Clarion Housing Association Limited (202218348)

REPORT

COMPLAINT 202218348

Clarion Housing Association Limited

6 February 2024

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. Payments of compensation from an earlier complaint.
2. Rent and utility bill arrears accrued while the property was unoccupied by the resident.
The Ombudsman has also considered the landlord’s complaint handling.

Background

The resident is an assured tenant of the landlord, and lives in a 2 bedroom flat in a block. The resident’s tenancy started in February 2021, and the landlord has no recorded vulnerabilities for her.
Although the resident’s tenancy started in February 2021, she was unable to move into the property at the time, as the extensive repairs were needed. The resident raised a complaint about the repairs, and exhausted the landlord’s complaint procedure in September 2021. The landlord upheld the resident’s complaint and offered £225 in compensation at stage 1, and an additional £750 at stage 2.
The substantive issues (repairs) of the resident’s 2021 complaint are not within the scope of this investigation. However, some information from the 2021 complaint responses is included below as it relates to how the compensation was offered, and gives important context to the events that followed.

Summary of events

The landlord sent its stage 1 complaint response to the resident, about repairs, on 30 April 2021. In relation to rent arrears and its offer of compensation it said:
1. In recognition of the repairs issues the arrears would “be cancelled on the date” the resident moved in
2. Any arrears letters received in the interim would not be acted upon
3. It offered a total of £225 in compensation for the repairs issues and complaint handling delays
4. It emphasised the offer of compensation was “entirely separate, and in addition to [the] rent credit outlined earlier in [its] response”
5. If the resident had any rent arrears, the compensation would be offset against the arrears.
The landlord sent its stage 2 complaint response, about the void repairs, on 30 September 2021. In relation to the rent arrears and its offer of compensation it said:
1. It upheld the resident’s complaint and offered £750 for its handling of the repairs, and complaint handling delays. This was offered in addition to the offer of £225, made at stage 1
2. If the resident had any rent arrears, the compensation would be offset against the arrears.
The resident contacted the landlord on 4 March 2021 to chase the compensation payment, as she was of the view she had not received the money. The landlord followed up with an email on the same day and said:
1. The compensation were “processed”
2. The £750 it offered at stage 2 was credited to her rent account on 10 November 2021
3. The £225 offered at stage 1 would be added as a credit to her rent account by 9 March 2022
4. It gave an extract from its stage 1 complaint response of April 2021 that referenced the cancellation of rent arrears when the resident moved in
5. It said the relevant team would address the “rent credit decision” once the resident moved in.
The resident responded on 4 March 2022 to make a complaint and said:
1. She was of the view the compensation being offset against rent arrears was done in “error” and went against what it had previously said
2. She was of the view she had been told all the rent arrears would be cleared when she moved in
3. She had not been informed about the decision to credit the compensation to the rent account, and was in “utter shock” about its decision to do so.
The landlord sent the resident its stage 1 complaint response on 30 March 2022 and said:
1. The resident was advised in both previous complaint responses that the compensation would be offset against arrears
2. It included an extract from its stage 1 response, of April 2021, that said payments would be made into her bank account and someone would be in touch within 28 working days
3. It included an extract from its stage 2 response, of September 2021, that said compensation payments would be offset against arrears
4. It apologised for “any confusion” caused by its wording at stage 1
5. It confirmed that due to the repairs issues and the length of time she had not been able to reside at the property, a rent credit would be applied to her account
6. It would only action the rent credit once the resident moved in
7. It had arranged an officer to visit her to assist her with any issues she had with her housing benefit claim
8. It did not uphold the complaint, as it was of the view the compensation payments had been handled correctly, and in line with its processes.
The resident contacted the landlord on 5 April 2022 and asked her complaint to be taken to stage 2, as she was unhappy with its response. The resident also raised a concern that she had accrued arrears on the gas and electric for ‘standing charges’ and wanted the landlord to address this issue. The landlord emailed the resident and said it had logged her complaint at stage 2 and said her case would be “assessed and allocated” as soon as someone was “available”.
A representative for the resident wrote to the landlord on 20 April 2022 in support of her stage 2 complaint. The representative said that it was “not fair” to use the compensation to offset the arrears. They said the arrears had built up were a result of the landlord’s mishandling of the repairs, which meant the resident was unable to move in. They were of the view the compensation should be paid directly to the resident.
The landlord emailed the resident on 20 May 2022 and apologised for the delay in responding to the stage 2 complaint. It said its investigation was “underway” and it hoped to issue its response within 10 working days.
The landlord sent the resident its stage 2 complaint response on 22 August 2022 and said:
1. It used the same extracts from the previous complaints as used in its stage 1 response and said there was no failure in how it had progressed the compensation payments
2. It offered £50 in compensation for the inconvenience of the wording of its stage 1 response, of April 2021
3. The resident’s property was “signed off” by its surveyor on 17 February 2022 as “habitable”. As such it had credited the resident’s rent account £5,693.18 to cover from when she signed her tenancy (28 March 2021) up to the above date.
4. It noted the resident had not moved in until 14 March 2022, but there was “no reason” why she could not have moved in on 17 February 2022.
5. It asked the resident to provide utility bills covering the period she had not lived at the property, and it would arrange for them to be paid
6. It apologised for the delay in responding to the complaint and explained the disruption caused by a “cyber security incident” was affecting its response times
7. It offered the resident £100 in compensation for its complaint handling
8. It advised that the compensation would be offset against any arrears on the resident’s rent account.

