and inconvenience that the failures identified in this report have had on him. The landlord is also ordered to make a further compensation payment of £250 in recognition of the distress and inconvenience the handling of his case has had on him.

The landlord’s handling of the associated complaint

The Ombudsman’s Complaint Handling Code 2022 (the Code) contains guidance that landlords were expected to follow at the time of this complaint. It says that a complaint is defined as: ‘an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the organisation, its own staff, or those acting on its behalf, affecting an individual resident or group of residents. It is positive to note that the landlord has adopted this definition as per its policy.
In this case the resident expressed his dissatisfaction to the landlord on 15 March 2023 when he asked for another operative to handle the collection of his arrears. The resident was not given the option for this to be recorded as a complaint. He then raised a further expression of dissatisfaction on 24 March. It is positive to note that he was advised that he could liaise with the manager at this point. However the landlord missed a further opportunity to record this as a complaint, as per its policy.
The resident expressed further expressions of dissatisfaction on 22 June 2023, following his receipt of a NOSP, and again on 26 September. However the landlord did not accept a complaint from the resident until 13 October. This service has found that the landlord missed at least 4 opportunities to log a complaint following the resident’s expressions of dissatisfaction. Consequently the landlord took over 6 months to respond to the resident’s dissatisfaction about the handling of the collection of his arrears.
It is positive to note that upon accepting the complaint the landlord responded to it within the timescales outlined within its policy and the Code. Which both say:
Stage 1 complaints will be acknowledged within 5 working days, and a full response will be provided within 10 working days. It may extend up to an additional 10 working days, but will provide reasons why.
Stage 2 complaints will be acknowledged within 5 working days, and a full response will be provided within 20 working days. It may extend up to an additional 20 working days, but will provide reasons why.
Nonetheless, due to the delay in the landlord accepting a complaint from the resident, the Ombudsman has found maladministration in this case. This is because the landlord did not adhere to its own policy by not offering to record the resident’s expressions of dissatisfaction as a complaint back in March 2023. This led to over 6 months delay in accepting a complaint.
The landlord is therefore ordered to apologise to the resident for its delay in accepting the complaint and it must pay compensation of £150 in recognition of the distress and inconvenience that this has caused the resident.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure in the landlord’s handling of the recovery of arrears associated with the lease.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s handling of the associated complaint.

Order and recommendations

Order

Within 4 weeks from the date of this report the landlord is ordered to;
1. Pay compensation of £250 to the resident for its handling of the recovery of arrears associated with the lease.
2. Pay compensation of £150 to the resident for its handling of the associated complaint.
3. Provide a written apology to the resident for the failures identified within this report.
The above amounts are in addition to what the landlord has already offered to the resident in respect of the complaint.
The landlord is ordered to confirm compliance with the above orders within 4 weeks of the date of this report.