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Westminster City Council (202009817)

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REPORT

COMPLAINT 202009817

Westminster City Council

14 September 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 resident complains about the landlord’s response to her claim for a discretionary disturbance payment, and her subsequent formal complaint about the matter.

Background

  1. The landlord’s Discretionary Disturbance Grants policy sets out that all such payments to residents are based on reasonable expenses. There are no set figures and no definition of ‘reasonable’ but any costs claimed should be for items which are needed as a direct result of the move (for example the cost of replacement blinds/curtains due to the size not being suitable). The costs should be based on the estimated average cost of the item in question.

Summary of events

  1. The landlord wrote to the resident on 22 April 2020 detailing that she may be entitled to assistance with ‘reasonable costs’ related to her upcoming move. The letter stated, ‘Payments are not set by law but are based on reasonable expenses.’ It went on to explain that costs would be based on ‘…the estimated average cost of the item in question i.e. average cost for removals which we would determine by obtaining quotes from our removal’s contractors.’
  2. In May 2020 the resident was permanently decanted from her bedsit property to a one-bedroom flat due to repair issues. The resident submitted receipts for discretionary disturbance payments that same month: £887.76 for flooring, and £69.76 for blinds. On 18 May 2020 the landlord emailed her to check that these were all the receipts she wished to submit before it processed her claim.
  3. The resident then submitted a receipt for a further £4,500 for flooring. On     29 May 2020 the resident emailed the landlord to say ‘…my father isn’t putting it through his company as I’m his daughter and the price will be ridiculous for me to pay for marble tiles, white wood flooring..etc so that’s why he hasn’t put the company’s details on there.’
  4. On 4 June 2020 the landlord wrote to the resident with a Claim for Discretionary Disturbance Payment form for her to fill out. The letter stated that the landlord would not cover the costs of flooring at £4,500, as this was not deemed a reasonable amount for a one–bedroom flat.
  5. Internal landlord emails of 10 and 11 June noted that the invoice that the resident had submitted from her father was for labour costs of £950, and £3500 for further flooring materials. The landlord said that while the labour cost was likely reasonable, £3,500 for flooring materials was excessive and would not be approved.
  6. On 15 June 2020 the resident emailed the landlord and said that the invoice was high ‘…because of the materials I’ve used.’ She said that the labour costs were shown on the invoice as £950. On that same date she also sent an email in which she said that she had received a letter from the landlord setting out that it was reimbursing her £1,325.52 (for the original flooring costs, blinds and a new cooker).
  7. She noted that she had not been reimbursed for the labour costs of £950, stating ‘I don’t need to be paid for the materials but if I could be reimbursed the 950 labour as I already had some flooring from before that I paid for out of my own money and I’ve already got the labour on a discount.’
  8. The next record of contact in the evidence available is dated 15 July 2020, when the resident emailed the landlord stating that she had still not been reimbursed for the labour costs. She acknowledged that the landlord had explained that it would not pay for ‘top notch materials’ but would usually pay the costs for laminate or vinyl.  She stated that the landlord needed to work out the costs to fit vinyl/laminate in a one-bedroom property and pay her this amount. The resident said that she had been saying as much for months.
  9. On 22 July 2020 the landlord emailed the resident and said that the invoice submitted for flooring totalling £4,500 was not considered reasonable for a one-bedroom flat. It said that, as she had been advised previously, if she submitted an invoice with a VAT reference it would pay ‘reasonable costs’ for the flooring, and asked that she send it a VAT invoice on company headed paper. It would then endeavour to reimburse her a reasonable amount.
  10. The next record of contact is dated 31 August 2020, when the resident emailed the landlord stating that she had been told that the landlord would get back to her in relation to refunding her the costs of vinyl flooring in a property of the same size. However, this had not happened. She said that if she obtained a VAT invoice from the company this would mean the costs would go into the thousands. However, she would now obtain one and submit it to the landlord shortly (the Ombudsman understands that this did not happen).
  11. The landlord replied on 2 September 2020, reiterating its previous stance on the flooring costs, and said that should the resident wish to take the matter further it would refer it as a formal complaint. The resident asked for this to go ahead. She said that even if the landlord did not honour the entire £4,500 costs, it should have calculated what it felt was reasonable, and reimbursed her that amount.
  12. On 29 September 2020 the landlord provided a stage one complaint response. In this it explained that disturbance payments were based on reasonable expenses, and any payment was based on the estimated average cost of the item being claimed. The resident had submitted a disturbance payment claim form on 6 June 2020, and payments were subsequently made to her as follows:
    1. New flooring – £887.76
    2. New window blinds – £69.97
    3. New cooker & installation – £368.00
  13. The resident had also claimed a further invoice for flooring for £4,500.00. The additional flooring costs were declined as these were not considered reasonable for a 1-bedroom property.
  14. In response the resident said that she had been told that while the landlord would not honour the full cost for the installation, it would work out a ‘reasonable amount’ and compensate her that amount. However, she had heard nothing since.
  15. On 2 December 2020 the landlord sent a stage two response. In this it noted that as per its policy, a Disturbance Payment was made to cover reasonable expenses associated with the move. This was based on the estimated average cost of the item being claimed. The resident also submitted an invoice for £4,500, and this was declined ‘…as this was not deemed to be a reasonable expense for flooring a one-bedroom property.’ The landlord noted that it had advised the resident in advance that it would only consider reasonable expenses and that the marble tiles and high-end wooden flooring she had used would not be accepted as ‘reasonable.’ It had reviewed the decision again and concluded that there were no grounds to meet the request for the additional disbursement payment of £4,500 for flooring.

