Yorkshire Housing Limited (202126749)

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REPORT

COMPLAINT 202126749

Yorkshire Housing Limited

24 November 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:
1. Administration of the resident’s rent account and explanation for the arrears.
2. Handling of the associated complaint.

Background

The resident has an assured tenancy with the landlord, a housing association, which commenced on 14 April 2016. The property is described as a two bedroom flat.
The landlord’s records noted that the resident has hearing problems.
The resident has also informed this Service that she has physical health issues.

Scope of investigation

The Ombudsman has seen records of enquiries made by the resident with the landlord since 2016 regarding her rent account. It is noted from the evidence that the landlord responded to various concerns about the direct debit charges in 2016, housing benefit overpayment, recovery of the charges and refunds to the rent account in 2017, 2018 and 2019.
From the information received from the landlord, the resident did not raise any enquiries or concerns about her rent account in 2020 and 2021. It is also noted from the evidence that the resident first raised a formal complaint concerning the administration of her account on 14 March 2022 following a letter sent to her by the landlord on 18 February 2022. This investigation will therefore focus on events that occurred from 18 February 2022, as we have not seen evidence of any other previous contact from the resident within 12 months of her complaint being made.
Paragraph 42 (a) of the Housing Ombudsman Scheme states that we may not consider complaints which in the Ombudsman’s opinion are made prior to having exhausted a member’s complaints procedure unless there is evidence of a complaint handling failure and the Ombudsman is satisfied that the member had not taken action within a reasonable timescale.
The resident has raised additional issues with this Service which were not part of her original complaint to the landlord and were raised after the landlord had issued its stage 2 response. These include her concerns that:
1. Charges (service charges for food) eligible for housing benefit payment had not been correctly applied and reflected in her overall charges.
2. Post from the landlord going missing and not being delivered.
3. The landlord had not reviewed her service charges to the start of the tenancy and only went as far back as 14 May 2018.
4. 2 large payments made to the rent account were not accounted for.
The resident has been advised to raise these matters with the landlord through its complaints process.

Landlord obligations

Under the tenancy agreement, the resident agrees to pay the rent and service charge weekly and in advance. It may increase or decrease the rent by giving the resident not less than one calendar month notice in writing. The general terms of the resident’s tenancy agreement provides a breakdown of weekly payments for the property. In the agreement rent is described as net rent, plus service charge and furniture charge or as varied in accordance with the agreement.
The landlord’s complaints policy (effective 1 January 2021) states that:
1. It will acknowledge stage 1 complaints and stage 2 complaints within 2 working days of receipt and respond to:
  1. stage 1 complaints within 10 working days of receipt
  2. stage 2 complaints within 20 working days of receipt.
2. Every closed complaint will be reviewed for internal lessons learnt to identify areas of improvement within its services.
3. It may extend the timescale of a complaint where there is good reason to do so. An example is when it requires longer to acquire all the information required from multiple sources to enable thorough investigation of a long standing, complex case.
4. It may consider compensation where appropriate. It will consider any quantifiable losses, time, trouble, distress and inconvenience and any payment that will put the customer back in the position that they would have been had the issue not occurred.

