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Notting Hill Genesis (202317422)

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REPORT

COMPLAINT 202317422

Notting Hill Genesis (NHG)

27 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:
    1. The resident’s service charge account.
    2. The associated complaint.

Background

  1. The resident is a shared ownership leaseholder of the property owned by the landlord, a housing association. She lives in a second floor flat, which is 1 of 6 properties in the building.
  2. On 5 and 19 October 2022 the resident asked the landlord for a breakdown of all service charges and a copy of all bills for the year ending 31 March 2022. The landlord then sent a request for payment to the resident on 2 November 2022 for a service charge deficit of £664.19, which was one sixth of the total deficit of £3,985.14 for the building.
  3. The resident disputed the service charge deficit on 7 November 2022 and continued to request a summary and breakdown of all charges for the year ending 31 March 2022 throughout November and December 2022. The landlord provided the end of year account for 2021 to 2022 on 9 December 2022. It also provided some invoices for various costs on 2 February 2023.
  4. The resident raised a complaint to the landlord on 27 March 2023. She disputed the service charge deficit amount of £664.19. She also disputed an increase in service charges from 1 April 2023 to £186.94 per month. She said the landlord did not respond to her requests for a breakdown of charges until 2 February 2023, and it only sent her a partial response. She said the summary included an invoice for fire risk assessments totaling £13,638 but the landlord did not consult the lessees. She also said other lessees had paid lower amounts towards the deficit, or nothing at all, and she wanted the £664.19 refunded.
  5. The landlord issued its stage 1 complaint response on 24 April 2023. It confirmed it had equally proportioned the service charge deficit between all 6 flats. It provided details on how the deficit arose by showing the total expenditure and the estimated expenditure. It apologised for the time taken to provide the summary of charges for the year ending 31 March 2022 and said the summary it sent was compliant with Section 21 of the Landlord and Tenant Act (1985). It also explained why other lessees might have paid less and confirmed no individual leaseholder was charged more than £250 for the fire safety checks so there was no need for any consultation.
  6. The resident asked the landlord to escalate her complaint the next day. She said she was still waiting for a full summary of all charges and wanted the amount of £664.19 refunded.
  7. The landlord provided its final complaint response on 19 June 2023. It said its stage 1 response of 24 April 2023 showed how the same charge was raised on each of the flats equally. It also said it provided a summary of the account with its stage 1 response and had arranged for her to inspect the accounts and invoices in its office. It confirmed it was satisfied its stage 1 response addressed all issues and was correct.
  8. The resident wants the landlord to refund the amount she paid of £664.19 for the deficit and to provide a breakdown of the £3,985.14 total deficit service charge demand for 2021–22.

Assessment and findings

Scope of the investigation

  1. It is understood that the resident’s complaint concerns delays providing her with information about service charges, and the landlord’s response to her requests for a refund. She also raised concern that the level of increase was not fair or justifiable. It should be noted that in line with paragraph 42.d of the Scheme, the Ombudsman may not consider complaints that concern the level of service charge or rent, or the increase of service charge or rent. As such, this report will not decide whether service charges are reasonable or payable but focus on the landlord’s communication with the resident and whether its response was reasonable in the circumstances. She may wish to seek legal advice on this aspect of her complaint.
  2. Furthermore, the Scheme says the Ombudsman may not consider complaints made prior to having exhausted a member’s complaints procedure. This would include any issues that arose following the landlord’s final response of 19 June 2023. Consequently, this investigation’s assessment is limited to events that occurred up to the final complaint response. The resident may wish to consider making a new complaint to the landlord if she is dissatisfied with its handling of any current matters.

