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London Borough of Lambeth (202336003)

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REPORT

COMPLAINT 202336003

Lambeth Council

3 June 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 queries about the service charge.
  2. The Ombudsman has also considered the associated complaint handling.

Background

  1. The resident is a leaseholder under an agreement dated June 2006. The landlord is a local authority. The property is a 1 bedroom flat on the fourth floor. The landlord is not aware of any vulnerabilities the resident may have.
  2. On 17 February 2016, the landlord issued a section 20 notice to the resident for work involving the replacement of electrical services systems. It was estimated that the residents’ individual contribution would be £1,985.80. The landlord sent the resident:
    1. a section 20 to the resident on 28 January 2021 notifying her of the total costs incurred for the scheme to date. It said it would provide individual costs with the final account invoice.
    2. a section 20 with total costs for the entire scheme on 23 March 2023. Again, it said it would provide individual costs with the final account invoice.
    3. an individualised invoice for the electrical works of £1,517.94 to the resident on 5 July 2023.
  3. The resident contacted the landlord on 2 August 2023. She said she contested the bill as the notice was sent in 2016, and the bill was 7 years from the notice. She contacted the landlord again on 18 August 2023 to ask for a response. The landlord responded and gave; several reasons for the delays, information about previous section 20 notices and its payment to contractors.
  4. The resident asked to see invoices. The landlord said it was unable to provide invoices related to individual properties as payment was based on entire contract costs and not individual leaseholder apportionment of costs. It paid contactors throughout the work via payment certificates. These were not individual invoices for each element of work. Invoice correspondence sent to the resident contained a summary breakdown of works and associated costs.
  5. The resident raised a stage 1 complaint on 24 August 2023. She:
    1. said the bill dated back to 2016 with no date of payment. She said 7 years was unacceptable.
    2. asked for a detailed invoice for her exact portion of bill.
    3. said she had not been provided a clear explanation of the work carried out on the property.
    4. said she did not believe amount (£1,517.94) was correct. It seemed disproportionate and without the exact breakdown of costs, it could not be proved that it was a fair portion of total bill.
  6. The landlord responded on 26 September 2023. It said that
    1. although costs may relate back to 2016, it had received the final account/invoice in February 2023. It had served an actual invoice to the resident on 5 June 2023. This was within 18 months of relevant costs being incurred. The operative date for section 20 was the date on which ‘costs were incurred’.
    2. it was unable to provide invoices related to individual properties as the payments are based on entire contract costs and not individual leaseholder apportionment of costs. The resident could request final account workings for their block, showing each element of work and associated cost.
    3. it had provided a final account, which gave breakdown of the work carried out. It provided payment certificates for additional clarity.
    4. the resident was responsible for a portion of costs. This was calculated using the rateable value of the resident’s property. The Inland Revenue (now HM Revenue and Customs) set the rateable values. 
  7. The resident asked to escalate the complaint on 29 September 2023. She felt the landlord had not explained the bill and asked for copies of specific documents. The landlord responded on 7 November 2023. It apologised for the delay and said:
    1. it believed it had explained the bill but accepted that 7 years was a long time to provide a final bill. It apologised for inconvenience.
    2. it had provided section 20 notices ensuring that residents were aware that this final cost would be invoiced.
    3. the resident had received her actual apportionment for the cost of the work.
    4. the work was required due to electrical systems being at their maintainable life expectancy. Elements were found to be in disrepair due to age and some parts could no longer be sourced from supplier. The capital works team decided a full replacement.
    5. provided an explanation of how the rateable value of each property was used to calculate the final invoice.
  8. The resident asked this Service to investigate on 16 November 2023. She said she was still not happy because; the figures did not appear correct, the time of the notification was in 2016, and she was not satisfied with the reason works were carried out. She disputed the amount and believed the bill should be zero. 

Assessment and findings

Scope of the investigation

  1. The resident’s complaint concerns the landlord’s handling of, and response to, her request for an explanation for the major works service charges. In accordance with paragraph 42.d of the Scheme, the Ombudsman may not consider complaints which concern the amount of service charge. However, we can assess whether the landlord’s overall communication with, and responses to, the resident were appropriate, fair and reasonable.
  2. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber) and the complainant would be advised to seek free and independent legal advice from the Leasehold Advisory Service (LEASE) ( https://www.lease-advice.org/) in relation to how to proceed with a case.
  3. Reference has been made to events and communication that took between 2014 to 2023 to contextualise the resident’s complaint and landlord’s response in 2023. The assessment has focused on the landlord’s response to the resident’s concerns raised in 2023.

The landlord’s handling of the resident’s concerns about the service charge.

