Paragon Asra Housing Limited (202103580)

REPORT

COMPLAINT 202103580

Paragon Asra Housing Limited

30 September 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

The complaint is about the landlord’s communication about the property’s energy supply.

Background and summary of events

The resident is an assured tenant of the landlord and the joint tenancy began on 19 February 2018. The property is part of a new build block and wider development that receives heating and hot water from a district heating system that is owned and managed by an independent energy supplier (the supplier).
The government’s current energy policy requires the introduction of heat networks in cities wherever feasible. This is in order to generate heat and power more efficiently, improve cities’ energy security and self-sufficiency, and reduce carbon dioxide emissions.
Although the resident’s tenancy agreement does not contain any specific clauses in regard to the district heating system or the supplier, section 3.19 sets out that ‘Where the building containing your home has a central supply of gas or electricity, you must read your meters as and when requested by us and pay to us or the supplier directly; on demand the cost of gas or electricity used in your home.’
It is not disputed that sometime before signing the tenancy for the property, the landlord had responded to an enquiry from the resident about the property’s energy supply and said that they would be able to choose their own supplier after an initial period with the supplier.
In April 2019, the resident contacted the landlord and said that they would not be signing the heating / hot water supply contract the landlord had in place with supplier as they intended to choose their own supplier.
In further email exchanges in August and September 2019 when the resident re-stated their wish to choose their own gas supplier (as they had been told they could) the landlord responded and said that:
1. There was no gas supply to the property so it was not possible to change or choose a gas supplier
2. After 12 months, residents were free to choose their own electricity supplier
3. The choice of supplier for the energy centre was not made by the landlord but by the developer
On 20 January 2020 the resident contacted the landlord and said:
1. They had received a letter from the supplier welcoming them as customers
2. They did not consider that they had a contract with the supplier
3. They had been told when receiving the keys to the property that they could choose any provider for all utilities apart from water.
After several chasing emails, the landlord responded on 29 January 2020 and explained that:
1. The supply of heating and hot water was from a central energy centre
2. There was no individual gas supply or boilers in individual flats
3. It was not possible to receive heating or hot water from another source other than the energy centre
4. It was not possible to choose a different provider as the energy centre was run by the supplier.
On 5 February 2020 after a further email exchange, the landlord apologised to the resident for the wrong information they had been given at the property sign-up and confirmed that it was not possible to choose a different energy provider.
The resident responded and said that they found the landlord’s response ‘baffling and dismissive’ and subsequently, in an undated email explained that:
1. They had been advised, after specifically asking, that after an initial period with the supplier they would be able to choose their own provider after handover.
2. Had they known the property was part of a ‘locked’ district heating network they would not have accepted the tenancy as they wanted to have control over their bills.
3. They had only received an ‘insincere apology’ in response
4. They were now receiving threats of legal action from the supplier, with whom they had not signed a contract
5. They were not refusing to pay their bills but wanted assistance in resolving the matter.
Having not received a response, the resident chased the landlord again on 29 September 2020 and received a response on 9 October 2020 that said that:
1. It apologised for the delay in responding
2. It understood the resident’s frustration at being misinformed about being able to change energy providers
3. The energy centre was a planning requirement and provided a more efficient service than individual boilers
4. The energy centre and infrastructure are the property of the supplier
5. The supplier set its charges at 81% of the average six standard gas tariffs
6. Energy consumption should be lower than for conventional systems
7. It apologised for incorrectly advising the resident about the supplier when they moved in
8. It offered £100 compensation for the delay in responding to the enquiry and for being misinformed
On 28 October 2020 the resident explained that they remained unhappy with the landlord’s response.
On 16 November 2020 the landlord responded and said that it had nothing further to add but also explained that it would learn from the complaint to ensure accurate information about heating systems was provided when homes are first let. It also conformed the complaint had exhausted its complaints procedure and signposted the resident to this Service.
On 5 May 2021 the resident contacted the landlord’s Chief Executive about the issue saying that:
1. The landlord had not attempted to resolve the issue
2. They would not enter into a contract with the supplier
3. They would not be liable for any charges whilst the issue was unresolved.
4. They had provided alternatives in the past that the landlord may wish to re-visit
5. They paid all rent, service charges and other bills on time
The landlord responded the next day and referred the resident to this Service.
The resident subsequently explained that they wanted the landlord to either:
1. Provide a means to choose their own energy supplier
2. Move them to a property where they can choose supplier
3. ‘Unwind’ the current tenancy agreement on the basis of misrepresentation and cover the cost of all accrued heating bills accrued
The landlord has subsequently explained that the supplier took over the district heating network from the developer in January 2020 and that the resident was not charged (and did not receive any bills) for energy consumed from the start of the tenancy in 2018 until that date. Internal emails suggest the resident received their first bill from the supplier in October 2021.

