Peabody Trust (202225937)

Back to Top

 

REPORT

COMPLAINT 202225937

Peabody Trust

22 October 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

  1. The complaint is about the landlord’s handling of the resident’s mutual exchange application.

Background

  1. The resident was previously a periodic assured shorthold intermediate rent tenant of the landlord of a house. She reports that her and her spouse have health issues that were affected by the handling of her mutual exchange application.
  2. The resident described applying and being accepted to join the landlord’s mutual exchange scheme in June 2022. This was to move to another area to be closer to her elderly and unwell parents who had no other family around. The resident explained that she then found another tenant to exchange with in their area and that both parties viewed each other’s properties. However, the other tenant had to live in their home for 12 months in order to exchange, so they agreed to re-apply in October 2022. The resident and the other tenant therefore resubmitted their mutual exchange applications to the landlord in October 2022. The landlord subsequently told her in October 2022 that it would take 42 days to process the exchange by November 2022.
  3. The landlord also said the mutual exchange required a surveyor’s inspection of the resident’s property, which it agreed to contact her to arrange. She nevertheless chased the landlord for updates twice in October 2022 and 6 times in November 2022 before it arranged the inspection. The landlord explained this was because its attempts to do so in its surveyor’s absence were unsuccessful. However, it said it aimed to complete the exchange before Christmas 2022, with no reason this could not be done as soon as possible. The resident and the landlord’s surveyor then signed its survey form to confirm her property was in acceptable condition to exchange in November 2022.
  4. The resident subsequently asked the landlord if the exchange paperwork was fine and if she could book movers. It told her in late-November 2022 it usually took 2 weeks to move after approval, which would most likely be in mid-December 2022. The landlord then agreed with the resident and the other tenant for them to sign up and move on the same date at that time. It subsequently asked her if she had an assured tenancy 2 working days before the sign up and moving date in December 2022. The resident told the landlord she understood this to be an assured tenancy and it again confirmed the sign up and moving date. It nevertheless contacted her on the afternoon of the last working day before her sign up and moving date in December 2022.
  5. The landlord explained that the resident could not exchange her property as she was an assured shorthold intermediate rent tenant. She and the other tenant therefore contacted it from December 2022 to dispute this. The resident asked why the landlord did not realise her ineligibility to exchange until shortly before this was due after she reapplied and chased it. She added that its manager could not explain this, she had to cancel movers, and her mental health was affected. The resident also told the landlord she asked to exchange over 6 months earlier and its website allowed assured shorthold tenants’ exchanges after 2 years. She then made a stage 1 complaint in December 2022 about it saying she could exchange before declining at the last minute.
  6. The resident therefore asked the landlord to grant her an assured tenancy so she could exchange. It logged this as a service request and not a complaint, so the service area handling the exchange responded to this in December 2022. The landlord apologised for the error in letting the resident go through initial exchange procedures before explaining her tenancy type was ineligible for this. It also apologised for being unable to convert her tenancy to exchange, as this limited her to other intermediate rent or private properties. The landlord added it asked its team to check all procedures and tenancies when applications were made. The resident subsequently asked the Ombudsman to help her progress her complaint with it.
  7. The resident complained the landlord only referred to human error, had no concern for her finances and mental health, and did not answer questions. She described packing, hiring movers, selling possessions to move to a smaller property, and leaving family and friends. The resident added her housing officer did not contact her, her and her spouse had emotional and health impacts, and her parents needed assistance. The Ombudsman therefore asked the landlord to send the resident a final stage complaint response in March 2023 that we chased in April 2023. Its May 2023 final stage complaint response found it incorrectly allowed her to join its mutual exchange scheme with an ineligible tenancy.
  8. This was due to intermediate rent assured shorthold tenancies’ financial arrangements preventing conversion to or exchange with more secure lower social rent tenancies. The landlord also found it did not correctly log or investigate the complaint under its complaints procedure, apologising for the resident’s frustration, inconvenience, and annoyance. It accepted this need not have happened and was worsened by her complaint being referred to the same service area. The landlord therefore described explaining this to its manager and seeking to ensure such errors and missed opportunities to put them right did not recur. It suggested disciplinary action might occur if this happened again and said its staff had been given complaint handling training.
  9. The landlord also apologised that the resident did not receive a stage 1 complaint response and had to approach the Ombudsman to escalate this. It acknowledged its late final stage response, but that her tenancy could not be changed and the outcome would be the same without its errors. The landlord therefore offered the resident its maximum £400 compensation for disruption from her time, trouble and inconvenience, and £250 for its poor complaint handling. However, she complained to us it did not answer why it did not pick up she was ineligible to exchange sooner. The resident added she had to repeatedly chase the landlord, cancel movers and utilities, and its apology and compensation did not cover her experience, belongings, and travel costs.

