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Notting Hill Genesis (NHG) (202320625)

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REPORT

COMPLAINT 202320625

Notting Hill Genesis (NHG)

28 March 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 handling of:
    1. The resident’s rent and service charge account.
    2. The associated complaint.

Background

  1. The resident is a shared owner of the landlord under an agreement dated 6 August 2021. The resident is a sub-lessee and the landlord is a lessee of a superior landlord under a head lease dated 21 October 2019. The property is a 1- bedroom basement flat.
  2. The landlord issued a final demand letter to the resident dated 12 June 2023 that said that if the resident did not clear arrears on his account within seven days, that it would issue a Notice of Seeking Possession. It added this could result in the resident losing his home. The landlord also said it would also contact the resident’s mortgage lender to discuss payment options. It requested the resident contact urgently to discuss the matter.
  3. The resident raised a stage 1 complaint on 17 June 2023. In this he said he had agreed a payment plan with the landlord. He was unhappy about receiving the final demand threatening that he could lose his home and the landlord would contact his mortgage lender. He said he had also contacted the landlord by phone and then email on 15 June 2023 but received no response. He said that he had explained previously to the landlord that he was experiencing financial difficulty that would be rectified when he started a new job. He felt that he was being unfairly treated. The resident did not specify a specific outcome and offered to start the payment plan from August 2023 to bring his account up to date by the end of the year. He also said he wished to complain about the property management officer concerned.
  4. The landlord responded at stage 1 on 2 August 2023. It said:
    1. It had closed the complaint as a “quick fix” in June 2023.
    2. It had revised the payment plan emailed to the resident on 5 June 2023 so it contained only service charges. It had emailed the resident again on 8 June 2023 and then issued the final demand notice on 12 June 2023.
    3. It had followed its income collection process and said that customers can expect to receive reminders in cases where there are high arrears on the account until a payment plan is formally agreed.
    4. The landlord upheld the complaint as the resident did not receive a prompt response to his email on receipt of the final reminder dated 12 June 2023. The landlord offered £150 compensation that it had previously offered the resident by email on 22 June 2023.
    5. It reminded the resident of the terms of the lease and income collection policy as arrears remained on the resident’s account and encouraged the resident to urgently make contact with the property management officer to agree a formal payment plan.
  5. The resident was dissatisfied with the landlord’s response and requested an escalation of his complaint to stage 2 on the same date. As an outcome the resident requested further compensation for the distress suffered due to the landlord’s pursual of the outstanding service charge balance and rent accounts.
  6. The landlord issued its final complaint response on 24 August 2023. It reiterated its response at stage 1 stating that its property management officer had followed its policy and could see no misconduct. It confirmed that it had not contacted the resident’s mortgage lender or solicitors. It upheld the resident’s complaint as it had not issued a new payment plan that was promised in its email of 22 June 2023. It had provided out–of–date signposting links in April, May and July related to the COVID-19 pandemic that no longer worked. It awarded £250 compensation comprising:
    1. £150 that it had previously offered.
    2. £50 for not following up with a revised payment plan following the email of 22 June 2023.
    3. £50 for providing out–of–date advice and support links in reminder letters and emails.
  7. The resident was dissatisfied with the landlord’s final complaint response and referred his case to us on 20 November 2023. As an outcome the resident requested increased compensation.

Assessment and findings

The scope of the Ombudsman’s investigation

  1. The resident referred to the impact of the landlord’s actions regarding the service charge arrears on his mental health. We do not doubt the resident’s statement about his mental health. However, the Ombudsman is unable to draw conclusions on specifically how the resident’s health may have been affected by any errors made by the landlord. Claims of personal injury ultimately, are better suited for courts or liability insurers to decide. The Ombudsman can however consider the overall detriment, inconvenience and time and trouble experienced by the resident due to a landlord’s failings as well as the landlord’s response to the resident’s concerns about his health.
  2. The resident made a subsequent complaint to the landlord in November 2023. At the time he referred his complaint to us this had not exhausted the landlord’s internal complaints process. The resident may wish to refer this complaint to us if he is not satisfied with the landlord’s final complaint response. For the avoidance of doubt, the Ombudsman’s investigation and assessment will focus on the events that occurred from April 2023 until the date of the landlord’s final complaint response of 24 August 2023 that the resident referred to us.  

