Sage Housing Limited (201914513)

REPORT

COMPLAINT 201914513

Sage Housing Limited

28 February 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:
1. response to the resident’s concerns about the administration of her rent account.
2. handling of the resident’s formal complaint about the above matter.
3. decision to apply to court to seek possession of the property.

Jurisdiction

What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
After carefully considering all the evidence, in accordance with paragraph 39(h) of the Housing Ombudsman Scheme, complaint 1c is outside of the Ombudsman’s jurisdiction.
Paragraph 39(h) of the Scheme states – “the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion, concern matters that are, or have been, the subject of legal proceedings and where a complainant has or had the opportunity to raise the subject matter of the complaint as part of those proceedings”.
At the beginning of 2020, the landlord had begun the process of issuing possession proceedings against the resident. When the matter was heard at court, the judge made the decision not to grant the possession order. The decision was made to suspend the claim on the basis that the amount of arrears on the resident’s rent account was in dispute.
During September and October 2020, it was agreed between both parties that the claim would be dismissed, that the landlord would pay the resident £725.82 compensation and the resident would agree to continue paying her rent together with an additional £42.11 per month. The agreement was finalised as a formal Consent Order. In communication to the Ombudsman, the landlord has confirmed that the figure of £725.82 was paid for “the distress she (the resident) had endured due to the claim having been filed and special damages incurred in relation to, for example, making phone calls to resolve issues in the rent account”.
It is noted that the resident believes that the landlord acted unreasonably in commencing possession proceedings. Ordinarily, the Ombudsman’s role when considering such complaints would be to assess whether or not a landlord followed its policy or procedure when dealing with arrears and then ultimately commencing possession proceedings. If it was established that the landlord did not follow its policy or procedure, the Ombudsman’s role would be to consider the adverse effect on the resident, and order compensation aimed at putting right some of the distress and inconvenience.
While it is acknowledged that the issue of whether possession proceedings were commenced prematurely was not decided by the court, the Consent Order did include the payment of compensation to reflect distress caused by the possession claim being filed. It therefore follows that the resident has already been compensated for the distress she was caused as a result of the landlord pursuing possession proceedings in 2020. As such, under paragraph 39(h) of the Scheme, the Ombudsman cannot consider the resident’s complaint about the landlord’s decision to apply to court for possession of the property, as the resident has already been compensated for the adverse effect caused as a result of the landlord commencing possession proceedings.
While the Ombudsman has not assessed the landlord’s actions in commencing the possession proceedings, they have been referred to within the report for the purpose of providing context.

Background and summary of events

The resident is a tenant of the landlord’s property. The property is a four-bedroom house which the resident occupies with her children.
The landlord has appointed a managing agent. The managing agent acts on the landlord’s behalf for matters relating to rent. Both the landlord and the managing agent have been referred to as “the landlord” for the purposes of the report. Where necessary, specific mention has been made to the managing agent alone.