Assessment and findings

  1. The resident’s tenancy agreement states that she had a periodic assured shorthold tenancy with the landlord but does not refer to intermediate rent. This nevertheless does say that she was unable to assign the tenancy without a court order. The landlord’s mutual exchange policy states that intermediate rent and periodic assured shorthold tenants will not qualify for exchanges. This instead says that assured shorthold tenants only qualify to exchange if they have fixed terms of over 2 years and social or affordable rent. The landlord is required to decide mutual exchange applications within 42 calendar days in writing with reasons after inspecting its tenant’s property. Tenants are not permitted to move without both landlords’ written confirmation and sign ups.
  2. At the time of the resident’s mutual exchange application, the landlord’s mutual exchange guide stated assured shorthold tenants had no right to exchange. Its website at the time nevertheless said they could exchange after 2 years, but this only related to social or affordable rents. The guide also said the landlord would keep its tenant informed of progress throughout the approval period from application to exchange. This additionally confirmed it could refuse exchanges for reasons including restrictions on the property, and that tenants must not move before its written permission. The landlord stated tenants could expect to move about 2 weeks after an unconditional full approval of an exchange.
  3. The landlord understandably told the other tenant the resident applied to mutually exchange with to postpone their application in June 2022. This is because the other tenant was not eligible to exchange at that time, having not been in their home for 12 months yet. It was therefore appropriate the landlord identified this and advised the other tenant to re-apply from their 12-month anniversary at their home in October 2022. This meant, however, that it was completely unacceptable that it did not also identify the resident’s ineligibility for a mutual exchange at the same time. The landlord instead unsuitably accepted her application to join its mutual exchange scheme in June 2022, which led her to find the other tenant.
  4. The resident’s tenancy agreement did not state she had intermediate rent, which the landlord’s mutual exchange policy excluded from such exchanges. Nevertheless, it should have kept full, detailed, and up to date records of her tenancy and rent indicating this and her ineligibility to exchange. Moreover, the agreement did confirm the resident was a periodic assured shorthold tenant unable to assign her tenancy without a court order. Therefore, the landlord should also have been aware she was ineligible to exchange from her June 2022 application to its scheme for these reasons. This is because the policy additionally excluded periodic assured shorthold tenants from exchanges, which were usually via assignment that was prevented by the agreement.
  5. This meant the landlord should have known the resident was ineligible to mutually exchange and declined her application for its scheme from the outset. It was therefore extremely unreasonable that it did not do so and instead suggested the opposite by inviting her to re-apply in October 2022. This indicated the landlord did not confirm the resident’s eligibility to exchange at her scheme application or approach with the other tenant in June 2022. As it only explained this as human error, this suggested it did not have appropriate systems, records, checks, or training in place to prevent this. While the landlord’s mutual exchange guide told the resident she could not exchange as an assured shorthold tenant, its website appeared to contradict this.
  6. Therefore, it was understandable that the resident believed she was eligible to mutually exchange, especially as the landlord accepted her application to its scheme. This was reinforced by its invitation to her to re-apply to exchange with the other tenant in October 2022, giving the legitimate expectation of eligibility. This is particularly because there was an onus on the landlord, as the party handling and approving the exchange, to know of and confirm eligibility. This meant it was very unsuitable and contrary to its mutual exchange policy that it did not do so. Its subsequent handling of the resident’s mutual exchange was also unreasonable, as this did not comply with the policy or its mutual exchange guide.
  7. The landlord did not decide the resident’s mutual exchange application within 42 calendar days in writing with reasons. This was contrary to its mutual exchange policy’s requirement for it to do so within that timescale. This was due to the landlord taking 56 calendar days from the resident’s 14 October 2022 application to decline this on 9 December 2022. This was after its surveyor inspected her property within the policy’s timescale on 25 November 2022, in line with its obligation to do so. However, there is no evidence the landlord gave the resident its decision to decline her application in writing with reasons at the time. There are only indications that it instead only called her twice on 9 December 2022 to inform her of this, contrary to its policy.
  8. The landlord’s mutual exchange guide also required it to keep the resident informed of progress throughout the approval period from application to exchange. It nevertheless did not do so and she instead had to chase it repeatedly before its above inspection of her property, which was inappropriate. The resident chased on 21 and 27 October and 9, 10, 11, 14, 16, and 21 November 2022 before the landlord’s 25 November 2022 inspection. She therefore experienced unnecessary additional time and trouble in doing so, especially because of her above ineligibility for an exchange. While the landlord explained this was due to it unsuccessfully seeking an inspection in its surveyor’s absence, it ought to have made arrangements for this.
  9. The landlord should also have regularly proactively communicated about the resident’s application’s progress so she did not have to chase it. Its failure to do so and its lack of inspection cover for its surveyor’s annual leave, a scheduled and commonly occurring absence, was unsuitable. The landlord should have instead ensured sufficient staff were available to continue usual functions during this absence, which was not sick or other unscheduled leave. If it was unable to, it ought to have updated the resident, in accordance with its mutual exchange guide’s obligation to keep her informed. It is also concerning the landlord did not reasonably manage expectations regarding its mutual exchange process and timescale to prevent her prematurely arranging to move.
