One Housing Group (202003763)

REPORT

COMPLAINT 202003763

One Housing Group

14 January 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 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

This complaint is about the landlord’s administration of a compensation payment for damage caused to the resident’s property.

Background and summary of events

Background

The resident is an assured shorthold tenant and the tenancy commenced on 9 May 2016.
The tenancy agreement shows that rent is due weekly and ‘is due in advance on Monday of each week’. It obliges the resident ‘to pay rent weekly and in advance’.
The resident is entitled to Housing Benefit which is administered by the local authority. The resident signed a document at the beginning of her tenancy to allow Housing Benefit to be paid direct to her landlord and to ‘still pay any amount of rent that is not covered by Housing Benefit’.
The landlord has an Income Collection Policy that states that ‘Tenants are deemed to be in arrears when they have missed one weekly or monthly payment, depending on the frequency of payments.’
The landlord had a 1-stage complaints process at the time of the events relevant to this case – its Compensation & Other Payments Policy shows that it will aim to respond to a complaint within 15 working days of receipt (or 30 calendar days in complex cases).
The landlord has a Compensation & Other Payments Procedure that requires the landlord to:

‘issue tenants with a written confirmation of any compensation they are to receive’
‘obtain written and signed acceptance from a claimant before administering compensation’
‘check that no significant rent arrears exist before making payments to tenants’
check with the relevant Income Officer to determine if there are arrears on a rent account and then send an outcome letter and acceptance slip to the resident with a notification of the rent adjustment

The Compensation & Other Payments Procedure also has a specific section on ‘Rent Arrears’, stating:

‘Where the claimant is a tenant with arrears on their rent account, any compensation or payments to which they are entitled should be offset against their rent account. Exceptions to this are where the claimant is in receipt of Housing Benefit, the arrears are a small accumulation between set payment dates or if the payment is necessary for living costs e.g. temporary accommodation costs.’

The resident’s rent account statement shows that a monthly amount of Housing Benefit is paid to it approximately every 4 weeks. The resident has provided this Service with the content of an email she was sent by a Benefits Assessor stating:

‘I can confirm your Housing Benefit payments are paid four weekly in arrears to your landlord One Housing Group Limited. As the payments are paid four weekly the payments will be paid on a different date each month.’

Between December 2019 and March 2020, the Housing Benefit amount paid was £426.40 every 4 weeks. The total rent for 4 weeks for this period was £677.76 so the resident was required to make her own payments in addition to Housing Benefit awards. The resident’s rent account was effectively paid in arrears but she did have a nil balance on her account on occasions during February 2019 and March 2019.
The rent account statement shows that from May 2020, the landlord received a reduction in Housing Benefit being paid towards the rent – deductions of £95.00 appear to have been made on each occasion a Housing Benefit award was paid. By August 2020, the Housing Benefit received was only £223.62 for that 4-week period.
The resident continued to make her own payments to the rent account from May 2020 but the rent arrears increased, even after these payments were made, reaching £541.05 after she made a payment on 30 July 2020 and reaching £934.46 by mid-August 2020.

Summary of Events

The resident wrote to her MP on 28 June 2020 to explain that she had experienced a kitchen sink tap burst in her property on 26 June 2020 that had led to flooding in the kitchen and her to slip and fall. The resident noted that:

she had been visited by an emergency officer from the landlord who had switched off the electric and water mains which left her without use of the electrical appliances and damages were caused to them
the emergency officer had told her the burst was caused by the tap not being installed properly and the resident added that she believed the kitchen installation was not carried out to full safety standards
personal possessions had been damaged in the hallway too
her mental wellbeing had been impacted by this incident
she was seeking replacement of electrical equipment and compensation for items like her shoes and rug as well as compensation for the inconvenience this had caused

The landlord has provided copies of further correspondence exchanges between it and the resident where:

the resident submitted an email to the landlord on 29 July 2020, refusing a compensation offer of £400.00 and instead seeking an amount of £2329.00 to cover damaged items
the landlord wrote to the resident on 31 July 2020 to advise that it would be awarding £2329.00 compensation
the landlord issued a compensation acceptance slip on 3 August 2020 that the resident signed and dated 6 August 2020 – this form included a note that the resident accepts the landlord has a policy ‘to offset any compensation offered against any rent or service charge arrears current at the time of offer’

There are internal landlord emails from 17 August 2020 where officers sought to confirm the resident’s rent account arrears. These stood at £934.46 but officers found that for the most recent rent period 20 July 2020 to 16 August 2020, Housing Benefit of £223.62 had been paid. It calculated that the rent liability for this period was £696.04 and so the shortfall for the period was £472.42.
The rent account statement shows that the £472.42 offset was processed on 17 August 2020.
The landlord wrote to the resident on 19 August 2020 to advise that the amount being paid to her would be £1856.58 as there were £472.42 arrears on her rent account that would be settled.
The landlord has recorded a telephone conversation with the resident on 20 August 2020 where it noted the resident was distressed. The notes indicate that the landlord explained to the resident that she was not being paid full Housing Benefit and the payment was to cover the rent shortfall for the claim period 20 July 2020 to 16 August 2020.
The resident telephoned the landlord on 20 August 2020 which led to a complaint being logged. A record of the call was taken by the landlord where it stated that the resident had asked for the compensation payment to be stopped and for the full amount to be paid because the rent arrears were not the resident’s fault but were due to the timing of Housing Benefit payments. The landlord made further notes of the complaint on 21 August 2020 stating that:

the resident was dissatisfied that the full compensation award had not been received because £472.42 had been paid to arrears on the rent account
the resident had been telephoning the landlord to try to resolve the matter and that the arrears were due to different Housing Benefit amounts being paid to the rent account
the resident had a young daughter and was pregnant
kitchen appliances were out of use due to the ongoing repair issue and leak, so the resident had needed to spend money on takeaways and carry washing to be cleaned elsewhere
the resident was seeking payment of the £472.42 that had been offset plus an additional £700.00 payment for the additional stress this had caused her

