Landlords can now complete the Complaint Handling Code Annual Submissions form. More information is available online.

The Riverside Group Limited (202013454)

Back to Top

REPORT

COMPLAINT 202013454

The Riverside Group Limited

20 December 2021


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 rent account, in particular with regards to a request for a refund of the credit on the rent account.

Background and summary of events

  1. The resident has an assured tenancy with the landlord.

Policies, procedures, and agreements

Rent Refund Policy:

  1. This document sets out that a tenant can ask for a refund of a credit on their rent account. The landlord is required to check if any refund is due and this is investigated by its Income Collection team, who will check how the credit was accumulated on the account and confirm if any refund is due to the tenant. If required, the Income Collection team may contact Housing Benefit/Universal Credit to confirm there is no overpayment to be recovered from the rent account.
  2. The document sets out a checklist that must be completed on all cases before a refund can be actioned. One of the questions on this checklist is question 8:
    1. ‘Is there a Housing Benefit overpayment outstanding?’.
    2. If there is a Housing Benefit payment outstanding then the refund cannot be paid to the tenant:
      1. ‘If any of tasks 4 to 8 are YES then the refund may not be a genuine credit and any credit needs to be used to pay off any other money owed to [the landlord] or the housing benefit department/DWP’.

Summary of events

  1. The Ombudsman understands that the resident is in receipt of Housing Benefit (‘HB’) which is paid directly to the landlord.
  2. On 21 November 2020 the landlord’s records note that it had received a request from the resident for a refund of the credit on her rent account. The landlord noted that it would need to enquire with the local authority HB team as the resident’s account was showing an overpayment of HB that was still outstanding and was in the process of being recovered by the local authority HB team. Any credit on the rent account would therefore need to be sent to the local authority. 
  3. The landlord emailed the local authority HB team on 24 November 2020 to inform them of the credit on the rent account of £562.19 and asked them if they would like to invoice the landlord for this amount so that this can be paid to them to reduce the outstanding HB overpayment. The local authority responded the next day and confirmed that it would raise an invoice for the amount of £562.19.
  4. The landlord spoke to the resident on 25 November 2020. The records note that the resident was upset that the credit on her rent account was going to pay off the HB overpayment. The landlord explained that as the HB overpayment was the reason for the credit being on her account, and as there was still an outstanding HB overpayment debt, the landlord was entitled to send this credit amount to the local authority. The resident was unhappy and said she wanted to take this further and she was advised to speak to the local authority HB team.
  5. On 30 November 2020 the local authority HB team emailed the landlord and said that they had been liaising with the resident about the rent account credit and they wanted to know the landlord’s position. The landlord responded on 1 December 2020 and explained that it was its policy regarding refunds from the rent account that any credit on the account would only be refunded if there was no outstanding HB overpayment. It said that in this case, given that there was an outstanding HB debt it would not be able to issue the refund to the resident.
  6. The landlord noted the resident’s dissatisfaction with this but it maintained that it was following its policy and it would pay the credit to the local authority HB team to reduce the HB overpayment. The records show that the local authority said it would advise the resident accordingly.
  7. 0n 7 December 2020 the landlord spoke with the resident and she said that she was presently in the process of lodging an appeal with the local authority HB team about the rent account credit being paid to them.
  8. On 8 December 2020 the landlord’s records show that it had contacted the local authority HB team about the resident’s case. It was advised that the local authority would be sending the invoice so that the landlord can arrange for the rent account credit to be paid to them.
  9. The internal correspondence from the landlord shows that the matter was reviewed and it was concluded that it could not refund credit from a rent account when there was an outstanding overpayment with HB.
  10. On 14 December 2020 the local authority HB team wrote to the resident to confirm that there had been an overpayment of HB since 2016. The resident had been repaying this via a weekly payment and the outstanding balance was currently £1116.26. It confirmed that it was notified by the landlord of a credit on her rent account in the sum of £562.19 and it said that the landlord asked them to send it an invoice for this amount so that it could be offset against the HB debt to help reduce the HB overpayment. The local authority maintained that the request had come from the landlord and that the local authority HB team had not instigated this.
  11. The records show that on 15 December 2020 the landlord authorised the invoice from the local authority and the rent account credit was passed to the HB team.
  12. The precise records are not clear, but around this time the resident logged a formal complaint with the landlord about its decision to refund the credit on the rent account to the local authority rather than to herself.
  13. O 17 December 2020 the landlord issued its Stage 1 complaint response:
    1. It explained the procedure for dealing with requests for a refund from the rent account. It said that it checks with the local authority for any outstanding HB overpayment and if there is any overpayment then the credit on the rent account is paid back to the local authority to reduce the overpayment.
    2. In this case the local authority had confirmed there was an overpayment of £1116.26 and so the credit on the account of £562.19 was to be paid back to them to reduce the remaining balance. It confirmed that this had been actioned on 15 December 2020.
    3. It also included an extract from its Rent Refund user guide regarding its process for validating any request for a refund. It maintained that its decision was in line with this policy and it had explained its decision to the resident on two occasions prior to completing the request.
  14. The resident requested an escalation of the complaint and this was received on 7 January 2021. The landlord then issued its final complaint response on 3 February 2021:
    1. It reiterated that its decision to pay the rent account credit to the local authority was based upon its Rent Refund policy.
    2. It explained that as part of its data-sharing agreement with the local authority it had notified them of the rent credit. It maintained that its decision to pay the credit to the local authority was correct and in accordance with its policy.
    3. It acknowledged the resident’s point that previously she may have received a refund of credit from the rent account, but it said that any previous refund made to her was done in error and not in accordance with its HB overpayment process or refund policy. It therefore did not uphold the complaint.
  15. The resident then referred the matter to this Service on 5 February 2021.

