Council charged wrong amounts to all of its tenants
A council that charged more than 2,800 residents incorrect rent amounts has today been formally found in breach of the Regulator of Social Housing’s rent standard.
Mid-Devon District Council last year realised that 1,243 of its tenants had been overcharged rent and 1,622 undercharged.
As Housing Today has previously reported, the issue dated back to 2002 and was due to the council incorrectly averaging valuation data, meaning the base rent was wrong.
The council last year referred itself to RSH and it has today been found non-compliant.
RSH said in its judgement: “Taking into account the extent of these issues and potential impacts on tenants, we have concluded that there are serious failings in how Mid Devon DC is delivering the outcomes of the rent standard.”
The total impact on the council’s Housing Revenue Account of the undercharged rent over the period is estimated to be £8m while the total overcharged amount for the period is estimated to be £7.5m.
RSH said: “Mid Devon District Council has confirmed that new tenancies are now charged at the correct rent, that rent charged has been corrected for those tenants overcharged, and that undercharged rent will be corrected only upon changes of tenancy. Mid Devon DC is continuing to investigate the issues and has sought external legal support to inform its plan to correct the errors.
“Mid Devon has advised us that it will be starting work to confirm the refunds due to individual tenants.”
The council last month has said it will examine 70 cases in which tenants were evicted solely or partly for arrears after being charged the wrong amount. However the council said it is satisfied the rent overpaid amounts have not been a “material factor in any evictions” and cited several mitigations, including that the overall amounts overcharged were low and the eviction process is multi-staged, meaning residents were offered support at various stages before eviction.
The council has put together a plan to model the incorrect payments, assess the impact on the Housing Revenue Account and issue refunds or compensation to tenants.
The judgement was one of 18 issued today by the Regulator of Social Housing. Read more here.
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