GreenSquareAccord Limited (202302675)

REPORT

COMPLAINT 202302675

GreenSquareAccord Limited

7 November 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

This complaint is about the landlord’s handling of the collection of the residents rent in advance and the rent arrears.
The landlord’s complaint handling has also been investigated.

Background

The resident holds an assured tenancy with the landlord, which is a housing association, which began on 1 July 2019. The landlord does not have any vulnerabilities listed for the resident, but it is prudent to acknowledge that the resident was homeless for a significant period of time prior to securing his property with the landlord, with help from the local authority.
At the start of the resident’s tenancy the landlord set up a direct debit for the 18th of every month. The first direct debit was taken on 19 August 2019, and has been taken on 18th of the month since. The resident has consistently paid his direct debit and has never missed a payment.
On 7 February 2023, the landlord sent the resident a minor arrears letter which explained that his account was in arrears. On 10 February 2023, the resident contacted the landlord upset, as he did not know that his account was in arrears and wanted to discuss it further.
On 13 February 2023, the landlord contacted the resident and informed him that he should be paying his rent in advance, as per his tenancy agreement and needed to increase his direct debit. The resident declined to amend his direct debit as he did not understand where the arrear had come from.
On 13 March 2023, the resident contacted the landlord and said that he was dissatisfied with the way in which the previous phone call had gone on 13 February 2022. The resident explained that he did not understand why his direct debit was changing to £458, but his rent had only increased to £436. A callback task was raised and sent to the accounts team leader.
On 22 March 2023, the resident contacted the landlord to raise a complaint as no one had called him back. The resident said that he had been chasing the landlord to find out why his direct debit had increased so much more than his rent. He explained that he had always paid his direct debit and wanted to know what months he had missed to cause the arrears.
On 24 March 2023, the landlord sent the resident a stage 2 acknowledgement, which said that it would provide a written response by 7 April 2023.On 5 April 2023, the landlord informed the resident that it needed more time and would respond by 14 April 2023.
On 12 April 2023, the account team leader contacted the resident and explained why the overpayment had been set up and that he only had 2 options in order to bring his account in line with his tenancy agreement, so that he was paying his rent in advance, rather than in arrears.
Later that day, the landlord provided a stage 2 response, where it:
1. Apologised for the delay in responding to his request for a callback on 13 March 2023.
2. Reiterated the information that the accounts manager gave on via phone, which confirmed that his account was in arrears and that he had 2 options:
  1. Move the direct debit to 1st of the month.
  2. Continue with the increased direct debit, but with a view to reduce the monthly overpayment to £16.68 per month to help reduce the impact.
Later on, the same day, the resident contacted the landlord and said that he was not happy to pay the arrears as he did not understand where they had come from. He explained that he had paid everything he was supposed to on the 18th of every month and that it had come as a big shock and caused him distress to hear that he had arrears as he had always paid his direct debit, which was set up at the start of his tenancy.
The landlord sent the resident a further stage 2 response, which gave the resident further details about his rent account and why the arrears had occurred, it said:
1. As per the tenancy agreement, rent should be paid in advance.
2. Until May 2022, the housing officer was responsible for monitoring the rent account. No action was taken unless a rent account went into arrears by one month.
3. The landlord decided that this was not an effective way in managing its rent accounts and a specialist team was implemented to ensure accounts were being managed effectively.
4. In order to ensure that the resident was not paying in arrears, the resident had the option to pay on 1st of every month or pay an additional £3.85 per week on top of the rent.
5. The lettings process had been improved to ensure that resident’s were paying in advance as per the tenancy agreement.
On an unknown date in April 2023, the resident contacted the landlord and asked for his complaint to be escalated to stage 3 of the process. The landlord responded on 20 April 2023 and explained that the purpose of the stage 3 is to ensure that the stage 2 investigation was fair and accurate, not to reinvestigate the issues raised at stage 2. The stage 3 response confirmed that the stage 2 was fair and reasonable, and that it had been partially upheld due to the delay the resident experienced when awaiting a response to his phone call in March 2023.
On 21 April 2023, the resident contacted the Ombudsman as he was dissatisfied with the landlord’s response. The resident explained that he could not change his direct debit from 18th of the month to the 1st, as this would mean that he would have to make 2 payments in one month. The resident said that he was worried about being made homeless again and as a resolution wants the landlord to maintain his agreed direct debit date of 18th of every month.

Assessment and findings

The Ombudsman’s approach.

