Plexus UK (First Project) Limited (202119456)

REPORT

COMPLAINT 202119456

Plexus UK (First Project) Limited

02 February 2023

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:
   1. The time taken by the landlord to update the Department of Work and Pensions (DWP) on the resident’s change in circumstances, and her subsequent request for a rent reimbursement.
   2. The landlord’s handling of the complaint.

Background

2. The resident is an assured shorthold tenant, living in a two-bedroom property. The landlord is a Private Registered Provider of Social Housing (PRPSH), and it uses an agent to manage its rent collection.
3. The tenancy was in joint names with the resident and her husband when it began in 2017. At the beginning of 2021, however, the resident and her husband separated, with her husband leaving the property. The resident told the landlord that her husband had left, and asked for the tenancy to be in her sole name. The landlord confirmed this with the resident’s husband.
4. Simultaneously, following a claim for Universal Credit (UC) to cover the cost of rent, the resident informed the Department for Works and Pensions (DWP) that she was a sole tenant. DWP said it needed evidence from the resident that the tenancy was in her sole name. Without the evidence, DWP would have to apportion the UC housing costs entitlement which meant it would only pay half of the rent. The resident subsequently returned to the landlord to obtain this.
5. On receipt of contact from DWP, however, the landlord advised that the tenancy remained in joint names, suggesting it had not obtained notice of a change. UC therefore only provided the resident with half of the rent amount (£574.99) in June 2021, which the resident paid to the landlord in August 2021.
6. Following allegations of arrears and back and forth correspondence with the landlord / UC, the resident raised a complaint in October 2021. She explained that she did not believe that she should have been required to pay the partial rent amount. This was only done as she had been pressured to pay with the threat of eviction if she did not. The resident was also dissatisfied with the time taken by the landlord to update DWP of her change in circumstance. She asserted that this was the cause of the arrears on her rent account.
7. In its stage one response, the landlord declined to refund the resident. While it noted that a payment had since been received from UC for May – June 2021, it asserted that rent arrears had accrued due to an absence of payments between March and June 2021. It consequently did not agree that reimbursement was due.
8. Following escalation of the resident’s complaint, the landlord offered a stage two response. It reiterated at this time that the resident remained liable for the cost. It explained that as UC had made the payment directly to her, funds were still due to be paid towards the rent arrears. It agreed, however, that part of this could be refunded (£179.24), having received a backdated payment from UC covering February – March 2021.
9. The resident advised this Service that she remained dissatisfied with the landlord’s response. This Service is aware that the landlord offered the resident a further ‘stage two response’ within which, it explained that the backdated UC payments had now left a credit of £293.35 which could be refunded. The Ombudsman is aware that the resident accepted this, but still seeks the difference in the amount paid.

Assessment and findings

The time taken by the landlord to update the Department of Work and Pensions (DWP) on the resident’s change in circumstances, and her subsequent request for a rent reimbursement.

