Sanctuary Housing Association (202109342)

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REPORT

COMPLAINT 202109342

Sanctuary Housing Association

29 June 2023

 

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:
    1. The landlord’s management of the resident’s rent account and her dissatisfaction with the credit reimbursed by the landlord.
    2. The landlord’s handling of the complaint.

Background

  1. The resident’s secure tenancy began in 1993, and at that time the resident’s landlord was a Local Authority. The current landlord replaced the Local Authority as landlord when the tenancy was transferred on 31 March 2007.
  2. On 1 August 2020 the resident contacted the landlord with concerns about rent charges during the period 1 April 2019 to 20 July 2020. In response the landlord explained that its system failed to automatically reduce her direct debit payments resulting in excess credit on the account. The landlord apologised and said that the direct debit had now been amended, and the correct payments would be taken from 8 September 2020. The landlord confirmed that the resident would be able to get a refund of £926.48.
  3. Months later, on 3 May 2021, the resident expressed dissatisfaction with how the landlord had managed her rent account and sought a full explanation for alleged discrepancies on her statement. She asserted she was owed £2,293.29 for the period 31 March 2007 to 29 March 2021. The resident attached her calculations to her email and asked that the landlord respond within 14 days with a refund of any monies owed.
  4. In an email dated 13 May 2021 the landlord responded to the resident with an explanation for the charges identified. It explained that more recent payments had been reduced due to the credit on the account but provided a refund form for the resident to reclaim the surplus. Upon depositing £584.19 into the resident’s account, however, the resident challenged the amount. The landlord made several attempts “to discuss the complaint/issue” once the rent statement had been revised.
  5. The landlord offered the resident a stage one response on 10 August 2021. Within this, it concluded that £584.19 was the correct refund amount. The landlord referred back to its previous calculations shared with the resident, and pointed out that the resident’s calculations had failed to include an arrears balance which was transferred when it took over her tenancy. The landlord stated that it was satisfied that the rent statements showed ‘a genuine live balance’ as they were adjusted automatically when any payment or deduction was made. The resident was invited to compare the rent statements with her calculations and to notify it of any payments not shown.
  6. On 19 August 2021 the resident requested that her complaint be escalated to Stage two. A response was subsequently issued on 1 September 2021 within which, the landlord firstly apologised for not clarifying the true credit on the rent account in the email of 13 May 2021 or the refund calculated. The landlord set out a chronology of events and pointed out that a breakdown of the credit had been previously shared. It again reviewed the resident’s calculations, this time alongside the rent account, and presented an explanation of its own in the same format. Errors and discrepancies found in the resident’s calculations were highlighted and explained. With this, the landlord also offered the resident £50 as a goodwill gesture in recognition of its poor communication in May 2021.
  7. The resident has explained to this Service, however, that she remains dissatisfied with the landlord’s response. While she has accepted the compensation offered, she remains unhappy with the landlord’s management of her rent account and states that she has been overcharged by approximately £2000. The Ombudsman is aware that on 18 October 2021, the resident emailed the landlord with an amended breakdown of calculations which it reviewed but did not consider accurate. This amended breakdown does not appear to be on file.