Events after the complaints process

The resident contacted this Service on 13 December 2022, asked us to investigate her complaint, and said:
1. The rent credit of £5,693.18 did not cover the full arrears accrued while she was unable to live at the property, and the arrears stood at £8,155.56
2. The landlord had not refunded the cost of utility bills despite her providing copies of bills, as it had asked
3. The compensation offered in its earlier complaint should have been paid directly to her, as “specified” in its original complaint response.
On 10 May 2023, the landlord sent the resident a stage 2 complaint “follow up” letter that said:
1. It had reviewed its handling of the rent refund and found that the resident had not moved back into the property until 14 March 2023
2. It had therefore increased the rent refund to £8,860.48 which had been applied to the resident’s rent account
3. It should have communicate its decision in writing to avoid confusion, and apologised for the inconvenience caused
4. It offered a further £200 in compensation for its handling of the rent refund, and would credit it against any arrears left on the resident’s rent account.

Assessment and findings

Relevant obligations, policies, and procedures

The landlord’s compensation policy states that any compensation offered will be used to offset any rent arrears a resident has. It states each case will be “considered individually” when doing so.
The landlord’s complaints policy states that it operates a 2 stage complaints procedure and will respond to stage 1 complaints within 10 working days and stage 2 complaints within 20 working days.

Payments of compensation from an earlier complaint

The landlord’s stage 1 complaint response, of April 2021, lacked clarity about compensation payments. It is evident that its position set out in the response of April 2021, and the lack of clarity, contributed to its overall poor handling of the issue.
The landlord’s stage 1 complaint response of April 2021 offered compensation for its handling of the repairs. It also explained that, as the resident was accruing arrears through no fault of her own, it would clear the arrears when she moved. Its indication that the offer of compensation for its admitted failings were “entirely separate” from the rent credit was reasonable. Later in the letter it also states that the compensation payment would be offset against any arrears. This statement was directly contradictory to its earlier comments, and caused confusion and inconvenience.
The landlord’s email of the 4 March 2022 was inappropriate in relation to the compensation payment. The landlord’s email included extracts from its complaint responses outlining that compensation would be credited against the resident’s rent account. It also outlined that it would decide on her rent arrears when she moved back in. Its email was silent on its earlier comments that the offer of compensation was “entirely separate” to its decision to clear her arrears when she moved in. This was unreasonable. The landlord unreasonably relied on aspects of its previous response, while omitting a key statement it had made which clearly indicated the rent arrears were a separate matter.
The landlord’s email of 4 March 2022 also failed to acknowledge there had been a delay in progressing the compensation offered at stage 1. This was a further failing in its handling of the issue.
The landlord’s stage 1 complaint response, of 30 March 2022, was also inappropriate in its handling of the compensation issue. Again, it included extracts from its stage 1 and 2 complaint responses, but failed to address the statement that had caused the confusion. It is noted that the landlord accepted its wording in the stage 1 response, of April 2021, was confusing. But, it did not address the specific comments about the compensation being separate to the arrears, which was unreasonable.
The landlord’s stage 2 complaint response also failed to address its previous comments about the compensation being separate to the decision to clear all arrears when the resident moved in. The lack of engagement on this issue, and simply relying on the fact it said any compensation payments would be offset against arrears was unreasonable. In line with its policy, the landlord failed to consider the individual circumstances of the resident, and how the arrears accrued when considering its position on the compensation. This led to its approach being unfair for the resident.
It is noted that the landlord offset the compensation offered against the resident’s rent arrears, and sought to outline its position in relation to the policy. However, it failed to consider that, in line with its complaint responses of 2021, that the rent arrears were not the fault of the resident. It also stated that it would clear the arrears after it had completed the repairs, and the resident had moved in. Given it planned to clear any arrears accrued while the resident was not living at the property, the decision to offset those arrears with the compensation was unreasonable.
The landlord’s approach to the compensation was unfair and caused an inconvenience to the resident. It unreasonably relied on aspects of its complaint response, while failing to address the specific issue that caused the confusion. The landlord admitted its wording was confusing, but the £50 compensation it offered did not fully put things right for the resident.
The landlord’s failings in its handling of the compensation payments amount to maladministration. It is noted that the landlord cleared the resident’s arrears in May 2023, when she moved back in. The landlord, unreasonably, offset some of the arrears with the compensation awarded in its complaint responses. The Ombudsman has therefore ordered the landlord to pay the resident the compensation ordered during her complaint, of 2021, directly to the resident.

