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East Midlands Housing Group Limited (202307683)

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REPORT

COMPLAINT 202307683

East Midlands Housing Group Limited

12 February 2025


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 administration of the rent account in 2022 and 2023.
  2. We have also investigated the landlord’s complaint handling.

Background

  1. The resident has been a shared owner leaseholder of the landlord, a housing association, since April 2021. The property is a 3 bedroom house. The landlord uses a 3rd party management company to provide external communal services.
  2. On 28 April 2022, the resident said she received a rent statement that showed her account was in arrears. She called the landlord and was told this was because her rent had gone up. The same day, she made her first complaint to the landlord and said she had not been told about the rent increase. Her lease said she should be told as soon as the review was completed, which was on 1 April every year.
  3. The next month, the landlord told the resident that her rent had been increased in error. It apologised and said it was correcting this. The same day, the resident asked for details of what services she was paying for as part of the 3rd party management company charge.
  4. The landlord sent its stage 1 response to the first complaint on 1 June 2022. It apologised for the time taken to respond to the resident’s initial enquiry and said this was because it was short staffed. Her rent was not due to be increased until April 2023. The 3rd party management charge was for grounds maintenance. There had been an error in the amount she had been charged for this, which meant she had overpaid. It apologised, confirmed it had reduced the charges and would backdate this.
  5. The same day, the resident asked to escalate her first complaint because the stage 1 response did not cover all the issues raised. The landlord sent its stage 2 response on 11 August 2022. This said the complaint was upheld because of poor customer service, errors and delays. It apologised and offered £175 compensation.
  6. On 20 March 2023, the landlord wrote to the resident and told her that her rent and service charge were going up from 1 April 2023. The resident made a second complaint to the landlord on 27 April 2023. She said the direct debit rent payment taken that month was not the increased amount. She had since been told the May payment would not be the increased amount either. The 2 underpayments meant her rent account would be in arrears of around £60 and this was the landlord’s fault. She had called the landlord that day and been told she needed to wait 5 working days for a response, but she wanted the matter investigated urgently. The next day, the landlord contacted her and agreed to change the direct debit to the increased amount.
  7. The landlord sent its stage 1 response to the second complaint on 16 June 2023. This said it did not change direct debits for the yearly rent increase until May each year. That year, some of the direct debits did not get changed in time for the May payment because of an error. It upheld the complaint, apologised and offered £107.80 compensation (£58.70 for the increased amount of rent for April and May that had not been collected, plus £50).
  8. The same day, the resident asked to escalate her second complaint because the stage 1 response had not addressed all of the issues. She said the compensation offered was not enough, considering the time she had spent contacting the landlord to resolve this matter. She was 7 months pregnant and this situation had caused her unnecessary stress.
  9. On 14 July 2023, the landlord sent its stage 2 response to the second complaint. It said this was upheld because the resident had received poor service. It apologised and offered £208.70 compensation. This was made up of £58.70 for the increased rent amount for 2 months that had not been collected and £150 for the delay in complaint handling and lack of response to her queries.
  10. The next day, the resident told the landlord that she did not accept its final response. The compensation did not reflect the time she had spent dealing with the issues or the landlord’s failures to respond and take ownership of the issues. She confirmed she had raised her complaint with us and in March 2024, we accepted her complaint for investigation.

