Brighter Places (202233133)
REPORT
COMPLAINT 202233133
Brighter Places
7 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 landlord’s administration of the resident’s rent account.
Background
- The resident occupies the property as a leaseholder under a shared ownership scheme and pays rent and service charges to the landlord. The landlord has no vulnerabilities recorded for the resident.
- The landlord increased the resident’s service charge, from £20.71 to £45.84 a month, from 1 April 2022. The resident’s direct debit was not amended and he accrued rent on his account.
- The resident contacted the landlord on 16 January 2023, in response to a letter it had sent several days earlier about his rent account. He noted there were inaccuracies in the letter about his tenancy type and balance, which showed he was in arrears. He noted that he had never defaulted on his service charge payments and asked that the landlord remove the debt and confirm that this had not affected his credit rating.
- The landlord responded the same day and apologised for the confusion. It explained that he would need to increase his direct debit to account for the service charge increase. It said he would also need to clear, or contribute towards, arrears at £211.80. It confirmed the debt would not affect his credit rating.
- The resident expressed shock and questioned why it had not amended his direct debit, nor contacted him about this sooner. He questioned whether the amount of debt was accurate, noting it had quoted a different figure in its letter. He requested that the landlord waive the debt and log a complaint on the matter.
- The landlord acknowledged the complaint the same day and provided its stage 1 response on 31 January 2023. The landlord apologised that the letter he received was in the wrong format and referred to weekly rent rather than shared owner charges. It clarified that the amount of debt quoted in the letter reflected the total prior to the payment he had made for January 2023. It confirmed he was £203.30 in arrears. It could not investigate why it had not amended the direct debit as the officer who had overseen his account had left the organisation.
- It assured the resident it would not overlook this in future. It said it would amend the letter about rental and service charge increases, to advise residents to check their accounts and notify it where it has not amended their direct debits. It offered the resident £25 compensation and the opportunity to set up a payment plan for the arrears.
- The resident requested that the landlord escalate his complaint the same day. He found it ‘appalling’ that the landlord was asking for money in a cost-of-living crisis and wanted it to write the debt off.
- The landlord logged the complaint on 2 February 2023 and responded at stage 2 on 3 March 2023. It reiterated its offer to set up a repayment plan and apologised for its failings. However, it said the resident should have informed it that it had not amended the direct debit.
- The resident remains dissatisfied with the landlord’s response and referred his complaint to this Service. He is seeking reimbursement for the charges that it applied to his account.
Assessment and findings
- The lease sets out the resident’s responsibility to pay costs incurred by the landlord through a ‘service charge’. The resident has not contested that the landlord notified him of the service charge increase in April 2022, but he was unaware that it had not amended his direct debit accordingly.
- The resident contacted the landlord to query the debt on his account and it instructed him to amend his direct debit going forward. He rightly noted that this was the responsibility of the landlord. Direct debits can only be amended by the receiving party. The landlord misinformed the resident, which caused him confusion and frustration.
- This added to the confusion it had caused by sending him a letter in the wrong format, which alluded to weekly rental charges and arrears totalling a different amount. The landlord acknowledged and apologised for this in its stage 1 response and provided clarity on the total arrears. It was fair and appropriate of the landlord to do so.
- In its response the landlord also accepted that it was responsible for amending the direct debit. While it could offer no explanation why it had not done so in April 2022, it apologised and assured the resident it would oversee this going forward. It followed through on this and amended the direct debit for February 2023, thereby taking appropriate steps to resolve the situation.
- However, the landlord said the resident bore responsibility for failing to notice that it had not amended the direct debit. The resident had access to statements through his online rent account, during the 10-month period that he was accruing arrears. It is reasonable to attribute some responsibility to the resident for reviewing his statements and account balance, and identifying the arrears.
- It was also reasonable for the landlord to have notified him sooner. The landlord has an ‘income management and maximization policy and procedure’ in which it sets out its approach for a positive payment culture, effective rent account management, and prompt identification and control of rent arrears. It notes that income officers review rent accounts regularly and emphasises ‘early intervention and personal contact whilst arrears are at a relatively low level, to support in the prevention of the rent debt escalating’.
- The Ombudsman does not consider 10 months to be prompt notification. The landlord has provided this Service with a copy of the resident’s account statement, dated 5 December 2022, but it has not evidenced that it sent this to the resident. The resident claims he first learned of the arrears in January 2023, 10 months later. The landlord was slow to notify the resident, which was not in accordance with its policy.
- In summary, there were failings in the landlord’s handling of the resident’s account. It did not amend the direct debit promptly, as was its responsibility. It was slow to identify that it had not done so, and to notify the resident of the arrears. However, is also recognised that the resident had access to information about his account and was responsible for payment of the service charges according to the lease.
- The landlord has acknowledged some of its failings and aimed to put things right by offering a repayment plan. The resident was concerned about the arrears and referenced the cost-of-living crisis. This was therefore an appropriate intervention, but it could have gone further with its offer of compensation. The resident experienced confusion, stress, and inconvenience, as a result of failings in the landlord’s management of the account. An offer of £25 does not adequately reflect this detriment.
- In light of the above, the Ombudsman finds service failure and further compensation is due. The resident’s request for full reimbursement of the fees is not proportionate given the steps taken by the landlord. However, in line with the Ombudsman’s remedies guidance, the landlord should pay the resident £75, inclusive of the amount already offered.
Determination
- In accordance with paragraph 52 of the Scheme, there was service failure in the landlord’s administration of the resident’s rent account.
Orders and recommendations
Orders
- Within 4 weeks of this report, the landlord should pay the resident £75 compensation for failings in its administration of the resident’s rent account. If the £25 previously offered to the resident during the complaints process has already been paid, it can deduct this amount from the total.