Summary of events

The landlord wrote to the resident on 18 February 2022 informing her that her direct debit would be increased from £43.59 to £50 per week. It explained that the shortfall from her housing benefit was £46.82 and the direct debit in place was not covering the payment in full.
It sent her a rent review letter on 21 February 2022 where it advised her of the new charges she would have to pay from 4 April 2022.
The resident contacted the landlord on 2 March 2022 to find out why her rent was being increased. It tried to return the resident’s call on 8 March 2022, but it was unable to reach her.
The resident contacted the landlord on 10 March 2022 for an update. She asked why her rent had gone up by £14. The landlord explained that it had increased by £3.69, but this could change subject to its investigation to determine if there were any issues with the account. The landlord also had internal discussions regarding the local authority charges that are usually included in the resident’s charges.
On 11 March 2023, the landlord noted that the resident made contact as she was confused about her service charges and that the amount had doubled. It noted that it went through her account and was able to explain to her that:
1. It was likely that her rent would increase slightly and her housing benefit may offset any increase, though it could not be certain about it until the new award was confirmed.
2. It had had to amend the direct debit and had worked out the shortfall based on her new rent charges, but this might change once the housing benefit figures for April 2022 had been determined.
3. It was not taking any extra charges other than the shortfall until its project team had completed the investigations.
The landlord contacted the resident on 14 March 2022. It noted that she was considering having her housing benefit payments made directly to her so she would not have to worry about the direct debit. It explained that she would still need to have her direct debit set up. It further advised that it was working through the history of her rent account for a full explanation of its administration. It noted that the resident also asked that the matter should be raised as an official complaint. She asked for a full explanation of why her payments were no longer covering her rent charges and for any errors to be resolved.
The landlord sent its stage one acknowledgement of the resident’s complaint on 14 March 2022. It advised her that it would contact her within the next two days to discuss her complaint in more detail. It said it would provide an outcome to her complaint within 10 working days.
The landlord contacted the resident on 18 March 2022 with an update on her complaint. It explained that:
1. It had carried out an audit of her account from the start of her tenancy.
2. This brought questions to light about the accuracy of the charges and the payments.
3. It needed time to review the account and ensure that rent charges, service charges and other charges were accounted for.
4. It may take some time but it would keep her updated.
The landlord’s internal emails dated 22 March 2022 noted that:
1. It was aware of bigger issues with charges and errors related to the accounts within the resident’s area.
2. It’s finance and rent and service charge team were working on the issues to identify how to resolve them.
3. It could inform the resident that there was an error but it was unable to put a resolution in place or give a timescale for the resolution so her complaint would have to be placed on hold.
In an internal email dated 23 March 2022 the landlord noted that the stage one response was due on 24 March 2022, but it was unable to advise a timescale for the resolution to the issues.
On 24 March 2022, the landlord updated the resident on the outcome of her complaint. It agreed that there were issues on the rent account that required further investigation and resolution. It said it was carrying out a detailed investigation into the history of her rent account, payments, and charges and that it would take some time to resolve. It agreed to contact her every two weeks on a Thursday to update her. It agreed to put this in writing. It confirmed the above in its stage one response letter issued the same day.
The landlord noted on 30 March 2022 that the resident contacted it to chase up the stage one response letter as she had not received it. It noted that the letter was sent on 25 March 2022.
It wrote to the resident on 31 March 2022 and invited her to a rent clinic on 13 April 2022 to discuss any concerns regarding her rent account.
It noted on 5 April 2022 that the resident had still not received the stage one response letter.
The landlord contacted the resident on 7 April 2022 to update her on the outstanding issue of her rent account. It explained that whilst the stage one response did not resolve the complaint, it had committed to taking the necessary steps to resolve the complaint and keep her updated on the progress. It advised her that the resolution would not happen quickly, as her account needed reviewing and this was complicated, but it would continue to provide fortnightly updates.
It advised her that she may request the escalation of her complaint to stage 2 if she remained dissatisfied with the handling of her complaint. The landlord also noted in its internal email discussions that it needed to review the resident’s account back to the start of the tenancy. It noted that the exercise would involve a number of teams.
The landlord conducted a home visit to the resident on 13 April 2022. It noted that the resident handed the visiting officer a letter of complaint requesting the escalation of her complaint to stage 2. Her reasons were that although the landlord had said it would review her account, it had not been able to provide a timescale for this. She was concerned that payments made had not been accounted for.
The landlord acknowledged the resident’s stage 2 complaint on 13 April 2022. It advised her that it would respond to the complaint within 20 working days. It noted that the resident wanted another copy of the stage one letter sent to her with the correct date of 24 March 2022.
It contacted the resident between 14 and 24 April 2022. During this period it went through her complaint with her and updated her on its investigation and meetings being held.
The landlord noted in its internal email dated 25 April 2022 that a number of inconsistencies were identified with the rent accounts within the resident’s area.
Its records dated 26 April 2022 indicated that it arranged an internal meeting to discuss the rent charge irregularities. It also noted in its internal emails that:
