Clarion Housing Association Limited (202113111)

REPORT

COMPLAINT 202113111

Clarion Housing Association Limited

19 October 2022

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 the resident’s mutual exchange, in particular the information provided about tenancy changes during the mutual exchange process.

Background and summary of events

Background

The landlord’s mutual exchange policy states that:
1. “A tenant’s right to exchange varies depending on the type of tenancy agreement they have:
  1. Protected Assured tenants – Protected Assured tenants have the right to assign their tenancy by way of exchange as outlined in their tenancy agreement and the transfer agreement.
  2. Fixed term Assured Shorthold tenants – Fixed term tenants in social rented property who are exchanging with a ‘lifetime tenant’ protected under s158 of the Localism Act have the right to exchange.
  3. For other fixed term tenants, including those in affordable rent properties, it will depend on whether the tenancy agreement gives a right to mutual exchange. However, Clarion will consider applications to exchange from customers with fixed term tenancies with a Social or Affordable Rent as long as the probationary period has been successfully completed. – allowed other party to exchange.
  4. The following residents do not have any right to exchange: Intermediate including rent4less, key worker or market rent tenants”.
2. “Mutual exchange is usually by way of each tenant assigning their tenancy to the other so that each effectively takes over their tenancy, including its status as Assured or Secure and its rent level”.
3. “However, Section 158 of the Localism Act 2011 provides protection for ‘lifetime’ tenants, i.e. Assured (non shorthold) and Secure tenants, that held their tenancy before 1 April 2012, who want to exchange with tenants with a flexible tenancy (a local authority tenancy type) or a fixed term Assured Shorthold Tenancy with a social rent which was not less than 2 years. It does this by each tenant surrendering their tenancy and the landlord granting a new tenancy. This is so the existing lifetime tenant will still have a ‘lifetime’ tenancy following the exchange”.
4. “For the purposes of this policy these are referred to as Localism Act exchanges. The protection is for the qualifying lifetime tenant only. In these circumstances Clarion will offer the tenant with a ‘lifetime’ tenancy at their current home an Assured tenancy, and the tenant with a fixed term tenancy, a new 5-year fixed term tenancy”.
5. “NB This protection does not apply where a lifetime tenant exchanges with a fixed term tenant whose property has an Affordable Rent”.

