Hammersmith and Fulham Council (202305491)

REPORT

COMPLAINT 202305491

Hammersmith and Fulham Council

18 April 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:
1. The landlord’s administration of the resident’s rent account and the build-up of rent arrears.

Background

The resident has a secure tenancy, created following a deed of assignment. The property is a 1-bedroom flat. The housing records confirm the resident has autism and suffers from depression and anxiety. The resident told this Service he also has learning difficulties and this affects his ability to manage his financial affairs.
The resident asked the landlord to set up a new direct debit mandate on 13 December 2022 via his online account. He did this because he wanted his rent payments to come out on a different date. He also asked his bank to cancel the existing direct debit mandate. The landlord made an amendment to his direct debit mandate on the same day but was notified on 14 December 2022 that it had been cancelled by the resident’s bank.
The landlord sent the resident an arrears letter on 31 January 2023. It said the rent account was £224 in arrears. It asked the resident to clear the arrears immediately or to make contact to agree a repayment plan. Further contact was made on 23 February 2023 via email. It asked the resident to make contact to discuss the rent arrears and noted his direct debit had been cancelled. No response was received from the resident. It made an application to the department of work and pensions (DWP) on 17 March 2023 for his rent to be paid directly to the landlord.
The resident contacted the landlord on 21 March 2023 after being notified by the DWP that his rent was being paid directly to it. He said he was unaware his rent had not been paid since January 2023 and his account was in arrears. He agreed to set up a standing order to pay £20 off the arrears each month, starting on 13 April 2023. The landlord confirmed the agreement in writing on the same day. The resident made the payment on the agreed date.
The landlord asked the DWP for a third-party payment to be taken out of the resident’s universal credit (UC) account on 6 April 2023 to cover the arrears. The resident contacted the landlord on 26 April 2023 and asked why money was being deducted from his UC payment for the rent arrears given he had agreed to set up a standing order. He said £60 had been taken out of his UC payment and he had no money to live off.
The resident told the landlord on 12 May 2022 that the DWP had made a further deduction of £60 from his UC payment to cover the arrears. He said he wanted it to be cancelled and asked for the money to be refunded. The landlord said it could not do this. It told the resident on 15 May 2022 that it could not write off the arrears. It said it ‘‘refused to believe the resident was not aware the direct debit had been cancelled and the money should be in his account to clear the arrears.’’ It asked the DWP to stop the third-party deductions on the same day.
The resident made a complaint on 15 May 2023. He said:
1. He submitted a direct debit request on 13 December 2022.
2. He was not told until 21 March 2023 that the direct debit had been cancelled and arrears had built up on the account.
3. £60 was directly taken out of his UC payment in April 2023 for the rent arrears. A further £60 was deducted in May 2023, despite the landlord agreeing to ask the DWP to stop the deductions.
4. He had learning difficulties and found it difficult managing money.
5. He wanted the landlord to write off the arrears. This was because it had caused the arrears. He said he found the situation stressful and as a vulnerable adult, he needed financial support.
The landlord served a notice of seeking possession on 17 May 2023. It also sent a reminder to the DWP on the same day requesting the third-party payment deductions were stopped.