The landlord’s handling of the resident’s rent and service charge account

  1. According to the resident’s lease agreement, the lease year runs from 1 January to 31 December. Under the agreement, the resident is required to pay the rent and service charges. This enables the landlord to pay the superior landlord under the terms of the head lease. According to the landlord, the resident’s service charge account was in arrears as specified in the landlord’s service charge estimate dated 18 January 2023.
  2. The landlord stated in its final complaint response of 24 August that it wrote to the resident on 28 April 2023 and 15 May 2023 concerning the arrears. A payment arrangement was set out in the landlord’s emails of 5 and 8 June 2023. There was an error pointed out by the resident in his 5 June 2023 email as this included the rent charges. The landlord apologised and rectified this in a further email of 8 June 2023. In this email, it asked the resident to confirm the arrangement. However, the resident explained in his stage 1 complaint that he worked for an airline and was away. He felt he would have time to check the arrangement when he returned.
  3. There was some evidence of gaps in the information that the landlord provided to us that predates the emails sent by the landlord in June 2023. It is not clear whether this indicates that there were some record keeping issues along with communication issues due to the transition of new staff members. It is important for landlords to keep complete and accurate records of any conversations and correspondence so that it can provide relevant information to its residents (and to us if necessary).
  4. It also states in its income collection policy that the landlord will keep records of all communication and correspondence with leaseholders regarding arrears. The missing records are not consistent with the landlord’s policy which is inappropriate. Our Spotlight report on Knowledge and Information Management (May 2023), available on our website, contains a number of recommendations for landlords to improve record keeping practices. Previous determinations have also identified gaps in knowledge and information management. We have therefore made a recommendation for the landlord to review any self-assessment it has carried out against the Spotlight report to make improvements in its knowledge and information management.
  5. The resident responded to the landlord’s final demand letter of 12 June 2023 on 15 June 2023. He received an automated response and then subsequently sent his stage 1 complaint to the landlord. The resident said he was unhappy with the way a final demand had been issued when a payment plan had been set up. He said he had previously told the landlord about his financial difficulties and felt that the landlord’s approach was unfair. As there are no earlier records, it is not clear at what point the landlord knew about the resident’s financial difficulties. However, the fact that it had sent emails on 5 June setting out the payment arrangement indicated that it must have had prior knowledge of the difficulties before this.
  6. The landlord’s income collection policy states that when a leaseholder falls into arrears it will offer guidance and help to repay the debts as soon as possible. It will look to arrange mutually agreeable repayment terms taking into account the lease terms, financial regulations and ongoing affordability of the property. It will signpost leaseholders to relevant support such as welfare benefit advisors, tenancy support networks and localised support. It will issue statements, use different communication methods such as in writing, text, phone and email. It will communicate with leaseholders to encourage payment of the debt and keep records of communication and correspondence with leaseholders concerning arrears.
  7. Sending the earlier reminders to pay to the resident was reasonable and in line with the landlord’s policy. However, the landlord sent out–of–date signposting links that no longer worked which was not reasonable. It recognised this in its final complaint response of 24 August 2023.
  8. The policy also says that enforcement action would only be taken when all reasonable efforts to tackle the debt had been attempted. Enforcement action could include contacting a mortgage lender, forfeiture of the lease and possession action. The landlord’s actions to send a final demand of 12 June 2023 threatening enforcement and possession action was therefore outside of the scope of its policy. The landlord only waited for two working days after its email of 8 June 2023 before issuing a final demand notice. The landlord’s actions were therefore heavy handed and unreasonable given a payment arrangement had been made. The resident told the landlord that he was worried sick over the weekend about potential enforcement action and the threat that he could lose his home. This would have caused unnecessary worry and distress for the resident during a difficult time, made worse by the fact that the resident would have been unable to contact the landlord until after the weekend.
  9. The resident said in his email of 19 June 2023 that he was worried that the landlord had contacted his mortgage lender. The landlord confirmed this was not the case the same day. It also said it would pause the arrears action for a month and that ad hoc payments could be made which was reasonable. It advised a payment plan would start in August 2034. However, there was delay in issuing the promised payment plan. The payment plan was dated 25 August 2023, two months later. It is not clear exactly when the resident received this as, in his email to the landlord of 30 August 2023, he advised that he was still waiting for the payment plan to come through. This delay was unreasonable.
  10. The landlord acknowledged in its email of 22 June 2023 that it had made “multiple errors” and also that the final demand should never have been sent. It said it had not responded quickly to the resident’s email of 15 June 2023 when he had clearly stated how worried he was and that the landlord’s actions were affecting his mental health. It said that communication issues had been evident in relation to a new member of staff. It offered its sincere apologies which was appropriate. It also said it had reviewed its onboarding process for new staff to ensure policies are applied. It offered £150 compensation which it said would be deducted from the arrears.
  11. The landlord offered compensation of £250 in its stage 2 complaint response inclusive of the £150 previously offered. This compensation was in line with the landlord’s compensation policy for service failings where there is a ‘high impact’ that has caused a “significant level of distress and inconvenience”. However, it is our opinion that this did not adequately address the identified service failings and level of worry and distress, time and trouble caused to the resident during a difficult time by the landlord’s failings.
  12. In summary:
    1. The landlord did not follow its income collection policy in issuing a final demand notice threatening that enforcement action would be taken and that the resident’s mortgage provider would be contacted and he could lose his home. Communication and record keeping issues were evident in the case. This caused unnecessary distress to the resident given that an agreement had been made for the resident to clear the balance on his service charge account.
    2. The landlord sent out–of–date signposting links to the resident and there is no evidence that further support was provided as per the landlord’s policy until an updated link was sent in the landlord’s final complaint response of 24 August 2023.
    3. There was an unreasonable 2 month delay in the landlord issuing its formal payment plan dated 25 August 2023.
  13. The Ombudsman considers that this amounts to maladministration for which orders have been made.
  14. Our role is to provide fair and proportionate remedies where we have identified maladministration or service failure by the landlord. In considering this we take into account our Dispute Resolution Principles: Be Fair, Put Things Right and Learn from Outcomes as well as our own guidance on remedies. In line with that guidance a fair level of compensation would be £400 (inclusive of the landlord’s £250 offer). This appropriately recognises the upset and frustration caused to the resident by the landlord’s failings.

