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Metropolitan Housing Trust Limited (202100884)

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REPORT

COMPLAINT 202100884

Metropolitan Housing Trust Limited

11 February 2022


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 handling of the resident’s service charge account, which resulted in significant arrears.
  2. The complaint is also about the landlord’s complaints handling.

Background and summary of events

  1. The resident has been a leaseholder of the landlord, at the property, from 19 June 2012. The property is a one-bedroom flat situated within a block.
  2. The landlord has a two-stage complaints procedure, whereby the landlord aims to investigate and respond at stage one of the complaints process within 10 working days.  Where a complainant is dissatisfied with the outcome of their complaint, they may request escalation to stage two, upon which, the landlord will review the complaint outcome and respond within 20 working days.
  3. On an unknown date in mid-2019, the resident has said that he was contacted by the landlord, who advised that there had been an underestimation on the service charge that he needed to pay for the year which resulted in a shortfall needing to be paid. This resulted in his direct debit being changed to a higher amount for the remaining of the financial year, from December 2019- March 2020.
  4. On 28 October 2019, the landlord wrote to the resident, advising that four monthly direct debit payments of £178.76 would be taken, starting on 2 December 2019.
  5. On 24 February 2020, the resident called the landlord, following an email from it regarding his direct debit for service charges.  During that call, the landlord reassured the resident that a payment arrangement was in place for service charges. However, the direct debit for the normal service charge was not collected after the four months payment of £178.76 had been taken, meaning that his service charge account became in arrears and this was not noticed by the landlord until July 2020.
  6. On 29 July 2020, the resident made a formal complaint to the landlord about the direct debit being stopped and misinformation given in the 24 February 2020 call, which had put him into arrears in his service charge account.
  7. On 2 September 2020, the landlord responded at stage one of its complaints procedure, although this response has not been provided to this Service.
  8. On 17 September 2020, the resident requested his complaint be escalated to stage two of the complaints procedure, which the landlord says it received four days later, on 21 September 2020.
  9. The landlord has stated that it provided its final stage two response on 28 December 2020, although the resident says it was on 15 February 2021.  The landlord’s stage two complaints response has no date on it, so does not clarify the situation.  In its response, the landlord made the following findings and conclusions:
    1. There were failings in communication; although the information given on 24 February 2020 was correct, as there was a payment plan in place at the time, however, the operative failed to identify that the payment would stop after four payments had been made
    2. There was an error in the way the payment agreement was set up;
    3. Due to Covid-19, there was a delay in reviewing accounts until July 2020, although the resident’s direct debit was not increased, as requested and it had agreed to spread the repayment over a longer period of time than usual, to minimise the financial impact on him;
    4. It had responded to the complaint at stage one well, providing meaningful updates, although acknowledged there had been delay in providing its formal response and offered £100 compensation in respect of this. 
    5. The landlord apologised that the direct debit had stopped in error and offered reassurance that it had learnt from its mistake.
  10. The resident remains dissatisfied because he does not feel the level of compensation offered sufficiently addresses the stress and frustration experienced in bringing the complaint and dealing with the landlord’s complaints team as well as the fact that the situation has left him with a shortfall of £682.24 on his account.
  11. The Ombudsman wrote to the landlord requesting documentation pertaining to the case on 14 June 2021 and having not received it, again on 6 July 2021.  The landlord requested an extension of time in which to provide the information to 14 July 2021, however no information was received by this date.  On 16 July 2021, the Ombudsman wrote again to the landlord, reminding it of its obligations as a member of the Housing Ombudsman Scheme and requesting the information by no later than 23 July 2021.
  12. The landlord then provided information, although this dates back to over a decade, pertaining to the purchase of the property and documents and records in respect of that.  The documentation does not include the landlord’s stage one complaint response, email correspondence, letters and records of telephone conversations between the landlord and resident or anything pertinent to this complaint, besides the one letter to the resident in October 2019.

