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Haringey Council (202005882)

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REPORT

COMPLAINT 202005882

Haringey Council

9 March 2021


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 concerns the landlord’s administration of the resident’s rent account.

Background and summary of events

  1. The resident is a secure tenant of the landlord, which is a local authority. The property is a flat in a communal building.
  2. On 28 October 2019 the resident wrote to the landlord regarding a letter she had received dated 21 October 2019 concerning rent arrears of £35.50. She informed the landlord that she had made a payment over the telephone on the morning of 21 October 2019 of £36.14 and therefore did not understand how she could be in arrears.
  3. The landlord replied to the resident on 1 November 2019. It informed her that the rent was due weekly on Mondays and that when the rent becomes due, her account will go into arrears until it receives a payment from her. It further informed her that if she made a one-off payment of £18.07 along with her regular rent payment of £36.14, her rent account would then be up to date and reminder letters would no longer be auto-generated.
  4. The resident replied to the landlord on 2 November 2019 and disputed that her rent account could be in arrears as she had regularly paid her rent fortnightly. Following a telephone call between the resident and the landlord on 7 November 2019, the resident wrote again and queried whether payments made in March 2019 and May 2019 had been correctly recorded on her rent account.
  5. The landlord wrote to the resident on 8 November 2019. It provided two statements with its email, one relating to the rent account and one relating to water account payments. It requested to call the resident to discuss her accounts in detail and the reasons why her rent account had gone into arrears. The landlord and resident spoke that afternoon and the landlord then wrote a second email summarising the telephone call. It informed the resident that:
    1. It apologised for the distress that this situation had caused her.
    2. Her rent account originally fell into arrears when £41.53 was automatically transferred from her rent account to her water rates account on 16 July 2018. This should not have been done without first discussing it with her.
    3. To resolve the issue, the landlord had approved a payment to be made to the rent account to bring it into credit without affecting the water rates account. It would contact the resident when this had been completed.
    4. It thanked the resident for her suggestions on how it could improve its telephone payments service, and informed her that it had passed her comments on to its finance team.
    5. It noted the comments made by the resident regarding the difficulty in making rent payments. It provided the contact details of its financial hardship team and advised her that they could offer help with managing her income and identifying any benefits or grants that she may be eligible for.
  6. On 3 December 2019 the landlord wrote to the resident and informed her that a £25 credit had been applied to her rent account which would mean the account would now remain in credit when the resident made payments. The landlord also informed the resident that its finance team reacted positively to her suggestion, and that it was looking to incorporate changes in a planned update to its payment system.
  7. The resident replied to the landlord on 4 November 2019 and expressed her confusion that a £25 payment had been made to her rent account when its previous email had highlighted a £41.53 discrepancy.
  8. The landlord wrote to the resident on 13 December 2019 and explained that the £41.53 figure was a payment transferred from her rent account to her water rates account. The £25 figure was a payment made to clear the arrears on her rent account and made in recognition that it should not have made the transfer without first informing the resident. The landlord also informed the resident that it was happy to discuss this in more detail via a telephone call.
  9. On 14 December 2019 the resident wrote the landlord and requested to raise a formal complaint. She stated her dissatisfaction with how her rent account had been handled by the landlord and requested compensation for the distress and inconvenience that this issue had caused her.
  10. The landlord acknowledged the complaint on 16 December 2019 and sent a stage one complaint response to the resident on 24 December 2019.It informed her that:
    1. Up to April 2016, the landlord’s residents had a single account for both rent and water rates. From April 2016 a sperate water rates account was set up and payments received were split between the two accounts. The rent account was credited first, then the water rates account. The landlord sent a letter to all residents informing them of this new approach.
    2. In April 2016 the resident’s weekly rent was £129.72 and water rates £11.77. After benefits, the resident was required to pay £29.93. The landlord automatically took the portion for water charges and credited it to the water rates account. On April 2017 the rent changed to £128.47 per week and water rates to £11.79, with the resident liable for £29.78 after benefits. In April 2018 the rent remained at £128.47 and the water rates increased to £12.07, with the resident liable for £30.10 after benefits. A payment appeared to have been missed on 8 January 2018.
    3. On 16 July 2018, on receipt of the resident’s fortnightly payment of £60.20, £43.53 was credited to the water rates account. This cleared the water rates account but left the rent account in arrears. From that point onwards, when the resident made her fortnightly payment, the rent account was left 64p in credit, but went £17.43 into arrears on the weeks between the payments.
    4. On April 2019 the weekly rent changed to £129.09 per week and the water rates were no longer collected by the landlord. After benefits, the resident was liable for £18.07 which was paid £36.14 fortnightly. The rent account continued to be 64p in credit following the resident’s payment and £17.43 in arrears in the weeks between payments.
    5. Its failure to inform the resident of the water rates payment on 16 July 2018 was “not acceptable” and as a result it had made a compensation payment of £25 credited to the rent account to ensure that it remained in credit while the resident made payments.
    6. In examining the rent account, it had identified that the adjustment made in July 2018 and a missing payment from 15 January 2018 had caused the rent account to go into arrears (it is not clear if this missed payment date was an error, and the landlord was actually referring to the payment it said had been missed on 8 January 2018, or if this was a second missed payment). The landlord provided rent statements from January 1997 to December 2020 and highlighted the relevant payments. It also offered to discuss the matter in more detail with the resident via a telephone call or at its housing office.
  11. The landlord explained that it had partially upheld the complaint, as the missing 15 January 2018 payment had not been previously identified, and it should have done more to resolve her concerns when she first made it aware of the issue.
  12. On 6 February 2020 the resident wrote to the landlord and requested to escalate the complaint to stage two. She described the grounds of her request as:
    1. The stage one response did not properly explain the discrepancies of her rent account.
    2. She disputed that the payment from 15 January 2018 was missing and noted that she had made payments on 29 December 2017 and 15 January 2018. She also queried the two dates given for the missing payment (8 and 15 January).
    3. The landlord did not address her claim for compensation.
    4. A payment she made on 30 January 2018 was not recorded on the rent statements provided by the landlord.
    5. The £41.53 taken from her rent account had not been transferred back.
    6. The reason why her rent account repeatedly went into arrears of £17.43 was due to a processing error and that this needed to be investigated by the landlord.
    7. She overpaid her rent by £29.44 on 15 February 2018 and wanted to know what happened to this overpayment.
    8. She believed that she had been paying excess rent due to a computer error on her rent and water accounts.
  13. As a resolution to the complaint the resident requested that the landlord corrected the overpayments of rent, removed the £17.43 processing payments, provided a correct rent account statement, perform a full audit of her rent account, and to  award compensation for the stress and inconvenience this matter had caused her and for the poor service she had received from the landlord.
  14. The landlord sent a stage two complaint response to the resident on 23 March 2020. It informed her that:
    1. It was satisfied with its investigation of the rent account undertaken at stage one, which went back to 1997.
    2. It was further satisfied that the compensation payment credited to the rent account was in line with its policies and procedures.
    3. It was unable to have its auditor examine her rent account, as the auditors were contracted to only provide internal reports. It, however, assured her that it “usually gets a substantial assurances response [from the auditor] which suggests that the [rent] accounts are properly managed”.
  15. The landlord concluded the response by informing the resident that she had now exhausted its internal complaints process and advised her on the steps to take to bring her complaint to this Service should she remained dissatisfied.