The service charge account

  1. Under the terms of the lease, the landlord has various obligations to insure the building in which the resident’s property is situated and to maintain and repair the structure of the building and its common parts. The resident is required to pay a proportion of the charges incurred by the landlord in complying with these obligations and associated costs. The resident pays her proportion by way of service charges.
  2. The landlord estimates its likely expenditure in each year ending 31 March, known as the account year. The resident makes payment on the basis of the estimate. As soon as practicable after the end of each account year, the landlord determines the amount by which actual expenditure has exceeded or fallen short of the estimate, and it notifies the resident of the surplus or deficit. 
  3. The resident has the right to request a written summary of the costs, which make up the service charges. The landlord must provide the summary within 1 month of the request, or 6 months of the end of the period to which the summary relates, whichever is the later. The summary must:
    1. Cover the last 12-month period used for making up the accounts relating to the service charge ending no later than the date of the request, where the accounts are made up for 12–month periods; or
    2. Cover the 12–month period ending with the date of the request, where the accounts are not made up for 12–month periods.
  4. The resident also has the right, within 6 months of receiving a written summary of costs, to require the landlord to provide reasonable facilities to inspect the accounts, receipts and other documents supporting the summary.
  5. The landlord sent the resident a service charge statement for the account year 2021-22 in September 2022 which showed a deficit. The resident asked the landlord on 5 and 19 October 2022 for further information. She asked for a breakdown of all service charges and a copy of all bills for the year ending 31 March 2022. The landlord responded on 20 October 2022 and said it was waiting for a response from its finance team.
  6. Without providing the requested information, the landlord asked the resident to pay the service charge deficit of £664.19 on 2 November 2022. Landlords are required by the Commonhold and Leasehold Reform Act 2002 to include a summary of the rights and obligations when issuing a demand for payment of service charges to residents. The landlord included this information with the demand for payment of 2 November 2022 which was appropriate.
  7. Despite the resident making further requests for a full breakdown of the costs on 7 and 22 November 2022, along with disputing the deficit amount, the landlord did not provide any information until it sent her an end of year account summary for 2021–22 on 9 December 2022. This was over 2 months after the resident’s initial request for further information, which was unreasonable.
  8. The resident then emailed the leasehold service charge team on 18 December 2022. She queried the charges for various services including communal electricity costs and communal cleaning costs. She also asked for full breakdowns and explanations of all costs and disputed an upcoming monthly increase of £61.56 for the next account year. She again disputed the deficit of £664.19 and asked why the landlord did not take it from the reserve fund, as it had not completed any cyclical works since 2012–13.
  9. There is no evidence of any response from the landlord until it emailed the resident on 2 February 2023. It provided invoices for estate maintenance, combined cleaning and estate charges and fire safety maintenance. It also clarified that the management fee, insurance and examination (audit) fee were internal costs. It said it was still awaiting copies of the electricity invoices from its utilities team and would provide them when available.
  10. As the landlord was required to provide reasonable facilities to inspect the accounts, receipts and other documents supporting the summary, it was reasonable for it to email relevant invoices to the resident. However, it had been almost 4 months since she first requested copies of all bills and a breakdown of all charges. We consider this delay to be inappropriate.
  11. When the landlord issued its stage 1 response of 24 April 2023 it explained how the deficit was proportioned between the 6 flats, but did not provide any further commentary or explanation of the breakdown of charges. It apologised for the time taken to provide a summary of charges as requested. However, it did not offer any compensation to acknowledge the time and inconvenience caused by its delays. This is not in line with its own compensation policy or that of this Service.
  12. When the resident asked to escalate her complaint the following day, she said she had only received part of the summary on 2 February 2023. She said she was still waiting for the landlord to provide the remaining summary information (copies of the electricity invoices).
  13. The landlord responded on 27 April 2023 and clarified there was a difference between a request for a summary of charges and a request to inspect the accounts, receipts and other supporting documents. It said it could arrange for the resident to inspect all documents in its office.
  14. On 1 May 2023 the resident requested further clarification on how the deficit accrued. She also asked for a statement for the reserve fund balance. The landlord responded on 4 May 2023. It said the main reason for the deficit was an increase in the reserve fund contribution. It explained the estimated expenditure was £9,336.96 but the actual expenditure was £13,322.10 leaving a deficit of £3,985.14. It confirmed the apportionment was 16.67% for each of the 6 flats. It also provided evidence that the reserve fund balance was £23,415.88 in 2018-19, £27,509.54 in 2019-20, £31,557.22 in 2020-21 and £38,506.39 in 2021-22.
  15. The resident continued to request a refund of the £664.19 deficit payment throughout May 2023. The landlord arranged for her to attend its office on 18 May 2023 to view all invoices and receipts.
  16. When the landlord provided its final complaint response of 19 June 2023 it reiterated what it had previously told the resident. We note by this time the resident had attended its office and viewed all available invoices and documents relating to the service charges. It also said it was satisfied its stage 1 response had addressed all issues. However, it still did not give consideration to compensation to acknowledge the time and inconvenience caused by its delays providing information to the resident.
  17. Since then, the Ombudsman published an insight report on service charges in December 2023. This sets out that when queries are raised about service charges, the landlord should respond in a timely way and provide the information in a consumer-friendly format. The report suggests that even if residents do not specifically invoke their rights to obtain information under the Landlord and Tenant Act, “it may still be appropriate to provide relevant and additional information to a resident to assist them in understanding the charge.”
  18. The landlord has told us it has since improved the clarity of the information provided with the service charge budget, to include a detailed booklet which clearly breaks down the service charge and shows what each item covers. It will also produce a detailed booklet from 2023-24 onwards which will include the variance for each element of the service charge, and commentary on the reasons for the variance.
  19. In summary, the landlord delayed providing evidence of bills and invoices to the resident for more than 4 months from her first request of 5 October 2022. It ultimately did provide the requested evidence and also arranged for her to attend its office to view all documents in person. However, it did not consider providing compensation to acknowledge the inconvenience caused by its delays.
  20. Therefore, we are ordering the landlord to apologise to and pay the resident £100 compensation. This considers the failings mentioned above and is within the bracket the Ombudsman’s remedies guidance would award for failures of this nature resulting in service failure that adversely affected the resident.