Rent and utility bill arrears accrued while the property was unoccupied by the resident

The arrears on the resident’s property were accrued due to the fact she needed to return to temporary accommodation, while the landlord completed the repairs needed. As such, the resident was unable to claim housing benefit for the property, as she had a live claim at her temporary accommodation. The resident moved in to her property in March 2023, nearly 2 years after she first signed the tenancy. This meant a significant amount of arrears had accrued during that time. It is not disputed by the landlord that the resident was unable to occupy the accommodation, and the arrears were accrued through no fault of the resident.
As outlined above, the landlord’s handling of the repairs is not within the scope of this investigation. This investigation has, instead, considered the landlord’s handling of the arrears, and whether its approach was reasonable in the circumstances of the case.
During the time the repairs issue was outstanding, the landlord maintained its position that it would clear the resident’s rent arrears when she was able to move in. Given it accepted the arrears were accruing through no fault on her part, this was an appropriate approach. In the evidence seen for this investigation, the landlord repeatedly sought to reassure the resident about the arrears. This was reasonable in the circumstances.
The landlord’s stage 2 complaint response, of August 2022, outlined it was of the view the resident had moved in. It said it would progress with the rent refund to cover the period, it was of the view, that the property was uninhabitable. This is evidence the landlord sought to honour the position it had maintained throughout. However, it is evident that the landlord did not progress with the rent refund at that time, which was a failing in its handling of the matter. Indeed, it is unclear why the landlord was of the view the resident has moved back in at that time, as the evidence indicates she did not move back in until March 2023.
In relation to the utility bills, the landlord’s stage 2 complaint was reasonable. The landlord asked the resident to provide copies of the bills, and said it would pay them. This was fair in the circumstances. It is noted that the resident told this Service she had provided the bills, but the landlord had not paid them. The landlord told this Service on 30 January 2024, that the resident had not provided a full copy of the bills, showing all charges. It is noted that the landlord may not have received the bills, as requested. However, that it did not follow up this issue in its letter in May 2023, was a shortcoming in its handling of the matter.
The facts in relation to the utility bill payments are disputed, and it is not possible to determine whether the resident provided the information. As such, the resident may wish to send the landlord copies of the utility bill again, so it can process the refund.
After the resident raised a concern about the rent arrears, and that she had not had a refund, the landlord revisited its position. It adjusted the rent refund to accurately reflect the time she had not lived at the property. This was appropriate, and went some way to putting things right. The landlord offered the resident £200 in compensation in acknowledgement of the inconvenience caused by the issue. This was reasonable in the circumstances.
The landlord’s stage 2 “follow up” letter failed to show any learning about why it had not issued a refund offered in its stage 2 complaint response. The follow up did not address why it was previously, incorrectly, of the view it the resident had moved back in. This was unreasonable. The compensation it offered for the inconvenience experienced was reasonable, but the lack of assessment and learning in its follow up letter were inappropriate. The landlord’s handling of the rent and utility bill arrears amount to a determination of service failure, and a series of appropriate orders are made below.

