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London & Quadrant Housing Trust (L&Q) (202305240)

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REPORT

COMPLAINT 202305240

London & Quadrant Housing Trust (L&Q)

29 April 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 the level of rent at the property.
  2. The landlord’s handling of the resident’s request for a fair rent to be registered at the property.
  3. The Ombudsman has also considered the complaint handling in this case.

Background

  1. The resident lives in a 2-bedroom flat on the first floor of the building. The resident previously held a secure tenancy with the landlord and transferred properties in September 2022. The resident therefore kept her secure tenancy status for her new home.
  2. The landlord has recorded the resident has a mental health vulnerability.
  3. A fair rent is a protected rent charged on a property where the tenant has a regulated or secure tenancy (that began on or before 15 January 1989). A landlord or tenant can make an application to have a fair rent registered with the Valuation Office Agency (VOA). The VOA is an executive agency sponsored by HM Revenues and Customs. It gives the government valuations and property advice and is responsible for a range of statutory duties relating to rental data; fair rent being one of its duties. 
  4. The rent for the resident’s new home was substantially higher than her previous rent and the landlord subsequently told her the rent on the property had not been registered with the VOA. The resident signed the tenancy agreement for her new home on the understanding the landlord would apply to VOA for a fair rent to be registered on the property to reflect her secure tenancy status. In the interim, the landlord adjusted the rent using the ‘social formula’ level set by government from the start of the tenancy. The ‘social formula’ is a set formula used by the government to calculate the rent for social housing. This formula takes account of the size, location, relative value of the property as well as local income levels to produce what is known as a ‘social formula’. 
  5. The resident and her support worker had to make numerous chase ups to the landlord about the landlord’s application to register the rent with VOA over the forthcoming months and on 28 November 2022, the resident complained to the landlord because she had not received the outcome from VOA. The landlord acknowledged the resident’s complaint the same day and said it would respond to her within 10 working days.
  6. On 16 January 2023, the resident submitted an online complaint to the landlord about the same issue. The resident said the landlord had failed to contact her. It is unclear from the landlord’s records when or if contact was made with the resident.
  7. On 7 February 2023, the landlord sent the resident its stage 1 complaint response and apologised for its delay. It explained the property had never had a fair rent registered with VOA. The landlord said in these circumstances it sets the rent using the government’s ‘social formula’ and then it requests the rent to be registered with VOA. Once the rent had been registered, VOA would confirm the amount of rent set and the landlord would make an adjustment to the rent account.
  8. The landlord explained to the resident it did not control the rent level and it had to apply to VOA and it sent its applications at the same time each year in May to June. The landlord said it would write to the resident once it had received the outcome from VOA. It explained the rent setting process to the resident that was reflective of the property valuation, area and local wage. The landlord apologised it had not previously explained the process to the resident, however, it said it did not have any grounds to uphold her complaint.
  9. The resident responded to the landlord on 10 February 2023 to express her dissatisfaction. The resident said she had expected a speedy response from VOA. The resident also expressed her concerns that the ‘social formula’ the landlord had applied to her tenancy was not in line with rents for similar properties within the neighbourhood.
  10. The resident’s support worker sent a letter to the landlord on 23 February 2023 as the resident did not understand why there was a delay in registering the fair rent. The support worker asked the landlord for proof that it had requested VOA to register the rent. The resident felt she had been misled by the landlord when signing up for the new tenancy as she said the landlord had assured her the rent would not be as high as the ‘social formula’ she was paying and the process was not explained to her. The resident’s support worker said the resident had been pushed into financial hardship and this had forced her to adjust her lifestyle.
  11. The resident had to chase the landlord up for a response on 23 March 2023 and she requested her complaint was escalated. The resident’s support worker also chased up a response with the landlord on 12 May 2023 as she had not heard from the landlord. They made subsequent chase ups to the landlord during May 2023 and early June 2023.
  12. On 2 June 2023, the landlord sent the resident its stage 2 complaint response. It confirmed it would make its application request to register the rent with VOA in June 2023. It said the resident would receive a confirmation letter from VOA who would confirm if the valuation was to be completed remotely or in person. The landlord also explained the rent would be adjusted accordingly once the outcome of VOA decision was known. The landlord said there was no evidence of a service failure and gave details of how she could progress her complaint to this Service.

Summary of events after landlord’s complaint’s process

  1. On 9 November 2023, the landlord sent an email to the resident to say it had delayed in sending its request to VOA as it had to complete work on its service charges that needed to be finalised to send to VOA at the same time. It apologised to the resident for the delay and said it had prioritised her application to be processed first. It said it would send the application to VOA that week.
  2. The landlord has provided a recent update to this Service. It received VOAs rent registration outcome in December 2023. The registered rent was set at £300 per week inclusive of service charges, effective from 20 December 2023. The ‘social formula’ rent set by the landlord was £178.08 per week. The landlord did not increase the rent to the registered rent of £300 per week and instead it kept the rent at £178.08 until 1 April 2024 when it increased the net rent by 7.7% as per the government rent standard. The current gross rent for 2024 is now £199.05 per week which is £100.95 below the registered rent set by VOA.

Assessment and findings

Jurisdiction

  1. What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Scheme. When a complaint is brought to this Service, the Ombudsman must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.
  2. After carefully considering all the evidence, in accordance with paragraph 42(d) of the Housing Ombudsman Scheme, the following aspect of the complaint is outside the Ombudsman’s jurisdiction.
    1.  The level of rent at the property.
  3. This is because the Ombudsman may not consider complaints which, in the Ombudsman’s opinion concern the level of rent or service charge or the amount of the rent or service charge increase. The resident may have the right to object to the registered rent set by VOA through the First Tier Tribunal.