1. The resident was not happy with the stage one response as it had not been able to give her correct balance on her rent account.
2. It was concerned that all it had at this stage of the complaint was a number of errors.
3. It needed to give the resident a date when it would be able to share and explain the correct balance on her rent account.
In its internal email dated 28 April 2022, it noted that there was an issue with the rent or service charges for the resident’s area as a whole. It noted that there was a team working on uncovering the issues to ensure that the correct information was on the system, to correctly manage residents accounts, set up direct debits to collect rent so that residents were not being overcharged. It said it was unable to take any arrears recovery action until the matter was resolved.
The landlord noted on 3 May 2022 that the resident had not received her acknowledgement letter and it arranged to have it sent again. It updated the resident on the progress of the investigation and explained that the investigation was ongoing.
In its internal email dated 4 May 2022 the landlord (rent and service charge team) noted that following the review of the resident’s account:
1. The rent review formula had been applied correctly assuming the rent was at the correct level in 2018.
2. The service charges and support charges had been applied correctly annually.
3. The resident had been charged the same amounts since April 2018.
In an internal email dated 5 May 2022, the landlord noted that the information from its rent team indicated that the correct charges had been applied and the issue was likely with its charging mechanism.
It had a meeting on 6 May 2022 to discuss actions required to correct the errors with the resident’s account.
The landlord contacted the resident on 10 May 2022 and advised her that its data performance and income team met on 6 May 2022 regarding the ongoing investigation.
In its internal emails dated 10 May 2022, the landlord noted that the case needed to be prioritised to prevent further escalation and that all the residents within the area were impacted by the errors found. It noted from its investigation that:
1. The rent and service charge for the resident’s account had been set up and maintained as it should have been. It would then be able to investigate the original complaint which was regarding her rent payments.
2. Funds collected to the sub-account that were meant to be credited back to the main account were not completed for some periods which left a credit on the account. It noted that in 3 cases, it could not see that the credit was returned onto the main account for 18 December 2017 (£31.64), 27 March 2021 (£63.28) and 12 March 2018 (£31.64).
3. The process to move the money skipped random weeks or was not run all of the time. This was normally recouped in future weeks, but it appeared there had been a miscalculation and only 4 weeks were recouped instead of 5.
4. It recommended that the credit balance on the sub–account to be moved onto the main account if it had not previously been done.
5. With the correct charges and balance, investigate direct debit payments to address the original complaint of why the resident’s payments no longer covered the charges.
6. It had also found that since April 2020 most weeks had been underpaid by £2.63 until April 2021 and £3.23 from that point on.
7. It needed to audit and tighten up all processes around sub–accounts to prevent this issue reoccurring.
The landlord had a meeting on 13 May 2022 to agree a plan to complete the calculations and check the resident’s housing benefit records. It also said the service charges had been resolved and that the rent needed to be checked from 2016.
It wrote to the resident on 16 May 2022 and advised that it would visit her on 17 May 2022 as agreed, to explain the findings of the investigation. It advised that once it had discussed the findings and proposed actions it would complete the complaint outcome letter and send it to her by 20 May 2022. It said this would be a little later than the initial response time advised.
The landlord noted in its internal email dated 16 May 2022 that it had completed a further analysis of the resident’s account from the period after the large housing benefit adjustment. It said that was the point of the highest credit and work had already been done to correct the account at that point. It concluded that:
1. It had summed up the underpaid values to get to £391.61 but it noted that it had actually undercharged on the local authority charge by £11.06 during that period, so it included an alternate value of £380.55 in case it wanted to recoup those charges whilst still giving the tenant a credit.
2. There was £126.56 to be credited to the main account due to its earlier findings and £37.20 credit balance on the sub–account which could be credited to the main account.
3. Total refund to main account £555.37 or £544.31 due to the likelihood of the undercharge.
It noted on 17 May 2022 that it hand delivered a letter to the resident and discussed the findings of the complaint with her. It agreed for the credit amount to be paid onto her rent account and assured her that queries raised about her payments going forward would be covered in the stage 2 response which she could expect on 20 May 2022.
The landlord issued its stage 2 response to the resident’s complaint on 18 May 2022. it said:
1. It apologised for the inconvenience and worry this issue had caused her.
2. It had checked her service charges and confirmed that all charges applied were correct. It provided a breakdown for the period of April 2018 to April 2022.
3. Her rent and service charge account had been analysed by its data team and they found that there were overpaid or underpaid values which calculated to £391.61.
4. In addition, it had undercharged her by £11.06 for her local authority charges, so it had debited that amount leaving a balance of £380.55 to be added as a credit as this had been caused due to a miscalculation of her direct debit payments. There was £126.56 and £37.20 to be credited to the main account (accrued on the sub-account).
5. In total it would arrange a credit of £544.31 to her main account.
6. If offered £50 shopping vouchers due to the inconvenience and stress this had caused.
7. As part of the learning from the complaint it recommended a full review of the process for rent and service charge calculations within the residential area as a whole.
The landlord contacted the resident on 20 May 2022 to let her know her complaint response has been sent to her housing manager by email so she would receive it on 23 May 2022. It also advised her that it would send £50 shopping vouchers through the post in recognition of the worry this has caused.

