Haringey London Borough Council (202202560)

REPORT

COMPLAINT 202202560

Haringey London Borough Council

29 September 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

The complaint is about the landlord’s handling of:
1. a request that it provide a service charge refund;
2. the associated complaint.

Background

The resident is a leaseholder of a one-bedroom flat. The landlord, a local authority, is the freeholder.
On 12 October 2021, the resident requested a £183.12 service charge refund from the landlord as she was in credit on her service charge account. She did not want the credit balance carried over to the next financial year.
On 4 November 2021, the resident made a formal complaint to the landlord because she had not received a response to her earlier request. She said the landlord acknowledged when she followed up earlier on the same day with a telephone call that the credit amount had still not been refunded, and she would have to wait 2-3 weeks for the account to be credited. It also said it was experiencing staff shortages. The resident responded that she still expected the landlord to follow its timescales and was dissatisfied with its approach to resolving a simple issue.
On 14 and 16 March 2022, the resident chased the landlord again at least 3 times, as she had still not received her refund, nor received a response to her emails of October and November 2021. In the meantime, the landlord had issued leaseholders with a major works bill. The resident said it was “insulting” that the same team which allegedly had staff shortages was sending bills for major works, when the refund she had requested 5 months previously had not been paid.
The resident felt this period was quite enough time for the issue to be resolved and again explicitly stated that she did not want the credit balance carried over to the next financial year. She emphasised that her complaint about a service charge refund was not connected with her separate complaint about a major works bill, which had been referred to instead. The landlord acknowledged the resident’s email the same day, and stated it would forward her email to its leasehold accounts team.
The landlord issued its stage 1 response on 17 March 2022. It apologised for the poor service and said it would process the service charge refund of £183.12 to the resident. It said a refund usually takes 21 days to reach the resident’s bank account. However, it acknowledged that the resident had already been waiting for almost 6 months. The resident then chased the landlord again by email on 5 April 2022. She reiterated she had made this request in October 2021 and had clearly asked for the refund to be made before the start of the new financial year. She felt the refund should have been actioned already, given that it was under £200 and had still not been paid.
The resident then referred her complaint to the Ombudsman on 9 May 2022, as she felt the delay in refunding her credit balance was unacceptable, and she wanted compensation for her time and trouble in trying to resolve this over the past 7 months. This included at least 3 telephone calls lasting over 30 minutes, numerous emails, and now having to contact us when the landlord was required to resolved this within 21 days, and had told her that it would do so. We therefore asked it to respond to her stage 2 complaint, but it instead said that it had already done so, again mistakenly referring to her major works bill complaint instead. The landlord then issued the resident with a cheque for £183.12 service charge refund on 12 October 2022, and the resident cashed the cheque on 20 October 2022.
The resident then complained to the Ombudsman that she was unhappy with the length of time it had taken for the landlord to issue the refund, and felt the landlord had given misleading information to the Ombudsman, claiming it had resolved the issue when it had not. As a resolution to her complaint, the resident is seeking to be paid the interest on the service charge refund and compensation.
The resident requested compensation for the distress and inconvenience caused by the delay, as well as for the time and trouble taken in pursuing the complaint. She calculated the compensation as being £2,585 in total for a year’s inconvenience, 2 days’ worth of telephone calls, and for having to send a total of 30 emails to the landlord and the Ombudsman about this. The resident also told us that the landlord later offered her £45 compensation, which it said was the maximum it could offer under its policy without providing her with the evidence of this that she requested.

Assessment and findings

Scope of investigation

This Ombudsman acknowledges that the resident had 2 complaints with the landlord at the same time, about a major works bill and about a service charge refund, which were entirely separate matters. This investigation will not consider matters relating to the major works bill.
This is because the Ombudsman may not investigate complaints that concern the level of rent or service charge or the amount of a rent or service charge increase, in accordance with the Scheme, as we do not have the authority and expertise to do so. In this case, however, the resident’s complaint is about how the landlord handled her request for a service charge refund. This investigation will focus on whether the landlord’s handling of the request was in line with its policy and good practice, and whether its actions were fair in all the circumstances of the case.