  1. The landlord’s leaseholder handbook states that residents are responsible for paying all service charges on time. The landlord is responsible for calculating service charges. It must also keep the building in good repair and maintain communal services. The leaseholder handbook also contains information on how the rateable value of the property is used to calculate individual service charges.
  2. The landlord’s leaseholder handbook uses section 20 of the Landlord and Tenant Act 1985 to define works as major if the cost of the works is greater than £250 per resident. The landlord will carry out a section 20 consultation where the work required may affect the resident’s property in the next 12 months.
  3. If the landlord decides to carry out work affecting the property and the cost is likely to exceed £250, it will send the resident a Notice of Intention. This should:
    1. give a general description of works the landlord intends to carry out.
    2. the reason why the works are necessary.
    3. the estimated cost of the works and the residents estimated contribution.
  4. Section 20B of the Landlord and Tenant Act 1985 specifies that when costs are incurred carrying out work, the landlord must do one of the following within 18 months:
    1. send the leaseholder a demand for payment.
    2. send the leaseholder a notification that costs have been incurred, and they will have to pay at a future date.
  5. The landlord’s leaseholder handbook states it may send a notification that costs have been incurred and that an invoice will be sent in the future. The landlord will include a breakdown of the costs with the invoice. The leaseholder handbook gives an example of what a major works service charge invoice includes and looks like.
  6. Under section 21 and 22 of the Landlord and Tenant Act 1985, leaseholders have the right to request a summary of the service charge costs. Having received the summary, leaseholders can then ask to inspect receipts and accounts from the last accounting year, or where accounts are not kept by accounting years, the past 12 months before the request.
  7. The Ombudsman’s insight report on service charges (which can be found on our website) states that landlords should consider whether the information given about service charges is in clear and simple language. This should be able to be understood by the ordinary person with no specialist knowledge.
  8. In this case, the landlord states that it sent a Notice of Intention in 2014. Given the span of the works and the length of time this investigation has not assessed this individual document.
  9. The landlord sent the resident a section 20 notice relating to landlords’ electrics on 17 February 2016, 28 January 2021 and 23 March 2023. The landlord stated in its stage 1 response that it sent additional section 20 notices in 2018 and 2019 but it has not provided these to this investigation. The landlord provided an estimated individual cost to the resident with the 2016 notice.
  10. The landlord sent the resident a major works service charge invoice on 5 July 2023. This referred to the electrical works notified in 2016 and since carried out. It stated that £1,517.94 was due within 30 days. It gave details on prompt payment and payment plan options. It included a breakdown of consultant’s fees, electrical installations, preliminaries and a management charge. This was reasonable and in line with its leaseholder handbook. In line with the Ombudsman’s insight report, it would have been best practice for the landlord to have explained some of these charges (e.g. preliminaries) further in clear and simple language.
  11. The resident contested the bill on 2 August 2023. The landlord acknowledged her concerns and gave reasons for the delay in issuing a final invoice. It stated that although the works were related to 2015/16 not all works took place in the same financial year. It gave details of additional section 20 notices sent to the resident in 2018, 2019, 2021 and 2023. This was reasonable and in line with the information in its leaseholder handbook.
  12. On 22 August 2023, the landlord told the resident she could request the final account workings for her block which would show each element of work and cost associated to it. The resident responded in writing and asked to see the invoices. It would have been reasonable for the landlord to have assumed that she was requesting the information offered. However, it did not provide the final account workings.
  13. The landlord provided payment certificates for work undertaken with its stage 2 complaint response on 7 November 2023. However, these did not provide information on each element of work and costs associated. The landlord did not show it had due regard to section 21 and 22 of the Landlord and Tenant Act when considering what information to provide in response to the resident’s request to understand their service charge. This was not reasonable and further confused the resident’s understanding of the charges.
  14. In summary, the landlord did not respond to the resident’s concerns and clarify what was unclear about the breakdown of costs provided. In addition, there were several communication shortcomings. These included:
    1. not giving the breakdown of costs in clear and simple language.
    2. not providing the final account workings for her block which would show each element of work and cost associated with it.
  15. The Ombudsman considers this amounts to maladministration. The landlord did not acknowledge its failings and did not take steps to put it right.
  16. Having considered the Ombudsman’s remedies guidance, the landlord is ordered to pay the resident £100 for the time and trouble caused by its handling of the resident’s concerns about the service charges.

The associated complaint handling.

  1. The landlord’s corporate complaints policy and the Housing Ombudsman’s Complaint Handling Code (the Code) oblige it to acknowledge complaints within 5 working days. It is required to respond to stage 1 complaints within 10 working days, and to final stage complaints within 20 working days.
  2. The landlord is only permitted to extend these timescales by more than 10 and 20 working days, respectively, with good reason. It is obliged to contact the resident within its original response timescales with the reasons for any extension and the expected timescale for its full complaint response.
  3. The resident made a stage 1 complaint on 24 August 2023. The landlord did not acknowledge this complaint and responded 23 working days later on 26 September 2023. It did not acknowledge or apologise for the delay. This was not appropriate.
  4. The resident escalated her complaint on 29 September 2023. The landlord did not acknowledge this complaint and responded on 7 November 2023, 27 working days later. It apologised for the delay in responding, but did not offer any further remedy.
  5. It was inappropriate that the landlord did not remedy its complaint handling delays and lack of updates. The Ombudsman’s remedies guidance and landlord’s compensation policy are clear that it should have considered apologising for delays and offering the resident proportionate compensation. It did not take suitable steps to follow our dispute resolution principle to put things right.
  6. The Ombudsman considers this amounts to maladministration. The landlord did not apologise for its stage 1 delays and did not offer proportionate redress for its complaint handling failures. The landlord has therefore been ordered to pay the resident £100 compensation to recognise its poor complaint handling and to apologise for this.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of the resident’s concerns about the service charges.
  2. In accordance with paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of the associated complaint.

Orders

  1. Within 28 days:
    1. the landlord must apologise to the resident for the failures identified above.
    2. the landlord is ordered to pay the resident £200. This is comprised of:
      1. £100 for the distress and inconvenience caused by the landlord’s failure to provide an appropriate breakdown of costs when requested and for its communication shortcomings.
      2. £100 for the distress and inconvenience caused by the landlord’s complaint handling failures.
      3. These sums must be paid direct to the resident and not offset against arrears where they exist.
    3. the landlord is ordered to send this Service evidence of compliance with the above orders.