The Ombudsman’s role is to determine complaints by reference to what is fair in all the circumstances and decide if the landlord is responsible for maladministration or service failure.
When investigating a complaint, the Ombudsman applies its dispute resolution principles. These are high-level good practice guidance developed from the Ombudsman’s experience of resolving disputes, for use by everyone involved in the complaints process. There are only 3 principles driving effective dispute resolution:
1. Be fair – treat people fairly and follow fair processes
2. put things right, and
3. learn from outcomes.

Scope of investigation

The resident has advised that the handling of this matter by the landlord has led to a deterioration in his physical and mental health. The Ombudsman cannot draw conclusions on the causation of, or liability for, impacts on health and wellbeing. This is outside our jurisdiction, but consideration has been given to the general distress and inconvenience that may have been caused to the resident.

Policies and procedures

The resident’s tenancy agreement states that he is obligated to pay his rent and service charge monthly in advance.
The landlord’s income management policy states that the landlord’s aim is to be firm and fair when collecting income from customers. It states that it will focus on early intervention, maximisation of income and prevention of debt. It further says that it is aware that any of their resident’s may, at various points, be vulnerable and may need additional support, especially those on limited incomes and with challenging circumstances. Staff will be sensitive to the needs of any individual whilst ensuring that they understand their payment obligations of rent is due in advance.
The landlord’s complaint policy states that it operates a 3 stage complaint process, detailed as:
1. Step 1: Resolve, within 2 working days.
2. Step 2: Contact, understand, investigate and manage complaint within 10 working days
3. Step 3: Executive review, consider escalation to review whether the case was handled fairly and reasonably.
The Ombudsman’s Complaint Handling Code (the Code), states that landlord’s must confirm the following in writing to the resident at the completion of each stage in clear, plain language:
1. the complaint stage
2. complaint definition
3. the decision on the complaint
4. the reasons for any decisions made
5. details of any remedy offered to put things right
6. details of any outstanding actions
7. details of how to escalate the matter to stage 2 if the resident is not satisfied with the answer.

The complaint is about the landlord’s handling of the collection of the residents rent in advance and the rent arrears.

