Home Group Limited (201904587)

REPORT

COMPLAINT 201904587

Home Group Limited

17 December 2020

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 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

The resident complains about:
1. the landlord’s communication and explanation in relation to an adjustment to the water charges on her rent account;
2. how the landlord handled an overcharge it identified on her rent account from 2017/18 and its explanation relating to this; and
3. how the landlord handled her formal complaint.

Background and summary of events

The resident is an assured tenant of a one-bedroom bungalow (the property).
In March and October 2017, the landlord responded to a complaint the resident had made about a request for the landlord to provide her with copies of water bills relating to the property.
On 28 May 2019, the resident requested the landlord re-raise the complaint about the amount of the water charge added to her rent account. She requested (under the Freedom of Information Act 2000 (the Act)) copies of her water bills from 2012 to 2020. She said that she had no proof that the landlord was paying the water charges or that the charges were correct. The resident specifically stated that she was raising a complaint and not a “Dissatisfaction of service”.
On 10 July 2019, following contact from the resident, the Ombudsman contacted the landlord requesting it confirm the status of the resident’s complaint.
On 11 July 2019, the landlord responded to the resident’s request under the Act. The landlord explained that it was not legally obliged to comply with the Act as it was not a public authority and as there was no personal data within the information requested, her request did not fall under the Data Protection Act 1998.
On 23 August 2019, the landlord informed the resident that her complaint had been escalated to a stage one complaint.
In September 2019, the resident raised a complaint to the landlord stating that she disputed the water charges and she was requesting the exact bill and breakdown of the weekly water charges for the property. She said she had tried to log a complaint several times.
On 11 September 2019, the landlord apologised for the lack of communication and misinformation in relation to the stage one complaint. The landlord explained that the water rate issue was responded to as a stage one complaint in 2017, therefore it was unable to re–investigate this matter and the request for the water bill was passed to its data protection office.
On 19 September 2019, the resident wrote to the landlord requesting to re-raise her complaint. She said she had requested this since 22 May 2019. The resident said that she had spoken to the landlord on 13 September 2019 and asked if there had been any other adjustment to her rent account and was told there had not. However, she requested a copy of her rent account statement and when this arrived the previous day, she found another credit on 9 September 2019 of £4.24. She requested a breakdown of what this credit was for and why it was not communicated to her.
On 30 September 2019, the landlord wrote to the resident in relation to the complaint. The landlord said that as it had already addressed her concerns around previous years, it would not be investigating these issues. However, it had liaised with its data protection office and was able to provide the water rates it was charged by the utility company for a home the size of the property for the years 2012 to 2019, and it listed these.
The landlord explained that as these charges were sent as a bulk bill, it was unable to share this with her as it contained commercially sensitive data and would breach data protection legislation. The landlord said that the charges were set by the utility company and were based on property size irrespective of usage and number of occupants.
In relation to the £4.24 credit, the landlord advised that this was a correction of an error caused when setting the accounts. As the rent was charged weekly, it was assumed that there were 52 Mondays in the financial year, however, there were 53. The rent the resident pays had been adjusted and her new charge was £77.64 per week not £77.80. It said that the difference of £0.16 per week had been expanded to cover the 26.5 weeks for which this charge had been incorrect, and a credit was applied to her account on 11 September 2019. This error impacted approximately 4000 properties. The landlord said it was only informed of the error on 13 September 2019 by its Income Management team and it apologised that this was not communicated to her on the call she made to it around that time.
Finally, the landlord noted that the resident had raised the issue twice previously. In May 2019, her communication was passed to the housing team to investigate and no stage one complaint was made. In September 2019, the concern was passed to the complaints team but it noted that the issue had been addressed in 2017 and it emailed her to inform her of this and that it would be closing down the case.
On 3 October 2019, the resident wrote to the landlord asking various questions, including:
1. How the landlord came to the weekly charge they set for the water.
2. She requested a new complaint be raised in relation to the £4.24 adjustment and asked why it did not say “account adjustment” on the rent account. She also said that she had not received a letter about it.
On 4 October 2019, the landlord explained that it receives charges from the utility company and then passes on the discount it receives from the utility company to residents to ensure that they receive the same benefits as if they did not pay the landlord direct. The discount applied to the account is £10 per financial year. The landlord said that it then divides the charge by the number of Mondays in the financial year.
The landlord also informed the resident that during its investigations, it was found that during the 2017/18 financial year, owing to the utility company setting the incorrect Rateable Variable on the property, she was overcharged by £22.30. This had been corrected on her account as of 4 October 2019. The utility company had assumed the property was larger than it was.
In relation to the £4.24 adjustment, the landlord explained that a decision was taken due to the minor cost of each adjustment (less than £7) that it would not be informing customers of the change. It apologised if she felt this had resulted in feeling that she had been left in the dark.
On 9 October 2019, the resident raised further queries with the landlord including asking how the incorrect Rateable Variable came to light and she suggested the charges on other years could also be wrong. She said that the landlord had not supplied the requested breakdown of the £4.24 adjustment and that its letter of 30 September 2019 had not explained that this was to do with water charges. She said if the landlord had supplied copies of the water bills to residents, then the issues would have been picked up sooner.
On 14 October 2019, the landlord explained that the issue with the Rateable Variable was spotted by one of its staff during a call of 4 October 2019 and the adjustment made immediately. The Rateable Variable had been the same other than the one stand-out year. The landlord explained that as the water was included with the rent charge, it referred to it as a rent charge change. It apologised if she had difficulties in obtaining this explanation previously. The landlord repeated its previous explanation as to why it could not pass on the bulk bills from the utility company.
The landlord also explained that it was human error which caused the issue of the two adjustments. The explained that as the adjustment made was less than £7 a decision was made not to send letters as it was cost prohibitive and as the adjustments were a credit, no tenant had been left worse off.
On 16 October 2019, the resident wrote to the landlord asking further questions/queries, including:
1. What was the utility company’s response to the Rateable Variable error?
2. How did the landlord know if the previous years were correct in terms of the Rateable Variable?
3. She had requested a breakdown the £4.24 credit several times and said that the landlord had not explained that it was to do with the water rather than rent.
On 16 October 2019, the landlord explained that the as Rateable Variable on the property was the same for each year other than one, no further action was taken. The landlord also provided a breakdown of the rent for the property comprised of assured rent, water charge and service charge. The landlord explained that the £4.24 was the cumulative amount the resident had overpaid from the beginning of the financial year until the adjustment of 30 September 2019.
On 17 October 2019, the resident wrote to the landlord asking further queries, including how did the utility company know that the Rateable Variable was incorrect. On 18 October 2019, the landlord responded again. The landlord said that the Rateable Variable was incorrect for the financial year 2017/18 but it was satisfied that this was a one-off error and it was happy to absorb the cost of £22.30 rather than requesting the utility company to investigate. The landlord referred back to its response of 30 September 2019 in relation to concerns about complaint handling.

