GreenSquareAccord Limited (202233697)

REPORT

COMPLAINT 202233697

GreenSquareAccord Limited

24 February 2025

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. Response to the resident’s queries about her rent account and service charge.
2. Complaint handling.

Background

The resident has a shared ownership lease from the landlord of the property, which is a 2-bedroom mid-terrace house. The landlord does not have any vulnerabilities recorded for her.
The resident made a complaint around February 2023 after she contacted the landlord on 30 December 2022 and queried her rent increase and that she no longer got rent free weeks. She also queried why she was having to pay a service charge.
On 27 February 2023, the landlord responded at step 1 of its complaints procedure. It said that it had changed from the yearly rent being divided by 48 (weeks) to 52 (weeks) from 2014. It outlined errors that had occurred with the resident’s rent account in 2021 and 2022. It had written off a deficit (£46.80) as an apology.
The landlord responded to an escalated complaint from the resident made via the Ombudsman on 6 June 2023 at step 2 on 12 July 2023. It repeated the failings it had found at step 1. Its review did not find any other failures and the resident disputed this on 17 July 2023. It sent a follow on response (28 July 2023). It explained the purpose of the service charge and that it had introduced a management charge, as permitted in the lease.
The resident escalated her complaint again (8 August 2023). She said she had not been told that the rent was being paid over a different period from 2014.
The landlord responded at step 3 (21 August 2023). It again repeated its earlier responses. It offered to arrange a home visit or telephone call to discuss the issues with the resident to try and resolve her concerns. It said this was because it felt trying to explain these to her again in writing would be unsuccessful.
The resident referred her case to the Ombudsman on 13 September 2023. She felt the landlord had not responded to her queries and she should not have to pay the service charge.

Assessment and findings

Scope of investigation

The resident has said that she should not have to pay the service charge. Paragraph 42.d. of the Scheme says that we are not able to investigate issues about the level or increase of rent or service charges. Therefore, we are also unable to determine the reasonableness or liability to pay service charges because we do not have the authority to do so. If the resident wants to challenge these aspects, she can do so by making an application to the First Tier Tribunal (Property Chamber). We can consider whether the landlord responded to the resident’s rent account and service charge queries in line with its policies and procedures, and whether this was fair and reasonable in the circumstances.
Within her communication, the resident advised that the situation had harmed her mentally. The courts are the most effective place for disputes about personal injury and illness. This is largely because independent medical experts are appointed to give evidence. They have a duty to the court to provide unbiased insights on the diagnosis, prognosis, and the cause of any illness or injury. When disputes arise over the cause of any such injury, testimony can be examined in court. Therefore, it is quicker, fairer, more reasonable, and more effective to seek a remedy to this through the courts, which we may not consider because we do not have the authority or expertise to do so. While we cannot consider the effect of the landlord’s actions or inactions on health, consideration has been given to any general distress and inconvenience which the resident experienced as a result.
The resident raised concerns about the wording of a rent increase letter within her escalation request from 8 August 2023. Paragraph 42.a. of the Scheme states that we may not consider a complaint made before it exhausted a landlord’s complaints procedure. This had not been considered during the landlord’s internal complaints procedure at the time. The resident has since referred this to us as a separate complaint (reference 202426225). As such, the query about the wording of this correspondence does not form part of this investigation.

