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GreenSquareAccord Limited (202312962)

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REPORT

COMPLAINT 202312962

GreenSquareAccord Limited

20 December 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:
    1. The landlord’s response to the resident’s concerns about the administration of her rent account and the calculation of her monthly direct debit.
    2. The landlord’s handling of the associated complaints.

Background

  1. The property is a 2-bedroom house and the resident has an assured tenancy which began on 30 October 2006. The landlord is a housing association.
  2. The landlord has advised this Service that it does not have any vulnerabilities recorded for the resident’s household.
  3. The landlord sent its annual rent notification letter to the resident on 13 February 2023. The letter stated that the weekly rent was £112.01 for the year 2023/24.
  4. The landlord then wrote to the resident on 8 March 2023 and advised her of her new direct debit amount for the rent and service charges, which was £493.23 starting on 3 April 2023. The resident contacted the landlord on 13 March 2023 to query her monthly direct debit. She asked the landlord to check the calculation as she believed the amount proposed by the landlord was incorrect.
  5. The resident chased the landlord for a response on 30 March 2023 and 19 April 2023. On 26 April 2023, the resident submitted a stage one complaint as she said that the landlord had not responded to her initial enquiry about the direct debit calculation. The landlord contacted the resident on 11 May 2023 and advised her that the monthly rent payments were £485.38 but it had added an amount to this figure to ensure that the resident’s account was never in arrears as per the tenancy agreement.
  6. The landlord provided further explanations to the resident about the direct debit calculation in May 2023 and in its stage one reply on 7 June 2023. The landlord also used its stage one reply to apologise for the lack of communication following the resident’s initial enquiry and offered £50 as a goodwill gesture.
  7. The resident wrote to the landlord on 9 June 2023 to say she was dissatisfied with the landlord’s explanation and requested the landlord to escalate her complaint.
  8. The landlord sent its stage 2 reply on 26 June 2023 and apologised for some inaccuracies in its stage one reply and for any confusion these caused. The landlord provided further information about the direct debit calculation and explained that it had added an amount to the direct debit to ensure the account was never in arrears. The landlord stated that the resident could claim any credit left on the account at the end of the financial year.
  9. The resident contacted this Service on 10 July 2023 to advise that she wanted to make a complaint that the landlord was charging her more than the current rent through her monthly direct debit. She said she was overpaying by £7.88 per month. The resident said she wanted the landlord to calculate the monthly direct debit by looking at the rent payable over the course of the financial year so that payments would result in there being a zero balance on the account at the end of March. The direct debit amount could then be recalculated when the rent changes in April. 
  10. The landlord wrote to the resident on 1 February 2024 setting out her new rent for the year 2024/25. The landlord has advised this Service that the resident’s monthly direct debit for 2024/25 is £529.91, which is the current rent of £119.98 x 53 divided by 12. The landlord has advised that the calculation uses 53 weeks rather than 52 because there are 53 Mondays of rent charged in the year 2024/25.

Assessment and findings

The landlord’s response to the resident’s concerns about the administration of her rent account and the calculation of her monthly direct debit