On 6 November 2019, the landlord provided a complaint response. The landlord repeated its earlier explanation as to the reason for the adjustment of £4.24 credit stating that the error was spotted on 9 September 2019 and the adjustments made to the total rent charge. The landlord explained that this was the term used to describe the total charge onto tenants and may include some or all of rent, service charge, water rates, management charges and sinking fund. The landlord explained that this took the weekly charge from £77.80 to £77.64 per week (in terms of water, this was £8.44 before 30 September 2019 and £8.28 after).
The landlord explained that as the total number of customers affected by this was around 4000, a decision was made not to inform customers of the change as it would not have been cost effective. The information would have been available on rent statements and the customer service centre could have addressed any concerns about this. The customer services managers were briefed of the adjustments on 13 September 2019. The landlord apologised that the adviser the resident spoke to on 16 September 2019 was not able to provide the information she needed.
In response to the resident’s request for copies of several years’ bills sent by the utility company, the landlord repeated its previous explanation about data protection but referred to the figures it had previously communicated.
In relation to the complaint handling, the landlord said that it initially advised in May 2019 that the issue would be investigated by the Housing team. The second complaint raised was logged for stage one but it then noted that the issue had been addressed in 2017 so it advised her of this and that it would be closing this down as an expression of dissatisfaction in accordance with its policy. The landlord said that it had followed the correct protocol as it had not had a chance to address the issue and it would pass all rent complaints to the housing team in the first instance. The landlord said that it was only in her response that she referred to something it could investigate (the £4.24 adjustment). The landlord apologised that this was not communicated sooner than 30 September 2019.