The landlord’s handling of the resident’s request for a fair rent to be registered at the property

  1. The resident transferred properties in September 2022, however, she noticed the rent for her new home was substantially higher than her previous rent. The resident queried this with the landlord before she signed for her new tenancy and the landlord said the property had not been registered as a fair rent with VOA. The landlord has a rent setting and changes policy that aligns to the Housing Act 1985. The landlord therefore adjusted the rent in line with its policy and by using the government’s ‘social formula’ that is prescriptive in how a rent should be calculated using the national average rent, property values, bedroom weight and county earnings.
  2. The resident had a secure tenancy with the landlord and therefore the landlord or tenant could make an application to have a fair rent registered with VOA. While it is outside of jurisdiction for this Service to assess the amount of rent on the property and the landlord’s application of the ‘social formula’, it was appropriate for the landlord to inform the resident it would apply to VOA to register a fair rent on the property.
  3. The resident had to make numerous chase ups to the landlord as she had not received the outcome of the VOA application about the registered rent. This led to the resident making a complaint to the landlord towards the end of November 2022. The resident continued to chase up the matter with the landlord and make a further complaint mid-January 2023 about the same issue as the landlord had still not responded to her.
  4. The landlord sent the resident its stage 1 complaint response early February 2023 when it confirmed to the resident it needed to register the property with VOA and in the interim it had applied the government’s ‘social formula’ and adjusted the rent. It told the resident that once VOA had set the rent, it would then make any further adjustments to the rent accordingly. 
  5. The landlord explained to the resident it sent its applications to VOA each year in May to June and advised her it did not control the VOA process or how it determined what amount of rent to set. The resident was clearly concerned that 5 months had elapsed since she signed the tenancy for her new home and the landlord had not yet made the application to VOA to register a fair rent on the property. The landlord recognised and apologised for its failure to fully explain the process.
  6. The resident contacted the landlord in February 2023 to express her dissatisfaction. She told the landlord she felt she had been misled about the rent process and because the level of rent had not yet been adjusted, she had been pushed into financial hardship. The resident had to continue to chase up the landlord for a response to her complaint and the landlord sent its stage 2 complaint response to her in early June 2023. The landlord reiterated its stance and advised her she would receive the outcome of the VOA decision in writing. The landlord would then adjust the rent accordingly. However, the landlord confirmed to the resident it had delayed in sending the application to VOA until November 2023. Given the resident signed her tenancy in September 2022, it was unreasonable for the landlord to take14 months to send its application to register the rent with VOA and for the resident to remain in uncertainty during this period.
  7. In summary, there is no evidence the landlord fully explained the rent setting process to the resident from the outset. While the landlord did apply the ‘social formula’ from the beginning of the new tenancy, the resident was of the understanding the landlord would apply for the rent to be registered with VOA within a reasonable timeframe. Despite the resident informing the landlord she was in financial hardship; the landlord did not make an application to VOA until November 2023. This was 14 months later and was an unreasonable delay that impacted her through the distress of uncertainty and the inconvenience of having to undertake many chase ups to the landlord. This was a service failing by the landlord and it will be ordered to pay £100 compensation to put things right for the resident. This level of compensation is aligned to the Ombudsman’s Dispute Resolution Principles.

Complaint handling

  1. The resident raised a complaint with the landlord towards the end of November 2022 and the landlord appropriately acknowledged the complaint the same day and said it would respond within its 10-working day timescale. The resident had to make various chase ups to the landlord and submit another complaint mid-January 2023 about the same issue. It was not until early February 2023 that the landlord sent its stage 1 complaint response to the resident. This delay of 6 weeks is inappropriate and does not comply with the landlord’s 10 working day timeframe. Further, there is no evidence the landlord kept the resident informed and instead, the resident had to make chase ups to the landlord to get a response.
  2. The resident expressed her dissatisfaction to the landlord mid-February 2023 and had to send chase ups to the landlord for it to respond during February 2023 to June 2023. The landlord inappropriately delayed the sending of its stage 2 complaint response to the resident until early June 2023; 14 weeks later. There is no evidence the landlord kept the resident informed throughout these delays.
  3. In summary, the landlord inappropriately delayed its response to the resident’s complaint at both stages of its complaint policy and therefore did not comply with its complaints policy or the Ombudsman’s Complaint Handling Code that says a landlord must respond to a complaint within 10 working days at stage 1 and 20 working days at stage 2. Neither has it evidenced that it requested an extension of time to facilitate the complaint response, or that it kept the resident updated.
  4. Further, the landlord did not acknowledge its failings and offer to put things right for the resident. The landlord’s late complaint responses no doubt caused the resident distress and inconvenience through her many chase ups to the landlord. The landlord should therefore pay the resident £200 compensation to put things right for her. This amount of compensation is aligned to the Ombudsman’s Dispute Resolution Principles.

Determination (decision)

  1. In accordance with Paragraph 52 of the Scheme, there was service failure with the landlord’s handling of the resident’s request for a fair rent to be registered at the property.
  2. In accordance with Paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of the complaint.

Orders and recommendations

Orders

  1. Within 4 weeks of this report, the landlord should write to the resident and apologise for the failures identified in this report.
  2. Within 4 weeks of this report, the landlord should pay the resident:
    1. £100 for its delayed handling of the resident’s request for a fair rent to be registered at the property.
    2. £200 for the landlord’s handling of the complaint.
  3. Within 4 weeks of this report, the landlord should review the findings of this report and advise this Service how it will improve its communications with residents and its process and management of the submission of applications to VOA.
  4. The landlord should reply to this Service with evidence of compliance with the orders within the timescales set out above.