  1. The tenancy agreement places an obligation on the resident “to pay the rent every week in advance on a Monday”.
  2. The landlord’s Income Management Policy dated 6 April 2021 states that its key policy principles are to:
    1. “Adopt a ‘never in arrears’ approach for income management and recovery of debt”.
    2. “Ensure that customers pay rent in advance in accordance with their occupancy agreement”.
  3. The landlord sent its annual rent notification letter to the resident on 13 February 2023, which advised the resident that the weekly rent from 3 April 2023 would be £112.01. The landlord then wrote to the resident on 8 March 2023 to advise her that her monthly direct debit would be £493.23 starting from 3 April 2023.
  4. As the resident’s direct debit had changed, it was appropriate for the landlord to write to the resident advising her of the new amount. The landlord’s actions were in line with the Direct Debit Guarantee offered by banks and building societies. This guarantee states: “If there are any changes to the amount, date or frequency of your direct debit, the organisation will notify you (normally 10 working days) in advance of your account being debited or otherwise agreed”.
  5. The resident wrote to the landlord on 13 March 2023 and queried the amount of her direct debit, which she said should be £485.38 per calendar month based on the weekly rent of £112.01. The resident contacted the landlord on 30 March 2023, 4 April 2023 and 19 April 2023 to chase a response to her initial enquiry. It was unreasonable that the landlord had not responded to the resident’s enquiry dated 13 March 2023. The resident had requested clarification of the direct debit charge prior to the date of the first payment (3 April 2023) and therefore was entitled to receive a response prior to the first direct debit payment at the new rate.
  6. The landlord’s lack of response to the resident’s initial enquiry prompted her to submit a complaint on 26 April 2023. However, the landlord’s records suggest that it did not receive this email as it was not sent to one of its advertised email addresses. The resident then wrote to the landlord on 4 May 2023 and said she was making a formal complaint. She said the landlord had not replied to her initial enquiry on 13 March 2023.
  7. The landlord acknowledged the complaint on 9 May 2023. It then left a voicemail message for the resident on 11 May 2023 and emailed her on the same day. The landlord explained that the weekly rent was £112.01, which equated to a monthly rent of £485.38. However, the landlord said it had increased the direct debit so that the resident’s account would be brought into credit within 12 months.
  8. It was unreasonable that by the time of its contact on 11 May 2023 the landlord had taken more than 8 weeks to reply to the resident’s initial enquiry dated 13 March 2023. This had led to the resident becoming increasingly frustrated, as stated in her stage one complaint.
  9. The resident replied to the landlord on 11 May 2023 and said she disagreed with its calculation of the direct debit. She stated that her payments were not out of line with the tenancy agreement and although the account would sometimes be in arrears, these were not “true arrears”. She requested a breakdown of how the direct debit had been calculated and asked where the debt on her account (£94.20) had come from. She also asked whether there was a separate team responsible for setting the direct debit amounts.
  10. The landlord’s Accounts Officer responsible for the resident’s rent account wrote to the resident on 12 May 2023. The Accounts Officer explained that she had calculated the direct debit using guidance produced by the landlord’s senior managers. She said she had used the last 3 credit balances on the rent account when the direct debit had been taken and calculated an average of these credit balances. The average was then deducted from the current monthly rent charge and divided over 12 months. The Accounts Officer attached a statement of the resident’s rent account.
  11. It was appropriate that the landlord had answered the resident’s questions regarding who had calculated the direct debit and how it had been calculated. It was also appropriate that the landlord had responded to the resident’s enquiry dated 11 May 2023 in a timely manner.
  12. The landlord’s records show that the resident was unhappy with the explanation she had been given and therefore the landlord arranged for the team leader to ring the resident. As the resident was unhappy with the explanation, it was reasonable for the landlord to escalate the matter to a team leader.
  13. The team leader spoke to the resident on 16 May 2023 and explained how the direct debit had been calculated. He also advised the resident that under the tenancy agreement the resident’s account should never be in arrears. The landlord reiterated this in its stage one reply on 7 June 2023.
  14. The Ombudsman has reviewed the landlord’s tenancy agreement and agrees that it places an obligation on the resident “to pay the rent every week in advance on a Monday”. The intention being that the rent account should not be in arrears at any time. In this case, the resident had chosen to pay her rent monthly. Although the tenancy agreement does not include provision for residents to pay their rent monthly, the Ombudsman’s view is that it was reasonable for the landlord to adhere to the principle that the account should never be in arrears. This principle is stated in the landlord’s Income Management Policy, which says that the landlord had adopted a ‘never in arrears’ approach in relation to income management and arrears recovery.
  15. The Ombudsman acknowledges the resident’s point that paying the weekly rent times 52 divided by 12 should lead to a zero balance at the end of the year. However, such an arrangement would, as the resident acknowledged, lead to the account showing an arrears balance at certain times of the year. The resident stated that in her view the arrears were not “true arrears”. However, based on the tenancy agreement, the Ombudsman’s view is that the landlord was entitled to consider any negative balance on the rent account as being arrears. Therefore, it was reasonable for the landlord to take steps to ensure the account did not fall into arrears at any point during the year.
  16. The landlord chose to add a small amount (£7.85) to the resident’s monthly direct debit in order to ensure the account did not fall into arrears during the year. This again was reasonable in the Ombudsman’s opinion as it would help the resident to spread the additional payment over the course of the year. The landlord advised this Service that it changed the resident’s monthly direct debit payments from 1 April 2024 so that she would only be paying her rent.
  17. The landlord accepted in its stage one reply that its initial communication had been poor and apologised for this. It also offered the resident £50 to put things right. The landlord’s compensation procedure states that it may offer gestures of goodwill where residents have suffered inconvenience or distress due to a failure in the way it has delivered a service. The procedure adds that this may not always be a monetary payment, it could be a voucher or flowers, usually to the value of £25.
  18. Therefore, as the landlord had taken over 8 weeks to reply to the resident’s initial enquiry dated 13 March 2023, the view of this Service is that it was reasonable for the landlord to apologise and offer compensation to put things right. The amount offered was in line with the landlord’s compensation procedure and therefore was reasonable to recognise the detriment caused to the resident by the delay in responding.
  19. The resident advised the landlord on 9 June 2023 that she was dissatisfied with the stage one reply. She questioned some of the information she had been given in the reply. For example, she said the stage one reply had referred to a highlighted section of the tenancy agreement but the attachments had not included any highlighted sections.
  20. The landlord sent its stage 2 reply on 26 June 2023 and apologised for the inaccuracies in its stage one reply, including that the attached tenancy agreement did not have any highlighted sections. The landlord provided a further explanation regarding the calculation of the direct debit and pointed out that the resident could request a refund of any credit on her account at the end of the year. As the resident had expressed continued dissatisfaction with the landlord’s explanations, it was reasonable for the landlord to provide further information about the calculation and to reassure the resident that she could request a refund of any credit balance on her account at the end of the year. It was also reasonable for the landlord to apologise for the inaccuracies in its stage one reply.
  21. Overall, the Ombudsman’s view is that the landlord acted reasonably by arranging for the resident to pay a small amount extra each month during 2023/24 to build up a credit on her account. This which would ensure the account was never in arrears. This was in line with the tenancy agreement and the landlord’s Income Management Policy. The landlord explained the reason for the extra amount to the resident. Although, the landlord’s initial communication with the resident was poor, it apologised for this and offered £50 compensation to put things right. Therefore, the Ombudsman has found that the landlord made a reasonable offer of redress in relation to its response to the resident’s concerns about the administration of her rent account and the calculation of her monthly direct debit.