Response to the resident’s queries about her rent account and service charge

The resident’s lease says:
1. The landlord can increase the rent after letting her know in writing.
2. The resident contributes via a service charge towards maintenance, communal management, and a reserve balance.
The landlord’s service charge policy states that management charges are permitted for the management of leases of shared ownership properties.
Before April 2022, the resident paid a service charge of £57.72 a year towards building insurance. The landlord advised that, from 1 April 2022, the service charge would also include a management charge.
In October 2022, the landlord told her that her direct debit would be £208.91 per month from 1 November 2022. The resident asked why her rent had increased and said a service charge was not part of her lease.
The landlord explained (9 November 2022):
1. It used to charge rent and building insurance weekly. In January 2021, it had changed this to monthly payments. In doing so, it had moved a credit of £168.28 onto the new rent account.
2. After a query from the resident (it is not clear when) it realised she had overpaid. As such, it reduced her monthly direct debit from £167.53 to £157.40.
3. The rent had then increased in April 2021. It had mistakenly not changed the direct debit amount.
4. The service charge should only be the £3.34 for building insurance. It would ask for the management charge to be removed.
5. It confirmed that the correct monthly charge for the rent was £170.96.
The resident made a complaint on 30 December 2022 and said:
1. Her rent had increased in April and November 2022. The landlord had told her this was for service charges. It then said it was due to arrears with the building insurance. When it looked into this, it found it owed her money.
2. She no longer received 4 weeks rent free.
3. She should not have to pay a service charge.
4. It had said it would write off her £46.80 arrears but gave no explanation.
5. She had been told she would have to wait 28 days to speak to someone.
The landlord responded at step 1 of its complaints procedure on 27 February 2023. It said:
1. It had told residents in 2014 that it would no longer operate rent free weeks. Instead of the yearly rent being divided by 48 weeks, it would be divided by the number of weeks in that year. In January 2021, it had changed this to monthly payments, in line with the lease. This did not affect the overall yearly rent paid.
2. It acknowledged that it had given incorrect information about the reason for the rent increase in November 2021. It had found that it owed the resident £74.50. It had credited this to her account by reducing the direct debit from £167.53 to £157.40. It apologised that it had not made this clear.
3. In September 2021, it had incorrectly charged the resident a deficit of £29.77 service charge. It had corrected this.
4. In October 2022, a management fee had been added in error. It had since removed this from the service charge.
5. Due to an error, the direct debit had not been increased from April 2022. As an apology, it had written off the difference of £46.80.
6. It had advised her that it could take up to 28 days to respond to her query. However, it had contacted her within 10 days.
7. It had made a number of errors in managing the account. It apologised for the worry and frustration caused.
On 17 March 2023, the landlord confirmed that it had an obligation to provide building insurance, as the resident was a shared owner. It had to do so unless the property was owned outright by a resident. It explained that it managed the property, and as such there was a management fee. It later explained (31 March 2023) that the management fee covered its management of leases, housing management functions, and managing any antisocial behaviour (ASB).
The resident asked us to help with her complaint. We asked the landlord on 6 June 2023 to respond at its second stage by 11 July 2023.
The landlord responded at step 2 on 12 July 2023. It apologised and repeated the failings it had found. It explained that the reference to ASB was in case residents experienced this. The management fee also included if residents wanted to make alterations or had general service questions. Its review had not identified any other failures.
The resident repeated her concerns on 17 July 2023 and said:
1. The landlord had not told her that the rent collection frequency had changed.
2. There was ASB in the area and there had been a murder. The police did not have a record of the landlord taking action to prevent ASB.
3. She could not afford to do alterations or buy any larger share of the property via the service charge.
4. It had not explained why, after 16 years, it was now charging a service charge.
The landlord sent a step 2 follow-on reply on 28 July 2023. It said:
1. As per its complaints procedure, it did not investigate matters that happened more than 6 months ago. Therefore, it could not investigate the concerns about the rent frequency changing in 2014, and the rent account from 2021, any further.
2. The criminal matters described would be for the police. It would cooperate with police investigations if required.
3. It had not said that the service charge enabled the resident to buy more of the property. This was not part of the service charge.
4. It understood that the resident did not want to make alterations but this could not be removed. It covered the cost of providing services to homeowners if and when needed.
5. She used to only pay towards building insurance but “in the last few years” it had introduced a management charge of £8.75 per month. It could do so under the lease.
6. It had removed the management charge in 2022 as a gesture of goodwill when the resident had queried it. As the charge was permitted under the lease, it would remain.
The resident escalated her complaint (8 August 2023). She said she had not been told that the rent was being paid over a different period from 2014. She also said that the landlord did not provide the services paid for in the service charge. Therefore, it should not charge her.
The landlord responded at step 3 (21 August 2023). It repeated its earlier responses and that criminal matters would be for the police to investigate. It offered to arrange a home visit or telephone call to discuss the issues. It explained how she could report ASB. It repeated that, although it had changed the frequency of the rent payment in 2014, this had not changed the overall cost of rent.
The resident referred her case to the Ombudsman on 13 September 2023. She felt she had been charged more by no longer having rent free weeks and that she did not receive the services paid for in the service charge.
From the correspondence seen, the landlord took the following action, which was reasonable in the circumstances:
1. The landlord provided a detailed explanation about the rent account at step 1. It is clear that the landlord clarified the rent increases and also investigated whether the charges on the rent account had been correct.
2. It explained that the change in rent frequency from 2014 had not affected the rent charged over the year. As this had occurred around 10 years ago, it advised that it was limited in the information it had available. Despite this, it addressed her concern as best as it could with the information available.
3. It explained the action it had taken in 2021 and 2022 when it had found errors with the rent account. This included writing off arrears on the account as a goodwill gesture. This showed that it had considered how its errors had affected the resident.
4. It explained that the service charge used to just include building insurance. It had subsequently added a management fee. It explained why it had done so, what this charge covered, and that it had acted in line with the lease.
5. When the resident questioned the introduction of the management fee, the landlord removed the fee for that year.
6. It responded to the resident’s concern that she was paying towards additional ownership of the property. It had mentioned ownership as an example in its correspondence from March 2023. It subsequently clarified this and explained that she was not being charged for additional ownership.
7. It offered to meet with the resident or discuss the matters by telephone to help her understand its complaint responses. This demonstrated that it had taken the concerns seriously and sought to help her understand the situation.
Although the landlord did a number of things right, the following failures have been found:
1. We have not seen evidence that the landlord told the resident why it had decided to introduce a management fee or what this was for at the time. When the landlord removed this fee, it was not clear enough as to why it had made this decision and when the fee would be restored.
2. The landlord wrote off the arrears (of £46.80) as a goodwill gesture. However, it did not show that it had fully considered the effect of the errors with the rent account on the resident.
When a failure is identified, we consider whether the redress offered by the landlord resolved the complaint. The redress offered by writing off the arrears (of £46.80) went some way to put things right. However, it was not proportionate to fully acknowledge the confusion caused to the resident by the errors with the rent account in line with our remedies guidance, which recommends awarding compensation of above this amount. As such, there was service failure by the landlord in its response to the resident’s queries about her rent account and service charge.
We have ordered compensation of £100 to acknowledge the effect and confusion caused by the errors on the resident’s rent and service charge account and the landlord’s lack of clarity about these. This is in line with our remedies guidance’s recommended range of compensation for such service failure, where the landlord’s redress did not quite reflect the detriment to the resident.