Summary of events

The tenancy began on 21 May 2019. The resident was due to move to the area to be closer to her father. However, shortly after signing the tenancy agreement, the resident’s father died unexpectedly. The resident has advised that in the weeks following her father’s death, she was responsible for arranging his funeral and taking care of his affairs. The resident says that as a result, she was not in a position to move to the property immediately.
On 9 July, the landlord wrote to the resident to advise that her rent account had accrued arrears of £1505.43 as of 7 July. The letter asked the resident to pay the outstanding balance and advised that her home would be at risk if she failed to clear the arrears on the account. Further letters were sent on 16 and 23 July as the arrears continued to grow. The resident subsequently moved to the property 21 July and says that she contacted the landlord in August to arrange payments to clear some of the arrears.
On 22 August 2019, the landlord wrote the resident to advise that a notice of seeking possession (NOSP) was being served due to the level of arrears on the account. Within the letter, the landlord asked the resident to pay the outstanding balance. It also advised that if the resident believed that her debt had been caused by a delay in processing a benefit claim, then she should check the progress of the claim.
The landlord wrote to the resident on 23 September to advise that its Money Advisor had attempted to make contact with her. It explained that the Money Advice Team could assist with any rent related benefit problems the resident may have been experiencing. The resident says that she continued to make rent payments; however, the landlord continued to advise her of rent arrears accruing on the account.
The matter was subsequently heard at court at the beginning of 2020, and the judge made the decision not to grant the possession order, as the amount of arrears was in disputed. The claim was suspended, and in October 2020 the landlord and resident subsequently agreed by consent for the claim to be dismissed. At this point, the landlord agreed to pay compensation to the resident’s rent account and the resident agreed to a repayment plan. However, the resident and landlord continued to engage in discussion about the rent statements, as the resident disputed the amount of arrears and did not consider that her account was being properly managed.
During 2020, the resident had been in contact with the Ombudsman to raise concerns about her landlord. The Service provided advice on raising a formal complaint, and confirmed that we could not intervene if proceedings were underway. Towards the end of 2020, after the possession claim was dismissed, the resident confirmed to the Ombudsman that she was unhappy with the landlord’s administration of her rent account – and that this had ultimately led to the possession proceedings. The resident added that she was also unhappy with the landlord’s response to her request to raise an official complaint.
In January 2021, further discussion took place and the resident advised that she had spoken with the landlord about her complaint, but was yet to receive a response. On 13 January, the landlord informed the Ombudsman that while the resident had raised dissatisfaction with matters previously, none of the expressions of dissatisfaction had “amounted to an official complaint”. However, given the Ombudsman’s involvement and through further discussion with the resident, it had confirmed what the elements of the complaint were and would respond within ten working days.
The landlord wrote to the resident on 28 January 2021, in response to her complaint. It said:
1. In response to the resident’s concerns that her rent account had not been managed satisfactorily, and that the adjustments had made the account difficult to understand, it had checked all the adjustments and it could confirm that they were correct. It had enclosed copies of the statements and indicated what each adjustment was in respect of.
2. The main reason for the adjustments was the change from a starter tenancy to a fixed term tenancy, and that a number of payments had been made using the old payment reference number, and these needed to be moved to the new tenancy.
3. It did appreciate that this had been confusing, and wished to apologise. It also confirmed that the process had since improved and the reference number when converting tenancies would remain the same.
4. The resident had queried why it had applied for direct payment of universal credit (UC). It confirmed that this was because the rent account was in arrears of £2273.43 at the time of application.
5. The resident had advised that she believed that the Department for Work and Pensions (DWP) had made more payments than were showing on her account. She had been asked to provide screenshots of this, but had failed to do so.
6. In response to the resident’s concerns about delayed UC payments, it could confirm that the delays were caused by the DWP who at the time paid landlords on a four-weekly schedule. This meant that landlords were receiving payment up to eight weeks after the claimant had received their UC.
7. There had been some discussion with landlord staff about a missing payment of £75.15 The landlord had asked for more information about this so that it could try to locate the payment. While it noted the resident’s comments that the payment was missing, without any further details, it could not search for it.
8. The resident wished to know why her concerns were not logged as an official complaint when she had requested this. It had passed on the resident’s email of 14 January, and it understood that this had been responded to on 27 January 2021.