Complaint handling

The landlord sent it stage 1 complaint response, 18 working days after the resident made her complaint. This was outside of the timeframe set out in its policy and the Ombudsman’s Complaint Handling Code (the Code). It is noted that this was not an excessive delay, and the landlord appropriately apologised when issuing its response.
The landlord’s stage 2 complaint acknowledgment was open ended, which was inappropriate. The landlord did not set out when it hoped to allocate, or indeed, respond to the resident’s complaint. This caused the resident an inconvenience of not understanding when, or if, the landlord would respond to her stage 2 complaint.
The landlord emailed the resident on 10 May 2022 and explained there would be a delay in responding to her complaint, but its investigation had started. This was over a month after the resident had asked it to open a stage 2 complaint. The evidence indicates this is the first time the landlord told the resident the investigation had started. The lack of communication about the complaint in the intervening period was unreasonable and caused further inconvenience. However, that the landlord used its email to apologise, and sought to manage the resident’s expectations about the delay, which was reasonable.
The landlord did not send the stage 2 complaint response for another 3 months after its email of 10 May 2022, which was an unreasonable delay. This Service has seen no evidence that the landlord sought to explain the further delays to the resident. This was a further failing in its complaint handling, and the resident experienced the inconvenience of a protracted complaints process.
It is noted that the cyber incident impacted on the landlord’s ability to respond to the resident’s complaint. However, its lack of communication to explain the delays was inappropriate. This Service has seen no evidence that the landlord acknowledged or sought to manage the resident’s expectations about the delays after its email of May 2022. The lack of periodic updates about the delay, was unreasonable. The resident experienced an unfair and protracted complaints process, without the landlord seeking to manage her expectations about the ongoing delays.
It is noted that, on 17 June 2022, the landlord introduced an ‘interim’ complaints policy which increased its response timeframes to 40 working days for stage 2 complaints. However, there is no evidence to indicate that the indicative timeframes were communicated to the resident, at any time, which would have helped manage her expectations. In any event, the landlord responded well outside of the timeframes set out in its interim procedure, which was a further failing.
The landlord’s complaint responses were sent outside of the timeframes set out in its policy and the Code, and the delay at stage 2 was unreasonable. Some of the delay was caused by the cyber incident it was experiencing. As outlined above, the landlord’s complaint responses failed to show learning it had done. The landlord was not proactive in communicating about delays with the resident, which caused an inconvenience. The £100 it offered for its complaint handling did not fully put things right for the resident.
The Ombudsman found similar complaint handling failings in a complaint determined by this Service in December 2023 (202203929). As a result of the finding of maladministration, we ordered the landlord to conduct training with its complaint handling staff. Given the recent order made in this regard, we have decided not to make such an order in this determination.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s handling of payments of compensation from an earlier complaint.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure in the landlord’s handling of rent and utility bill arrears while the property was unoccupied by the resident.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s complaint handling.

Reasons

The landlord said throughout that the arrears would be cleared when the resident returned to the property, as they had been accrued through no fault on her part. The decision to then offset those arrears, that it planned to clear in any event, with compensation offered for admitted failings was unfair. The landlord’s approach to the compensation payments was unfair and caused an inconvenience to the resident.
The landlord, appropriately, agreed to clear the rent arrears accrued as a result of the property being unoccupied, through no fault of the resident. There was a delay in progressing with the rent refund offered a part of its stage 2 complaint response. The landlord revisited its offer of a refund when it became aware of its mistake, and offered compensation for the inconvenience caused, which was appropriate. The landlord failed to show learning about how the error had occurred, which was a shortcoming in its handling of the matter.
The landlord’s complaint responses were sent outside of the timeframes set out in its policy and the Code, and the delay at stage 2 was unreasonable. Some of the delay was caused by the cyber incident it was experiencing. The landlord was not proactive in communicating about delays with the resident, which caused an inconvenience. The £100 it offered for its complaint handling did not fully put things right for the resident.

Orders

Within 4 weeks the landlord is ordered to:
1. Apologise for the failings identified in this report
2. Pay the resident £1,800 in compensation, made up of:
  1. The £50 it offered for the inconvenience caused by the wording of its stage 1 complaint response of April 2021 (if it has not already done so)
  2. The £975 compensation offer (from 2021) it offset against the rent arrears
  3. A further £200 in recognition of the inconvenience caused by its handling of the compensation payments
  4. The £200 it offered for its handling of the rent arrears (if it has not already done so)
  5. A further £75 in recognition of the inconvenience caused by its handling of the rent arrears
  6. The £100 it offered for its complaint handling (if it has not already done so)
  7. A further £200 in recognition of the inconvenience caused by its complaint handling.
Within 8 weeks the landlord is ordered to complete a review into its handling of the compensation and rent arrears payments. The landlord should consider the failings identified in this report, and how to prevent similar failings happening again. The review should have a particular focus on:
1. Considering the individual circumstances of the resident, when deciding to offset arrears with compensation offers
2. The delays in progressing payments
3. The clarity of its position to avoid confusion and contradiction.