Assessment and findings

  1. The Ombudsman’s role includes an assessment of whether the landlord has followed proper procedure, good practice, and behaved reasonably, taking account of all the circumstances of the case.
  2. It should be borne in mind that it is not the role of the Ombudsman to determine the validity of the HB overpayment itself. Nor can we determine whether or not the local authority was acting correctly by accepting the payment from the landlord. If the resident wishes to challenge this, she will need to refer the matter to the local authority HB team in the first instance, and then the Local Government & Social Care Ombudsman thereafter.
  3. Our role in this case is to consider the landlord’s response to the resident’s request for a refund of the credit on her rent account. In doing so, we are guided by our Dispute Resolution Principles, which are, ‘be fair – treat people fairly and follow fair process; put things right and learn from outcomes’.
  4. The crux of the resident’s complaint is that she disagrees with the landlord’s decision to pay the rent account credit to the local authority instead of refunding it to her. The resident has said that she believes that the landlord does not have the right to ‘do what they did with my money without notifying me’ and she said that it did so without notifying her or asking her permission to do so.
  5. Looking at the facts of the case, and the available evidence, the Ombudsman is satisfied that the landlord has acted appropriately. It is not disputed that at the time of her request for a refund of the rent account credit, there was an outstanding HB debt against her. The records show that the resident was made aware by the landlord that it needed to take into account any HB overpayment debt when considering her refund request.
  6. The landlord has acted appropriately by flagging this with the resident within a few days of receiving her request. It clearly explained its refund process to both the resident and the local authority HB team.
  7. The landlord’s refund policy is clear on how it deals with any request for a refund of credit on the rent account. In this instance, the landlord has acted appropriately and its decision was in line with its refund policy. The available evidence also demonstrates that the landlord informed the resident of its decision before the refund amount was passed on to the local authority.
  8. The Ombudsman duly acknowledges that the resident may well feel strongly that she should be entitled to any refund of the credit on her rent account. However, there is no evidence to show that this credit was accrued separately or independently of the overpayment of HB; and where there is an outstanding HB overpayment debt, the landlord’s policy dictates that any rent account credit in this scenario must be offset against the HB overpayment debt.     
  9. The resident has said that she had previously been given a refund of credit from her rent account and the landlord should be able to do so again. Firstly, the Ombudsman has seen no evidence in relation to this previous refund request and therefore it cannot comment on this. Secondly, the landlord has explained that any such previous refund may have been done in error as it contravenes its refund policy. The Ombudsman is of the view that, based upon the present evidence, the landlord’s decision not to refund the credit to the resident is appropriate and in line with the policy that is in force at this time.
  10. Whilst the landlord’s overall handling of this matter was appropriate, the Ombudsman has noted the resident’s concern that while the credit on the rent account was being accrued, she was not made aware of the refund policy and that any credit could be offset against HB debt. The Ombudsman takes the view that, going forward, the landlord ought to make it clear to tenants at an early stage of the credit accruing on the account of the implications of having a significant credit on the rent account when there are HB debts outstanding.

Determination (decision)

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its handling of the resident’s rent account, in particular with regards to a request for a refund of the credit on the rent account. 

Reasons

  1. The landlord has shown that it responded appropriately to the resident’s request for a refund and its decision was in line with its policy. There is nothing in the resident’s tenancy agreement or within the landlord’s policies that obligate it to refund the credit on the rent account directly to the resident when there is an outstanding HB debt. Therefore, the landlord’s decision in this case was reasonable.

Orders and recommendations

Recommendation 

  1. The landlord to consider reviewing its refund policy so that in future it takes steps to recognise that in cases where there is a large credit accruing on the rent account, it ought to make it clear the implications of having a large credit on the rent account when there are HB debts outstanding, so that its tenants are aware at an early stage that they may not be entitled to a refund of this credit.