Assessment and findings

Management of the rent account

  1. The landlord accepted that it failed to adjust the direct debit in April 2020 in line with a decrease in rent. The resident was therefore overcharged until the email of 4 September 2020 when the direct debit was adjusted following the resident’s email enquiry of 1 August 2020.
  2. In April 2021 the landlord incorrectly adjusted the direct debit. The rent increased, but the direct debit decreased. The direct debit was corrected from 6 July 2021 onwards. This correction was likely due to the landlord’s consideration of the rent account following the resident’s email of 3 May 2021.
  3. In the email of 13 May 2021, the landlord sincerely apologised for the failure to adjust the direct debit in April 2020. There is no evidence that the landlord apologised for the incorrect adjustment to the direct debit in April 2021, which may have been reasonable in the circumstance.
  4. The Ombudsman has considered both the rent statements provided by the landlord, and the resident’s own calculations, nonetheless, and is satisfied that the landlord provided the resident with accurate information for her to consider alongside her own calculations.
  5. In the email of 15 June 2021, the landlord explained how it reached the refund figure of £584.19. The Ombudsman notes that there is a mathematical error in the calculations in the landlord’s email dated 15 June 2021: £1150.70 – £533.52 = £617.18 (and not £617.20 as stated in the email), however, once the additional £32.99 is deducted, the actual total is £584.19, which is the payment the resident received.
  6. The landlord’s explanation for reaching the refund calculation could have been clearer and is confusing if compared to the rent statement. The landlord refers to a credit balance of £1150.70 on 3 May 2021, however the rent statement shows a £650.17 credit balance on 3 May 2021. The credit balance of £1150.70 appears on 6 May 2021 after the direct debit payment of £500.53 for May has been added to the rent account. It is likely that the landlord’s subsequent “advanced” deduction of rent caused some confusion in the calculation.
  7. The tenancy agreement states that “the total rent payable at the start of the tenancy is £43.94 each week”. This infers that payments are to be made in advance. It is a standard term that rent is payable in advance, and as the resident had agreed a monthly direct debit arrangement for paying her rent the Ombudsman is satisfied that the deduction of the month’s rent before the refund of the balance is reasonable.
  8. The landlord acknowledged in its Stage 2 response that at Stage 1, it failed to clearly set out why it disagreed with the resident and what the refund amount would be. It noted that it did not clarify the correct balance on the rent account and in recognition of this failure, the landlord offered a £50 goodwill payment in the Stage 2 complaint response. This was reasonable. As well as recognising that the resident had been overcharged and refunding the amount, it also took steps to recognise the resident’s distress.
  9. Notwithstanding the mathematical error by two pence, the Ombudsman is satisfied that the landlord has reimbursed the resident with the correct sum. The credit paid was £584.19.
  10. The Ombudsman has not seen the calculations the resident sent to the landlord on 18 October 2021, after the Stage 2 response. Nevertheless, having considered the landlord’s explanation in the email of 26 October 2021 for why it maintains its calculations are correct, and having considered the rent statement and annotated calculations in detail, the Ombudsman is satisfied that the landlord’s approach was reasonable.
  11. The Ombudsman has seen nothing further from the resident which indicates that the rent statements and the landlord’s calculations are wrong. While the resident has said they remain dissatisfied with the landlord’s calculation, this is not enough to suggest any maladministration in relation to the landlord’s handling of matters.

Complaint handling

  1. The resident’s complaint to the landlord dated 18 June 2021 was not included in the documents provided to this Service. However, there was an automated reply from the landlord on that date, which confirms that the resident made contact on that date.
  2. Although a telephone record indicates that the landlord was referring to the resident’s contact as a complaint, the landlord failed to log the resident’s complaint or provide her with a timescale for the stage 1 response. It was only following intervention from the Ombudsman that a formal stage 1 complaint was logged on 5 August 2021. According to the landlord’s records, the complaint acknowledgment was sent to the resident on the same date that the Ombudsman’s letter was received.
  3. The landlord’s complaints policy provides that a complaint is to be acknowledged within five working days (verbally or in writing) with a proposed resolution within 10 working days. A stage 2 complaint should receive a written response within 20 working days of the complaint being escalated.
  4. As such, the resident’s complaint should have been logged by 25 June 2021, but it was not logged until 5 August 2021. This was a delay of almost six weeks (29 working days). The landlord subsequently did not handle the resident’s complaint within the required time limits and or deal with the issues raised according to the requirements of its policy and procedures. As a result, the Ombudsman has found service failure against the landlord with respect to its complaint handling.

Determination (decision)

  1. In accordance with paragraph 53(b)of the Scheme the landlord provided reasonable redress in its management of the resident’s rent account and the credit reimbursement.
  2. In accordance with paragraph 52 of the Scheme there was a service failure relating to the landlord’s handling of the resident’s complaint.

Orders and recommendations

Orders

  1. In recognition of the landlord’s complaint handling in this case, it should award the resident £50. This should be paid on top of the £50 already offered by the landlord as a goodwill gesture.
  2. The landlord should ensure that it makes this payment, and provides the Ombudsman with proof of this, within four weeks of receiving this determination.

Recommendation

  1. The landlord should ensure that it pays the resident the £50 goodwill payment previously offered.