Southern Housing Group Limited (202206524)

A picture containing logo

Description automatically generated

REPORT

COMPLAINT 202206524

Southern Housing Group Limited

28 April 2023

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 response to the resident’s reports of hot water loss.
The Ombudsman has also considered the landlord’s complaint handling.

Background and summary of events

Background

The resident moved into the property on 4 March 2019 under an assured shorthold tenancy.
The property is a two bedroom flat, which is part of a block that is served by a communal heating and hot water system. The freeholder of the block is a private developer from which the landlord leases a number of the units. The block is managed by an External Managing Agent (‘EMA’), which has a contractual relationship with the freeholder to service and maintain the block’s communal services, which includes the heating and hot water.

Policies & Procedures

The Landlord and Tenant Act 1985 sets out a landlord’s obligation to keep in repair and proper working order installations for space heating and heating water. This is reflected in the resident’s tenancy agreement and the landlord’s Repairs Policy, which state that the landlord is responsible for keeping in good repair and working order any installations it provides for space heating, water heating and sanitation and installations for the supply of water, gas and electricity.
The landlord’s Repairs Policy states that the landlord will deal with emergency repairs within 24 hours, and this includes loss of heating or hot water between 31 October and 1 May. The landlord aims to complete all other repairs as quickly as possible, and at a time that suits the resident. With regard to communal repairs, it states that it does not directly manage some of the schemes and estates in which it has properties. Where this is the case, a managing agent arranges contracts and provides services in the communal areas. The landlord states it will endeavour to communicate and work closely with the agent to ensure residents receive a satisfactory service.
The landlord has a Compensation Policy where, for loss of hot water, the landlord will pay the resident £10 + £2 per day, starting two days after the defect is reported, until hot water is reinstated. However, this applies only when there is no other method of providing hot water within the property. For poor service, including failure to follow its procedures, the landlord will pay the resident £25, and for multiple service failures and unquantifiable loss, it will pay between £25 and £50. The landlord also provides discretionary payments in recognition that every case is different, and to take into account the severity of the issue. It states there is no limit in terms of the amount that can be paid, but that the payment must be agreed by a senior manager.
The landlord has a two stage complaints process. It acknowledges stage one complaints within three working days and aims to send a response within 10 working days. If the landlord is unable to respond within this time, it can request an extension of an additional 10 working days.
The second stage of the process offers the resident three different options. A compensation review takes place when the resident is unhappy with the level of compensation the landlord has offered. A complaint review panel is held when the resident is unhappy with the outcome of a stage one response and where the landlord has not offered any redress. A senior management review can be requested for all cases unless the issue is about an increase in compensation. The policy states that the landlord’s decision on the most appropriate option is based on the resident’s desired outcome, along with the outcome of the stage one complaint.

