Landlords can now complete the Complaint Handling Code Annual Submissions form. More information is available online.

Clarion Housing Association Limited (202119286)

Back to Top

 

REPORT

COMPLAINT 202119286

Clarion Housing Association Limited

21 November 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

  1. The level of compensation offered by the landlord in recognition of acknowledged service failures relating to its administration of the resident’s service charge account.

Background

  1. The resident has been a leaseholder of the landlord, at the property, from 12 October 2015. The property is a house.
  2. The resident originally complained to the landlord that she had been charged for a sinking fund which she was not part of and did not need because her property was a house. The landlord’s investigation found that it had indeed erroneously charged the resident for a sinking fund since 2015, because her property was listed as a flat, rather than a house, in error. The landlord said it would update its system to reflect the correct property type to prevent the error from reoccurring and refunded the monies into the resident’s service charge account, dating back to 2015 when the error started.
  3. The landlord also offered the resident compensation for the fact that she had had to chase the landlord about the issue, seeking correction of a mistake and also in recognition of its delayed response to the complaint. In terms of compensation amount, in the body of its June 2021 complaints letter, the landlord referred to awarding “£650” compensation but in the table set out directly underneath, it broke this down as £100 and £50 respectively, totally £150.  This left ambiguity as to compensation amount.
  4. A further error by the landlord meant that the compensation was not processed, which led to the resident chasing this.  When she contacted the landlord about the issue, she was advised that the compensation amount was actually £150 and not £650, as it had initially detailed.  The resident then submitted a complaint about delay of the compensation payment and the amount.
  5. The landlord explained that the £650 had been an administrative error and offered a further £150 compensation (to the original £150 which was also referred to as being £650 in the same letter), bringing the total compensation to £300.  This was comprised of the corrected level of compensation for the prior complaint (£150), for repeatedly having to chase responses for the offered compensation (£50), for misdirection in giving incorrect information for the offered compensation (£50) and for the impact experienced, including distress and inconvenience and time and trouble (£50). It apologised that it had not processed the payment, which was due to human error in not starting a compensation process and advised that feedback had been given to staff to prevent a recurrence of the issues.
  6. The resident remains dissatisfied with the compensation amount, which she believes is insufficient given the failings and impact.

Assessment

Scope of Investigation

  1. In her correspondence with this Service, the resident detailed her desired outcome relating to the level of compensation, she also requested that the Ombudsman take steps to ensure that the landlord no longer included the sinking fund payment on her annual service charge statement and that it reimburse charges erroneously levied over previous years. These further issues have not been investigated further here as it is evident from landlord correspondence post dating the complaints process under investigation that these issues have been resolved. This includes a February 2022 service charge statement that does not include a sinking fund charge.

Level of compensation for acknowledged service failures

  1. The landlord’s typographical error, stating that the compensation amount was to be £650 rather than £150 in the body of the letter was unfortunate and it gave rise, in that moment, to a reasonable expectation that this was the amount awarded. Given the landlord’s error in charging the resident for a sinking fund since 2015, £650 in recognition of this, whilst particularly generous, would not necessarily be considered to be significantly disproportionate.
  2. However, there was also a breakdown of the compensation directly underneath the £650, stating that the total compensation amount was £150 and it separated this amount out to comprise of £100 for the resident having to chase the landlord as to the issue and seek to get a mistake rectified and £50 for a delayed complaint response at this stage. The discrepancy between the total amount of £650 and £150 was therefore in plain sight and the amount could reasonably have been either.  The £150 had been specifically broken down, however, whereas the £650 had not, which indicates a leaning to that amount.
  3. Compensation, whilst an important and effective remedy in resolving some complaints, is not the only way to do so and is also not an automatic right in circumstances where mistakes have been made such as the administrative errors in this case, irrespective of any impact.  It would be reasonable for the landlord to offer compensation given the significance of the error and its impact over time, which it appropriately did, but it would not be obliged to do this.
  4. The landlord’s compensation policy states that awards of up to £250 may be made in instances of service failure resulting in some impact on the complainant, whereas awards of between £250 to £700, may be for cases where considerable failure is found, although there may be no permanent impact on the complainant.  This reflects the Ombudsman’s published ‘Guidance on Remedies’; compensation offers of more than £250 reflect maladministration rather than service failure and are most suitable for complaints at the serious end of the scale.
  5. The £150 offered by the landlord was an appropriate amount. It was appropriate because it reflected that there had been an error made which amounted to service failure which had some impact on the resident. Although the landlord did also state the compensation amount was £650 in the body of this same complaint letter, it was clear there was a discrepancy and one of the amounts was incorrect.  Given that it was the £150 that was broken down, it would have been reasonable to assume that it was this amount that was awarded rather than the higher figure of £650.
  6. The additional £150 offered by the landlord to reflect the error in its prior complaint response -which created an expectation of a higher amount of compensation – as well as the delay in processing the compensation, leading to the resident chasing and the associated distress and inconvenience and time and trouble, was a further appropriate compensation amount to offer.  This brings the total compensation amount to £300, which goes beyond what the Ombudsman would expect in recognition of service failure and into the category of what might be considered an appropriate amount for maladministration.
  7. Whilst the error made by the landlord, did have an impact on the resident, this was rectified by the landlord refunding the monies and later, changing the system to stop the issue from happening again.  Feedback was provided to staff and a total of £300 compensation has been appropriately offered to further make up for what happened.
  8. The landlord lacked empathy in its complaints responses, missing opportunities to acknowledge its role in causing the resident unnecessary distress – it had been a stressful time for the resident and she has described to this Service that the issue was compounded by personal struggles at that time – however, taking all of the circumstances of the complaint into account, it has provided reasonable redress in the Ombudsman’s opinion. The total amount of compensation offered equates to a figure the Ombudsman considers reasonable for cases involving multiple service failures over a protracted period.
  9. In the interests of improving the landlord/tenant relationship, and in order to provide the resident with reassurance and clarity, a recommendation has been included below for the landlord to write to the resident, apologising for its role in causing the resident distress and inconvenience over an extended period. This letter will also detail the amounts overpaid by the resident over the years in relation to the sinking fund and to confirm how and when these overpaid amounts were reimbursed to her. It is appreciated that the landlord provided similar information back in 2020, however, sending an updated statement will provide the resident with added clarity and reassurance about any further issues that occurred from that date onwards.

Determination

  1. In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, there was reasonable redress by the landlord in respect of the complaint.

Recommendations

  1. If not already done so, the landlord to pay the resident the total of £300 compensation that it offered to her.
  2. The landlord to write to the resident, clarifying the exact amounts she overpaid whilst the sinking fund charge was erroneously added to her annual service charge and confirming how and when these monies were reimbursed. This letter to also include an apology for the impact these issues had on the resident.