The landlord’s handling of a request that it provide a service charge refund

The Ombudsman’s role is to consider whether the landlord resolved the resident’s complaint satisfactorily in the circumstances and offered appropriate redress. In considering this, the Ombudsman assesses whether the landlord’s actions were in line with the Ombudsman’s Dispute Resolution Principles:
1. Be fair – treat people fairly and follow fair processes;
2. Put things right; and
3. Learn from outcomes.
The Ombudsman must first consider whether a failing on the part of the landlord occurred, and if so, whether this led to any adverse effect or detriment to the resident. If it is found that a failing did lead to an adverse effect, the investigation will then consider whether the landlord has taken enough action to ‘put things right’ and ‘learn from outcomes’.
On receiving a request for a refund, the landlord has an obligation to examine a resident’s service charge account and, if appropriate, refund the resident within a reasonable timescale while keeping a resident updated throughout. Its website says that it will send leaseholders, such as the resident, their annual actual service charge bill usually in September, and that it will raise a credit on their account if this is less than their estimated service charge that it calculated in the previous year, with its service charge invoices payable within 21 days. There is no dispute that the resident was entitled to a return of the overpayment on her service charge account.
The resident contacted the landlord on 12 October 2021 stating that she wished to have the credit on her leaseholder service charge account refunded. She requested the refund be paid into her bank account and stated that the landlord had previously paid a similar refund for 2019/2020. It is recognised that the landlord did not acknowledge or respond to this email of October 2021. This is concerning as it acknowledged in its stage 1 response that the resident had then been waiting for almost 6 months.
In November 2021, the resident again called and wrote to the landlord to chase the refund, and to confirm that she previously rang the landlord in October 2021, which informed her she needed to request her refund in writing. A member of staff provided the resident with an email address at that time and said it would take up to 21 days for her bank account to be credited. It was appropriate for the landlord to set out the steps and timescale for the refund.
However, after the resident had made the refund request in writing in October 2021, the landlord neither responded to this within the timescale it gave her in November 2021, nor after she chased it. This would have caused frustration to the resident, added to by the fact the refund was under £200, and so there would likely be no additional requirements for approval of the payment.
It is understandable why the resident then explained in March 2022 that she felt “insulted” when she was told the landlord’s leasehold team had staff shortages, which would result in a delay in processing the refund, yet leaseholders were receiving bills for major works. The resident felt the landlord was keen to bill her but not refund her. The landlord should have noted while preparing the bills that there was an outstanding request for a refund on her account and processed the refund before issuing the bill, or at least should have processed the refund and at the same time advised her that the requested refund was underway.
In its stage 1 response of 17 March 2022, the landlord said it would process the refund and advised it usually takes 21 days to reach the resident’s bank account. It was therefore reasonable for the resident to expect the money to be in her bank account by 7 April 2022. This did not happen. The resident chased the landlord again in April 2022 and referred her complaint to the Ombudsman in May 2022.
Although the landlord apologised for its poor service in its stage 1 response of 17 March 2022, which was appropriate, it was not until 12 October 2022 that it issued a cheque for the refund of service charge, several months after the Ombudsman intervened. This was a timeframe of 12 months from the point of initial request, and not before the end of the financial year as requested, which were failings on the landlord’s part. Even at the stage 1 response point, a delay of over 5 months was a considerable amount of time to wait for a refund. Given the simple nature of the request, the landlord should not have taken as long as it did. It is unclear why this was the case, given that its initial explanation of a staff shortage had not stopped it sending major works bills.
The landlord’s discretionary compensation policy states that a discretionary payment is a payment the landlord chooses to make, also known as gesture of goodwill. Further, it says it will consider making a discretionary payment for service failure or poor service, and this may be appropriate when the resident was adversely affected by the landlord’s delay in taking action. It states it will take a number of considerations into account, such as the resident’s time and trouble in pursuing a complaint, but does not mention maximum or other amounts of compensation.
At the stage 1 response point, the landlord should have considered offering discretionary compensation, given that its failings had adversely affected the resident, in that she had been inconvenienced by not receiving the refund earlier and had spent time and trouble chasing the landlord. However, it did not consider doing so, despite being permitted and encouraged to by its discretionary compensation policy, which was another failing on its part.
It is therefore understandable that the resident also requested interest on the service charge refund, and compensation for her distress and inconvenience from the landlord’s delay in refunding her. However, the £2,585 total compensation she requested was more in line with damages that a court or insurer might award for specific losses, and not the Ombudsman’s remedies guidance, which instead recommends compensation of up to £100 for the landlord’s failure resulting in delays in getting matters resolved that has been ordered below. While the resident mentioned that it offered her £45 compensation for this, there is no evidence that this was either the maximum available to it or that it did so in a timely manner during the complaints procedure, so it has also been ordered to pay this to her below, if it has not done so already.
Overall, the time taken to process the refund was excessive and the landlord failed to take ownership of the matter, which resulted in distress and inconvenience for the resident, as well as time and trouble in chasing the landlord. Throughout its complaints procedure, there is no evidence the landlord made an effort to ‘learn from outcomes’ so as to prevent a recurrence of this issue, and so an order has been made below for it to remedy this by carrying out a case review to do so, and share this with the resident and the Ombudsman and apologise to her.