Assessment and findings

Administration of the rent account in 2022 and 2023

  1. The resident’s lease agreement says that the rent is reviewed annually, with effect from 1 April each year. After the landlord has completed the review, it will tell the resident the new amount she has to pay. The lease also says that the resident agrees to pay the landlord a share of the costs for the maintenance and management of the communal areas.
  2. When the resident contacted the landlord in April 2022 with an enquiry about her rent, the landlord acknowledged receipt of this contact 5 days later, on 2 May 2022. It confirmed it had passed her enquiry to another department and that it would respond within 5 working days. This did not happen and the landlord did not respond to the resident’s enquiry until 16 May 2022. This was 10 working days after it acknowledged her enquiry and only after she had chased the response on at least 2 occasions, on 11 and 14 May 2022. This left her feeling ignored by the landlord.
  3. When the resident made an enquiry about her rent account the following year, in April 2023; the landlord responded the next day. This was within the 5 working day committed timescale.
  4. The landlord has admitted that it made errors in the administration of the resident’s rent account in relation to the increase in 2022 and 2023. While understandable that errors can occur, it is concerning that the landlord made errors 2 years in a row. This caused the resident to lose faith and trust in the landlord’s ability to properly manage her rent account.
  5. The resident has told us that the landlord made another error in the administration of her rent account in 2024. While the specifics of this do not form part of this investigation, it is concerning to hear that another error has occurred for a third year in a row.
  6. The landlord confirmed it has identified learning and added an extra step in its process as a result of the error in 2023. This is positive and should help to avoid a similar error happening again. However, it is not clear what, if any learning it took from the error made in 2022.
  7. An order has been made for the landlord to review its errors in the administration of the resident’s rent account in 2022 and 2024. Once completed, the landlord is to provide a written report setting out the reasons for the errors, any learning identified and changes already made or to be made to avoid such errors in the future.
  8. In May 2022, the resident asked for details of what the service charge for the 3rd party management company covered. The landlord provided this information within its stage 1 and 2 complaint responses, which was reasonable. The landlord told the resident it had identified an error in the amount it was charging for this. The amount of service charges and the landlord’s process for setting these is outside our jurisdiction, as this is more appropriately considered by the First Tier Tirbunal. Because of this, we cannot comment on how or why this overpayment happened.
  9. What we can consider is how the landlord managed this issue and its communication with the resident. The landlord identified this error on or around 20 May 2022. It then told the resident about this in the stage 1 response less than 2 weeks later and agreed to refund the overpayment and backdate this. While frustrating for the resident that this error occurred, the landlord’s actions in response were reasonable.
  10. The landlord has told the resident and us that it does not change direct debit payments for the yearly rent increase until May each year, even though the rent increases from 1 April. This is because it has to wait for February’s retail price index (RPI), which is not released until mid to late March each year. By the time it has the RPI information and has made the rent increase calculation, it is too late to increase the direct debit for April’s payment. While frustrating for the resident, this explanation is reasonable and means the delay in informing her about the rent increase is not a failure by the landlord.
  11. The resident’s lease says that the landlord will tell her about the new rent amount “immediately” following the review. The use of the word immediately indicates this is to be done quickly. However, it is expected this will take the landlord some time to coordinate as it has to do this for a large number of residents at the same time. In 2023 the letter telling the resident about the rent increase was dated 20 March 2023. From the evidence provided, it is not clear when the landlord became aware of the RPI figure for February 2023, but the date of the letter suggests it was sent soon after this, which was reasonable.
  12. The landlord has told us that, because it does not increase the direct debits until May each year, the amount taken that month covers the increased amount for April and May. This approach is sensible to ensure rent accounts are brought up to date quickly. It is also understandable that the landlord would need to adopt this approach due to its inability to calculate the rent increase earlier due to circumstances beyond its control.
  13. However, this approach is not set out in any of the landlord’s policies or processes. It also does not, as standard, tell residents about this. This is a concern as it means residents have no way of knowing about this adopted approach unless they contact the landlord to ask about the payments. That is what happened for the resident as she did not become aware of this arrangement until she made a formal complaint in 2022.
  14. This should not be how residents find out about the landlord’s processes that affect them. These should be proactively shared and made available for residents, particularly where it relates to money as some people live on strict budgets and unexpected increases in payments could result in financial hardship. That is why it is important that the landlord tells residents about this arrangement and is flexible where required.
  15. We recognise that the landlord has told us that it will look at a fairer and more affordable way to manage the shortfall for April in future years rent increases. This is positive but, in addition, the landlord should also consider how it will tell residents about any arrangement it has in place to make up shortfalls in the payments. Therefore, an order has been made for the landlord to review this arrangement and produce a written process on how it will manage this going forward. This should include how it will proactively tell residents about this arrangement and how it will publicise the process. 
  16. The landlord identified failures in its administration of the resident’s rent account as part of the complaints in 2022 and 2023. It apologised on both occasions, identified learning and offered a total of £383.70 compensation. Some of this compensation was for complaint handling failures in 2023. The landlord did not specify an exact amount for this but included it as part of an offer of £150 for this and other failures. Therefore, we will consider half of this amount (£75) for complaint handling failures. This means that the total amount offered for this issue was £308.70.
  17. It is positive that the landlord independently identified failures in its handling of this issue and offered redress to the resident. This shows it was prepared to take accountability for its actions and wanted to put things right. However, considering the full circumstances of the case and in consultation with the Ombudsman’s remedies guidance, the redress offered is not quite proportionate to the failings identified by this investigation.
  18. Balancing the landlord’s failures and the detriment caused to the resident, with the steps it has already taken to put things right; a finding of service failure is appropriate. An order has been made for the landlord to pay the resident £400 compensation, which is inclusive of the £308.70, if not done so already. This is in accordance with the Ombudsman’s remedies guidance.