The landlord has provided a copy of an email it sent to the local authority on 21 August 2020, asking for the current Housing Benefit award for the resident and whether there was an overpayment for that award or a previous one (the landlord has informed this Service that there was no reply to its email).
The landlord issued its complaint response to the resident on 8 September 2020. The landlord advised that:

it had considered the resident’s circumstances when processing the compensation and this is why it decided to offset only £472.42 against the resident’s rent account rather than the full balance of £934.46
it had informed the resident on 19 August 2020 that £1856.58 would be paid to the resident but ‘any arrears being offset as a final payment would be deducted’
it had spoken to the resident on 20 August 2020 to advise that part of the £2329.00 disrepair compensation would be offset against the £934.46 arrears and explained the reason for the arears accumulating (this was linked to an overpayment of Housing Benefit)
the resident was informed of the policy to offset against rent arrears on the compensation form she had signed and referred to the tenancy agreement, quoting that ‘payment of weekly rent is due in advance on Monday of each week’
it would therefore not be reimbursing the £472.42 that had been offset nor paying an additional £700.00
its communication regarding the rent account could have been better and an apology was offered
there were fluctuations in Housing Benefit awards that meant during the week commencing 17 August 2020, the shortfall was £472.42 and by the week commencing 7 September 2020, the arrears were £830.57
the complaint was not upheld but an apology was offered for the problems the resident had encountered with repairs

The resident’s MP raised her case with the landlord on 15 September 2020, asking the landlord to liaise with the local authority and to establish that the resident had paid her rent in full. The MP raised concerns that a deduction was being made from a compensation award that was to cover the resident’s damages.
The landlord wrote to the MP on 28 September 2020. It confirmed it had offset compensation against the Housing Benefit underpayment of £472.42 and provided a copy of its previous complaint response (paragraph 20).

Assessment and findings

The level of compensation awarded for the burst tap incident and damages caused as a result has not been investigated by this Service. Based on the evidence provided to this Service, this matter has not been considered through the landlord’s complaints process so this would not be within the jurisdiction of the Ombudsman.
However, it is relevant that the landlord has failed to explain whether any part of the £2329.00 compensation award was intended to reflect the inconvenience and distress the resident complained of or whether it was solely to reflect the losses that the resident incurred. The Ombudsman’s Guidance on Remedies advises landlords that it would not expect them to offset compensation against rent arrears where the compensation is in recognition of ‘out of pocket’ expenses. The Ombudsman would therefore have expected the landlord to have offered a breakdown of what the £2329.00 compensation was in recognition of and made a decision accordingly on whether an offset against rent arrears was fair in the circumstances – it was unreasonable that the landlord has failed to demonstrate that it considered this.
The landlord made its decision that compensation was warranted on 31 July 2020. Before processing the compensation payment, it checked the resident’s rent account for arrears – this was in accordance with the landlord’s Compensation & Other Payments Policy and Compensation & Other Payments Procedure.
On reviewing the rent account, the landlord determined that it was in arrears. Based on the evidence this Service has seen (paragraphs 9-11) and the requirement within the tenancy agreement to pay rent weekly and in advance, this decision was reasonable.
The landlord’s procedures state that compensation should be offset against the rent account where there are arrears but there is an exception ‘where the claimant is in receipt of Housing Benefit’. The landlord was aware the resident was in receipt of Housing Benefit – it was therefore inappropriate for the landlord to offset the compensation against the rent account arrears. If there was a reason why it decided to act contrary to its procedures, the landlord should have recorded why this was and offered an explanation to the resident but it has not done so.
The landlord issued the compensation acceptance slip on 3 August 2020, arranged the rent account offset on 17 August 2020 and then wrote to the resident on 19 August 2020 to advise of the revised compensation award that would be paid to her. This was not in accordance with its compensation procedure – the procedure requires it to check the rent account before sending an outcome letter and acceptance slip to the resident. The landlord’s actions were therefore inappropriate as the landlord did not act according to its own procedure and the landlord lost the opportunity to advise the resident of the revised compensation figure at the time of issuing the compensation acceptance slip; instead, the resident was only advised of the revised compensation figure once the offset had already been processed.

Determination

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure in the landlord’s administration of a compensation payment for damage caused to the resident’s property.

Reasons

The landlord offset a compensation award against the resident’s rent account when she was in receipt of Housing Benefit (contrary to its own procedures) and when this was award was in recognition of the resident’s damaged possessions.

Orders

The landlord to pay compensation of £200.00 in respect of the inconvenience and distress caused by the service failure identified in this report (in addition to the £1856.58 if it has not already paid this).
The landlord to write to the resident to apologise for the service failures identified in this report.

The landlord should confirm compliance with these orders within 4 weeks of the date of this report.

Recommendations

The landlord to review its compensation procedures to ensure that they are clear on how offsetting of compensation should be processed in cases where residents are in receipt of Housing Benefit. All relevant staff should be made aware of these procedures.