The landlord’s handling of the associated complaint

The landlord’s customer feedback policy sets out that it aims to resolve any service failure that the resident has experienced and provide the service required. It will raise a formal complaint following an expression of dissatisfaction as a result of, for example, its failure to provide a service or failure to respond to an initial enquiry.
When a formal complaint is logged at stage 1, the landlord aims to issue a written response within 10 working days. If the resident remains unhappy, they can ask to escalate the complaint to stage 2. An independent review is then undertaken by an officer who was not involved in reviewing the stage 1 complaint, and it aims to issue a written response within 20 working days of the request to escalate.
The resident’s complaint was first made by email on 4 November 2021. She expressed dissatisfaction about the handling of the matter and said she was “not impressed with the complacency of resolving such a simple issue”. The resident chased the landlord by email on 14 March 2022. The landlord treated this later email as the formal complaint, but the Ombudsman notes that no response was made to the complaint of 4 November 2021 until the resident chased in March 2022.
The landlord issued its stage 1 response on 17 March 2022. Given the resident’s first expression of dissatisfaction was actually made in November 2021, this was a timeframe of 92 working days later, which was significantly outside the landlord’s timescale of 10 working days as set out in its customer feedback policy.
The resident’s email of 5 April 2022 should have been treated as the resident’s request to escalate the complaint, since any further of expression of dissatisfaction, however made, should be treated as such a request. This is in line with the Ombudsman’s Complaint Handling Code (the Code), and under this the landlord must also not unreasonably refuse to escalate a complaint. In this case, the landlord did not respond at all to the resident’s escalation request, whereas, in line with its customer feedback policy, it should have issued a stage 2 response within 20 working days by 5 May 2022. No stage 2 response to this complaint appears to have been issued.
It is noted that the landlord emailed the Ombudsman on 4 October 2022 with a stage 2 response letter, but this related to a separate complaint raised by this resident which she had not referred to the Ombudsman. This strongly suggests that there is confusion on the part of the landlord with regard to managing and responding to multiple complaints raised by a resident where there is an overlap in the time that the complaints are active. A recommendation has therefore been made below for it to examine and introduce appropriate methods to improve its practice of managing such complaints.
The Ombudsman issued a special report on the landlord in July 2023. The report followed an investigation carried out under paragraph 49 of the Scheme, which allows the Ombudsman to conduct further investigation into whether there is a systemic failure. A number of issues that arose in the handling of complaints were mentioned in the special report. The landlord effectively operated a 4-stage complaints process under its previous complaints policy and procedure: an informal stage, two formal stages and an optional third formal stage. This is contrary to the Code, which states that 2-stage landlord complaint procedures are ideal. A recommendation has therefore been made below for the landlord to follow the recommendations of our special report in response to this.
Additionally, the special report identifies evidence of poor complaint handling quality. In this case, the landlord’s stage 1 response simply mentioned that the refund would be processed but did not identify any failures, or whether redress should be provided, or any learning.
Furthermore, the landlord did not act fairly in that it failed to provide a stage 2 response. While it eventually provided the requested refund on 12 October 2022, it still had an obligation to respond formally at stage 2, having received a further expression of dissatisfaction on 5 April 2022. This is indicative of poor complaint handling and a desire to close a complaint down when it, incorrectly, believes an issue had been properly resolved.
The Ombudsman expects that, even when the landlord believes a complaint has been resolved, it will still respond in writing to any further expression of dissatisfaction relating to the complaint. This did not happen. It is also noted that the landlord did not reply to or acknowledge the resident’s escalation email of 5 April 2022. This was a further failing in its handling of the matter, and was contrary to the Code. An order for the landlord to pay the resident another £100 compensation in recognition of this, in line with our above remedies guidance, and a recommendation for it to review its staff’s training needs in relation to the Code have therefore been made below for it to remedy these failings.

Determination

In accordance with paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of:
1. a request that it provide a service charge refund;
2. the associated complaint.

Orders and recommendations

The landlord is ordered to:
1. Pay the resident compensation totalling £245 within 4 weeks, which is broken down into:
  1. £145 for the distress and inconvenience caused as a result of it failing to issue a requested refund in a timely manner, consisting of the £45 that it previously offered her for this, if she has not received this already, and a further £100.
  2. £100 for failing to engage with the complaint, excessively delaying its stage 1 response, and not providing a formal stage 2 response.
2. Carry out a case review within 8 weeks of why it did not issue the refund or respond to the resident’s calls, emails, and formal complaints in a timely manner, and what steps it will take to prevent a recurrence of this. The landlord must share this review with the resident and the Ombudsman, and write to her to apologise for the failings identified in this report when it does so.
It is recommended that the landlord:
1. Ensure that it complies with the recommendations of the Ombudsman’s July 2023 special report on the landlord.
2. Examine and introduce appropriate methods to improve its practice of managing multiple overlapping complaints: for example, by always using its allocated complaint reference number in written correspondence and quoting it when speaking on the telephone to a resident. This will also help to avoid confusion where there are multiple complaints raised by a resident with an overlap in the time that the complaints are active.
3. Review its staff’s training needs in relation to their application of the Code to formal complaints, to ensure that this is followed in every case.
The landlord shall contact the Ombudsman within 4 and 8 weeks to confirm that it has complied with the above orders, and whether it will follow the above recommendations.