Complaint handling

  1. The resident labelled her contact to the landlord on 28 April 2022 as a complaint. Within the email, she said she was unhappy that the landlord had increased her rent and not told her about this. The landlord’s complaints policy at the time defined a complaint as an expression of dissatisfaction about the standard of service, actions, or lack of action by the landlord. Therefore, the resident’s contact on 28 April 2022 should have been treated as a complaint and logged as such. The landlord did not do this.
  2. On 5 May 2022, the landlord told the resident that it had not raised a formal complaint because her enquiry needed to be sent to the relevant department to contact her first. If she did not receive a response within 5 working days, then this could be passed to its complaints team. This was incorrect as the resident was expressing dissatisfaction about an action already taken by the landlord (the increase in her rent and lack of communication about this). Therefore, this should have been raised as a complaint.
  3. The landlord did not comply with its complaints policy when it refused to log the resident’s contact as a complaint. It was unfair to expect her to wait for a further service failure before it would log a complaint. This error and failure to comply with its complaints policy amounts to maladministration. An order is made for the landlord to deliver training to all front line staff on how to identify a complaint, in line with its current complaints policy. We will consider this order complied with if the landlord can show that training has been delivered on this subject in the last 12 months.
  4. After the resident made her complaint in April 2022, she contacted the landlord on at least 3 occasions in May 2022 to chase this up. It was only after these additional contacts that the landlord logged and acknowledged the complaint, on 18 May 2022. This was 13 working days later and over the landlord’s committed timeframe of 5 working days, set out in its complaints policy at the time. This amounts to maladministration and left the resident feeling that the landlord was not taking the complaint seriously.
  5. The landlord’s stage 1 response to the first complaint was sent 10 working days after it had logged and acknowledged the complaint. This was in line with its committed response time of 10 working days, set out in its complaints policy at the time.
  6. The landlord did not acknowledge the resident’s escalation request of 1 June 2022, until 12 working days later, on 21 June 2022. This was again, only after she had chased this up the day before. The stage 2 response was sent 37 working days after the complaint was escalated. This was over the committed response time of 20 working days, set out in its complaints policy at the time. This amounts to maladministration.
  7. During this period of delay, the landlord acknowledged and apologised for this. However, it did not refer to this in the final response and there is no evidence it considered any other redress for the complaint handling failures in 2022. This left the resident feeling that the landlord did not take her complaint seriously.
  8. The landlord acknowledged the resident’s second complaint on 5 June 2023. This was 24 working days after she sent it on 27 April 2023 and so over the landlord’s committed timeframe of 5 working days. During this period of delay the resident contacted the landlord on at least 2 occasions to chase it up. This delay and lack of response amounts to maladministration and left the resident feeling ignored.
  9. The landlord sent the stage 1 response for the second complaint on 16 June 2023. This was 9 working days after the complaint had been logged and acknowledged, in line with the landlord’s committed response time of 10 working days.
  10. The landlord acknowledged the resident’s stage 2 escalation request for the second complaint on 23 June 2023. This was 5 working days after the escalation request was received and in line with the committed timeframe of 5 working days. It then sent the stage 2 response 15 working days later, on 14 July 2023. This was also in line with its 20 working day committed response time.
  11. The landlord acknowledged failures in its handling of the second complaint in 2023 and offered redress for this. However, it did not do this for failures in its handling of the 2022 complaint. Therefore, the landlord has not provided reasonable redress to the resident and a finding of maladministration is appropriate. Orders have been made for the landlord to apologise to the resident for its complaint handling in 2022 and 2023 and pay her £150 compensation, inclusive of the £75 already offered.

Determination

  1. In accordance with paragraph 52 of the Scheme there was:
    1. Service failure in the landlord’s administration of the rent account in 2022 and 2023.
    2. Maladministration in the landlord’s complaint handling.

Orders

  1. Within 4 weeks, the landlord is ordered to provide evidence that it has:
    1. Reviewed its errors in the administration of the rent account in 2022 and 2024. Once completed, the landlord to provide a written report to the resident and us, setting out the reasons for the errors, any learning identified and changes already made or to be made to avoid such errors in the future.
    2. Paid the resident £550 compensation, made up of:
      1. £400 for its administration of the rent account in 2022 and 2023 (inclusive of the £308.70 already offered).
      2. £150 for its complaint handling (inclusive of the £75 already offered).
  2. Within 8 weeks, the landlord is ordered to deliver training to all front line staff on how to identify a complaint, in line with its current complaints policy. We will consider this order complied with if the landlord can show that training has been delivered on this subject in the last 12 months. Evidence of compliance to be provided to us within 8 weeks.
  3. Within 12 weeks, the landlord is ordered to review its arrangement for making up the shortfall in April rent payments and produce a written process on how it will manage this going forward. This should include how it will proactively tell residents about this arrangement and how it will publicise the process. Evidence of compliance to be provided to us within 12 weeks.