The resident replied on 9 February, and said:
1. The manual adjustments that had been made were “impossible to understand”. Landlord staff had admitted this on occasion too. She had tried to seek help from other organisations too, and they had tried to contact the landlord to reconcile the account and prevent court action but to no avail.
2. The landlord had applied to DWP for payments to be made directly, but this was denied on 24 July 2019 as she had only moved to the address three days beforehand. She wished to know why she had not been notified of this action.
3. The landlord further requested payments to be made to it directly on 23 September, citing arrears of £3,047.63. However, this figure was incorrect.
4. On 10 October 2019, DWP had called the landlord to request an accurate rent balance as the resident had been given three different figures, which did not tally with what DWP had on file.
5. DWP then contacted the landlord again in February 2020, and it informed the landlord that payment had been made. The resident said that the landlord was not allocating UC payments received in a timely manner and the situation was beyond her control.
6. In relation to delayed DWP payments, the October 2019 payment took 10 days to be allocated, November’s took a month and a half, and the December payment took two months. The resident added that she had tried to contact the landlord about this; however, it took “no accountability”, and despite her requests that the landlord sort the issue out with DWP directly, no action was taken.
7. The formal complaint had been made to the landlord – and not the managing agent – in 2020. The landlord had agreed to investigate the complaint and offer a resolution within three working days; however, this did not happen and the member of staff with whom she spoke simply wished her “good luck” at court when she chased the matter.
8. She was unhappy with the response to her complaint, and that facts had been reported incorrectly. She felt that she had tried very hard to try to get the issues resolved, and that the landlord had failed to acknowledge the impact of its mismanagement of her account.
The landlord issued its final response to the complaint on 10 March 2021. It said:
1. It appreciated that there had been a significant number of adjustments on the resident’s account which had made the rent statement “difficult to understand”. Its staff had spent a “considerable” amount of time reviewing the account prior to responding, and it was able to confirm that all of the adjustments were correct.
2. As had been previously advised, the main reason for the adjustments being made was that several payments were made quoting the old reference number- when the starter tenancy was in place – and these had to be moved to the new, five–year fixed term tenancy, account.
3. It noted that staff had apologised for how confusing this had made the account, and it also wished to apologise for any confusion that had been caused.
4. While it acknowledged that the resident had been in touch on a number of occasions regarding the account, it was aware that it had provided her with several copies of the rent statement along with a “clear explanation of the balance owed”.
5. Its records show that on 30 October 2020, the resident had spoken with Income Recovery and requested further copies of the rent statements. These were provided, and it had been indicated on each the reason for the adjustment – as well as confirmation of the total payments received. It understood that the resident was unhappy that missing and/or expected payment had not been included. However, when the member of staff tried to obtain further details, the resident disconnected the call.
6. It wished to clarify that the rent account balance did not include any expected payments which may be due from the DWP. All payments from DWP were paid direct to the resident’s rent account and any delays were caused by DWP – not its income processing.
7. It wished to confirm that all payments that had been made to the old account in error had been credited to the new account. It also wished to thank the resident for confirming that as of 29 January 2021, she agreed that the balance was correct.
8. It partially upheld this element of the complaint as it acknowledged that its internal processes in creating a new account when converting the tenancy had resulted in a number of adjustments which made the rent statement difficult to understand.
9. In relation to the complaint handling, it noted that the resident had discussed her concerns with both managing agent and landlord staff. Through its investigation, it had established that the resident had spoken with the managing agent in February 2020, and had advised that she was waiting for a complaint response from the landlord. It said that it wished to apologise that the resident had to contact the Ombudsman directly, and that her concerns were not investigated and responded to in 2020. This element of the complaint was upheld.
In concluding, the landlord said that it accepted that it had fallen short of its expected standard in some areas when dealing with the resident’s complaint. It wished to offer the resident a total of £350 compensation in acknowledgment of this. The amount was broken down as £50 for the lack of communication and £300 for “missed timescales”. The landlord added that if the resident remained dissatisfied with the response, she could refer her complaint to the Ombudsman.
The resident accepted the landlord’s offer of compensation. However, she remained dissatisfied with the conclusions that had been reached and referred the matter to this Service for further consideration.

