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Clarion Housing Association Limited (202325768)

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REPORT

COMPLAINT 202325768

Clarion Housing Association Limited

30 May 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

  1. The complaint is about the landlord’s handling of the resident’s concerns regarding service charges, including his associated complaint.

Background

  1. The resident held a shared ownership lease with the landlord, which ended following the sale of the property in November 2022.
  2. In September 2020 and September 2021 the landlord issued final service charge statements, outlining actual costs versus estimates. On 27 September 2022, the landlord contacted the resident to explain that it was experiencing IT issues as a result of a cyber-attack. Therefore, it said it was not in a position to provide him with a statement of actual service charges for the service charge year ending 31 March 2022.
  3. The landlord said that costs incurred during 2021–22 were reported to be £11,024, with an estimated individual property cost of £1,300. Actual costs were later confirmed as £557.09, resulting in a credit of £1,021.87 applied to the customer’s account.
  4. The resident raised a complaint on 4 May 2023 regarding the unrefunded credit, the landlord’s delayed communication, and its delay in finalising accounts following the sale of the property. He said that it was “totally unfair given the current economic climate”.
  5. The landlord sent its stage 1 response on 16 June 2023. It outlined its understanding of the complaint and said:
    1. The delays were due to a cybersecurity incident in June 2022, which prevented the finalisation of the 2021–22 accounts. This led to an estimated cost of £1,300, with actual costs subsequently confirmed at £557.09.
    2. A credit of £1,021.87 had been applied to the new owner’s account, and had the cyber incident not occurred, these funds would have been paid to the resident before the sale in November 2022. It had arranged for the refund to be credited to the resident’s bank account.
    3. It acknowledged that it had failed to communicate the refund promptly after finalising the accounts. It offered the resident £200 for delays and communication issues, plus an additional £50 for responding outside its published timeframes, totalling £250.
  6. The resident remained unhappy with the response and requested to escalate his complaint to stage 2 on 16 June 2023. The landlord sent its stage 2 response on 19 July 2023. It said that:
    1. It was sorry for its delayed response, which was due to high customer contact. It reiterated that its stage 1 response was deemed fair and accurate. It determined that the initial investigation and compensation were appropriate, considering the delays were caused by a cybersecurity incident.
    2. Any payments for management packs were unrelated to service charges and could not be considered in relation to compensation. A management pack for a leasehold flat is a set of documents given by the landlord or managing agent to help the buyer’s solicitor understand the management, service charges, lease terms, and other important details about the property.
    3. It offered the resident a further £50 compensation due to the complaint response delays, bringing the total to £300 (£250 previously awarded plus £50 for delays).
  7. The resident raised an additional stage 1 complaint on 11 September 2023, seeking a review of the compensation, which he said he still had not received. The landlord provided a formal response on 20 October 2023. It said that:
    1. Despite initial delays and high inquiry volumes, the resident’s outstanding initial £250 compensation payment and additional £50 payment were not processed promptly, partly due to service failures and communication issues. The payments had now been made to his account.
    2. It apologised for the delays and for not responding within its 20-day service level agreement, and offered him an additional £150 in compensation. This was made up of £100 for the delay in processing the compensation and £50 for the delayed complaint response.
  8. The resident contacted this Service on 1 November 2023. As an outcome he said he wanted a refund of the service charges he was owed.