The landlord issued its stage 1 complaint response on 31 May 2023. The complaint was partially upheld. It said:
1. It amended the resident’s direct debit mandate on 13 December 2022, but received notification from the resident’s bank on 14 December 2022 that it had been cancelled. This was on the instruction of the resident.
2. It contacted the resident on 23 February 2023, 3 March 2023 and 17 March 2023 about the arrears and the cancelled direct debit but received no response.
3. It made an application to the DWP on 17 March 2023 for the resident’s rent to be paid directly to the landlord.
4. A repayment plan was agreed with the resident to clear the arrears on 21 March 2023.
5. It asked the DWP for a third-party payment arrangement to be set up to cover the arrears on 6 April 2023. It asked for the arrangement to be cancelled on 15 May 2022 at the resident’s request.
6. A notice of seeking possession was served on 17 May 2023.
7. It should have contacted the resident when the direct debit was cancelled and before it applied for the third-party payment.
8. It could not write off the rent arrears. This was because the resident had asked for the direct debit to be cancelled. It said it could make a referral to its welfare benefits team if the resident was struggling financially.
The resident contacted the landlord on 1 June 2023 and asked for his complaint to be escalated.
A councillor contacted the landlord on 27 June 2023 and said the resident was having problems with his rent account and arrears were building up on his account. The landlord advised the councillor that there was a dispute about how the direct debit was cancelled and noted that no payments were received between January 2023 and April 2023. It also said the resident had not notified the landlord that he had changed his email address and no longer had a mobile phone. It confirmed no further action would be taken if the resident maintained his rent and arrears payments. The resident told the councillor on 27 June 2023 that he had not changed his email address but had failed to tell the landlord his new mobile number. He also said the landlord had accused him of lying and there would have been no arrears if it had sorted out the direct debit.
The landlord issued its final complaint response on 28 June 2023. It said it supported the findings made in the stage 1 complaint response and partially upheld the resident’s complaint. It also said:
1. It changed the direct debit date on the day the resident made the request.
2. The bank cancelled the existing direct debit on the resident’s instruction and told the landlord to do the same. The landlord was duty bound to do this under the terms and conditions of BACS.
3. It should have contacted the resident when the direct debit was cancelled.
4. The application for a third-party payment was set up in error and without informing the resident. A manageable payment plan had been put in place to clear the debt.
5. It was unable to clear the arrears but would offer £50 compensation for the time and inconvenience caused.
6. A new procedure had been introduced to notify residents following a request to cancel a direct debit.
The resident’s complaint was accepted by this Service on 26 February 2024. He said the landlord did not notify him the direct debit was cancelled and there were arrears on his account. He also said it did not keep to the repayment plan and arranged for money to be deducted from his UC payment. He said he changed both his email address and phone number before the arrears started to build up on the account. He wanted the landlord to write off the arrears and to offer an apology for the mistakes it made. The resident believed the landlord discriminated against him because of his disabilities.

