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Peabody Trust (202321897)

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REPORT

COMPLAINT 202321897

Peabody Trust

29 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:
    1. Request for an explanation of the amount charged for a communal electric service charge.
  2. We have also considered the landlord’s handling of the associated complaint.

Background

  1. The resident is an assured tenant of the landlord. The property is a 1-bedroom flat in a building where common parts are maintained by the landlord.
  2. The resident wrote to the landlord to enquire about the communal electric service charge rise on 14 July 2023. On the same day the landlord responded and said the rise was because all utility rates are now higher.
  3. On 28 July 2023 the resident wrote to the landlord saying she wanted to make a formal complaint. She asked for justification and evidence for the rise in the service charge for communal electricity. The landlord replied on 2 August 2023, saying the increase was a result of a change in global energy rates.
  4. The resident wrote to the landlord on 25 August 2023, explaining she was unhappy as the estimated service charges for electric had increased and she wanted evidence of the reason for the increase.
  5. On 9 September 2023 the resident asked us for support in escalating her complaint. On 24 October 2023, we asked the landlord to provide its stage 1 response within 5 working days.
  6. The landlord provided its stage 1 complaint response on 14 November 2023. It said that the rise was to cover a large increase in electricity costs. It declined to provide a breakdown in costs as the resident paid a fixed service charge.
  7. The resident asked to escalate her complaint on 15 November 2023. She said that she was not satisfied with the landlord’s response and wanted an answer for the increase.
  8. On 14 December 2023, the landlord provided its stage 2 complaint response. In its response it said that:
    1. The increase was due to unforeseen increases in inflation and insurance.
    2. As the complaint was about the level of the service charge, it was out of the landlord’s complaint jurisdiction and the resident may want to apply to the First Tier Tribunal.
    3. Because of the above, it did not uphold the resident’s complaint.
    4. It had identified complaint handling failures and offered £200 compensation to the resident.
  9. The resident referred her complaint to us on 29 January 2024 as she remained unhappy with the landlord’s handling of her complaint and wanted to know why the service charge increase had occurred. The complaint became one that we could investigate on 1 July 2024.

Assessment and findings

Scope of investigation

  1. In accordance with paragraph 42(d) of the Housing Ombudsman Scheme, the Ombudsman may not consider complaints concerning the level of rent or service charge, or the amount of the rent or service charge increase. As a result, this investigation will not consider the level or reasonableness of the resident’s service charges. However, we can investigate the landlord’s response to the resident’s queries about the service charge increase.

Residents request for an explanation of the amount charged for a communal electric service charge.

  1. The communal electric service charge is included in the resident’s tenancy agreement as a fixed service charge. There is no legal definition of a fixed service charge. We define them as charges which are set by the tenancy agreement or lease which are not based on the actual cost of the service provided.
  2. The tenancy agreement says that the resident’s rent includes this charge for certain services, including “Lighting, heating, gas, electricity, water and sewerage services”. The service charge is fixed and reviewed every 12 months. The landlords Service Charges Policy says the landlord will fix the charge according to its own estimates and costs and commits to “Deliver quality services that are cost efficient, clear and transparent”.
  3. The landlord’s stage 1 response on 14 November 2023 said that energy costs had risen, it did not provide the resident with evidence for this. The landlord had agreed an extension for the stage 1 response with the resident on 31 October 2023 so it could get more information from its service charge team. Given this, providing a more detailed explanation or evidence for the rise in this response would have been better practice from the landlord. However, its response here was not a failure. The landlord was under no obligation to provide a detailed explanation or supporting bills, invoices or other documents.
  4. The landlord’s stage 2 response on 14 December 2023 provided further information to the tenant on the increase, attributing it to rising inflation and insurance costs. It is a positive that the landlord chose to provide more detail here, though it did not provide evidence beyond this. Given its obligations, this response was reasonable in this situation.
  5. As has been noted, in both of its complaint responses the landlord did not provide the resident with evidence that its energy costs were rising. As this is a fixed service charge, there is no responsibility for the landlord to provide this information to the resident. The situation would be different if this were a variable service charge, as landlords have greater responsibility under the law when it comes to variable service charges. Though the landlord might have considered providing the requested information to the resident in an effort to be transparent, especially given the commitment in its Service Charge Policy, it is under no obligation to do so. Therefore, not providing this information was not a failure of the landlord.
  6. Our Insight Report on Service Charges says that we expect landlords to be able to provide clear information about a service charge that is payable. As has been referenced, the landlord also has made a commitment to be transparent. Because of this we have recommended that the landlord consider supplying extra information to residents enquiring about fixed service charges in the future. Though the landlord is not under a legal obligation to provide detailed information and evidence, which is why there is no failure from the landlord here.
  7. In summary, the responses that were provided to the resident could have been more detailed. However, the landlord was under no obligation from the tenancy agreement, its own policies and procedures or the law to provide justification and evidence to the resident. Because of this, we find that there was no maladministration in the landlord’s handling of the resident’s request.