  10. The landlord’s mutual exchange policy did not permit the resident to move without both landlords’ written confirmation and sign ups. Its mutual exchange guide also confirmed she must not move before its written permission and expected moves about 2 weeks after its unconditional full approval. However, the landlord’s handling of the resident’s application did not suggest this, which encouraged her to make earlier arrangements prior to receiving its decision. This is because it told her on 16 November 2022 it aimed to move her before Christmas 2022. The landlord added there was no reason it could not do this as soon as possible. It therefore raised the resident’s expectations about moving sooner instead of clearly outlining that the above steps had to occur first.
  11. The landlord also told the resident on 29 November 2022 it usually took 2 weeks to move after approval. While this was from its mutual exchange guide, it additionally incorrectly told her this meant she would likely move on 13 to 14 December 2022. The resident therefore relied on this to arrange with the other tenant, her movers, family, and friends to move on 12 December 2022. Moreover, the landlord confirmed to her on 1 December 2022 this was the moving and sign up date, despite not approving her application yet. This was inappropriate, as its mutual exchange policy and guide required its approval before any moves. Moreover, the landlord unsuitably only began investigating the resident’s eligibility by calling her about her tenancy on 8 December 2022.
  12. The fact that the landlord waited until 2 working days before the scheduled exchange to check the resident’s eligibility for this was completely unacceptable. This also meant its verbal decision declining this for ineligible tenancy and rent status on 9 December 2022 was 1 working day before the exchange. This was worsened by the landlord only calling the resident about this late in the afternoon of the final working day, maximising distress and inconvenience. While its mutual exchange guide confirmed it could refuse exchanges for the above reasons, its above information suggested her exchange would occur. This was until just prior to the exchange, when the landlord finally considered eligibility, which was extremely unreasonable.
  13. It was therefore appropriate that the landlord’s complaint responses apologised for letting the resident go through exchange procedures before explaining she was ineligible. It also suitably apologised for her frustration, inconvenience, and annoyance. The landlord additionally offered the resident its compensation and remedies policy’s £400 maximum award for moderate disruptions from failures in its service. Moreover, this was within the Ombudsman’s remedies guidance’s recommended range of compensation for failures adversely affecting residents. Nevertheless, there was a high impact and high effort for the resident from the landlord’s failures to follow procedure or communicate over extended time.
  14. The resident also reported her and her spouse’s significant emotional and health impacts from the landlord’s failings in handling her mutual exchange application. This was from chasing it, packing, hiring and cancelling movers, changing utilities, selling possessions, travel costs, leaving friends and family, and her parents needing assistance. The landlord’s above compensation award was therefore not proportionate to fully recognise the resident’s extensive disruption and significant impact, which entitled her to more compensation. This is as defined by its compensation and remedies policy and the Ombudsman’s remedies guidance, with the latter recommending up to £1,000 for such impacts. The landlord has been ordered below to pay this to the resident.
  15. This is as well as the £400 the landlord already offered the resident, which it has also been recommended to pay her below. This is if it has not done so already. The landlord has additionally been ordered below to write to apologise to the resident for the further failings identified by this investigation. This is in line with the Ombudsman’s dispute resolution principle to put things right. Moreover, the landlord has been ordered to provide the resident with details to submit a liability claim to it or its insurers. This is because of reported damages to her and her spouse’s health and finances from its handling of her mutual exchange. We do not have the authority or expertise to determine liability for such damages in the way a court or insurer might.
  16. In relation to the Ombudsman’s dispute resolution principle to learn from outcomes, the landlord described doing the following in the resident’s case. It said it asked its team to check all procedures and tenancies when mutual exchange applications were made. The landlord also explained its failure to correctly log and investigate the resident’s complaint to its manager to prevent future errors and missed opportunities. It added disciplinary action might occur if this happened again and its staff had been given complaint handling training, showing appropriate learning from this. The landlord also subsequently self-assessed its compliance against our Complaint Handling Code but did not explain how the resident’s ineligible mutual exchange progressed so long.
  17. The landlord has therefore also been ordered below to carry out a senior management review of its handling of the resident’s mutual exchange. This is to identify exactly why its failures in handling this happened, and to outline how it proposes to prevent these from occurring again. The landlord shall present the review to its senior leadership team and provide the resident and the Ombudsman with a copy of its review. This review should include its staff’s training needs on the application of its mutual exchange policy and guide. This is to ensure the landlord has suitable systems, records, checks, and training in place to confirm eligibility at the outset of every mutual exchange. This is also to ensure residents are informed of progress throughout every approval period.
  18. With regard to the landlord’s complaint responses, it acknowledged it did not issue a stage 1 response but a service request. It additionally accepted the resident had to approach the Ombudsman to escalate her final stage complaint, and that its response was 20 working days late. The landlord therefore offered her its compensation and remedies policy’s maximum £250 for severe complaint handling failures in following policy or investigating correctly. This was within our remedies guidance’s recommended range of compensation for failures adversely affecting the resident, so this was proportionate to recognise its poor complaint handling. The landlord has therefore been recommended to pay this to her below, if it has not done so already.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was maladministration by the landlord in its handling of the resident’s mutual exchange application.