Summary of events

In 2019, while the EMA was upgrading the communal boiler system, the landlord installed hot water cylinders, with immersion heaters, to the flats in the block. This was to ensure that residents continued to have an uninterrupted hot water supply.
The resident called the landlord on 25 March 2021 to report he was having problems getting hot water. He said that an engineer had told him not to switch off the immersion heater but this resulted in an increase in his bills from £50 to £110 per month. He asked the landlord if it could address the issue with the communal boiler so he did not have to use the immersion heater. He added that, once this was fixed, he would be claiming compensation for the additional cost on his electricity bill.
On 8 April 2021, the resident contacted the heating contractor to report that he was relying on his booster switch (immersion heater) to get hot water and, as a result, his energy bills had significantly increased. He stated he wanted to be reimbursed for the additional cost and was happy to provide copies of bills to show the increase. The contractor replied on the same day to say it would not reimburse the resident for using a booster switch and that the EMA was working through the flats to get the problem resolved as soon as possible.
The resident called the landlord on 18 April 2021 to raise a stage one complaint and stated the following:
1. He had been having problems with his hot water since April 2019, where it would cut out after 10 minutes.
2. He was receiving mixed messages from the landlord, who advised him it was a communal issue that had been fixed and then at the same time telling him various parts need to be replaced, including the boiler.
3. His electricity bill had increased from £30 to £110 a month because he was having to use his booster switch.
4. He had been told there may be an issue with the sensor, and that a new one was on order.
5. He was growing increasingly frustrated because he felt he was just being passed around and that nobody was taking responsibility.
6. He wanted compensation for the higher electric bills and for the amount of time it was taking for the hot water issue to be resolved.
The landlord acknowledged the resident’s stage one complaint on 20 April 2021 and the resident telephoned the landlord on 27 April 2021 for an update on the hot water issue. He felt the landlord was not taking the matter seriously and said the heating contractor was not doing anything. The landlord could not clarify whether this was a communal issue or if it only affected the resident’s property but told him it would ask the contractor to contact him about the repair, and keep him updated.
On 4 May 2021, the landlord tried to contact the resident and left a text message regarding a joint visit itwanted to make with the EMA to discuss the ongoing hot water issue.
The landlord sent the resident its stage one response on 17 May 2021, which stated the following:
1. The landlord was aware the resident was having issues with the amount of hot water he was getting and that this was due to the hot water system, which was originally designed to only provide hot water in the mornings and afternoons.
2. If residents used all the hot water, they needed to turn on the immersion booster switch while the communal boiler was not providing hot water.
3. During this time, there had been confusion about the nature of the work that was being done on the boiler and how residents would receive hot water.
4. It acknowledged that, following work to replace the hot water cylinder, the booster had been on constantly. This had resulted in higher electricity bills, but the resident’s flat was on the list to be re-wired so his property could receive constant hot water without having to use the booster switch.
5. The landlord explained that its heating contractor was responsible for servicing and maintaining the individual heating components in the flats but that, because the EMA was responsible for the communal heating supply, the landlord would not be able to offer the amount of compensation the resident was seeking.
6. It acknowledged the resident had been without hot water and his electricity bills were higher and offered him £150 as a goodwill gesture, in recognition of this.
The landlord recorded that, due to illness, the heating contractor was unable to attend for an appointment that was booked for 20 May 2021. On the same day, the resident sent the landlord his stage two complaint, and stated the following:
1. He would not accept the landlord’s offer of £150.
2. He stated that the EMA had already told him they would not be compensating him for any additional costs but that his bills had gone up by three times and that he paid his rent to the landlord.
3. He reminded the landlord that he had been paying his rent in full but not getting hot water and that it was the responsibility of the landlord to work with the EMA to resolve the issues that tenants were having with their heating and hot water.
The resident contacted the landlord again on 24 May 2021 to ask for a timeline by when the re-wiring work to the communal boiler would be completed. He said he felt ignored and that it had taken the landlord’s Home Services Manager (HSM) three months to get back to him. The landlord told him the HSM did not usually get involved in repair issues.
The resident called the landlord on 7 December 2021 to chase up his stage two complaint. It returned his call on 18 January 2022 and thanked the resident for giving it the opportunity to discuss his concerns.
The landlord followed up the telephone conversation on 26 January 2022 to tell the resident that it was still waiting for information from its heating contractor and that it would have to delay its stage two response to 4 February 2022. It said it wanted to ensure any compensation it offered was calculated fairly and that, for this reason, it was important it obtained information regarding the booster switch.
On 14 February 2022, the landlord sent its stage two response, which stated the following:
1. It acknowledged the resident had waited an unacceptably long time for his hot water issue to be resolved and stated that this was a failure on the part of the heating contractor and EMA.
2. It admitted there had been service failure in the way it handled the resident’s stage one and stage two complaints.
3. As per its discussion with the resident, on 18 January 2022, it was not possible for it to provide an accurate calculation of the increased usage based on the utility bills the resident had provided. It said that this was because it could not calculate the resident’s normal usage against the booster switch usage. In order to resolve the complaint, the landlord offered to increase its offer of compensation to £259 and broke this down as follows:

Delay to repair £25
Delays in administering complaint £25
Goodwill gesture £50
Booster switch £159
1. The landlord acknowledged that its communication with the resident was poor and that this, along with the delay in restoring the resident’s normal hot water service, was a failure.
2. It apologised for the inconvenience and distress the resident and his family had suffered, and thanked him for his patience and understanding while the repairs were taking place.
3. The landlord recognised it was essential there was regular contact between the landlord and its EMA, and that a designated person was needed to coordinate between the landlord and EMA, and provide updates to residents whenever breakdowns occur in the building.