10. Legally, joint tenants can end their periodic tenancy by one, or both tenants serving a valid notice to quit, or by all parties (the landlord and tenants) mutually agreeing to end the agreement (known as a surrender). If the joint tenancy ends, the landlord may agree to grant a new sole tenancy to the remaining occupier. A tenancy agreement is a legally binding document which would usually be issued and signed by the landlord and tenant(s) at the point they agreed to the terms of it.
11. In this case, the resident contacted the landlord on 25 May 2021 to advise of a change in occupancy and need for the tenancy agreement to be changed. Records confirm that on the same day, the landlord called the resident to clarify the change of circumstance, and noted that the resident’s husband had moved out “around 20 February 2021”. It was able to confirm this with the resident’s husband on 27 May 2021.
12. As such, this Service would have expected the landlord to have taken action to produce a new tenancy agreement, to reflect the change in circumstance. The Ombudsman is aware that the resident explained to the landlord at this time that the joint tenancy was hindering her UC entitlement. Prompt action would have subsequently been reasonable.
13. Despite this, however, this Service has found that the landlord did not update its computer system – or produce a sole tenancy agreement for the resident – until 12 August 2021. The Ombudsman is aware that a compensation amount of £3,266.23, believed to be in arrears, was credited to the resident’s account on the same day, having been owed to the occupants for some time. The Ombudsman is unable to determine whether this delay in crediting the resident’s account was linked to the absence of proactive action to offer a new tenancy.
14. With knowledge that the resident was relying on her UC allowance to support her with the rent payments, in any case, the landlord could have updated DWP of the resident’s circumstance. Having recently submitted a Social Rented Sector (SRS) form (on 12 May 2021) to inform DWP that the tenancy was in joint names, upon learning of the change on 27 May 2021, it should have completed an updated SRS form. The Ombudsman is aware that it did not do this until 16 September 2021 – despite frequent contact with the resident throughout this period. This was almost four months after the resident and her husband had notified it of the change, resulting in a shortfall in the payments being made and distress caused to the resident.
15. This Service appreciates that the UC guidance manual for landlords explains that “Claimants are responsible for telling DWP of any changes that might affect their Universal Credit payment”. Being that it is ultimately the resident’s responsibility to ensure that payments are made, this is a reasonable expectation. The manual also states, nonetheless, that “where a Managed Payment to Landlord (MPL) is in place, landlords are equally responsible for telling DWP of any changes they could reasonably know might affect the claimant’s Universal Credit payment”. With such an arrangement in place, the landlord had a responsibility to share the change in occupancy.
16. In its stage two complaint response, the landlord said – in relation to the SRS form – that it completed the first form “before we were aware of the sole tenancy and an amended one once we were made aware of the change.” It is clear from the evidence, however, that there was a delay in sharing this information with DWP.
17. The Ombudsman has subsequently determined that there was a failure in service where this matter was concerned. It is clear from the evidence that the landlord’s delay in producing the tenancy agreement after being alerted to the change, and in communicating the change to DWP, resulted in the incorrect rent amount being paid. This inevitably would have caused the resident undue distress and inconvenience. The Ombudsman is aware that the resident made contact with the landlord on several occasions to prompt it to share proof of her sole tenancy.
18. With regards to the refund sought by the resident, however, this Service cannot see that the landlord acted unreasonably in its refusal to offer this. While the landlord held some responsibility for the shortfall in the amount being paid by UC, the £574.99 which was paid directly to the resident was still an amount which was due to the landlord as partial rent. This formed part of the housing element of the resident’s benefit and at this time, was required by the landlord to offset (in part) the resident’s arrears. It would not have been appropriate for the landlord to have refunded this amount, given that this would have put the resident’s rent account back into arrears.
19. Upon receiving backdated payments from DWP this Service can see that the landlord offered the resident a refund of the total credit on her account. This appears to have arrived from an accumulation of extra money which was being claimed from the resident’s Universal Credit standard allowance, due to her account being in arrears. By the time of the landlord’s final response, it agreed to offer a refund of £293.35. In the Ombudsman’s view, this was fair. It would have also been fair, however, for the landlord to have offered compensation in recognition of the adverse impact its inaction had on the resident. Given that the landlord offered a further stage two response, it missed the opportunity to do this.

The landlord’s handling of the resident’s complaint.

20. The Ombudsman is satisfied that at stage one and two of the complaints process, the landlord responded to the resident in accordance with the timeframes set out in its complaints policy. While the landlord did not signpost the resident to the Ombudsman Service at this time, this has not been considered to be a failure as it noted that the resident was already in communication with this Service.
21. Contrary to good practice and the guidance offered within this Service’s Complaint Handling Code (the Code), however, it appears that the landlord employed a three-stage approach. This was as it offered a further complaint response which the Ombudsman notes came almost six weeks after the resident raised her further dissatisfaction with its handling of matters. This was inappropriate.
22. As the Code explains, landlord’s should seek to employ two-stage procedures unless they strongly believe that a third stage is necessary, and have set out why as part of their self-assessment. This ensures that the complaint process is not unduly long. It also explains that where a third stage is in place it must be actively requested by the resident and should be responded to within 20 working days – which did not happen here.
23. The Ombudsman is subsequently not satisfied that the landlord handled the resident’s complaint appropriately. At the time of its initial stage two response (on 22 December 2021), the landlord should have set out its final position and confirmed that the resident had exhausted its process. While the landlord later apologised for its delay in offering a further response (on 1 February 2022), it did not recognise that its final position should have been given at an earlier time.

Determination

24. In accordance with paragraph 52 of the Scheme, there was maladministration with regards to the time taken by the landlord to update the Department of Work and Pensions (DWP) on the resident’s change in circumstances, and her subsequent request for a rent reimbursement.
25. In accordance with paragraph 52 of the Scheme, there was service failure with regards to the landlord’s handling of the resident’s complaint.

Orders and recommendations

Orders

26. The landlord is ordered to:
    1. Write to the resident to offer an apology for its delay in notifying DWP of the change, and its delay in providing a copy of the tenancy agreement.
    2. Pay the resident £200 in recognition of the distress, time and trouble, and inconvenience caused by its delay in updating DWP in a timely manner and issuing a new tenancy agreement.
    3. Pay the resident £50 in recognition of its handling of her complaint.
27. The landlord should ensure that it complies with the above orders within four weeks of receiving this determination.

Recommendations

28. The landlord should consider:
    1. Providing training to its staff about the handling and recording of changes to tenancies.
    2. Providing training to its staff about its responsibilities in notifying DWP where relevant changes to a tenancy might affect a claim when there is a Managed Payment to Landlord in place.
    3. Investigating one of the root causes of this complaint, such as why the compensation cheque was delayed as this may prevent problems in future cases.
    4. Reviewing its complaint handling procedures to ensure clear processes are in place for escalating and responding to complaints.