The landlord’s handling of the associated complaints

  1. At the time of the resident’s complaint, the landlord operated a 3-step complaints procedure:
    1. The first (informal) step was referred to as ‘resolve’ and was intended to be used for complaints that could be resolved within 48 hours.
    2. The second (first formal) step was referred to as ‘step 2’ and was the equivalent of stage one complaint as defined in the Ombudsman’s complaint handling code. This had a timescale of 10 working days, with the possibility of extending to 20 working days if necessary.
    3. The third (second formal) step was referred to as ‘step 3 executive review’ and was the equivalent of stage 2 as defined in the Ombudsman’s complaint handling code. This had a timescale of 10 working days.
  2. The resident submitted a complaint to the landlord on 26 April 2023. However, the landlord’s records suggest that it did not receive this complaint as it was not sent to one of its advertised email addresses. She also wrote to the landlord on 4 May 2023 to advise that she was making a formal complaint. The landlord acknowledged the complaint on 9 May 2023 and stated in the acknowledgement that due to increased demand and reduced capacity, it may take up to 20 working days to reply to the stage one complaint. The acknowledgement therefore said that the landlord would reply by 7 June 2023.
  3. The landlord sent its stage one reply on 7 June 2023 and had therefore kept to the timescale advised in its acknowledgement. Based on the complaint submitted by the resident on 4 May 2023, the landlord took 22 working days to respond. It was a shortcoming that the landlord took this long to reply as the time taken was much longer than the landlord’s advertised 10–working day target. However, the Ombudsman has taken into account that the landlord had advised the resident of when she would receive a reply and had kept to this timescale. This Service has also taken into account that during the period the resident was waiting for the reply, both the Accounts Officer and the team leader had spoken to the resident to explain the direct debit calculation. Therefore, based on these factors, the Ombudsman does not consider the time taken to reply to the stage one complaint to be a service failure.
  4. The resident wrote to the landlord on 9 June 2023 and said she was dissatisfied with the landlord’s stage one reply. The landlord acknowledged this stage 2 complaint on 14 June 2023 and said it would reply by 26 June 2023. The landlord replied on this date and therefore took 11 working days to respond. The landlord therefore sent its stage 2 reply within an appropriate timescale.
  5. Overall, the Ombudsman has found that the landlord replied to the resident’s formal complaints within reasonable timescales.

Determination

  1. In accordance with paragraph 53.b. of the Housing Ombudsman Scheme, and in the Ombudsman’s opinion, there was reasonable redress offered by the landlord in relation to its response to the resident’s concerns about the administration of her rent account and the calculation of her monthly direct debit.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of the associated complaints.