Metropolitan Housing Trust Limited (202010100)

REPORT

COMPLAINT 202010100

Metropolitan Housing Trust Limited

29 April 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 refers to:
   1. The landlord’s administration of the resident’s rent account.

Background and summary of events

2. The resident has an assured tenancy with the landlord.
3. The resident had previously lowered the monthly direct debit for her rent account due to a large amount of credit on the account. The landlord’s records show that the resident called the landlord on 4 March 2020 to discuss her yearly rent increase and the balance on her account; at this stage, the resident’s rent account was still in a significant amount of credit.
4. The resident called the landlord on 26 September 2020 and was advised that her rent account had fallen into arrears. She set up a monthly arrangement to pay the full rent amount and an additional payment towards the arrears on her account.
5. On 12 October 2020 the resident raised a complaint with the landlord and advised the following:
   1. She explained that she had previously had a large credit on her rent account of over £3000, but the landlord had then reduced her monthly direct debit significantly. She called the landlord on 26 September 2020 and it confirmed that she was now in arrears of over £900.
   2. She asked the landlord to explain why she had not been contacted when the credit on her account ran out, and why her direct debit had not been increased as this was within the landlord’s control. She expressed concern about how long this matter would have been left for if she had not called.
   3. She had now increased her direct debit but did not feel that she should pay back the full £900 as the arrears were not her fault. She said that this had caused her a great deal of stress as she had never been in arrears before.
6. The landlord acknowledged the resident’s complaint on 13 October 2020. It advised that the resident should receive a response by 26 October 2020. It explained that due to the impact of Covid-19, there could be a delay in progressing the complaint, but it would keep the resident updated.
7. The landlord issued its stage one complaint response on 3 November 2020 and confirmed the following:
   1. The landlord apologised for the delay in providing a response and any inconvenience this may have caused.
   2. It explained that, due to the direct debit not being amended when the resident contacted the landlord in March 2020, her rent account began to fall into arrears in July 2020 and continued to fall further into arrears as the year went on. It had discussed this matter internally and established that the resident should have been transferred to its income team during this call to discuss increasing the direct debit payments, but this was not done.
   3. It explained that its rent-monitoring system did not flag the account as being in arrears in July 2020, meaning it had not attempted to contact the resident in line with its process for arrears recovery. It explained that it had not been able to identify why this did not happen as this system was automatic.
   4. It explained that the arrears on the resident’s rent account were genuine as it had not received a full payment for her monthly rent for a number of months. It agreed that the service the resident had been provided with was outside of its standards and that the stress and inconvenience caused could have been avoided. It advised that no additional charges or interest had been applied to the resident’s account and noted that the resident had set up a payment plan for an additional amount to be made each month paid toward the arrears.
   5. The landlord apologised for the inconvenience caused and offered £200 compensation in recognition of the time and trouble the resident had spent pursuing the complaint. It advised that it had identified training needs which would be acted upon and the resident’s complaint would be used as a case study with the intention of improving its services and understanding the causes behind such failures.
8. The resident emailed the landlord on 3 November 2020 to advise that she was unhappy with the landlord’s response and offer of compensation. She felt that the landlord had not fully understood the stress this matter had caused to her as a single parent. She explained that she did not have the funds to pay back the arrears and the issue had been caused by the landlord not her.
9. The landlord acknowledged the resident’s escalation request on 8 November 2020 and advised that she would receive a response by 20 November 2020. It explained that, as before, there may be some delay due to the impact of Covid-19, but the resident would be kept updated.
10. The landlord issued its stage two complaint response to the resident on 8 December 2020 and advised the following:
    1. It advised that the stage two complaint remained partially upheld. It acknowledged that the arrears on the resident’s account were genuine but that its rent-monitoring system had not acknowledged that the account fell into arrears in July 2020 for which it apologised.
    2. It outlined its stage one response and advised that it was not within its process to monitor accounts which were in credit. In line with the Tenancy Agreement, it is the tenant’s responsibility to ensure that their rent is paid in full and on time.
    3. It explained that it had software to help it manage rent collection, but the resident’s arrears had not been detected.  Due to Covid-19, its Income Team had not managed to contact every customer who was in arrears, which may have been another reason that the resident was not contacted. It confirmed that it was working with its supplier to rectify the underlying issue and explained that it would be implementing a new collections system which would improve its ability to respond more efficiently to accounts that fall into arrears. It advised the resident to register for an online rent account so that she could find up-to-date information about her rent account at any time.
    4. It confirmed that the agreement to allow the resident to clear the outstanding balance with token monthly payments, along with the compensation offer, was fair. It said that it would not be in a position to remove the arrears from the account and no further action would be taken as long as the agreement was in place.
    5. It explained that the stage one complaint was handled correctly and again offered the resident £200 for her time and trouble. It explained that usually this would be paid directly into any rent account to offset any arrears, but it would be happy to transfer this directly to the resident if she wished.

Assessment and findings

11. The resident’s tenancy agreement confirms that the resident would be obliged to pay their rent in full when due.  The landlord’s money and debt policy states that the landlord should aim to identify and contact tenants who fall into arrears as soon as possible to prevent arrears increasing. The landlord should also offer arrangements to repay arrears in instalments based on an assessment of what is affordable to the resident and regularly reviewing the arrangement to make sure it is still suitable and does not cause any undue hardship.
12. It is not disputed that the landlord should have contacted the resident as soon as the rent account fell into arrears in July 2020, to prevent the arrears increasing. The landlord has acknowledged that the stress and inconvenience to the resident could have been avoided had it identified that her rent account had fallen into arrears sooner. It has provided a satisfactory explanation as to why this was not done and advised that there had been an issue with its automatic rent-monitoring system. 
13. The landlord has explained that no further charges or interest had been applied to the account and the arrears were because the monthly rent payments had not been paid. Ultimately, the resident is obliged to pay her rent in line with the Tenancy Agreement so the landlord would not be expected to refund this amount, although it was reasonable for the landlord to offer compensation due to its failings. 
14. Where there are admitted failings by a landlord, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: be fair, put things right, and learn from outcomes.
15. The landlord acted fairly in acknowledging its mistake and apologising to the resident. It put things right by investigating the resident’s issue and awarding £200 compensation. The compensation award was in line with the landlord’s own compensation policy for a high impact on the resident. This amount is also in line with the Ombudsman’s own remedies guidance and the landlord offered compensation which was proportionate to the distress and inconvenience experienced by the resident in relation to the landlord’s failings.
16. Furthermore, the landlord demonstrated that it learnt from outcomes by identifying training needs and seeking to implement a new collection system to ensure that it could address arrears on a tenant’s rent account quickly. It has also advised that the resident’s complaint would be used as a case study with the intention of improving its services and understanding the causes behind such failures.
17. For the reasons set out above, the landlord has offered redress to the resident which, in the Ombudsman’s opinion, resolves the complaint satisfactorily. The measures taken by the landlord to redress what went wrong were proportionate to the impact that its failures had on the resident.

Determination (decision)

18. In accordance with paragraph 55 (b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress in respect of its administration of the resident’s rent account prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Reasons

19. The landlord has acknowledged that it could have acted sooner in relation to the resident’s rent arrears, to prevent any stress or inconvenience for the resident. The landlord has demonstrated that it has attempted to put things right and learn from the resident’s complaint and has offered £200 compensation which is proportionate to the impact on the resident. The resident would be responsible for paying her rent payments in full, and therefore the landlord would not be expected to refund this amount.

Orders and recommendations

20. It is recommended that the landlord pays the resident £200 as previously agreed (if it has not done so already).