Assessment and findings

The landlord’s handling of the resident’s concerns regarding service charges

  1. The landlord’s service charge policy says that residents pay based on expected costs, not for services already received. The landlord estimates these costs by looking at past expenses and adjusting for inflation. At the end of the year, it will calculate the actual costs, and any extra or shortfall will be added to residents’ rent accounts.
  2. The landlord’s compensation policy outlines the ranges of compensation it will offer residents after considering the relevant circumstances. The landlord will offer residents compensation in the range of £50 to £250 on occasions when it has failed to deliver a service, and this has had some impact on the resident. Examples of the impact on residents included in the policy are distress and inconvenience, disappointment, and delays in getting matters resolved as a result of the landlord’s actions.
  3. It is not disputed that the landlord’s management of the resident’s concerns about service charges was inadequate, as it failed to respond promptly, pay the owed compensation, and refund the credit in a timely manner. This investigation will therefore focus on whether the landlord’s offer of compensation was reasonable in the circumstances and in line with its compensation policy.
  4. The evidence shows that the landlord provides residents with the actual service charges in September of the accounting year. On 27 September 2022, the landlord contacted the resident to explain that there was a delay in providing the actual charges for that year, caused by a cybersecurity incident in June 2022, which was out of its control. The communication also explained how the incident affected the finalisation of the accounts and the difference between estimated and actual costs. Since cyber-attacks are unpredictable and serious, attributing the delays to the incident was reasonable. However, it was unreasonable for the landlord to update the resident about the situation only when the actual accounts were due. The cyber incident happened over 2 months earlier, so the delay was foreseeable. If the landlord had warned the resident about the possible delay earlier, it could have better managed his expectations about when the refund would be received.
  5. The resident raised a stage 1 complaint on 4 May 2023 and the landlord responded on 16 June 2023. The landlord acknowledged that it failed to communicate the refund promptly after finalising the account, which caused inconvenience to the resident. It apologised and offered £200 compensation for delays and communication failures. This was positive action by the landlord as it accepted its failings and attempted to put things right.
  6. The resident was still unhappy and asked to escalate his complaint to stage 2. This was because he felt the compensation was not enough and believed it was unfair for him to have to pay for the management pack as part of the property sale. The landlord responded at stage 2 on 19 July 2023, reaffirming that its initial response was fair and accurate. It confirmed that the full credit had been correctly applied and refunded to the resident, and that extra costs for the management pack were not related to the service charges. Therefore, it advised no additional compensation would be provided. This decision was appropriate, as compensation should match the specific issues or service failures.
  7. According to the landlord’s compensation policy – which provides for awards of between £50 and £250 in cases where a service failure causes impact such as distress, inconvenience, or delays – the £200 compensation offered to the resident fell within the appropriate range. Since the landlord acknowledged its communication failures and delays that caused the resident inconvenience, the amount was consistent with its policy. Therefore, we find the offer was reasonable and aligned with its stated guidelines for such circumstances.
  8. On 11 September 2023, the resident raised an additional stage 1 complaint in relation to not receiving the compensation that was offered to him on 19 July 2023. He continued to chase the payment throughout October 2023, with the landlord providing its stage 1 response on 20 October 2023.
  9. The landlord acknowledged the delays and communication issues in handling the resident’s compensation payments, explaining that the delays were caused by a high volume of queries. It offered the resident £100 in additional compensation. Considering these circumstances, the £100 offer was reasonable and again aligned with the landlord’s compensation policy.
  10. During recent contact with the resident, he advised this Service that he had still not received the compensation that was offered to him on 20 October 2023. On 29 May 2025 the landlord confirmed there appeared to be an outstanding compensation payment of £300 owed to him. A recommendation has been made in relation to this.
  11. The decision has been made to address the landlord’s complaint handling as part of the substantive complaint. This is because it offered a total of £150 for its delayed responses. Its offer of £150 is similarly considered proportionate to put things right, and had this Service assessed complaint handling separately, we would have found reasonable redress.

Summary and conclusion

  1. In conclusion, the landlord’s actions demonstrated an effort to address the issues caused by delays and communication failures related to the resident’s service charge and compensation payments. While initial failings occurred, such as delayed account finalisation due to a cybersecurity incident and inadequate communication, the landlord acknowledged these failures and took steps to rectify them. This included offering compensation in line with its policies. The compensation amounts of £200 and £100, offered at different stages, were reasonable and consistent with the landlord’s policies, given the circumstances and the impact on the resident. Overall, the landlord’s responses and actions reflected an acknowledgement of service failures and an attempt to put things right, in line with our dispute resolution principles. Therefore, its overall offer is considered reasonable redress for the failures in its handling of the resident’s concerns regarding services charges.

Determination

  1. In accordance with paragraph 53.b of the Housing Ombudsman Scheme there was reasonable redress by the landlord in its handling of the resident’s concerns regarding service charges, including his associated complaint.

Recommendations

  1. It is recommended that the landlord:
    1. Pays the resident the £450 compensation it previously offered to him in relation to this case. Our finding of reasonable redress is made on the basis that this amount is paid.
    2. Updates the resident on why some of the compensation was not previously paid to him, and considers further compensation for the delay if appropriate.
    3. Assesses its internal recording procedures against the recommendations of this Service’s spotlight report on Knowledge and Information Management (KIM). This should include the completion of this Service’s free online training in relation to KIM for landlords and relevant staff if this has not been done recently.
  2. The landlord should inform this Service of its intentions in relation to the recommendations.