On 15 February 2022, the resident contacted the landlord to say he was not happy with the outcome of his stage two complaint, that he had sent bills showing an increase in energy usage and wanted the landlord to increase its offer of compensation. The landlord responded on the same day to say that it was sorry the resident felt its offer did not meet his expectations. It reiterated that calculating the increased usage from the booster switch was complex and that other factors could have contributed to the increase, including a change in tariff and the use of additional appliances. It advised the resident that he had exhausted the landlord’s complaints process.
The resident contacted this Service on 30 June 2022 to say his hot water had been intermittent for the previous two years and that he had to use a booster switch, which has increased his electricity bills. He stated he had a three year old child and that the compensation the landlord had offered was not fair. He contacted this Service again on 14 July 2022 to report that the repairs were still outstanding, that he was still having to use the booster switch for hot water and that his bills were averaging £80 a month from the previous figure of £30/£40.
This Service wrote to the landlord on 14 July 2022 to ask if it would consider reaching a mediated resolution to the complaint and the landlord responded on 29 July 2022 to say it would like to participate in mediation. It went on to state that, although the resident had provided copies of bills, he did not provide a previous bill to show the increase. It said that, as the issue had been ongoing, it would commit to following up on the appointment set for 3 August 2022 to resolve the hot water issues and wanted to offer an increased compensation amount of £750, which it broke down as follows:

a. Overall delays & inconvenience caused £150.00

Service failures and poor complaint handling £150.00
Increased energy bills over three years (3 x £150) £450.00

On 8 August 2022, the resident told this Service the landlord’s offer was inadequate and that it did not recognise the stress he had experienced over a period of two to three years. This Service progressed its investigation accordingly.