The landlord has provided a copy of the resident’s rent statement which covers the period from the start of the tenancy until the present day. The rent statement shows that the landlord applies the monthly rent to the resident’s account on the 1st of every month.
At the start of the resident’s tenancy the landlord was provided with a cheque for 1 month’s rent in advance, which covered the rent from 1 July 2019 until 31 July 2019. On 1 August 2019, the landlord again applied the month’s rent onto the resident’s rent account. In line with his tenancy agreement, and to ensure that his rent account did not go into the arrears, the resident would have been expected to make his next rent payment on 1 August 2019.
However, as the landlord was aware, the resident had to make a new application to universal credit (UC) to assist him with paying his rent. The resident’s first UC payment was set to be received on 18th of every month and inline with this, the landlord set up a direct debit for the same day, starting from August 2019 and continued every month.
This meant that the resident’s rent account would be arrears for the first 18 days of each month, and then when his direct debit was taken, he would be in credit until the rent was applied on the 1st day of the following month. This arrangement has remained in place, and information provided by the landlord shows that in line with its income management policy, carried out regular monthly checks to the resident’s rent account, noting ‘Account OK’.
In February 2023, the landlord decided that the resident’s account was in arrears and wrote to him. The landlord has not provided the Ombudsman with a copy of the letter, but internal telephones notes suggest that it proposed to amend the resident’s direct debit from £418.27 a month (which was the amount of his full rent) to £458.28 to cover the arrears on his account.
The landlord stated in its stage 2 response that up until May 2022, the resident’s housing officer was responsible for monitoring his rent account and unless it went into arrears by a full month (for example the resident missed a direct debit payment) no action was taken. However, in May 2022 it decided that this was not an effective way to manage account and implemented a dedicated specialist team to ensure accounts were being managed effectively.
The Ombudsman acknowledges that the landlord must take steps to ensure that it has processes in place to maximise its rental income, but it is not clear why it took until February 2023 for the landlord to write to the resident and inform him of that. Furthermore, there is no indication to show that when the landlord made the decision to change the way it monitored the resident’s rent account, that it took any steps to write to him to inform him of the change and explain why it was making this decision so that he could be prepared for the impending change.
The decision to write to the resident, unexpectedly, informing him that he was in arrears caused the resident ‘extreme panic and distress’. The resident explained to this Service and the landlord that he did not understand where the arrears had come from as he had always paid on time, and the money left his account the same day it was paid by UC. The resident further explained that he felt increasingly anxious and distressed that he would lose his home and would become homeless again.
When the resident contacted the landlord on 10 February 2023, he was informed that he should be paying his rent in advance, however the resident declined to increase his payments. The resident contacted the landlord again on 13 March 2023, where he again explained that he didn’t understand why his direct debit was increasing to an amount more than his monthly rent. He also expressed that he was unhappy with the staff member’s conduct on the previous phone call.
Records show that an internal administration error occurred and the callback request was not sent to the relevant department correctly. This led to the resident contacting the landlord on 22 March 2023 to express his dissatisfaction and explained that he did not understand why his direct debit was more than his monthly rent. He said he had always paid his direct debit, never missed a payment and no one has ever contacted him previously to say he had missed payments or explain where the arrears came from.
The landlord took contacted the resident 3 weeks later by phone, and then via its stage 2 response letter and attempted to explain to the resident why the arrear had occurred and the options he had in relation to resolving the issue. Throughout the communication, the resident made it clear that he did not understand where the arrear had arisen and wanted more information from the landlord.
The resident was justified in seeking answers which he could clearly understand in relation to this issue. Therefore, when the resident explained that the issue had not been explained in a way that he could understand, and that the answers had prompted further questions, the landlord should have done more. The landlord could have signposted the resident to organisations or information which could have given the resident more insight into why it had made its decision, or tried to reword their earlier responses in a way that the resident might better understand. The landlord failed to do so.
Opportunities were missed to better inform the resident about the issues which he was seeking clarity for. The landlord could have taken a number of step to help the resident understand more, which may have avoided the distress the resident experienced, such as:
1. Writing to the resident initially to inform him that it was amending the way that it was managing his rent account.
2. Detailing why it was making the decision.
3. How it would impact him, and that as result he would have to make over payments to bring his account in line with his tenancy agreement,
Furthermore, there is no indication that the landlord followed it income management policy by treating the resident sensitively given his vulnerabilities, nor did it treat him empathetically. The responses given to the resident were policy originated and lacked empathy. There is no indication to show that it considered any reasonable adjustments based on the resident’s circumstances, that his UC payment was received in the middle of the month and that he had never missed a rental payment.
Furthermore, on 19 April 2023 the landlord received a letter from the resident’s community psychiatric nurse (CPN) that the situation had had a significant impact on the resident. However, there is no evidence to show that the landlord reassessed its position at this time. This would have been in line with its policy position, which it failed to apply.
The landlord offered the resident 2 options, in order to bring his account in line with its tenancy agreement, which was to either change his direct debit to the 1st of the month or pay an additional amount on top of his monthly direct debit. There is no indication that the landlord considered the repercussion of these options, as both options would have had a detrimental effect on the resident.
The landlord failed further failed to consider the impact of what it was asking the resident to do. The landlord was aware that the resident received UC and that this included a full housing element for his rent, therefore he would be unable to change his direct debit to 1st of the month, as this would mean that he would have to pay 2 lots of rent within 1 month, and any overpayment would have to be paid out of the resident’s personal living element and may have put pressure on the resident’s monthly disposal income.
Although the response provided by the landlord attempted to explain why it was taking the steps it had, no attempts to better explain the resulting questions, or clarify earlier responses, were made. Therefore, there was maladministration with the landlord’s response to the resident’s request for details of his rental arrangements and rent arrears.
The Ombudsman draws the landlord’s attention to section 6 of the Housing Ombudsman Complaint Handling Code, which sets out what the Ombudsman considers are the best practice principles of “putting things right” where there have been failings. This includes the principle that any remedy offered by a landlord “must reflect the extent of any service failures and the level of detriment caused to the resident”. Therefore, the decision to not take into consideration those factors was not reasonable.
In assessing an appropriate level of compensation, the Ombudsman takes into account a range of factors including any distress and inconvenience caused by the issues, the amount of time and effort expended on pursuing the matter with the landlord, and the level of detriment caused by the landlord’s acts and/or omissions. It considers whether any redress is proportionate to the severity of the failing by the landlord and the impact on the resident. The Ombudsman also takes into account the evidence that has been provided.
Ultimately the Ombudsman considers what would be fair and proportionate. The aim of compensation is not to be punitive, but to provide redress for the impact of any failings by the landlord on the resident. In the case of compensation for distress and inconvenience, we are not able to quantify a definitive loss and the intention of such an award is to recognise the overall distress and inconvenience suffered by the resident.
The Ombudsman has first considered the distress and inconvenience suffered by the resident as a result of the landlord failure to communicate with the resident in an empathetic manner. In line with the Ombudsman’s remedy guidance where there has been a failure which had a significant impact on the resident, an amount of £600 to £1000 is recommended. While the landlord was acting in line with the resident’s tenancy agreement, the resident expressed that he had never received any previous communication from the landlord and that the letter received in February caused him the substantial emotional distress. As far as he was aware his rent had always been paid correctly and had never had an issue previously. The resident expressed that he suffered such distress that he attempted suicide and received intervention from the crisis team due to the fear of loosing his home and becoming homeless again.
The resident has always paid his rent on time and never missed a payment, and while the date of his direct debit means that his account is in arrears when the monthly rent is applied to his account on 1st of the month, the landlord is aware of the reasons why and was acceptable for the first 3 and half years of his tenancy. Although the landlord is entitled to bring the resident’s rent account in line with his tenancy agreement, the distress the resident experienced could have been avoided had it taken steps to contact the resident and explain the changes it was making, rather than sending an arrears letter without any prior contact or communication of any sought.
In recognition of this, the Ombudsman has made an order for the landlord to pay £700 compensation, along with recommendation to ‘put things right’ for the resident.