Assessment and findings

  1. In her complaint to this Service the resident has said that she suffered financial loss, medical emergencies and mental health issues due to failings by the landlord. She states ‘They need to reimburse me for my £950 installation costs and the £716 for the other half of my flooring…’ She explained that a staff member had told her that the landlord would do so. She says that the landlord was now refusing to do this because of a VAT number, which was not a legal requirement, and the only reason that she was unable to provide this was because the company she used was not supposed to be working inside due to the Covid-19 restrictions, and people would lose their jobs if it provided a VAT receipt.
  2. It is not clear to this Service what the £716 the resident refers to as the ‘other half’ of her flooring is here, given she has claimed a total of £5,387 for flooring (the original £887.76 plus the additional £4,500).
  3. By way of the landlord’s letter of 22 April 2020, the resident was appropriately made aware prior to her move, and prior to the purchase of additional flooring, that any costs claimed must be ‘reasonable’. Initially, the resident only seems to have expected the landlord to pay £887 for flooring materials and then £950 labour costs, as set out in her 15 June 2020 email. She later asked the landlord to calculate what it felt a reasonable amount to be for the work that was carried out and reimburse her that amount. This was a reasonable proposal to settle the matter, and the landlord did agree to do so, however, not without a VAT receipt.
  4. It is not clear why the landlord requested a VAT receipt as there does not appear to be any question that the works had been carried out, this is not a requirement which is set out in its Discretionary Disturbance Grants policy, and the landlord did not provide a reason to the resident. Additionally, not all businesses are VAT registered. However, the resident made clear that her father’s company, which completed the work, is VAT registered but her father did not put the job through his company to avoid the escalated VAT costs that would be incurred. As VAT tax evasion is against the law this Service would not expect a landlord to knowingly involve itself in such matters by reimbursing the associated invoice.
  5. The resident later informed this Service that the only reason that a VAT receipt could not be produced was due to the works carried out at her property breaking Covid-19 restrictions. It is not clear whether this was known to the landlord at the time, but again, this is not something that the Ombudsman would expect the landlord to knowingly involve itself in by reimbursing the associated invoice.
  6. Nonetheless, the landlord said that it would consider a further payment for ‘reasonable’ costs in July 2020, giving the impression that additional flooring costs were reasonable and could be granted. It is unclear why it did not calculate an amount it thought was reasonable for materials and labour, and reimburse the resident this amount (if the £887 previously paid had not already done so).
  7. Both the landlord’s stage one and stage two responses failed to address the specific complaint that the resident was raising. Both responses reiterated that the £4,500 invoice was not deemed reasonable and so would not be paid, but this was not the complaint that the resident was making. She had already accepted that the full £4,500 would not be paid and was instead complaining that the landlord had not made a calculation of what it thought was ‘reasonable’ and reimbursed her this amount. The complaint responses provide no comment on this issue, which was the crux of the matter.
  8. The landlord failed to consider through the complaint procedure that it had previously told the resident that it could make an additional payment (albeit when the condition of a VAT receipt was met). This had caused her inconvenience because she pursued payment over the course of several weeks, offering an explanation for the VAT receipt not being provided and proposing an alternative way to calculate reasonable costs.