Assessment and findings

Response to the reports of hot water loss

The Ombudsman wishes to acknowledge that the resident and his family have experienced a great deal of distress over a lengthy period of time, while trying to get their hot water problem resolved. The Ombudsman recognises how upsetting it must have been to be faced with an unreliable hot water supply and higher energy costs while waiting for a repair to be completed, especially when the resident and his partner were looking after a very young child at the time.
The Ombudsman’s role is to consider the response by the landlord to a resident’s reports, whether it complied with its policies, current legislation and good practice, and whether its approach and actions were reasonable in the circumstances.
The resident had been raising concerns from April 2019 that he was getting an intermittent hot water supply, where the water got cold after about 10 to 20 minutes. Internal correspondence indicates that the EMA was carrying out ongoing works to upgrade the block’s communal heating system and that temporary boilers had been installed in order to provide the flats with a reliable hot water supply. The landlord was correct to provide a temporary fix while the communal repair was being completed. Evidence shows that, at the end of November 2020, the landlord installed an unvented hot water cylinder in the resident’s property, with an immersion heater that could be activated by way of a booster switch. This meant that the resident had independent access to hot water without the need to rely on the communal boiler system. However, because an immersion heater uses electricity, and the kilowatt cost of electricity is higher than gas, it is a more expensive way of heating water.
There is evidence of multiple visits to the property by engineers; however, as the landlord has not provided any records of discussions that took place between the contractor’s engineers and the resident, there is no evidence the landlord provided the resident with proper instructions on how the immersion heater worked. The resident states he was advised by an engineer that he should keep the switch on at all times, which would explain why he was receiving much higher bills than he expected. In addition, there is no evidence the immersion heater was fitted with a timer, or that this was considered, which would have given the resident the option to heat water at certain times of the day, and therefore save on electricity costs. Although the landlord cannot be held entirely responsible for the amount of time the resident kept his booster switch on and would therefore not be expected to meet the additional energy cost in full, the lack of action by the landlord to ensure the freeholder and its EMA resolved the communal boiler issue in a timely manner resulted in the resident receiving higher electricity bills than usual. The landlord was at fault for initially telling the resident that, because the EMA was responsible for the communal heating supply, it would not offer compensation for the increased energy costs. Although the landlord was reliant on the EMA and freeholder to resolve the communal issue, the landlord is responsible for working with the freeholder in order to ensure the resident is provided with the services, as set out in the resident’s tenancy agreement. It is positive to note that the landlord had later agreed to contribute towards the cost of the higher bills.
In its stage one response, the landlord explained to the resident that the communal boiler was originally only designed to provide hot water in the mornings and afternoons, which was why a booster switch was needed to top up the supply. It told the resident there was work taking place to re-wire the system so it could provide hot water 24 hours a day, and that his flat was on the list to be re-wired. It is understandable that it can take time to upgrade a communal heating system and some delays may be inevitable. However, there is no indication the landlord had made sufficient effort to communicate with the freeholder or EMA in order to provide updates to the resident about the ongoing works. There was nothing to indicate, prior to the stage one complaint, that the landlord had given the resident any assurances that work was taking place to resolve the issue. There is nothing to suggest the landlord had provided an explanation of the fault before the resident raised his complaint, or that it had given the resident an estimated time of completion.
It was only after the resident had raised a formal complaint that the landlord made attempts to contact the EMA to clarify the cause of the hot water problem, and provide the resident with an update. Internal correspondence at the time reveals that the landlord had itself been unclear about the cause of the hot water issue and was confused over the nature of the work being carried out by the EMA. This indicates a lack of co-ordination and communication between the landlord and the EMA, which explains why the resident was not getting any updates on the ongoing work.
There is also evidence in the landlord’s internal correspondence that the resident was getting conflicting information from different engineers and the various parties involved.It appears nobody at the time was able to clarify whether the hot water issue was communal or something that was only affecting the resident’s flat. It is clear the lack of a single point of contact meant the resident was being passed from one party to another, which included the landlord, the EMA and the heating contractor. This would have exacerbated matters and only added to the resident’s uncertainty over whether or not the hot water issue was beingaddressed,or when his electricity bills may go down.
The landlord’s records provide limited information regarding discussions with the EMA to show what action plans were agreed. In situations where the landlord is not responsible for a repair and is reliant on the EMA to take action, the resident is reliant on the landlord to pursue the freeholder and its EMA to ensure action is being taken. This Service recognises the landlord may have had some challenges with the EMA and that some factors were out of its control.However, the landlord’s records indicate a lack of engagement with the freeholder and EMA, and demonstrate a lack of effective collaboration, proactive monitoring and communication in dealing with the issue. The landlord therefore did not work closely with freeholder or EMA, which is contrary to the commitment in its repairs policy.
Thework to fix the communal boiler was overly protracted to the point it was still unresolved for over a year after the resident had raised his initial complaint. In addition, the landlord gave no proper explanation for the delay.It was inappropriate for the landlord to advise the resident in its stage two response that the delay was due to a service failure on the part of the EMA and heating contractor, without acknowledging its own responsibility for the delay.
The landlord has admitted there were service failures and has not disputed the resident was affected for a long period of time. The landlord therefore acted appropriately by apologising to the resident, telling him how it was going to take steps to work more closely with the EMA and improve its communication with residents. The landlord was also correct in its mediation offer to increase compensation in recognition of increased electricity bills and the service failures it had acknowledged in its stage one response. However, the Ombudsman feels the landlord failed to offer a fair level of redress as it had not properly assessed the impact on the resident of the delays, poor communication and repeated visits by engineers to try and fix the problem.
While the landlord appears to have believed it was normal that the communal heating system would only provide hot water twice a day, it did not pay regard to the resident’s reports that, in practicality, this meant his property was provided with little hot water. This in turn forced him to use the booster switch in order to access a reliable and uninterrupted hot water supply. In addition, the landlord appeared to have little regard to the additional costs to the resident of having to use the booster switch.The Ombudsman’s Dispute Resolution Principles are:
1. Be fair – treat people fairly and follow fair processes
2. Put things right
3. Learn from outcomes
In the Ombudsman’s opinion, the landlord’s offer does not adequately reflect the extent of the distress and inconvenience caused to the resident and requires further redress to put matters right.