Post complaint process actions

The landlord noted on 24 May 2022 that a further discrepancy had been identified in the service charge (new annual charges). It said it had written confirmation which differed to the confirmed charge by rent and service charge team. It asked for confirmation on the correct service charge and for the account to be updated and credited. It also noted that it had raised the issue of letters not being received with its complaints team.
On 26 May 2022, it arranged to credit the resident’s account with £544.31 as a result of the stage 2 investigation.
The resident complained in her letter dated 29 May 2022 to this Service that her account had fallen into arrears on 3 occasions since the start of her tenancy, but the landlord had only gone as far back as 14 May 2018 in its review. The resident mentioned 2 payments of £1185.36 and £1000 (historical) were paid into her account bringing into credit, but later told in February 2022 that she was in arrears. She said the amount she paid each week in addition to the housing benefit payment covered her rent in full. She also raised issues with post not being delivered and being sent by email to the housing manager to hand to her.
On 31 May 2022, the landlord suggested in its internal email that the process used for the resident’s case should be replicated to all the addresses within her residential area.
The landlord’s noted in its internal email on 7 June 2022 that it had updated the resident’s charges to the correct amount. It noted that a lead person within its organisation would oversee the recommendations made within the stage 2 complaint to ensure corrective action was taken.
The resident wrote to this Service on 11 July 2022 regarding concerns about her housing benefit entitlement (service charges for food) and whether charges eligible for housing benefit had been applied correctly to her account.

Assessment and findings

The Ombudsman’s Dispute Resolution Principles are:
1. be fair
2. put things right
3. learn from outcomes.
This Service will apply these principles when considering whether any redress is appropriate and proportionate for any maladministration or service failure identified.

