Catalyst Housing Limited (201912385)

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REPORT

COMPLAINT 201912385

Catalyst Housing Limited

22 December 2020


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 regarding the landlord’s response to the resident’s queries on the following:
    1. The status of her tenancy and the implications on her request for a transfer.
    2. Her application for the mutual exchange of the property.
    3. The handling of her formal complaint on the issues.

Background and summary of events

  1. Following the assignment of tenancy to her from her ex-partner in May 2018, the resident holds an assured shorthold tenancy of the property, which is owned by the landlord. In an email to her, of 30 January 2019, which appeared to be in response to a query to the landlord, it explained that it could not review her rent. The landlord further advised that her tenancy type was ‘intermediate rented’, which meant that it was above social rent but below market rent, and advised her to seek further information on this from ‘.gov.co.uk.’
  2. In an email to her MP, of 30 January 2019, the resident mentioned that he had assisted her in securing her tenancy of the property. However, it had been assigned to her on the same terms as had applied to her ex-partner when he held sole tenancy of the property. He had been on an intermediate rent as the landlord had acquired the property on a mortgage rescue. She felt that this was unfair as she earned less than he did and could not afford the rent, in addition to her living costs.
  3. No further information has been provided on the issue in the ensuing months, until the resident contacted this Service in June 2019. The landlord advised at the time that the matter was not being dealt with within its complaints process and it would log a complaint which would be responded to by 4 July 2019.
  4. The landlord provided a decision on the issue, on 12 July 2019, in which it clarified the status of the resident’s occupancy of the property. As the property was transferred to it under the Mortgage Rescue scheme it was not intended for social rent letting as there were attendant restrictions. It maintained that the status and rent for the property would remain unchanged. It added that it would support her in seeking a solution and had arranged for its Financial Inclusion officer to contact her by 19 July 2019. It intended to assess her financial situation in order to ascertain how to assist her.
  5. The landlord further stated that it had used its discretion in granting the assignment of the property to the resident after her partner moved out, having indicated that he was willing to allow her to continue to reside there with her children. He had been the sole tenant of the property and she had inherited the tenancy he held. It stated that her housing need should, ordinarily, have been determined by the council. It had, instead considered communications by her MP in granting her the assignment. It advised her to approach the council to request a transfer and stated that she could request for an independent review within 21 days of its decision. The landlord also offered the resident £50 in compensation due to its delay in responding to her complaint.
  6. On, 12 July 2019, the resident requested for the escalation of her complaint, stating that no one was interested in swapping properties with her due to the high level of rent of the property. As her ex-partner, and not herself, had been the mortgagor of the property, she opined that the landlord could change her status to social rent. In its response, of 15 July 2019, the landlord advised the resident to contact its Financial Inclusion Team and stated that it was willing to seek a resolution for her if it could be evidenced that she was unable to afford the rent. The resident chased the landlord for a response to her escalation request in August and September 2019 and advised this Service that there had been no further response on the issue.  
  7. In an email to her MP, of 7 January 2020, the resident stated that she had found a person willing to mutually exchange with her. However, the landlord had rejected her application for mutual exchange as it stated that she was on intermediate rent and it would be unfair for another tenant to take on her tenancy and rent rate. She stated that she was unaware of this situation as she had no documents to that effect. Her tenancy agreement was for an assured shorthold tenancy for a fixed term of three years and the information on the landlord’s website indicated that she was, therefore, eligible for mutual exchange. She was unable to afford the rent for the property and had to pay an additional sum for bedroom tax as her daughter had moved out of the property. The issue was affecting her mental health, she was in rent arrears and the landlord was not responding to her emails.
  8. The resident’s MP wrote to inform the landlord that she was facing eviction due to the level of rent and the requirement for bedroom tax payment. It also mentioned that she was being threatened by her ex-partner, thus, did not feel safe in the property and mutual exchange had been refused by the landlord. In its response, of 17 January 2020, the landlord confirmed that the resident did not qualify for mutual exchange due to the tenancy she holds but clarified that her rent account was in credit. Nonetheless, it had advised her to apply to the local council for Discretionary Housing Payment, to assist with the bedroom tax cost. It had also advised her to apply for a non-molestation order against her ex-partner and, with her agreement, would refer her to support agencies.
  9. The resident made another complaint to the landlord, on 27 February 2020, in which she stated that she had been unaware that she had an intermediate rental agreement at the time she took up tenancy in 2018. She had not undergone an assessment when she was assigned the property and wished to make a Subject Access Request for her tenancy documents as all she had received was the assured shorthold tenancy agreement. She had visited the landlord’s office on 24 December 2019 and had been advised to go the local council to request re-housing. She queried why the landlord would not transfer her to a two-bedroom property which would be more affordable for her as the council stated that it could not assist her because she was not homeless.
  10. In its final response to the resident, of 6 March 2020, the landlord reiterated that she did not qualify for mutual exchanges ‘because of the circumstances around the receipt’ of the property. As the rent was higher than the normal level for its rental properties, it was not suitable for other residents of its housing stock.