Orders and recommendation

Orders

  1. The landlord is ordered to:
    1. Pay the resident £1,000 additional compensation within 4 weeks to recognise her extensive disruption and significant emotional and other impacts.
    2. Write to the resident within 4 weeks to apologise for its further failings in handling her mutual exchange application identified by this investigation. It shall accept responsibility for these and acknowledge their impact on her.
    3. Provide the resident with details within 4 weeks to submit a liability claim to it or its insurers. This is for the damages she reported to her and her spouse’s health and finances.
    4. In accordance with paragraph 54g of the Scheme, carry out a senior management review within 8 weeks of its handling of the resident’s mutual exchange. This is to identify exactly why its failures in handling this happened, and to outline how it proposes to prevent these from occurring again. The landlord shall present the review to its senior leadership team and provide the resident and the Ombudsman with a copy of its review. This review should include:
      1. Its staff’s training needs on the application of its mutual exchange policy and guide.

This is to ensure the landlord has suitable systems, records, checks, and training in place to confirm eligibility at the outset of every mutual exchange. This is also to ensure residents are informed of progress throughout every approval period.

  1. The landlord shall contact the Ombudsman within 4 and 8 weeks to confirm that it has complied with the above orders and whether it will follow the below recommendation.

Recommendation

  1. It is recommended that the landlord pay the resident the £650 compensation it previously offered her, if she has not received this already.