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Peabody Trust (202127669)

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REPORT

COMPLAINT 202127669

Catalyst Housing Limited

31 October 2023 (amended at review)

 

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 resident’s rent account.
  2. The Ombudsman has also considered the landlord’s:
    1. Complaint handling.
    2. Record keeping.

Background

  1. The resident has held an assured tenancy since early 2004 and the landlord is a housing association. The resident is vulnerable as a result of disability (for which she is in receipt of disability benefits) and has raised a separate complaint to this Service (reference 202007982) regarding repairs to the property.
  2. The rent for the resident’s property had been mostly paid from housing benefit payments – there had been a small weekly shortfall from the start of the tenancy in March 2004 until January 2014, for which the resident had made additional payments.
  3. As a result of housing benefit being paid in arrears, the resident’s rent account had been in arrears consistently. The landlord had made an application to the Department for Work and Pensions (DWP) to take direct payments from the resident’s benefit payments. This application was approved and payments from DWP were received monthly between January 2020 and November 2020. The amounts received varied but totalled £190.10 over this period.
  4. The resident complained in November 2020 about the landlord’s action in making this application for direct payments from her benefits without notice and requested a full breakdown of her rent payments. The landlord’s stage two response of 23 June 2021 explained it was within its rights to take this action but acknowledged its inadequate communication and offered £100 as a goodwill gesture in respect of this. The landlord provided a summary of the resident’s rent arrears accrual on 6 July 2021 which explained the shortfalls and the additional payments the resident had made. It confirmed that the resident’s rent account was in credit and that it was the resident’s responsibility to manage the rent account.
  5. The resident was unhappy with this response and escalated her complaint to this Service in March 2022, as she felt the level of compensation offered was not sufficient and the landlord had failed to provide a full breakdown of her rent account as she had requested.

Assessment and findings

Administration of rent account

  1. The tenancy agreement sets out the rights and responsibilities of both the resident and the landlord. It says that the payment of weekly rent is due in advance on the Monday of each week.
  2. The landlord’s rent arrears policy says it will use all appropriate methods to recover rent arrears, including small claims court, third party debt orders, attachment of earnings and third-party payments.
  3. From the evidence provided to the Ombudsman, the application to DWP to take direct payments from the resident’s benefits occurred before payments started in January 2020. Arranging direct payments from benefit claims to cover rent arrears was appropriate because it was in line with the landlord’s rent arrears policy.
  4. The ‘Early Intervention’ section of the landlord’s rent arrears policy says the landlord monitors resident’s rent accounts on a weekly basis and proactively contacts residents when they become two weeks in arrears to prevent the arrears increasing. It adds that it takes into account individual circumstances to assist residents with arrears to access appropriate financial advice and set realistic repayment agreements.
  5. However, the landlord provided no evidence that it followed this policy and contacted the resident. This is a clear service failure. It would have been appropriate for the landlord to contact the resident before making an application to the DWP for direct payments, firstly to notify her that this was a potential consequence of having rent arrears but also to offer the resident other options to resolve the arrears.
  6. The landlord’s rent arrears policy also says that vulnerable tenants will be referred to support services for assistance in sustaining their tenancy. The landlord provided no evidence to demonstrate that it followed this policy; it would have been reasonable for it to have considered the resident’s vulnerabilities and signposted her to support in these circumstances.
  7. The landlord also provided no evidence that it considered the resident’s past history when she previously made regular top-up payments on a voluntary basis when there had been a shortfall between her housing benefit payments and rent in the early years of her tenancy. The landlord should have taken this as evidence that the resident would engage with the landlord if it had appropriately communicated with her regarding the rent arrears. By going straight to direct deductions from benefit payments, the landlord acted in way that was heavy‑handed. This was a further service failure.
  8. The landlord did not handle the administration of the resident’s rent account appropriately. There were several service failures – it did not follow its own policies in communicating with the resident; it did not take into consideration her vulnerabilities; and it was heavy-handed in its actions to recover the rent arrears.
  9. In its complaint response, the landlord offered an apology for the resident’s experiences, including not feeling listened to or supported and the upset caused. It found that it had failed to provide her with a written breakdown of the rent arrears and while its decision to make an application for direct payments from the resident’s benefits was “fair and reasonable”, it could have done more to notify the resident of this and give her an opportunity to resolve the rent arrears in another way. The landlord has accurately identified its failures.
  10. The landlord made a recommendation for an internal process review to prevent incidents of this kind reoccurring and offered the resident £100 as a goodwill gesture. The landlord also agreed to send a full breakdown of the resident’s rent account to her, as requested. This breakdown was sent on 6 July 2021 but was not a full accounting of payments in/out as the resident had initially requested. This full accounting was sent to the resident on 9 June 2022, after this Service had contacted the landlord about the complaint. The landlord has attempted to put things right, but the offer was not proportionate and there was an unreasonable delay in providing a full account of payments and rent arrears.
  11. In relation to the failures identified, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: Be Fair, Put Things Right and Learn from Outcomes as well as our own guidance on remedies.
  12. The landlord has attempted to put things right, but the offer of compensation was not proportionate to the impact on the resident. Accordingly, financial compensation of £350 is appropriate to reflect the evident distress and inconvenience caused to the resident (this includes the £100 previously offered).