Assessment and findings

  1. The Ombudsman’s investigation of this complaint has proven to be more complicated due to the inadequate documentation provided by the landlord. While the tenancy agreement indicates that the resident became the sole tenant of the property in May 2018, it does not specify that she is on intermediate rent, nor does it clarify the implications of her rent status. Her email to the MP, of 30 January 2019, indicates that she was aware that the property was acquired under the Mortgage Rescue Scheme. However, the landlord has not provided any document to show that the resident was informed that this meant that in taking up the tenancy she would not be eligible for any concessions available for social tenants.  
  2. The facts of the case show that the resident was assigned the property through the intervention of the MP. Thus, it is reasonable to expect that she would have ensured, whilst seeking to remain resident in the property, that she was aware of the terms of her tenancy. A tenancy agreement is a legal contract between the parties, and it is the responsibility of each party to ascertain that they are satisfied with the conditions they are signing up to.
  3. From the foregoing, this Service finds that, while the landlord has not provided evidence that the resident was informed about the implications of her rent status, she was aware that the property was not rented by her ex-partner as a social letting. The resident was also aware of the level of rent charged by the landlord as this was stated on the tenancy agreement.
  4. In accordance with paragraph 39(g) of the Housing Ombudsman Scheme (the Scheme), ‘the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion concern the level of rent or service charge.’ Thus, this Service is unable to consider the level of rent charged by the landlord but can consider the adequacy of its response on the issue. 
  5. The landlord explained that the tenancy is on intermediate rent and the resident is not a social tenant. It also explained that it is unable to review the rent charged to the resident and advised her to seek further information on her rent status. The web address provided by the landlord is incomplete not helpful as a source of the information she requires. As stated above, it has also not provided adequate documents on the nature of her tenancy. The tenancy agreement does not indicate that the property is intermediate rented and does not show that there are further conditions guiding the resident’s occupancy. Nonetheless, the tenancy agreement provides in clause 1(3) that the rent could be reduced or increased by the landlord at the expiration of the fixed term. This means that any review of the rent is at the landlord’s discretion and could be considered only after the fixed term has ended. 
  6. The tenancy agreement states that the resident’s tenure is for a fixed term of three years, which means that the landlord was accurate in stating that it could not consider a review of the rent at the time the resident requested it as the fixed term had not expired. In addition, the resident had contracted to pay the amount of rent stated in the agreement. Overall, there was no failing in the landlord’s decision not to review her rent as there was no requirement in its policy or her tenancy agreement for it to do so. The landlord was proactive and reasonable in offering to support the resident in finding a solution to the issue when she explained that she would experience financial difficulties if the rent was not reduced.   
  7. The landlord’s Transfer Policy provides as follows in clause 2.2 that it does not ‘allow intermediate housing tenants to transfer.’ It further clarified that these included tenants in Mortgage Rescue and on intermediate rent. Without documentary evidence, it is impossible for this Service to ascertain that the resident was not aware, at the start of her tenancy, that she was categorised as an intermediate tenant. However, she was aware that the property was in Mortgage Rescue. Clause 2.2 of the Transfer Policy shows that the landlord is unable to transfer her to more affordable accommodation. Thus, its decision not to do so is in accordance with its policy and there is, again, no provision in her tenancy agreement indicating that she is eligible for a transfer. The local council is responsible for dealing with homelessness, thus, the advice that she should contact it was accurate. 
  8. It was appropriate that the landlord advised the resident to seek a legal remedy with respect to the reported threat by her ex-partner. It was also reasonable that it offered to refer her to support agencies who are better placed to deal with the issues she raised, this is in addition to the Police whom she stated had already been involved in the matter.
  9. The resident has provided an extract from the landlord’s website stating that assured shorthold tenancies of up to two years are eligible for mutual exchange. This is the general rule and should apply to the property as the fixed term is for three years. Although the tenancy agreement has made no provision for mutual exchange, no evidence has been provided in support of the landlord’s assertions that the property cannot be mutually exchanged due to its intermediate rent status. This is another instance of the difficulties created by the lack of documentary evidence in this case.
  10. On the whole, this report concludes that significant documentary evidence was required with respect to the landlord’s assertions on the implications of the resident’s rental situation. Despite not providing requisite proof it has maintained its position on the nature of the resident’s tenancy and the implications for mutual exchange. The Housing Ombudsman has no evidence that the resident was not on intermediate rent and cannot determine that the landlord’s position is inaccurate. It is also unable to require the landlord to authorise mutual exchange on the property.
  11. The resident may wish to seek legal advice regarding the landlord’s position with respect to the mutual exchange decision by the landlord. This Service also finds that compensation is warranted to the resident by the landlord because it has failed to provide comprehensive information on the status of her tenancy. 
  12. The landlord provided a decision on the formal complaint in July 2019, having first logged a formal complaint in June 2019. It offered the resident the goodwill gesture of £50 for providing a decision 8 days later than it promised. However, it did not consider that compensation was warranted for its handling of the formal complaint after the resident requested the escalation of the matter. The landlord was prompt in acknowledging the escalation request and confirmed its intentions of considering the issues further, with the view of offering her a solution.
  13. This Service notes that the landlord advised the resident to contact the team which would consider any evidence she would provide regarding her financial situation. The resident chased it for a further response in August and September 2019, but it has not provided evidence of having responded to her. It is noted that the landlord’s Complaints policy has no timescale requirement for independent review stage. It is further noted that its Complaints Policy allowed the landlord to decide that a review may not be warranted. It was therefore not required to escalate the complaint where it found that its position remained unchanged.
  14. Nonetheless, it was not reasonable that the landlord did not communicate its position on the escalation request to the resident for up to seven months after the formal review decision. This only occurred after it had been requested by this Service to provide a closure response in March 2020. This Service therefore concludes that the landlord’s response to the formal complaint at independent review stage was below reasonable standards. Compensation is, therefore, warranted for this aspect of the complaint.
  15. The resident has mentioned that the situation has resulted in an impact to her mental health. This report has not considered this aspect of her complaint. This is because this Service is unable to establish a causal link between reports of the health issues experienced by complainants and the actions of landlords. The resident may wish to seek legal advice about this, as a personal injury claim may be a more appropriate way of dealing with this aspect of her complaint. Our position here is in accordance with paragraph 39(i) of the Scheme which provides that: ‘The Ombudsman will not investigate complaints which, in the Ombudsman’s opinion concern matters where the Ombudsman considers it quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure’.
  16. It must be noted that the later complaint of February 2020 has not been specifically discussed in this report. This is mainly because the issues raised formed part of the original complaint and have been discussed in preceding paragraphs. Furthermore, it is not for this Service to consider how the landlord has responded to the requests for documents on the Freedom of Information Act including SAR. The resident may wish to contact the Information Commissioner’s Office (ICO) for further advice on this issue.