Summary of Events

The resident has been represented by a family member in bringing her complaint to the landlord and this Service.
The resident was a tenant of the landlord of a three bedroom house, holding a Protected Assured Tenancy that commenced in 1994. The resident moved to another property owned by the landlord in October 2020 by way of mutual exchange as part of a 4-way swap. The new property has two bedrooms and is let on an affordable rent. The resident now holds a 6 year Fixed Term Assured Shorthold Tenancy that commenced on 27 March 2015 for the new property following a Deed of Assignment on 2 November 2020.
The resident considered carrying out a mutual exchange as a way of downsizing and on 25 January 2020 the landlord sent her exchange forms.
On the application form, that was completed on 29 June 2020, under a section titled “why are you applying for mutual exchange?” the resident had written – “Iv [sic] a three bed house and all I need is two bed. Iv [sic] discussed all this with a solicitor and CAB as someone in your office a while ago tried telling me that my tenancy stays with house and it doesn’t, the tenancy goes with tenant. I’v [sic] proven on paper which I will send to your CEP if have to. Clarion has made this rule up themselves. We’ve [sic] never been notified of tenancy changes, I’v [sic] had my tenancy since 1993. I will go to MP on this. I need to be secure. If I was moving with someone that didn’t hold a Clarion tenancy I would understand. This will be a 4-way swap and I’m going to a Clarion house. We’v [sic] all accepted the houses are they are. Thank you for your time but look into this. Any problem let me no [sic]”.
The representative’s correspondence states that she spoke to the landlord about a mutual exchange several times in June and July 2020. She has stated that she asked the landlord in writing to confirm that the resident would not lose her Protected Assured Tenancy as part of the mutual exchange but it did not respond.
On 28 July 2020, the landlord confirmed receipt of the forms and advised that it aimed to give the resident a decision by 17 August 2020. It advised the resident to “check the terms of the tenancy to make sure that you’re not losing any of your existing rights”.
The landlord’s records indicate that it spoke to the resident or her representative to provide advice of the mutual exchange process. (It is not clear who exactly the landlord spoke to or the date of the conversation from the information provided to this Service). It “explained that by exchanging the incoming tenancy will become [the resident’s] therefore losing the Protected Assured Tenancy”. The file note for the call also stated that the landlord agreed to confirm this in a letter but after the call realised that this was not possible, and that it called back three times but could not get through.
The landlord’s records also show another phone call from the resident or her representative. (Again, it is not clear who exactly the landlord spoke to or the date of the conversation from the information provided). The note states that the landlord advised the caller that the resident’s tenancy would take place through a Deed of Assignment whereby she would be giving up her Protected Assured Tenancy to take an Assured Shorthold Tenancy which would be ending next March. The file note states that the resident “has given this a lot of thought and this is okay”.
The landlord confirmed by letter that the application for the mutual exchange was approved on 9 October 2020. On 20 October 2020, the landlord wrote again to advise the resident of the weekly rent for the new property.
The resident moved properties on 3 November 2020. The resident has advised this Service that the landlord did not advise her of the type of tenancy she would have for the property and was not provided a copy of the tenancy agreement.
In December 2020, the representative wrote to the landlord’s Chief Executive expressing concerns about the resident’s new tenancy. She noted that the landlord had not phoned back after she called, provided contradictory information or sent letters without the name of the sender.
On 22 February 2021 the representative complained that the resident had to “give up” her Protected Assured tenancy when she carried out the mutual exchange. The representative argued that tenancies should “go with you when you move, they do not stay at the property”.
On 28 March 2021 the landlord sent the Stage 1 response to the complaint to the representative. It advised that:
1. The mutual exchange was completed by way of a Deed of Assignment and the parties involved effectively swap tenancies.
2. It had spoken with the resident on 3 August 2020 who advised that she would consult with a solicitor about the swap. It spoke to the resident again on 19 August 2020 who advised that she would like to continue with the swap.