Complaint handling

Although the landlord’s stage one response was delayed, its complaints procedure allows it to extend the timescale by a further 10 working days. The landlord was correct in contacting the resident before the initial 10 working days had elapsed to let him know it would require additional time in order to provide a response. In this case, the landlord responded within the extended timescale of 20 working days, as allowed by its process. However, it should be noted that the reason the landlord gave for extending the timescale was that it required information from the EMA as to when the repair would be completed. It is not clear what discussions, if any, the landlord had had with the EMA before it sent its stage one response, as there are no records showing correspondence between the two parties during this period. This might explain why the response did not give a timeframe or any indication to the resident of when the EMA was likely to resolve the communal boiler issue as it had previously advised. It should be stressed that the landlord should not wait until the substantive issue is resolved before providing a complaint response, as this may unnecessarily delay the complaints process. If the issue remains unresolved, the landlord should advise the resident in its response what actions it is taking to resolve the matter.
The landlord took around nine months to respond to the resident’s stage two complaint of 20 May 2021, which represents a failure to meet the expected service standards set both by the landlord’s own policy and the Ombudsman’s Complaint Handling Code. The landlord omitted to acknowledge the resident’s stage two complaint and, when the resident chased this up on 7 December 2012; nearly seven months later, it took the landlord a further 28 working days to contact him to acknowledge and discuss his concerns. The Ombudsman recognises that this was around the Christmas period but, even taking this into account, the additional delay was excessive. In its response, the landlord did not provide a proper explanation for these delays, although the internal correspondence indicates that the complaint had not been picked up at the time. This suggests a potential flaw in the way the landlord keeps track of active complaints, particularly when they are overdue. It is positive that the landlord acknowledged the above-mentioned failings and offered compensation in recognition for them; however, the amount the landlord has offered does not adequately address the time taken and effort the resident made to chase the landlord for information and updates, or the amount of stress and anxiety this caused the resident and his family, which included a very young child.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in the way the landlord responded to the resident’s reports of hot water loss.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was severe maladministration in the way the landlord handled the resident’s complaint.

Reasons

The landlord has acknowledged the service failures, long delays, poor communication, the lack of engagement with the freeholder and its EMA, and the inconvenience caused to the resident for the heating and hot water issues. Although it increased its offer of compensation, this only happened as a result of intervention by this Service, and the increased amount was not proportionate to the extent of the service failures, and the distress and inconvenience caused to the resident and his family.
The landlord took around nine months to respond to the stage two complaint. When the resident chased his complaint after more than six months, the landlord delayed acknowledging it for another month, before taking a further month after that to send a response. It offered no explanation for these delays or make any undertaking on what steps it would take to ensure the same complaint handling failure is avoided in future.

Orders

In addition to the £750 the landlord had previously offered to the resident, which includes recognition for three years of increased electricity bills, the Ombudsman orders the landlord to pay compensation of:
1. £200 for the poor communication, lack of updates to the resident, lack of coordination with the EMA and the distress and inconvenience caused over a period of two years;
2. £250 for the poor complaint handling and the resident’s time and trouble pursuing his complaint.

The total amount of £1,200 must be paid within four weeks of the date of this determination.

The landlord to apologise to the resident, within four weeks of the date of this determination, in line with this Service’s guidance that:
1. An apology should be made by the landlord as a body, rather than an identified member of staff.
2. An apology should acknowledge the maladministration or service failure; accept responsibility for it; explain clearly why it happened; and express sincere regret.
3. Where appropriate, an apology should include assurances that the same maladministration or service failure should not occur again and set out what steps have been taken to try to ensure this.
The landlord to carry out a review of how it works with the freeholder and its EMA to improve communication and service provision and establish a single point of contact that can liaise between the landlord and freeholder in order to be able to update residents when communal works are taking place. The landlord to report back this Service within eight weeks of this report, to confirm it has complied with this order.
The landlord to confirm with the resident about whether he now receives full hot water from the communal system. If not, it should liaise with him to inspect the issues he experiences first hand, which lead to having to use the booster switch. It should then review the situation, discuss the status of the resolution to the issue with the freeholder and EMA, and review any further practical or financial support it can provide its residents at the block affected by the issue. The landlord to report back this Service within eight weeks of this report, to confirm it has complied with this order.

Recommendations

The landlord to review its systems for complaint handling in order to ensure all complaints are progressed in a timely manner, and that the onus is not put on complainants to ensure their complaints are picked up by the landlord.
The landlord to review its repairs records for its other properties in the block to establish if any other households have been affected by similar issues to the resident. If the landlord identifies any such households it should proactively ensure that any outstanding issues around the supply of hot water to their individual properties are resolved and consider whether an offer of compensation would be appropriate.