Determination (decision)

  1. Having considered all the evidence, I am satisfied that in accordance with paragraph 54 of the Scheme, there was service failure by the landlord with respect to its response to the resident’s queries. This is mainly with respect to its failure to provide documents, on the following:
    1. The status of her tenancy and the implications on her request for a transfer
    2. Her application for the mutual exchange of the property.
  2. I am satisfied that in accordance with paragraph 54 of the Scheme, there was service failure by the landlord with respect to delays in handling of her formal complaint on the issues, at the independent review stage.

Reasons

  1. There is no evidence that the resident was unaware that her rental situation meant that she was not a social tenant, however there is also no evidence that she was aware of further conditions on her tenancy beyond the provisions of the tenancy agreement. It is a landlord’s responsibility to maintain adequate records on its properties, but it has not provided sufficient documents in support of its position on the nature of her tenancy and its decision that she is not eligible for mutual exchange on the property. There were significant delays in the landlord’s handling of the independent review stage of her formal complaint.

Orders and recommendations

  1. I make the following orders to be complied with by the landlord within four weeks of the receipt of this report:
    1. The landlord should pay compensation to the resident of the total sum of £150. This comprises £100 for the lack of adequate documentation on the issues and £50 for its poor handling of the formal complaint.
  2. It is recommended that the landlord should consider providing further information to the resident on her status as an intermediate rent tenant and the conditions related to this.
  3. The landlord should consider making policies and providing comprehensive tenancy terms with respect to its intermediate rental properties in order to minimise the likelihood of reoccurrences of the complications which were evident in this case.