The tenancy agreement

The tenancy agreement states that the weekly rent – £256.00 is due in advance. It states that owing to the start date of the tenancy (21 May 2019), the first payment owed will be for six days at a daily rate of £36.57 – which amounts to a total of £219.43. Following this, rent will be payable at the full rent rate from the Monday after the start date of the agreement.
In addition, the tenancy agreement states – “should the tenant at any time receive Housing Benefit or any other benefit or credit in respect of this Tenancy then the tenant will (subject to any regulatory restriction preventing it) ensure that such benefit is paid to the landlord”.

Assessment and findings

While it is noted that the resident continues to have concerns about the landlord’s administration of her rent account, the investigation of this complaint has assessed events from when the tenancy began until March 2021 when the landlord provided a formal response about its administration of the rent account.
There are no obligations on the landlord under the tenancy agreement – or otherwise – in relation to the administration of rent accounts. Although landlords are advised to act promptly where accounts enter arrears, and are encouraged to set up repayment plans so that arrears do not accrue to unmanageable levels under Government guidance, there are no obligations in relation to the management of the rent account itself. The Ombudsman has therefore assessed the landlord’s overall handling of the rent account and whether it was reasonable.
It is acknowledged that the resident had suffered a bereavement, and that her circumstances had changed considerably between signing up to the tenancy in May 2019 and subsequently moving into the property on 21 July 2019. In correspondence to both the landlord and this Service, the resident has advised that discussions took place with landlord staff and she was informed that “she would not be expected to move, and that there would be no arrears”. However, the Ombudsman has not been provided with any contemporaneous evidence which shows that any agreements had been made, and that rent payments would not accrue on the account.
The tenancy agreement states that rent would become payable from the start date; and in the absence of any other evidence, the Ombudsman cannot find that the landlord acted unreasonably in charging rent from 21 May 2019 onwards.
As the arrears on the account began to grow, the landlord issued correspondence informing the resident that that account was in substantial arrears. This was appropriate and in line with the landlord’s Income Recovery procedure. The contemporaneous evidence provided to this Service shows that from July 2019, the landlord had appropriately tried to engage in conversation with the resident about the arrears that had accrued on her account and had tried to broach the subject of entering into a payment plan. The call notes from the landlord’s system show that the resident did not wish to engage in discussion during some of the telephone conversations; however, an agreement to make payments was later agreed in August 2019.
It is acknowledged that the resident had made additional payments, on top of the required weekly rent, and that she was expecting discretionary housing benefit and universal credit payments to be added to the account too. It is also noted that the delay in these benefit payments being added to the account affected the level of arrears. The evidence provided to the Ombudsman shows that there was some disagreement between the landlord and resident about whether the landlord had acted fairly in relation to DWP payments that were made between October 2019 and January 2020. The resident has advised that she, together with other agencies, had tried to contact the landlord to discuss the shortfalls. Conversely, the landlord says that it had asked the resident to provide information about proof of payments from UC, but that the resident had initially failed to do so.
On the basis of the evidence that is available, the Ombudsman cannot reconcile the difference here. However, it is acknowledged that the issues surrounding the benefit payments compounded the situation relating to the rent account arrears. It is acknowledged that the resident was ultimately liable for the rent under the terms of the tenancy agreement – irrespective of the fact that she was in receipt of benefits. However, it would have been reasonable in the circumstances for the landlord to provide the resident with a detailed explanation of how it processed benefit payments, and the likely processing times, so that the resident had a clear understanding of where and how delays may be encountered.
When the landlord responded to the complaint in March 2021, it explained that the rent account balance did not include any amounts that were expected in the form of benefit payments. Although it was appropriate to provide this explanation, given the issues that had arisen and the confusion surrounding the processing of benefit payments that had occurred towards the end of 2019, it would have been reasonable to have provided the resident with this explanation sooner. That the landlord did not take such action was a shortcoming in its handling of the matter. While providing such an explanation would not have affected the total arrears on the account, it could have helped to clarify the landlord’s position, and to help the resident understand how her rent account was being administered.
Within its final response to the complaint, the landlord acknowledged that the statements had become “difficult to understand” owing to a number of adjustments that had been made. This included payments being made using an old reference number following the change to the resident’s tenancy. However, it was able to confirm that the adjustments were correct. The landlord also said that its investigation of the complaint had found that staff had provided rent statements when requested, and had provided clear explanations of the balance owed.
While the landlord may have considered that the explanations were clear, this was not the resident’s experience – and she had advised the landlord as such when making her complaint. In addition, given that the landlord had acknowledged that its own adjustments had been the cause of confusion and had made the rent account statements difficult to follow, it would have been reasonable for the landlord to offer the resident some redress for the inconvenience and confusion she had been caused.
It is acknowledged that in the final response to the complaint, the landlord offered the resident £50 compensation for “a lack of communication”. However, it is not clear what this was in specific reference to. Nevertheless, that the landlord did not offer compensation for the confusion and inconvenience caused by its adjustments to the resident’s rent account was a failing in its response to the complaint. When considering how the resident should be compensated, the Ombudsman has not taken into consideration the impact that was caused as a result of the landlord commencing possession proceedings, given that this has already been compensated for, as detailed at the beginning of this report.

Complaint handling

As detailed above, it was only following intervention from this Service that the landlord considered the resident’s concerns through its formal complaints procedure. The landlord appropriately acknowledged this failing – and that it had not responded to the complaint for approximately a year – when it issued its final response. The landlord’s offer of £300 in respect of “missed timescales” was proportionate in the circumstances, and in line with the Ombudsman’s guidance on remedies.

Determination (decision)

In accordance with paragraph 54 of the Scheme, there was maladministration in the landlord’s response to the resident’s concerns about the administration of her rent account.
In accordance with paragraph 55(b) of the Scheme, the landlord has made an offer of reasonable redress in respect of complaint handling failures.

Reasons

The evidence provided to the Ombudsman shows that while the landlord had initially taken appropriate action in relation to managing the rent account, it would have been reasonable for it to provide the resident with further explanation as to how it processed benefit payments given the confusion that had arisen. When responding to the complaint, the landlord acknowledged that its own adjustments to the rent account had made it difficult to follow; however, the landlord failed to offer the resident any compensation for the confusion and distress that had been caused as a result. This was not appropriate, and the landlord should take steps now to put things right.
The landlord acknowledged that it had failed to deal with the resident’s complaint appropriately, and offered a sum of compensation that was proportionate in the circumstances.

Orders

Within four weeks of the date of this determination, the landlord should pay the resident £250 for the inconvenience and confusion that was caused a result of its response to her concerns about the administration of her rent account.