Complaint handling

  1. The resident made her complaint on 9 November 2020 and the landlord issued its final stage two response on 23 June 2021, an elapsed period of 227 days (seven and a half months). The landlord’s complaints policy states that it aims to resolve all complaints within ten working days, with a further appeal stage responded to within a further ten working days.
  2. The landlord has not provided any evidence that it had either acknowledged or responded to the complaint at stage one, or any evidence of how it handled the complaint internally prior to issuing the stage two response in June 2021. This is a clear service failure, both in failing to comply with its own complaints policy by not providing a stage one response and not responding to either stage within the outlined timeframe. This is not compliant with the Ombudsman’s Complaint Handling Code, and the landlord has not given itself the initial opportunity to consider the circumstances and review its actions internally before issuing a final response.
  3. Overall, the landlord’s handling of this complaint was poor because it did not follow its own complaint policy and the response and resolution offered to the resident was inadequate and delayed. This contributed to the resident’s distress. Financial compensation of £250 is appropriate to reflect that impact on the resident by these complaint handling failures.

Record keeping

  1. On 18 May 2022 the Ombudsman requested from the landlord all relevant information relating to this complaint, including its internal correspondence and copies or records of correspondence sent to the resident about the rent arrears. While the landlord did provide its stage two final response and relevant policies, it did not provide any copies of correspondence with the resident or internal documents relating to the complaint. No explanation was given for that, and it is reasonable to presume that these records either do not exist or were not provided to this Service. Either way, that is a record keeping failure.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was maladministration in respect of the landlord’s:
    1. Handling of the resident’s rent account.
    2. Complaints handling.
    3. Record keeping.

Orders

  1. The landlord is ordered to make a formal apology to the resident in writing within four weeks.
  2. As part of its stage two complaint response, the landlord agreed to review processes to ensure better communication around rent arrears for all residents. The landlord is ordered to ensure this review has been conducted and provide the Ombudsman with evidence of its findings within three months.
  3. The landlord is ordered to pay compensation of £600 to the resident, in full or in installments once information has been provided by the resident in regard to mitigating any impact on her benefits. If this information has not been provided within 4 weeks, the landlord is to hold making the payment, until such a time that the information has been provided by the resident.

This sum is made up of:

a. £350 for the failures found in the landlord’s administration of the resident’s rent account (minus £100 if it has been paid previously).

b. £250 for the distress and inconvenience caused to the resident by the failures found in the landlord’s complaint handling.

  1. The landlord should provide evidence of compliance with these orders within four weeks and three months respectively.