Assessment and findings

It is not disputed that prior to signing the tenancy for the property, the landlord explained to the resident that after an initial period of paying the supplier for energy costs they would be able to switch and choose their own supplier. The landlord subsequently explained that this information was a mistake and that all residents of the block can only receive heating and hot water from the supplier and that there is no gas supply to the property.
It is important to note that, unlike a court, this service is not able to make legally binding decisions about either misrepresentation or something being mis-sold. If the resident feels that the landlord’s mistake in providing inaccurate information may amount to misrepresentation or the property being mis-sold to them, they should seek independent advice.
Although there are no specific clauses in the resident’s tenancy agreement about the supplier or the energy centre, there is a broader obligation related to buildings with central gas supplies for the resident to pay either the landlord or the supplier directly for any gas used in their home. Whilst the wording of this clause does not relate exactly to the resident’s situation (as there is no supply of gas to their property, only heating and hot water) it would again be for a court to determine if this clause amounts to a legal obligation on the resident to pay the supplier for the heating and hot water used in their home.
It was more than 12 months after moving in to the property, having received initial contact from the supplier that the resident first explained to the landlord that they wanted to choose their own gas supplier as they had been told they could. The landlord responded appropriately and engaged with the resident in a series of emails explaining the situation in terms of the energy supply and by September 2019 had explained clearly that there was no gas supply to the property and so it was not possible for the resident to choose a supplier.
This was a reasonable response because it is evident that as a result of the energy centre providing centralised heating and hot water to properties within the development, there was no gas supply to individual properties. As such, it was not possible for the landlord to provide the resident’s wanted outcome of being able to choose their own gas supplier. Furthermore, it was reasonable for the landlord to explain that the contract arrangements for the energy centre and the supplier were outside its control. This is because such contractual details would have been between the developer and the supplier under planning supervision from the local authority.
However, the incorrect information provided by the landlord to the resident has caused them a significant amount of distress and inconvenience. This is evidenced by the resident’s repeated and on-going dissatisfaction and contact in which they clearly explain that being able to freely choose their energy supplier was important to them, which was why they specifically asked if they would be able to do so prior to signing the tenancy.
When the resident raised the matter again in early 2020, the landlord again responded and explained the situation in regard to the energy centre and also in February 2020 apologised to the resident for being given incorrect information about being able to choose a gas supplier. This was an appropriate response that looked to put right its now acknowledged communication failure.
As the resident remained dissatisfied, it was appropriate for the landlord to respond to the issue as a formal complaint. However it was not appropriate that there were delays in its initial complaint response that required the resident to chase for a response, or that the response was not issued until October 2020, several months after the resident had made clear their continued dissatisfaction. This delay represents a service failure by the landlord.
In determining whether there has been service failure or maladministration we consider both the events that initially prompted a complaint and the landlord’s response to those events. The extent to which a landlord has recognised any shortcomings and the appropriateness of any steps taken to offer redress can be as relevant as the original mistake or service failure.
In this case, the landlord accepted both its mistake with the incorrect information it provided to the resident about being able to choose an energy supplier and its delay in providing its initial complaint response. It also apologised for both failures and offered the resident £100 compensation in its initial complaint response of October 2020. It further explained in its November 2020 response that it had learned from the complaint by ensuring accurate information was provided to new tenants at sign-up in regard to energy supply.
Although the resident’s frustration at not being able to choose a gas supplier is accepted, there is no evidence that they have been financially disadvantaged by not being able to do so. In this regard it was reasonable for the landlord to explain to them that district heating systems usually result in lower energy costs for heating and hot water than if the property had its own gas supply and boiler.
Furthermore, although it is not disputed that an officer provided incorrect information to the resident, this was a mistake and the landlord is not obliged or bound to abide by what has been said in error. Furthermore, as is set out above, the landlord is unable to provide the outcome being sought as there is no gas supply to the property and the contractual arrangements for the energy centre are outside of its control.
As such, the landlord’s explanations, apologies, £100 compensation and information as to how it had learned from the complaint were sufficient put right the resident’s complaint. Furthermore, these actions were proportionate to the impact of its accepted mistake in providing inaccurate information about the energy supply and its delay in responding to the complaint.

Determination (decision)

In accordance with paragraph 55(b) of the Housing Ombudsman Scheme the landlord has offered redress to the resident that satisfactorily resolves their complaint about its communication about the property’s energy supply.

Reasons

It is not disputed that the landlord mistakenly provided the resident with incorrect information about being able to choose their own energy supplier. However the landlord subsequently accepted this failure and took sufficient steps to put it right by apologising, offering compensation and explaining how it had learned from the complaint. Whilst the resident was understandably frustrated by not being able to choose their own gas supplier, there is no evidence that they were significantly disadvantaged by not being able to do so.

Recommendations

The landlord to contact the resident and arrange to pay the £100 compensation it previously offered.
The landlord to review its sign-up procedures and tenancy agreements for use when a property is part of a communal heating system to ensure accurate information is provided to new tenants and that the tenancy agreement accurately reflects any contractual obligations in regard to paying for communal heating / hot water.