The landlord repeated its previous explanation about the Rateable Variable.
The landlord’s complaint notes of 18 November 2019 state that the resident requested a “proper” explanation of charges made to the account when escalating her complaint. In subsequent correspondence, the resident referred to the complaint not being raised for five months. She complained that no information was sent to tenants in relation to the adjustments to the rent account. The landlord had not said that this was an error relating to the water account. The response with the breakdown was “too little too late”.
In relation to the Rateable Variable issue on the water account, the resident asked how the landlord knew if the previous years were correct. The resident felt she had been “left in the dark” in relation to the rent account. She referred to spending many hours telephoning the landlord in relation to the issues.
On 3 December 2019, the landlord offered for a manager to visit the resident and discuss her rent account and the breakdown of the charges face to face as part of the stage two review. The resident did not accept this offer stating that she did not feel it would help.
On 12 December 2019, the landlord responded to the complaint at stage two of its complaints procedure. In relation to complaint handing, the landlord explained that her request of May 2019 to re-raise her previous complaint and request for copies of water bills was passed to the Data Projection Office to respond to and it apologised if it was not made clear that a Stage one complaint would not be logged. She made contact again in August 2019 and it had incorrectly advised that a stage one complaint would be logged. It subsequently explained that it would not reinvestigate the old complaint. In response, the resident had queried a recent rent account adjustment and the service in relation to the complaint handling. This was logged as a new issue and a stage one complaint.
In relation to the rent account adjustment, the landlord concluded that an adequate response had been provided at Stage one and repeated its previous position. The landlord repeated its explanation surrounding the Rateable Variable confirming that the resident was overcharged by £22.30 and this was corrected.
Finally, the landlord said that as the resident said that she had made repeated phone calls and had been left not knowing what was going on with her rent account, it repeated the offer for a manager to visit her and discuss the account in person. It hoped this would provide an opportunity for any points of uncertainty to be addressed with all information being available to view. In recognition of the service failure in communication when logging complaints and the advisor not providing her with the information on the adjustment when queried, the landlord offered £55 discretionary compensation.
In January 2020, the resident contacted the landlord about the proposed meeting. The landlord arranged to meet the resident to discuss the issues around water charges. This meeting was cancelled by the resident due to the COVID 19 pandemic as the resident was self-isolating. The landlord has confirmed to the Ombudsman that it is still willing to hold a meeting with the resident when this is possible.

Assessment and findings

The landlord’s communication and explanation in relation to an adjustment to the water charges on her rent account

Under the terms of the tenancy agreement, the rent payable by the resident is “made up of and includes the net rent, water rate and service charge due and payable” under the agreement. The agreement also states that the landlord will “pay to the appropriate water companies any amounts due to them and collected from you by way of water charges”.

The Ombudsman’s Disputes Resolution Principles are:
1. Be fair – treat people fairly and follow fair processes.
2. Put things right.
3. Learn from outcomes.

