Clarion Housing Association Limited (202125633)

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REPORT

COMPLAINT 202125633

Clarion Housing Association Limited

30 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

  1. The complaint is about the landlord’s handling of:
    1. The administration of the resident’s service charge account after he staircased to 100% ownership of the property.
    2. The associated complaint.

Background

  1. The resident is a leaseholder of the property, and the landlord holds the headlease for the building within which the property is situated.
  2. On 26 October 2021, the resident submitted a complaint to the landlord. He explained that he was very unhappy with the lack of communication regarding his service charges. He stated that he staircased to 100% ownership last September and he received a letter on 18 October 2021 stating that he owes £2,450. In addition, the resident explained that he was asked to set up a direct debit with the landlord’s managing agent and explained it was unclear who he should be paying the service charges to.
  3. The landlord provided its stage 1 complaint response to the resident on 16 December 2021. It explained that there was a delay in processing the resident’s welcome letter following his staircasing to 100% ownership in August 2020. The landlord stated that this was because it thought that the head lease had been transferred, so it believed there was no need for the resident to set up an account to pay the charges to the landlord. However, the landlord explained that its service charge team did not notify the relevant team that the resident would still be required to pay the service charges to the landlord. The landlord offered the resident £250 compensation, in recognition of the error and for the delay in providing the stage 1 response.
  4. On 16 December 2021, the resident contacted the landlord and requested his complaint to be escalated to the next stage of the landlord’s complaints process. The resident stated that the complaints process was managed appallingly, as he chased and called approximately 10 times over a 2-month period. The resident also explained that he was unhappy with the compensation amount of £250 which was offered.
  5. The landlord provided its stage 2 complaint response to the resident on 25 January 2022. The landlord explained that it agreed that its error led to the resident’s account being closed. However, it stated that the resident would have been aware that his monthly service charges were still payable. Also, prior to completion of the final staircasing, the resident had been paying service charges to the landlord. The landlord stated that it would contact the resident by 5pm on 28 January 2022 to clarify the balance owed, reinstate the resident’s monthly payments, and discuss a repayment plan to cover the arrears. In addition, the landlord stated that it was satisfied that its offer of £250 from its stage 1 response was adequate.
  6. The resident remained dissatisfied with the landlord’s response and submitted his complaint to the Ombudsman. He stated his desired outcome was for a monthly direct debit to be set up for his service charge payments and to receive an increased amount of compensation.
  7. The landlord has confirmed that it set up a payment arrangement including a payment plan with the resident in February 2022.
  8. Furthermore, on 10 March 2023 the landlord apologised for its failure to contact the resident by 28 January 2022 to set up the payment arrangement. It offered a further £50 compensation to recognise the error.

Assessment and findings

The landlord’s handling of the administration of the resident’s service charge account after he staircased to 100% ownership of the property.

  1. The resident’s lease explains that the resident is obliged to pay the service charge during the term of the lease, by equal payments in advance at the same time and in the same manner in which the specified rent is payable under the lease.
  1. The landlord acknowledged in its stage 1 and 2 complaint responses that its error led to the resident’s direct debit being cancelled, which resulted in the resident’s service charge payments not being taken after he staircased to 100% ownership of the property.
  2. In addition, the landlord confirmed in its complaints responses that it had checked with its leasehold team to confirm whether the resident was required to pay his service charges to the landlord or managing agent. It was confirmed that the resident’s service charges were to be paid to the landlord.
  3. The Ombudsman recognises that the resident was responsible for paying his service charges in line with his lease agreement. However, it is evident that when the resident staircased to 100% ownership, the landlord was unclear about whether the resident should have been paying his service charges to the landlord or the managing agent. It is also evident that the landlord did not identify the error with the service charge payments until the resident raised it as part of his complaint. Therefore, there was a failure by the landlord in its communication regarding the service charge payments and the administration of the resident’s service charge account.
  4. The landlord initially offered the resident £200 compensation in its stage 1 complaint response to recognise its error with the handling of the resident’s service charge account and payments. In addition, to resolve the issue, the landlord explained in its stage 2 complaint response that it would contact the resident by 28 January 2022 to confirm the outstanding balance, discuss a payment plan and reinstate the monthly payments.
  5. However, the landlord failed to contact the resident by 28 January 2022 to reinstate the service charge payments. The resident had to go to the time and trouble of chasing the landlord on multiple occasions before it made contact with him on 21 February 2022. The landlord acknowledged and apologised for its failure in a letter sent to the resident on 10 March 2023. In addition, the landlord also offered the resident £50 compensation for the failure. However, this was over a year later and after the resident had to go to the further time and trouble of referring his complaint to the Ombudsman.
  6. The Ombudsman acknowledges that the landlord cancelling the resident’s direct debit and its delay in reinstating a payment arrangement was unreasonable, and this caused the resident considerable worry and inconvenience. The Ombudsman also acknowledges that the landlord had gone some way to putting this right at the end of its complaints procedure by offering compensation and committing to reinstate the resident’s service charge payments. However, the overall compensation offer of £250 offered by the landlord was not sufficient to recognise the error and the delay, including the failure to complete the actions agreed in the stage 2 response by the target it had set. Therefore, there has been maladministration by the landlord in its handling of the administration of the resident’s service charge account after he staircased to 100% ownership of the property.
  7. It would be appropriate for the landlord to pay the resident additional compensation of £150 to proportionately reflect the distress and inconvenience caused. The amount of compensation awarded is compliant with the Ombudsman’s Remedies Guidance (published on our website), which sets out the Ombudsman’s approach to compensation. The remedies guidance suggests awards of £100 to £600 when there was a failure which adversely affected the resident.