The landlord’s complaint handling

  1. The landlord’s Complaints Policy says that for a stage 1 complaint, it must be acknowledged within 5 working days and a response will be provided within 10 working days. For a stage 2 complaint, it will provide a response within 20 working days. It uses the same definition of a complaint as the Complaint Handling Code, that a complaint is “an expression of dissatisfaction, however made, about the standard of service, actions or lack of action”.
  2. The resident submitted a complaint to the landlord on 28 July 2023. In an email to the landlord she said “I am making a formal complaint”. The landlord responded to this as a service request and did not provide a response under its complaint procedure. It did not explain this to the resident in its reply to her or offer to escalate her issue if she remained unhappy with their response. It should have responded to this email in line with its Complaints Policy as the contact from the resident fits its description of a complaint.
  3. Our Complaint Handling Code stipulates that a landlord must be able to recognise the difference between a service request and a complaint, and this should be set out in their Complaints Policy. Therefore this was an inappropriate response from the landlord, it should have recognised and treated the resident’s contact as a complaint.
  4. This response did cause confusion to the resident as she then tried to escalate her complaint to stage 2 on 25 August 2023. The landlord took this to be her initial complaint. The landlord acknowledged the resident’s complaint on 7 September 2023. This was 10 working days from the resident’s contact and so not in line with the landlord’s policies and procedures.
  5. The landlord sent its stage 1 complaint response on 14 November 2023, after being contacted by us on 24 October 2023. This was 54 working days from the resident’s complaint of 25 August 2023 and was a failure of the landlord.
  6. The landlord sent its stage 2 complaint response on 14 December 2023. This was 21 working days from the resident’s complaint escalation of 15 November 2023 and so is a failure from the landlord as it is 1 day over the time limit set out within its Complaint Policy.
  7. The stage 2 response acknowledged some of its complaint handling failings, recognising the delay in responding to the resident’s contact of 25 August 2023. It did not address the resident’s original complaint of 28 July 2023. If the landlord had addressed this, then we would be finding reasonable redress for this element of the complaint as the landlord had recognised its failings and taken steps to put things right. However, given the failure to appropriately address the resident’s initial complaint we find service failure in the landlord’s handling of the resident’s complaint.
  8. The stage 2 response of the landlord awarded the resident £200 compensation in recognition of its poor complaint handling. The amount awarded by the landlord represents the maximum amount that it awards for a moderate service failure. For it to qualify as a severe failure these events would have had to cause a significant impact on the resident.
  9. Our Remedies guidance puts the level of redress for service failure at £50 – £100. The delay in appropriately dealing with the resident’s complaint did not have a significant impact on the resident. Therefore, the amount of compensation awarded by the landlord is still appropriate in the circumstances.
  10. We have ordered the landlord to write and apologise to the resident for delay in recording her complaint between 28 July 2023 and 25 August 2023. We have also recommended that in future the landlord should consider whether to provide more information on how a fixed service charge has been calculated. The resident has confirmed in a conversation with this service on 13 May 2025 that the compensation she was offered has been paid to her.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of the resident’s request for an explanation of the amount charged for communal electric service charges.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, the landlord was responsible for service failure in its handling of the associated complaint.

Orders and recommendations

Orders

  1. Within 4 weeks of the date of this report, the landlord must provide evidence that a Complaints Handling Manager has written to the resident to apologise for the additional delay in processing her complaint.

Recommendations

  1. Considering our Insight Report on Service Charges and its commitment to transparency, the landlord should consider whether it would be reasonable in the future to provide more information on how fixed service charges have been calculated.