Assessment

  1. The resident contacted the landlord as she did not believe that her rent account should be in arrears and that she should not be receiving reminder letters. Following further correspondence over the matter, the resident raised a complaint.
  2. On receipt of the complaint, the landlord undertook a full investigation of the resident’s rent account and sent a stage one complaint response. It went into detail on what rent and water rate payments had been liable on the account and how these were paid by the resident. It highlighted two historical issues that had caused the rent account to go into arrears: that £43.53 of her rent payment on 16 April 2018 was credited to the water rates account and a missing payment from 15 January 2018.
  3. The landlord apologised to the resident and accepted that it should have contacted her at the time of the 16 April 2018 adjustment. In recognition of this, it credited £25 to the resident’s rent account, which would keep the account in credit even if the resident continued to pay her rent fortnightly.
  4. With one important exception, the landlord acted appropriately in response to the resident’s rent account queries. It provided detailed answers on how the rent account had been organised, and the payments it had received. It explained why the rent account went into arrears and made a compensation payment to the account to clear them. It apologised to the resident for the distress of receiving arrears reminder letters, and offered advice and support through its financial hardship team after she informed it of her struggle to meet rent payments.
  5. The landlord’s compensation payment corrected the balance of the account and put it back into credit. This redress was reasonable because it resolved the main issue of the complaint as the account would no longer be in arrears, and reminder letters would not be generated while the resident continued to make fortnightly payments.
  6. The apology was reasonable as it recognised the distress caused to the resident on receipt of arrears reminder letters despite making regular rent payments. The landlord responded to the resident’s queries in a timely manner, provided detailed answers to her questions, and offered to provide additional support through its financial hardship team. Overall, most the actions the landlord took in response to the resident’s concerns and complaints were reasonable and proportionate.
  7. However, the exception referred to in paragraph 20 relates to the resident’s request to escalate her complaint. In her request she referred to and asked for further clarification about some of the payments she had made, including ones which she said she had evidence for. She also queried the landlord’s possible error with the dates of a missing payment in January 2018. The matters of this complaint are understandably complex and lengthy, and, while the landlord had provided well-reasoned explanations, it was almost inevitable that they could raise further issues needing clarification. The landlord should have used its stage two complaint response to address the residents final rent account queries, because they were relevant to the overall issue, and would have provided further clarity. It did not do so, instead referring her back to its stage one explanation. That was a service failure.

Determination (decision)

  1. In accordance with paragraph 54 of the Scheme, there was service failure in the landlord’s handling of the resident’s rent account. 

Orders

  1. In light of the service failure identified in this report the landlord is ordered to:
    1. Respond to the queries raised by the resident in her letter of 6 February 2020 — specifically those in relation to her queries about payments, deductions, and transfers to and from her rent and water accounts. This response should be provided within eight weeks of the date of this report. A copy should also be provided to this Service.
    2. Pay the resident compensation of £150. This payment must be made within four weeks of the date of this report. The landlord should update this Service when payment has been made.