The associated complaint

  1. Under the Ombudsman’s Complaint Handling Code (the Code) landlords must ensure they acknowledge a complaint within 5 working days. They must respond to the complaint within 10 working days of the acknowledgment at stage 1. They must also acknowledge an escalation request within 5 working days and provide a final response within 20 working days of the date of acknowledging the escalation request. The landlord’s complaints policy is compliant with the above requirements of the Code.
  2. The resident raised a complaint on 27 March 2023. There is no evidence the landlord acknowledged the complaint within appropriate timescales. It issued its stage 1 response on 24 April 2023, which was 18 working days after the resident’s complaint, and not in line with the Code or the landlord’s own complaint policy to respond within 10 working days. The stage 1 response also did not acknowledge the delay or offer any apology or redress.
  3. Following the resident’s escalation request of 25 April 2023 the landlord responded on 4 May 2023 and said it trusted it had responded to all queries to prevent the escalation, which was not appropriate.
  4. In total the resident had to request an escalation 3 times until the landlord acknowledged it had escalated the complaint to stage 2 on 19 May 2023. The delay in escalating the complaint was a complaint handling failure. It then did not issue its final complaint response until 19 June 2023. Although that was 20 working days from the escalation acknowledgement, it was outside of the required timescales from the resident’s escalation request of 25 April 2023. The final response also did not acknowledge the delay or offer any apology or redress.
  5. Landlord’s must have an effective complaint process to provide a good service to its residents. An effective complaint process means landlords can fix problems quickly, learn from its mistakes and build good relationships with residents. In this case, the landlord did not acknowledge the initial complaint and delayed providing its stage 1 response. It also delayed acknowledging the escalation request and issuing its final complaint response for which it offered no redress. The Ombudsman therefore finds service failure for the failures identified in the landlord’s handling of the associated complaint.
  6. Therefore, we are ordering the landlord to pay the resident £100 for the time, trouble, and inconvenience caused by its complaint handling failures. This is in line with the Ombudsman’s remedies guidance recommendations of compensation in this bracket for such failings resulting in service failure that delayed getting matters resolved.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was service failure in relation to the landlord’s handling of the service charge account.
  2. In accordance with paragraph 52 of the Scheme, there was service failure in relation to the landlord’s handling of the associated complaint.

Orders and recommendations

Orders

  1. The landlord must within 28 days of the date of this determination:
    1. Provide the resident with an apology for the failings outlined in this report.
    2. Pay the resident total compensation of £200, which is made up of:
      1. £100 in recognition of the time, trouble, distress, and inconvenience caused by its failures to appropriately handle the service charge account.
      2. £100 for the time, trouble, and inconvenience caused by the landlord’s complaint handling failures.
  2. All payments must be paid directly to the resident and not credited to the rent account unless otherwise agreed by the resident.