3. Its website and its Mutual Exchange Policy stated that the protection where lifetime tenants would still have a Iifetime tenancy following a mutual exchange under section 158 of the Localism Act did not apply where a lifetime tenant exchanges with a fixed term tenant whose property has an Affordable Rent.
4. It therefore did not uphold the complaint as the correct process was followed and both parties held the correct tenancy agreements. However, it would offer £50 compensation for the delay in sending the complaint response.
On 31 March 2021, the representative escalated the complaint. She advised that she wanted the resident’s tenancy to revert back to the Protected Assured Tenancy she held at her previous address. She maintained that the tenancy should remain with the tenant not the property meaning that when a tenant exchanges with another person the tenancy type moves with them.
On 12 May 2021 the landlord sent the Stage 2 response to the complaint. It stated that:
1. It had explained that mutual exchange is usually by way of each tenant assigning their tenancy to the other so that each effectively takes over the other’s tenancy, including its status as Assured or Secure and its rent.
2. It had advised the resident on 3 August 2020 that by completing the Mutual Exchange, she would be taking on the incoming tenancy and lose her Protected Assured Tenancy. The resident had confirmed on 19 June 2020 that she wished to continue.
3. In conclusion, it considered that it had provided a good level of guidance and feedback on the exchange to the resident and it was her decision to proceed with the exchange. It therefore upheld the Stage 1 response.
The representative continued to write to the landlord after the final complaint response to pursue her complaint. On 17 May 2021 she wrote to landlord disputing the landlord’s statement that it had spoken to the resident on 3 and 19 August 2020 and that she had accepted its advice. The representative also noted that her own tenancy had stayed the same when she previously had mutually exchanged. In a letter dated 22 May 2021, the representative stated that she had spoken to a member of staff on 29 June 2020 who had advised her that the tenancy stays with the tenant.
In a further letter the representative advised she had spoken to the landlord about the mutual exchange in June 2020 and on 6 July 2020, 14 July 2020, 20 July 2020, 22 July 2020, 12 August 2020 and 14 August 2020, providing the names of the members of staff that she had spoken to. She stated that resident’s tenancy status was not discussed during the calls. The representative stated that she had spoken to Shelter who advised her to ask the landlord to confirm the resident’s tenancy type and to provide her with the most secure form of tenure. She enclosed a factsheet from Shelter which advised that “If your tenancy began before 1 April 2012 and you want to swap with someone whose tenancy began on or after 1 April 2012 and is less secure than your own, you should ask your new landlord to grant you the most secure form of tenancy that it can”. The representative also stated that the resident had been assured in September 2017 when she had first explored a mutual exchange with the same exchange partner that her tenancy would stay the same with only the rent changing.
The representative’s letter made reference to other annotated documents that were also enclosed and which she believed supported her argument that the resident should have retained her Protected Assured Tenancy. She suggested a meeting where all her paperwork could be seen.
In a further letter sent on 15 August 2021 the resident noted that the landlord had not responded to Shelter’s query. She also highlighted that the landlord did not put anything in writing following the application of June 2020.
In letters dated 19 and 21 September 2021, the representative referred the complaint to this Service. She highlighted that she had asked about six times for the landlord to put something in writing and show the rules determining that the resident would lose her tenancy; however, the landlord never made clear that she would losing her tenancy. The representative with her letter dated 21 September 2021 enclosed several documents which she believes provides support for argument that the resident’s tenancy agreement for her previous property should have stayed with her. She had reiterated her complaint in a further letter dated 4 January 2021 in which she stated that the landlord “were making up the rules” as they go along. The representative also stated that the landlord had still not provided evidence that it spoke to the resident as it stated and in fact it was only her (the representative) who ever spoke to the landlord.