Assessment and findings

Management of service charge account

  1. There is no doubt that the landlord made a mistake in not ensuring that the resident’s ordinary service charge direct debit continued, following the four months of increased service charge payments collected by direct debit between December 2019 and March 2020. This mistake caused inconvenience to the resident, with the fact that the ordinary service charge was not being taken and this was not being picked up until July 2020; leading to his service charge account being put into arrears.
  2. The secondary error by the landlord occurred during the 24 February 2020 discussion between it and the resident, where it was not picked up that the final service payment would be taken in March 2020, with no scheduled payment thereafter. Had the fact that there were no forwarding payments beyond March 2020 been picked up at this point, the subsequent debt would not have occurred.
  3. Both errors caused stress and inconvenience to the resident, leaving him initially incorrectly reassured that payment would be taken and then being taken into hundreds of pounds of arrears as a result of no payments being taken. This has undermined the landlord-leaseholder relationship and damaged the resident’s confidence and trust in it.
  4. The landlord sought to address the financial problem caused, by offering a payment plan and not making an immediate demand for the money which – despite the errors – was owed by the resident. The landlord’s actions here were reasonable in the circumstances, as a means of making the payment more manageable as the charges are a contractual commitment.
  5. The landlord made reference in its complaint response to the resident of his responsibility to pay service charges and this is indeed the case, even in the face of errors such as the ones that occurred in this case. The resident would have likely noticed that service charge payments were not leaving his account and indeed, he has made reference to this in the documentation provided to this Service.  He believed, however, that the payments would be taken in due course and/or they had not yet been finalised and/or there was a recalibration of charges by the landlord, rather than it simply being a case of him erroneously not being charged for monies owed.
  6. The resident’s responsibility to pay service charges and ensure that payments are being made, does not detract from the landlord’s mistakes, however, and it has appropriately recognised its mistakes, apologised for these and confirmed that learning will take place as a result.  Besides advising that the arrears were not picked up until July 2020, due to the impact of Covid-19, the landlord has not used the opportunity in responding to the complaint, to explain why the errors occurred in the first place or what learning it had taken, however.  An explanation of what went wrong and why and an indication of steps that will be taken to help prevent a recurrence are often important aspects of responding to a complaint and this is something the landlord missed the opportunity to do.
  7. It is unfortunate that mistakes sometimes do happen and the mistakes in this case did not go without impact.  However, the landlord has taken steps to put things right, by acknowledging the errors, apologising for them, offering a payment plan and explaining that it would learn from what had happened.

Complaints handling

  1. The landlord’s actions in recognising the errors, apologising and reassuring the resident that it would learn from it were appropriate because compensation is not the only way of resolving a complaint; offering an apology acknowledges the impact on an individual of an error and an apology alongside learning from a complaint, demonstrates that the matter has been taken seriously and is in accordance with the expectations of the Housing Ombudsman’s published ‘Dispute Resolution Principles’.  The landlord has also reasonably offered a payment plan, as discussed above.
  2. The landlord’s response to the complaint was significantly delayed, however, at both stages one and two, with no explanation of this provided. The £100 compensation recognises the delay, but the absence of explanation does not go far enough in redressing this, as it was significantly outside of the timescales set out in its complaints policy, with no information as to why.  Understanding why a complaint is delayed – particularly where the delay is extensive as is the case here – is an important part of complaint handling, both for the landlord in understanding its internal procedures and what went wrong and externally, in its explanation to the resident, as part of good complaints handling practice. The landlord has said that it provided “meaningful updates” to the resident during its initial delay, although these have not been provided to this Service.
  3. Further, as a member of the Housing Ombudsman Scheme, the landlord is obliged to provide documentation pertaining to a complaint received, on request, in accordance with paragraphs 9 and 10 of the Scheme.  The Ombudsman’s complaint handling code also sets out a landlord’s duty to cooperate with the Ombudsman at a paragraph 3.20 as follows “Landlords shall cooperate with the Ombudsman’s requests for evidence and provide this within 15 working days. If a response cannot be provided within this timeframe, the landlord shall provide the Ombudsman with an explanation for the delay…” and at paragraph 3.21 “Failure to provide evidence to the Ombudsman in a timely manner may result in the Ombudsman issuing a complaint handling failure order”.
  4. The landlord significantly delayed in this respect and despite a revised deadline ultimately being agreed following the Ombudsman’s third chaser letter, it did not provide the full documentation requested but instead sent many historic documents regarding the sale of the property and service charge information dating back over ten years; this was unhelpful.
  5. As an evidence-based Service, it is not possible to properly assess the landlord’s handling of a matter and complaint, in the absence of the full evidence, or any explanation as to why evidence has not been provided.  Landlords are expected to keep records of communication, including letters, emails and telephone calls, with residents and if these cannot be provided, an explanation as to why this is the case.

 

 

Determination (decision)

  1. In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, there was reasonable redress in respect of the complaint about the landlord’s management of the resident’s service charge account.
  2. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was maladministration in respect of the landlord’s complaints handling.

Reasons

  1. The landlord acknowledged and apologised for the errors made, offered a payment plan to minimise the detriment to the resident and sought to learn from the complaint.
  2. However, it failed to respond to the complaint within the timescales set out in its complaints policy. Additionally, it failed to provide the documentation requested by the Ombudsman within good time or at all. 
  3. As a member of the Housing Ombudsman Scheme, the landlord has a responsibility to provide information requested within the time scale specified; it did not do this on several occasions, despite this information being requested and consequences of not sending it, made clear.

Order

  1. The landlord to pay the resident £250 compensation for the maladministration found in its complaints handling, comprised of:
    1. £100 in respect of the significant delays to its complaints responses (and lack of explanation as to why);
    2. £150 in respect of the significant delay in providing information to this Service and for failing to provide all of the documentation specifically pertaining to the complaint.
  2. The level of compensation is a total amount and not in addition to any compensation already accepted.
  3. The landlord to confirm compliance with the above orders within four weeks of the date of this report.