In relation to the £4.24 adjustment to the resident’s rent account, the resident initially complained that the landlord had not informed her of this adjustment and requested a breakdown of the adjustment. In response, the landlord explained why this adjustment had occurred (due to the accounting error relating to the number of Mondays in the financial year). The landlord explained that her rent had been reduced accordingly and the adjustment was the £0.16 overpayment for the first half of the year which had been credited to her account. This landlord’s response was appropriate to explain why the adjustment had occurred and provide the details of the adjustment.
The resident raised further concerns such as how it calculated the charge and why it had not written to her about the adjustment. In response, the landlord provided a further explanation of how the charge was calculated and passed on to the resident and that it had decided that due to the amount of the adjustment it would not inform customers of the change. The landlord’s complaint response of 6 November 2019 also explained that due to the number of customers affected, it was not cost effective to write to them all. The landlord said customer services managers were briefed of the adjustments but it apologised that the adviser the resident spoke to on 16 September 2019 was not able to provide the information she needed.
The landlord acted appropriately by responding to the resident’s request for further explanations around the calculation of the adjustment and why it had occurred. While the resident was also dissatisfied that the landlord had not written to her about the adjustment and this was understandable, the landlord has provided a reasonable explanation as to why it did not do so taking into account the number of customers affected, the amount of the adjustment and that it was a credit. While any formal increase in net rent would need to have been in accordance with the terms of the tenancy agreements and Sections 13 and 14 of the Housing Act 1988, this adjustment was a correction of an accounting error which led to a small credit to the resident’s account and therefore it was reasonable for the landlord to distinguish this from a formal rent increase which requires a formal process and notification to the resident.
Nevertheless, in the situation where the landlord decided not to write to every resident, it was particularly important that this information was accessible by the affected tenants and therefore appropriate that it briefed the customer service managers. The landlord should have been able to explain the adjustment to the resident when she called on 16 September 2019, therefore there was a shortcoming in its communication on this occasion. However, when responding to the complaint, the landlord appropriately acknowledged and apologised for this shortcoming. It also said that the compensation offer of £55 was partly to address this.
The landlord’s complaints response was therefore in accordance with the Ombudsman’s Disputes Resolution Principles to be fair and put things right as it acknowledged its shortcoming and offered appropriate redress. While the compensation was modest (taking into account that it was also for the shortcoming in relation to the complaint handling, see below), it was also proportionate taking into account the nature of the shortcoming and length of time the resident was impacted.
The resident also complained that the landlord had not made clear in correspondence that the adjustment related to the water charge rather than rent. It is acknowledged that the landlord’s correspondence of 30 September 2019 did not refer specifically to the water charge and therefore should have been more specific when explaining the adjustment. However, when this was raised by the resident, the landlord explained that the water charge was part of the rent and in its complaint response of 6 November 2019, the landlord explained in further detail what the rent included. This explanation was in accordance with the terms of the tenancy agreement (paragraph 37 above) and was therefore appropriate.
Overall, while the resident’s concerns about the adjustment and the landlord’s communication around this were understandable, the landlord’s response to the complaint was appropriate as it explained what had happened and the reasons for this. The landlord apologised for its shortcoming in communication when she telephoned about the issue and answered her various queries in relation to the adjustment. The landlord wrote a number of responses to the resident’s queries and evidenced that it was making a reasonable effort to answer her questions, which was fair.

How the landlord handled an overcharge it identified on the rent account from 2017/18 and its explanation relating to this

In response to the landlord identifying this second adjustment required to the rent account, the resident raised various questions about this. She asked about the landlord’s communication with the utility company about the issue and she queried how the landlord knew that the other year’s figures were correct. The landlord responded by explaining that the incorrect figure for the Rateable Variable was identified on 4 October 2019 and immediately adjusted. It explained that the Variable had been the same for the other years so it was confident that others were correct. The landlord also explained that it was happy to absorb the cost of £22.30 rather than requesting the utility company to investigate therefore no further action was taken.
It was of concern to the resident that during the course of her complaint about one unexpected adjustment to the rent account, another error was identified by the landlord. As a result, she lacked confidence in the landlord’s response and explanations about this. While this was understandable, the landlord responded appropriately by answering the resident’s questions, explaining why it was confident the figures for other years were correct and why it had not raised the issue with the utility company. Given that it was a historical error and the landlord absorbed the cost of the mistake, this was reasonable. The landlord responded to the resident’s various questions and requests for more information and made a reasonable effort to address her concerns and reassure her.
The resident also felt that if the landlord had supplied residents with copies of the water bills then this adjustment and the £4.24 adjustment (above) would have been picked up sooner. The appropriateness of the landlord’s response under the Data Protection Act as to why it did not pass on the water bills to tenants is outside of the remit of this investigation as it falls under the jurisdiction of the Information Commissioner’s Office. However, it is noted that the landlord did provide the rates it was charged by the utility company for a property the size of the property for the years 2012 to 2019.
Overall, the landlord acted appropriately in making reasonable efforts to explain the second adjustment fully and answer the resident’s questions in relation to this. Given that the resident still had concerns about the rent account following the final complaint response, the landlord’s proposal to meet with the resident face to face to discuss her outstanding concerns was appropriate. It is unfortunate that this meeting did not go ahead due to the restrictions caused by the COVID 19 pandemic. The resident has indicated to the Ombudsman that she requires further explanation in relation to the Rateable Variable.
Given the ongoing restrictions at the time of this investigation, the Ombudsman has made a Recommendation that the landlord offer an alternative format for discussion of any outstanding concerns.