The landlord’s complaint handling.

The landlord’s policy states that it has 3 steps within its complaint policy. There is no indication as to how each stage will be treated or how it will respond to resident’s.
When the resident first raised his dissatisfaction with the landlord’s handling of his rent account in March 2023, there is no evidence that the complaint was ever considered at stage one and no explanation or apology has been provided to the resident for this.
The Ombudsman’s complaint handling code (the Code), published in July 2020 and revised in March 2022, explains that a complaint must be acknowledged within 5 working days and logged at stage one of the complaints procedure. In this case, the this did not happen until the resident chased the landlord for a response.
The landlord then sent a stage 2 acknowledgement on 24 March 2023, whereby the landlord said that it would respond by 7 April 2023. It is not clear why the complaint was logged directly at stage 2, as the resident had not received a stage 1 investigation or response.
Internal records show that on 5 April 2023, the stage 2 investigator asked the income team leader to contact the resident so that she could respond to the complaint at stage 2 of the process. A phone call was made on 12 April 2023 whereby the landlord called the resident and explained why the direct debit had been changed. On the same day, the landlord provided its stage 2 response, which reiterated the details given over the phone.
Following the resident’s escalation request, the landlord provided the resident with a stage 3 response. The response detailed that stage 3 of the process is not to reinvestigate the stage 2 investigate, but to determine whether the investigation had been fair and reasonable.
Although the landlord’s policy has 3 steps, the process does not treat resident’s fairly. It does not offer an opportunity for the stage 1 investigation to be reviewed, nor does it allow any the residents request for escalation to be addressed. There is no indication that a stage 1 investigation was carried out formally. Therefore, the decision to register the resident’s complaint at stage 2 of the process led to the resident not having the opportunity to have the investigation reviewed and any further questions answered. The complaint handling missed opportunities to seek a resolution at the earliest opportunity and did not seek to actively listen to the resident’s concerns or learn from its failings. It only acknowledged the delay in its response and not the impact upon the resident. This caused the resident distress and inconvenience and time and trouble chasing the matter. This amounted to maladministration.
In line with this Service’s remedy guidance, where there has been a failure which has adversely affected the resident and the landlord has made no attempt to put things right by taking the time to further explain its complaint response, payments of between £100 and £600 are recommended.
In recognition of the distress and inconvenience the resident has experienced, the Ombudsman has made an order for the landlord to pay the resident an amount £225.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration with the landlord’s handling of the collection of the residents rent in advance and the rent arrears.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration with the landlord’s complaint handling.

Orders and recommendations

The landlord is ordered to pay the resident a total of £925 within 4 weeks of the date of this report, which is made up of:
1. £700 for distress and inconvenience caused by the landlord’s handling of the resident’s rent account.
2. £225 for the distress and inconvenience caused by the landlord’s complaint handling.
The landlord is ordered to make contact with the resident to understand his vulnerabilities and update its systems to reflect this, including any reasonable adjustments.
The landlord is ordered to provide the resident with a written apology for the failure identified within this report.

Recommendations

It is recommended that the landlord considers whether it can make a reasonable adjustment with regard to how it manages the resident’s rent account based on his vulnerabilities. The landlord should communicate any adjustment clearly to the resident.
It is also recommended that the landlord take steps to communicate to all affected residents about its decision to change the way in which it is now monitoring rent accounts and clearly explain the reasons and how this may impact resident’s.