  9. While the landlord stipulated in July 2020 that a VAT receipt was required to reimburse additional costs, the landlord did not maintain this position through the complaint procedure; the landlord only advised that the total amount claimed was unreasonable and would not therefore be reimbursed. The landlord did not offer any explanation for this shift in position and did not consider that this would have been confusing for the resident.  The landlord missed an opportunity to identify that the resident’s expectations had not been well managed.
  10. In light of the above, there were some failings on the part of the landlord in its handling of the request for reimbursement, and in its complaint response.
  11. As part of this investigation, the Ombudsman asked the landlord what it would consider to have been a ‘reasonable’ cost for the flooring works carried out at the property. In response it said ‘When we arrange floor coverings for void     1 bedroom flats such as this we have a fixed rate with our supplier of £462. This rate is for carpets.  We also provide vinyl wooden flooring effect which is around 10% higher…’ It went on to acknowledge that residents may wish to obtain higher quality coverings and that some flexibility was required for residents who had to move through no fault of their own. It said, ‘We therefore allow the investigator an element of discretion in determining what is reasonable in the circumstances.’
  12. In light of the above, it may be that the £887 that has already been reimbursed may be higher than what the landlord would have calculated to have been ‘reasonable’, had it done so. Having said this, it seems likely that the landlord’s costs for such works would be lower than an individual’s such as the resident, and as it has stated, there is an element of discretion to be applied. Further, the Ombudsman notes that the landlord had previously stated that the £950 labour costs were likely to be reasonable, which appears to be somewhat at odds with the £462 figure provide by the landlord for labour and materials.
  13. Taking the above into account, the amount paid by the landlord for the resident’s flooring was unreasonable. It evidently felt that the initial £887 amount was fair, and then undertook to calculate a ‘reasonable cost’ on receipt of a further (VAT) invoice. While it would not be appropriate for the landlord to reimburse the invoices submitted by the resident for the works, it is appropriate for an additional amount to be paid given that the landlord had identified through internal communication, and to the resident, that additional costs would be reasonable in this case. Taking into account the £887 already paid, an additional amount broadly in line with the £462 quoted by the landlord would be fair in line with the landlord’s policy and its letter to the resident of 22 April 2020, which set out ‘reasonable’ costs.

Determination (decision)

  1. In line with Section 54 of the Scheme, there was service failure in the landlord’s response to the claim for a discretionary disturbance payment, and its subsequent formal complaint about the matter.

Reasons

  1. There have been failings in the landlord’s handling of this matter because the landlord did not give the resident consistent advice, having given the impression that it would make an additional payment for flooring but then reversing this decision through the complaint procedure without sufficient explanation. This has caused inconvenience and distress for the resident.

Orders and recommendations

  1. Within one month of the date of this report, the landlord should pay the resident a total of £475, comprised of £400 for flooring costs and £75 for the failings in the handling of the complaint.