Complaint handling

At the time of the complaint, the landlord had a 3–step complaints procedure:
1. Step 1 – it will try to resolve the issue within 2 working days.
2. Step 2 – it will investigate a complaint and respond usually within 10 working days but no more than 20 working days.
3. Step 3 – a Director will review the matter, usually within 10 working days.
The resident made a complaint around February 2023 (the exact date is not clear). The landlord provided a step 1 response on 27 February 2023. This response was detailed, addressed her concerns, and outlined the actions it had previously taken to put things right. However, this response did not give any details on how the resident could escalate her complaint.
The resident sought our help and we asked the landlord on 6 June 2023 to respond at the next stage of its procedure by 11 July 2023.
The step 2 response was provided by the landlord on 12 July 2023. This was 26 working days after we had asked for the complaint to be escalated. This was longer than the complaints policy and the timeframe we had given the landlord to respond. The landlord acknowledged the delay and apologised for this. Although delayed, this response was thorough and signposted the resident to step 3.
On 17 July 2023, the resident reiterated her complaint and put forward new issues of crime in the area. The landlord sent a step 2 follow-on response on 28 July 2023 to address these new aspects. In this response, it said that it would only consider events that took place within 6 months of the formal complaint. This was confusing, as it had addressed the issues of the rent account in its previous responses. It was therefore unreasonable for it to say, part way through its complaints procedure, that these were out of time.
The resident escalated her complaint on 8 August 2023. The landlord responded at step 3 on 21 August 2023. This was 9 working days later, which was in line with its policy. This addressed the resident’s new concerns about crime in the area and concluded that the previous responses had been fair and accurate.
There were failures in the landlord’s complaint handling as follows:
1. The step 1 response did not advise how the resident could escalate her complaint.
2. The step 2 response was therefore only provided after we contacted the landlord after the resident asked for our help, and this was delayed by 6 working days. Although the landlord apologised, it did not demonstrate that it had considered any discretionary compensation for this, as allowed for in its compensation policy.
3. The information about issues being out of time in the step 2 follow-on response was confusing, as it had previously considered and responded to those points.
Given these failures, there was maladministration in the landlord’s complaint handling. To acknowledge the effect of the failures on the resident, compensation of £150 has been ordered. This is in line with our remedies guidance’s recommended range of compensation when such maladministration has adversely affected the resident.
The landlord changed its complaints policy in December 2024 to be in line with the Housing Ombudsman’s Complaint Handling Code. As such, we have not made any orders in respect of this.

Determination (decision)

In accordance with paragraph 52. of the Scheme, there was service failure in the landlord’s response to the resident’s queries about her rent account and service charge.
In accordance with paragraph 52. of the Scheme, there was maladministration in the landlord’s complaint handling.

Orders

The landlord is ordered to take the following action within 4 weeks of this report and provide evidence of compliance to the Ombudsman:
1. Pay a total of £250 compensation to the resident. The compensation is made up of:
  1. £100 to acknowledge the effect and confusion caused by the errors on the account and lack of clarity in the landlord’s responses to the rent and service charge queries.
  2. £150 to acknowledge the effect on the resident of the complaint handling failures.