Assessment and findings

The resident wishes to be granted a more secure form of tenure. However, in investigating this complaint it is not within the Ombudsman’s power to change or otherwise determine the type of tenancy for the resident. The Ombudsman’s role is to consider the appropriateness and reasonableness of how the landlord dealt with the resident’s mutual exchange application and subsequent formal complaint, taking into account relevant legislation, policies and procedures and good practice.
Whilst this investigation does not seek to determine the resident’s tenancy type, it should be noted that a tenancy is a contract relating to a legal interest in land. Under a tenancy agreement, the tenant has the right to occupy the premises – which will be defined and clearly identified within the agreement – subject to the payment of rent. The resident’s comments that she has “taken her tenancy” with her before when moving properties is noted. However, a tenancy agreement relates to the land – and not the individual. As such, the terms of the tenancy agreement will set out the rights and obligations of both parties in respect of the property/premises, and any areas covered by the agreement.
As the resident’s belief that she should retain her Protected Assured Tenancy at her new property underpinned her formal complaint, the landlord had a responsibility when responding to the complaint to explain the legal basis under which it conducted the mutual exchange. It took steps to do this insofar as in its Stage 1 and 2 complaint responses it made clear to the resident that the protection afforded under section 158 of the Localism Act for lifetime tenants who held a tenancy before 2012, such as the resident, to retain their lifetime tenancy did not apply when the exchange partner was an Assured Shorthold Tenant with an Affordable rent, as in this case. It further explained that the mutual exchange would be completed through a Deed of Assignment which meant that the resident would have taken on the Assured Shorthold Tenancy for the new property with the Affordable Rent.
However, the landlord missed opportunities to make clear what tenancy the resident would have on completion of the exchange at the time she applied. From the onset, within her completed application form, the resident contended that she should retain her lifetime Assured Tenancy. However, the landlord at no point clarified in writing that she would not retain her Assured Tenancy or be granted a new one, or the reasons why. In fact, there is no evidence that the landlord even made explicit that the exchange property had an Affordable Rent as opposed to a Social Rent which can affect the type of tenure when carrying our mutual exchanges. The lack of clarification was unreasonable given the significance of changing from a Assured Tenancy to an Assured Shorthold Tenancy on an Affordable rent, in particular with regard to security and rent level. The lack of written clarification was also unreasonable insofar as the landlord essentially considered that the resident’s belief that she was eligible to keep her Assured Tenancy was mistaken under law, and therefore needed to be corrected.
The landlord in not upholding the resident’s complaint has relied on advice provided in phone calls during the exchange process which it stated were made on 3 and 19 August 2021 in its complaint responses. The representative has disputed the landlord’s version of the phone calls and even that it spoke to the resident. In any event, as the landlord did not sent a letter to confirm the outcome of the phone calls, as requested by the representative, it did not take sufficient steps to manage the resident’s expectations about how the mutual exchange would affect the resident’s tenancy situation.
The landlord had further opportunity to make clear what tenancy the resident would have when writing to approve the mutual exchange and to advise of the weekly rent in October 2020. There is no good reason why it did not do so. The representative has also stated that the resident does not possess the tenancy agreement for her new property. Whilst prospective tenants have a responsibility to satisfy themselves that a new property and the tenure attached meets their needs, landlords similarly have a responsibility to provide relevant documents such as the tenancy agreement at the point the tenancy is signed for.
The representative continued to write to the landlord after she had completed the complaints procedure. The representative in her further correspondence raised further points and made reference to enclosed documents that she interpreted as supporting her position that the resident should have retained an Assured Tenancy. This Service has three Dispute Resolution Principles which it expects landlords to follow, Be Fair, Put Things Right and Learn From Outcomes. Regarding the first the Ombudsman expects landlords to “Be flexible in application of policy, practice and process to ensure that individual needs are taken into account” and to have “Provision for flexibility to deal with a complaint differently, … if that might produce a fairer outcome”. Given the ongoing dispute and further information provided, the landlord by not engaging with the resident further, for instance meeting with her as requested, did not sufficiently follow the Dispute Resolution Principles in order to resolve the complaint. This failure exacerbated the resident’s dissatisfaction and perception that the landlord was “making up the rules”.
Issues raised within the further correspondence from the representative that the landlord failed to address include: no discussion of the tenancy situation in several specified phone calls; being told previously that the tenancy would stay with the resident; the landlord not responding to the query whether it provided the resident with the most secure form of tenancy possible (which may have entailed explaining the Affordable Rent regime); and the relevance of the representative’s own experience of exchanging properties.
The representative has also provided this Service with annotated documents which she stated she provided to the landlord to support her position that the resident should have an Assured Tenancy. The landlord has not confirmed that it received these documents. Had it done so, it missed an opportunity to confirm its interpretation and the relevance of documents. Regardless of whether it received the documents, it did not respond to the representative’s further requests for it to review the issue of the resident’s tenancy status.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure by the landlord.

Reasons

From the onset, within her completed application form, the resident contended that she should retain her lifetime Assured Tenancy. However, the landlord at no point clarified in writing that she would not retain her Assured Tenancy or be granted a new one, or the reasons why. In fact, there is no evidence that the landlord even made explicit that the exchange property had an Affordable Rent.
The landlord had further opportunity to explain the resident’s tenancy situation after the resident wrote further several times after the Stage 2 response. The landlord by not engaging with the resident further, for instance meeting with her as requested, did not sufficiently follow the Dispute Resolution Principles and ultimately take the necessary steps to resolve the complaint.

Orders and recommendations

The Ombudsman orders that the landlord within the next four weeks:
1. Pays the resident £250 for the distress and inconvenience caused by the failings in its provision of information about tenancy changes during the mutual exchange process.
2. Considers the supporting documents the resident has provided and then explains whether or not they have any bearing on the resident’s current tenancy type. The landlord may consider meeting the resident and her representative in person before sending its response.
3. Provides the resident with a copy of the tenancy agreement.