How the landlord handled her formal complaint

The landlord’s Complaints policy defines a complaint as an “expression of dissatisfaction by one or more members of the public about [the landlord’s] action or lack of action, or about the standard of service provided by or on behalf of [the landlord]”.
The policy states further that the landlord systematically records and investigates all complaints whether informal or formal. It aims to resolve complaints at first point of contact wherever possible. It also states that there may be occasions where it is fitting for it to make a good will gesture and award compensation.
The complaints procedure as set out on the landlord’s website states that once a complaint is made, it will investigate the complaint and try to resolve it within five working days. If this is not possible, it will let the resident know why and do everything it can to resolve it as quickly as possible. If the resident is not happy with the stage one response, they have eight weeks to request a review at stage two. Stage two is the final stage of the complaints procedure under which it aims to resolve the complaint within 20 working days. If it is not able to resolve it in this time, it will contact the resident and explain why.
The resident complained about the time taken for the landlord to respond to her complaint. The resident requested to raise a complaint on 28 May 2019. Rather than raise a complaint, the landlord responded to the resident’s request for the water bills as a Freedom of Information procedure request. On 23 August 2019, the landlord informed the resident that her complaint had been escalated to an official Stage one complaint. On 11 September 2019, the landlord apologised for the lack of communication and misinformation in relation to the stage one complaint being logged. It explained that the water rate issue was responded to as a stage one complaint in 2017 therefore it was unable to reinvestigate this matter and the request for the water bill was passed to its data protection office who would respond.
There was a shortcoming in the landlord’s communication in relation to the complaint. In response to the resident’s correspondence of 28 May 2019, the landlord should have informed the resident that it was not raising a complaint and explained why it was not doing so. The landlord did this on 11 September 2019, but this was outside of the timescales set out in its policy and the resident had made contact with the landlord and the Ombudsman by this point.
In the landlord’s final complaint response, the landlord apologised that it did not make clear in May 2019 that a stage one complaint was not being logged and that it incorrectly advised that a complaint would be logged in August 2019.The landlord offered £55 compensation for the failures in communication about the complaint. While there was a shortcoming in the landlord’s complaints handling, the landlord has responded appropriately to this aspect of the complaint by acknowledging, apologising and offering compensation for its shortcoming, in accordance with the Ombudsman’s Dispute Resolution Principles.
While the compensation was modest (taking into account that it was also for the shortcoming in communication about the £4.24 adjustment referred to above), it was also proportionate taking into account the nature of the shortcomings and the time period over which it occurred. It was also in accordance with the Ombudsman’s own Remedies guidance (which refers to awards of £50 to £250 for the distress and inconvenience for, for example, where there has been a service failure which had an impact on the complainant but was of short duration and may not have significantly affected the overall outcome for the complainant).
In conclusion, when considering how a landlord has responded to a complaint, the Ombudsman considers not just what has gone wrong, but also what the landlord has done to put things right in response to a complaint. This includes the steps the landlord has taken to address the shortcoming and prevent a reoccurrence, as well as any compensation offered. In response to the resident’s complaint about its complaint handling, the landlord took appropriate steps to acknowledge and apologise for the shortcomings and offered appropriate compensation. In doing so, the landlord has offered appropriate redress to resolve the complaint.
However, it is noted that there is no evidence of the landlord indicating how it would learn from its shortcoming and prevent it happening again, therefore the Ombudsman has made a Recommendation in relation to this.

Determination (decision)

In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, the landlord provided reasonable redress in respect of the complaint about the landlord’s communication and explanation in relation to an adjustment to the water charges on the rent account.
In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in relation to the complaint about how the landlord handled an overcharge it identified on the rent account from 2017/18 and its explanation relating to this.
In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, the landlord provided reasonable redress in respect of the complaint about how it handled the formal complaint.

Reasons

There were some shortcomings in relation to the landlord’s communication about the £4.24 water rates adjustment and its handling of the complaint. However, when responding to the complaint, the landlord acknowledged and apologised for these shortcomings and offered appropriate compensation as redress. The landlord made reasonable efforts to respond to the resident’s queries and concerns about the adjustments to the rent account by providing information and explanations in relation to these, which was appropriate.

Recommendations

If the resident would still like to discuss her concerns about the rent account with the landlord, the landlord to offer to respond to these concerns over the telephone or in writing depending on how the resident would like to communicate about this.
The landlord to remind its complaints handling team of the importance of raising a complaint where it is appropriate to do so in accordance with its complaints policy and of communicating with residents as to the status of their complaint.