Assessment and findings

Scope of the investigation

In considering the landlord’s response to the complaint, it is noted that the resident has referred to a possible impact upon his mental health. Whilst these concerns have been referenced in this report, it should be noted that the Ombudsman is not in a position to make findings about the possible impact of the issues under investigation on a resident’s mental health, as this would be more appropriate for a court to consider. In this respect, the resident is advised to seek legal advice if he wishes to take his concerns further.

The landlord’s administration of the resident’s rent account and the build-up of rent arrears.

It was appropriate for the landlord to amend the resident’s direct debit mandate on receipt of his request. There is, however, no evidence it took any action after being notified by his bank that the direct debit mandate had been cancelled. This was not appropriate or in accordance with the landlord’s rent income recovery policy. This says it will act quickly to prevent arrears from occurring and offer early support to residents. The landlord’s failure to notify the resident led to the build-up of arrears.
It was appropriate for the landlord to contact the resident on 31 January 2023 given the arrears were escalating. It was also appropriate for it to ask him to clear the arrears or make contact to agree a repayment plan. This was in accordance with its rent income recovery policy. This says it will ensure residents are made aware of their debts at an early stage and given the opportunity to come to an arrangement to clear the arrears. Given the landlord was not aware the resident had changed his email address and telephone number, it was reasonable for it to assume he received the letter.
The landlord contacted the resident again on 23February 2023 but again received no response. No evidence was provided to this Service confirming the landlord contacted the resident on 3 March 2023 and 17 March 2023. It made an application to the DWP for the resident’s rent to be paid directly from his UC payments on 17March 2023. This was in accordance with the landlord’s rent income recovery policy. This says it will request alternative payment arrangements and direct deductions where there are high rent arrears, a history of debt or other vulnerabilities.
The housing records confirm the resident was told on 21 March 2023 that his direct debit mandate had been cancelled and arrears had built up on the rent account. It was appropriate for the landlord to agree a repayment plan with the resident. This was in accordance with its rent income recovery policy. It was reasonable for the landlord to confirm the agreement in writing. There is no evidence it made a referral to its welfare benefits team for debt and welfare benefits advice. Its rent income recovery policy says it will do this. The resident set up a standing order as agreed, with the first payment posted onto his rent account on 13 April 2023.
The landlord asked the DWP on 6 April 2023 to make direct deductions from the resident’s UC payments to cover the arrears. It did this even though a repayment plan had been previously agreed with him. The resident said this led to him experiencing stress and financial hardship. It was reasonable for the landlord to ask the DWP to cancel the request on 15 May 2023. This demonstrated it wanted to put things right for the resident. The landlord also confirmed it could not write off the rent arrears. This was in accordance with its financial regulations. These say debts should only be written off once all reasonable steps have been exhausted and where they are considered uneconomical to pursue.
The email sent on 15 May 2023 was accusatory in nature and implied the resident knew the direct debit had been cancelled and the money was still in his bank account. These comments were not appropriate and failed to take account of the resident’s disabilities or how they affected his ability to manage his financial affairs. This meant the landlord did not give regard to its duties under the Equality Act, 2010. The comments also failed to take account of the fact that the resident was cooperating with the landlord and wanted to resolve the issue.
The housing records confirm the landlord served a notice of seeking possession on 17 May 2023. It said it did this because of the high level of arrears and to ‘‘protect the landlord’s interest.’’ Given the resident’s rent was being paid directly to the landlord and he had set up a standing order to pay off the arrears, this course of action was heavy handed and not appropriate. The landlord knew the resident was vulnerable and struggled to manage his financial affairs. Its actions were also not in accordance with its rent income recovery policy. This says it will serve a notice of seeking possession if a resident does not take steps to reduce the arrears or enter into an agreement to reduce the arrears gradually.
It was reasonable for the landlord to send a reminder to the DWP on 17 May 2023, reminding them to cancel the third-party deduction arrangements which covered the arrears. Despite doing this, further deductions were made by the DWP in June 2023. The landlord cannot be held responsible for this.
It was appropriate for the landlord to acknowledge the mistakes it made in its complaint responses. This included noting that it should have contacted the resident when the direct debit mandate was cancelled and before applying for the third-party deductions. It was also appropriate for the landlord to amend its procedures in light of the learning it identified. It also said it could make a referral to its welfare benefits team. This was in accordance with its rent income recovery policy.
In summary, the landlord failed to notify the resident that his direct debit mandate had been cancelled and did not notify him that it had made a request for third party payments even though he had set up a standing order. This caused the resident distress and financial hardship. The accusatory nature of the email sent on 15 May 2023 and the serving of the notice of intention to seek possession also damaged the landlord’s relationship with the resident and it failed to take account of his disabilities. Although it acknowledged the mistakes it made in its complaint responses, identified learning and applied this, its offer of £50 compensation was not sufficient to put things right. Given these findings, there was maladministration by the landlord in its administration of the resident’s rent account and the build-up of rent arrears.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its administration of the resident’s rent account and the build-up of rent arrears.

Orders

Within four weeks of the date of this report, the landlord is ordered to offer an apology to the resident for the failings set out in this report.
Within four weeks of the date of this report, the landlord is ordered to pay the resident £250. This must be paid directly to the resident and made up as follows:
1. £200 for the distress and inconvenience caused to the resident for the failure to administer his rent account and the build-up of rent arrears.
2. £50 previously offered to the resident, if not already paid.
Within twelve weeks of the date of this report, the landlord is ordered to review its training arrangements for relevant staff to ensure it meets its obligations under the Equality Act, 2010.