The landlord’s handling of the associated complaint.

  1. The Ombudsman’s Complaint Handling Code (the code) sets out the Ombudsman’s expectations for landlords’ complaint handling practices. The code states that a stage 1 complaint response should be provided within 10 working days of the complaint. It also states that a stage 2 response should be provided within 20 working days.
  2. At the time the landlord issued its stage 1 and 2 complaint responses in December 2021 and January 2022, the landlord did not have any complaint response timescales referenced in its complaints policy. However, a recent check of the landlord’s website shows that it has now updated its complaints policy with complaint response timescales which are in line with the code.
  3. The resident first submitted his complaint to the landlord on 26 October 2021. Following this, the landlord provided its stage 1 response on 16 December 2021. This response was sent to the resident 5 weeks late. The response time was not compliant with the code. The landlord’s records confirm that the resident contacted the landlord on multiple occasions for an update on his stage 1 complaint response.
  4. On 16 December 2021, the resident requested his complaint to be escalated to the next stage of the complaints process. It took around 26 working days for the landlord to provide its stage 2 response, which was provided on 26 January 2022. The landlord’s response was slightly late and not compliant with the timescales referenced in the code.
  5. The Ombudsman recognises that the delay would have caused inconvenience to the resident. However, the landlord did acknowledge the delay in its stage 1 complaint response and offered the resident £50 compensation to recognise the inconvenience caused.
  1. The compensation offered to the resident is compliant with the Ombudsman’s Remedies guidance referenced above. In the Ombudsman’s opinion, the compensation proportionately reflects the impact of the delay on the resident, and it amounts to reasonable redress in this case.

Determination (decision)

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was a maladministration in the landlord’s handling of the administration of the resident’s service charge account after he staircased to 100% ownership of the property.
  2. In accordance with paragraph 53 (b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress prior to investigation, which in the Ombudsman’s opinion, resolves the complaint about the landlord’s complaints handling satisfactorily.

Orders

  1. The landlord to pay the resident an additional £150 compensation for its handling of the administration of the resident’s service charge account.
  2. If it has not already done so, the landlord to pay the resident pay the resident its original offer made in its stage 1 response of £250 compensation and the £50 compensation it offered in correspondence dated 10 March 2023, for its failure to contact the resident in January 2022 to set up a payment arrangement. In line with our service’s established approach, the compensation awarded by the Ombudsman should not be credited to the resident’s rent account and should instead be paid to him directly.
  3. The landlord to write to the resident and the Ombudsman setting out the changes it has made to its service charge accounting as a result of the resident’s complaint.
  4. The landlord to review its processes to ensure commitments made in its stage 1 and 2 complaint responses are monitored and followed through. The landlord should confirm to the Ombudsman the action it has taken in this regard.
  5. The landlord should provide evidence of compliance with the above orders within 4 weeks of the date of this report.