The landlord’s handling of the associated complaint

  1. The resident’s stage 1 complaint was made on 17 June 2023. The landlord stated in its stage 1 response of 2 August that it had closed the complaint in June 2023 as a “quick fix”. The landlord offered the resident a “quick fix” in its email on 22 June 2023 when it offered £150 compensation and stated that “multiple errors had been made”. The formal stage 1 complaint response was sent on 2 August 2023. No evidence has been seen that the landlord told the resident that it had closed the complaint in June 2023 at that time or that the resident had agreed to this which was not in line with its policy and not reasonable. In fact the landlord emailed the resident on 21 July 2023 to say that the stage 1 complaint response would be sent shortly. There was therefore an unnecessary delay of 33 working days in issuing its stage 1 response causing inconvenience and time and trouble to the resident in pursuing his complaint through the landlord’s complaints process.
  2. The “quick fix” stage referred to in the landlord’s policy at the time of the resident’s initial complaint was an unnecessary stage ‘0’. This is contrary to the Ombudsman’s Complaint Handling Code (the Code). Under 5.2 of the Code it says that it is not appropriate to have extra named stages (such as ‘stage 0’ or ‘informal complaint’) as this causes unnecessary confusion.  Under 5.3 of the Code it states that a process with more than 2 stages is not acceptable under any circumstances as this will make the complaint process unduly long and delay access to the Ombudsman. The landlord has since revised its policy in July 2024 to bring this in line with the Ombudsman’s Complaint Handling Code (the Code) and this no longer has a “quick fix” stage.
  3. The landlord issued its final complaint response on 24 August 2023. This was within its complaint policy timescale of 20 working days for a stage 2 complaint response so this was reasonable.
  4. Whilst the landlord gave a suitable apology by email on 22 June 2023, it did not do so in its subsequent complaint responses. It only said it was sorry at stage 2 that its response to date had not met the resident’s expectations. A good apology is crucially important and can often resolve a complaint at an earlier opportunity. The landlord was unfortunately more focussed on setting out the sequence of events and the identified service failings. A sincere apology could have resolved the complaint at an earlier stage and the landlord missed this opportunity which was inappropriate.
  5. The landlord initially demonstrated some learning from the resident’s complaint in its 22 June 2023 email. It was reasonable to learn from its identified service failings, however, it did not demonstrate learning within its formal complaint responses which was not appropriate. Section 9.1 of the Ombudsman’s Complaint Handling Code (the Code) states that landlords must look beyond the circumstances of the individual complaint and consider whether service improvements can be made as a result of any learning from the complaint.
  6. In summary:
    1. The landlord inappropriately closed the resident’s stage 1 complaint as a “quick fix”. The “quick fix” stage acted as a stage O which is contrary to the Code and unduly prolonged the complaint journey with a delayed stage 1 complaint response being made 33 working days after the complaint had been made.
    2. The landlord whilst recognising that errors had been made, did not provide a suitable apology in its stage 1 or stage 2 complaint responses which was not appropriate.
    3. The landlord’s did not demonstrate learning from the outcomes of the complaint in its stage 1 or stage 2 complaint responses as required by the Code.
  7. The Ombudsman considers that this amounts to maladministration for which orders have been made.
  8. In line with our Dispute Resolution Principles and remedies guidance above, a fair level of compensation would be £150. This appropriately recognises the unnecessary inconvenience, along with the time and trouble caused to the resident by the landlord’s complaint handling failings.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was maladministration in respect of the landlord’s handling of the resident’s rent and service charge account.
  2. In accordance with paragraph 52 of the Scheme, there was maladministration in respect of the landlord’s handling of the associated complaint.

Orders and recommendations

Orders 

  1. Within 4 weeks of the date of this report, the landlord is ordered to issue a written apology to the resident. The apology should be made by a senior manager or above and a copy sent to us.
  2. Within 4 weeks of the date of this report, the landlord is ordered to pay the resident a total of £550 of compensation comprising:
    1. £400 (inclusive of the £250 awarded by the landlord) in respect of the landlord’s handling of the resident’s rent and service charge account. This is in recognition of the worry and distress and time and trouble caused to the resident by the landlord’s service failings including communication issues, knowledge and information management issues and delays.
    2. £150 in respect of the landlord’s handling of the associated complaint. This is to recognise distress and inconvenience and time and trouble caused to the resident by the landlord’s complaint handling failings.

Recommendation

  1. It is recommended that the landlord review its self-assessment in relation to our Spotlight report on Knowledge and Information Management, if it has not already done so, to consider where improvements may be made in its communication and record keeping practices.