Administration of the resident’s rent account and explanation for the arrears

It is evident from the information seen by this Service that the landlord took the resident’s concerns about her rent account seriously. It contacted her within 4 working days (8 March 2022) of the date it received notification of her concern (2 March 2022) about the arrears on her account. It carried out an audit of her rent account and acknowledged early on in the process, to the resident, (14 March 2022) that there was likely an issue with the account which required further investigation. Whilst it was unable to point out the exact issue, it showed good practice in its openness about its concerns.
The landlord managed the resident’s expectations from the outset in being clear to her that the investigation may take some time and that it was unable to provide a specific timescale for the completion. It is noted that the resident was unhappy about the uncertainty and how long the investigation would take but it assured her that it would keep her updated. It also noted that no extra charges would be taken apart from the shortfall (between the rent and housing benefit payment) until its investigations had been completed. This was a reasonable approach to ensure any detriment to the resident as a result of the delay in the investigation was minimal. It also advised that no further recovery actions would be taken until the matter was resolved. This was an appropriate and proportionate step to take.
The landlord updated the resident at various stages of its investigation. It remained accessible to the resident and gave her various avenues to express or discuss any concerns about her rent account through phone contact, home visits and its rent clinic which it invited the resident to attend. This showed that it applied a person centred approach in dealing with the resident’s case.
We have seen from the evidence that the landlord worked collaboratively with the relevant teams within its organisation (rent team, complaints team and data performance team) to review the resident’s rent account and payment history. It checked that the charges had been applied correctly to the account since the start of the tenancy, that the rent review formula, service charges and support charges had been applied correctly annually. It carried out a detailed analysis of the account and noted that some payments had not been credited to the right accounts. It then proceeded to investigate why the resident’s account was in arrears. The landlord provided evidence of its findings of the resident’s account from 11 June 2018 till 9 May 2022, which showed discrepancies in payments charged and received for this period. It concluded that a total of £544.31 should be credited back to the resident’s accounts as a result of the errors found in the administration of the resident’s account. This was an appropriate step to take and showed that the landlord had reviewed the matter in an open and transparent way.
The landlord acknowledged this error in its response to the resident, offered apologies and compensated her with vouchers for the amount of £50. It has also demonstrated some learning from its review of the resident’s account and recommended:
1. An audit and tightening up of its processes around sub–accounts to prevent this issue reoccurring.
2. A full review of the process for rent and service charge calculations within the resident’s area as a whole.
Based on the above, it is evident that the landlord made some errors in the administration of the resident’s account. It admitted this error and it conducted investigations within a reasonable period of time to put things right. It advised the resident of its findings and assured her that measures would be put in place to address it. It learned from its errors and set up an action plan to prevent a reoccurrence. In view of this, the landlord has offered reasonable redress in its administration of the resident’s rent account.

Complaint handling

The landlord responded to the resident’s stage one complaint within 10 working days in accordance with the timescales set out in its complaints policy. It was unable to resolve the concerns raised at the time of its response, to the resident’s satisfaction, but it duly advised her that she could request the escalation of the complaint to the next stage. It acted in compliance with this Service’s complaint handling code by advising the resident that she may access this Service at any point of its investigation for advice.
However, the landlord took 25 working days to respond to the stage 2 complaint as opposed to the 20 working days stated in its complaints policy. Although the response was late, the landlord managed the resident’s expectations. It provided regular updates during its investigation, visited her to discuss its findings and it advised her that the response would be delayed. Whilst the above steps were appropriate, the landlord did not acknowledge the delay in its stage 2 response or offer apologies for the inconvenience. This is a service failure and would have caused the resident some worry as she is elderly. It is therefore appropriate to offer compensation to the resident in light of this omission and the inconvenience caused.

Determination (decision)

In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, the landlord was reasonable redress in its administration of the resident’s rent account.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in the landlord’s handling of the associated complaint.

Reasons

The landlord recognised that there was an error in the administration of the resident’s account. It conducted a thorough investigation to find the root course of the problem and it kept the resident updated throughout the process. On identifying the problem, it worked swiftly to resolve it, apologised to the resident for the inconvenience caused and offered compensation in form of shopping vouchers. It has also shown some learning from the resident’s case and put measures in place to improve its processes.
The landlord responded promptly to the resident’s stage one complaint and it escalated her complaint to stage 2 at her request. It provided regular updates to the resident on the status of its investigation and it notified her that there would be a delay in responding to the stage 2 complaint. Whilst these steps were appropriate, it failed to acknowledge the delay in its response and it did not apologise to the resident for any inconvenience it may have caused.

Orders

Within four weeks of the date of this letter the landlord should:
1. Apologise to the resident for the failure identified in its complaint handling.
2. Pay the resident £50 for the inconvenience caused due to the delay in responding to her stage 2 complaint.

Recommendations

Contact the resident regarding the additional concerns raised with this Service (after its complaints process had been exhausted) to address them.