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Clarion Housing Association Limited (202302128)

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REPORT

COMPLAINT 202302128

Clarion Housing Association Limited

24 January 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 and response to the resident’s concerns regarding the administration and communication of the service charge for 2023–24, in particular the increase of the charge for communal electricity.

Background

  1. The resident is an assured tenant of the landlord, and her tenancy commenced on 9 June 2021. Her property is a 1-bedroom flat in a block of 3 properties.
  2. On 23 February 2023, the landlord sent the resident notice of her new rent and service charge. The service charge increased from £19.10 to £94.21.
  3. From 28 February 2023, the resident queried the service charge. She noted the charge for communal lighting was increasing from £1.27 (2022-23) to £65.26 (2023-24). The landlord did not respond to the resident’s request to provide further information that would explain the increase. Therefore, on 18 April 2023, the Ombudsman asked the landlord to register a formal complaint.
  4. In the stage 1 response of 4 May 2023, the landlord explained the elements of the service charge and stated that the charge was correct. The landlord offered compensation of £100 for its delay in responding to the resident’s service charge queries.
  5. The resident escalated the complaint on 5 May 2023, as she had not received a breakdown in costs, in particular regarding the communal lighting. She also asked if there were any other energy requirements in the communal area that may have contributed to the increase in the charge.
  6. The landlord sent the stage 2 response on 11 July 2023, after inspecting the communal electricity meter. It accepted that the consumption and therefore the cost was more than expected. Its investigations had not found anything to suggest that the meter had been interfered with. However, it accepted that, while the bills were accurate, they were inconsistent with a communal service. The landlord therefore confirmed that the charge for communal electricity should be £1.27 (the estimated charge for 2022-23) x 1.3 (to reflect a 30% increase in electricity prices) = £1.65 per month.
  7. The landlord also offered £250 compensation to replace the compensation offered at stage 1. This comprised of £100 for its delay in responding to the resident’s concerns since 28 February 2023, £50 for the delay in responding to the stage 2 complaint, and £100 discretionary compensation.
  8. On 18 August 2023, the landlord sent a letter confirming that the communal electricity charge for 2023-24 was £1.65, and that it had refunded the overcharge from April to August 2023.

Assessment and findings

  1. The resident’s tenancy agreement confirms that she pays a service charge. On 28 February 2023, she responded to the rent increase notice. She asked why the charge for communal lighting was increasing from £1.27 (2022-23) to £65.26 (2023-24). Her query was forwarded to the landlord’s service charge team and the resident sent further emails of 4 and 11 April 2023 pursuing a response; however, there is no evidence that the landlord provided a substantive response to the resident. As over a month had passed, this was an unreasonable delay.
  2. In the stage 1 response, the landlord confirmed that the communal lighting charge was for the cost of electricity and power to communal areas including communal lighting. It stated that this was based on the amount billed by the energy provider. However, it did not provide any figures or calculations, or otherwise explain why the charge for communal lighting had risen so much, over 50 times. It therefore missed an opportunity to demonstrate an in-depth investigation to resolve the complaint, despite offering compensation for the late response.
  3. After the resident escalated her complaint, the landlord inspected the electricity meter at her block. This was appropriate as this enabled it to establish whether there was an error or fault with the meter that could explain the increase in the charge. The landlord found no fault or error. However, it accepted while the bills supported a higher charge, the recorded consumption higher than expected for a communal service. It therefore decided to revise the charge for communal lighting so that it increased by only the percentage increase in the unit cost of electricity. The landlord was not obligated to revise the service charge as it had the right to recover the costs incurred. This was therefore an appropriate use of its discretion. Having revised the charge, it was reasonable that it included some increase as this was based on the rise in electricity prices.
  4. In the stage 2 response of 11 July 2023, the landlord stated that it would amend the estimated service charge for communal electricity to £1.65 and confirm in writing separately the following week. It did not write again within this timeframe but emailed on 18 August 2023, by which time the resident had referred her complaint to this Service. In its email, the landlord attached a letter dated 14 July 2023 which formally confirmed that the communal lighting charge was £1.65. The letter confirmed that the resident’s and her neighbour’s account had now been updated and the overcharge from April to August had been refunded. The landlord therefore ensured that there was no financial detriment to the resident from the delay in issuing confirmation of the revised service charge. Moreover, in refunding the resident, the landlord ensured that she was in the position she would have been in had the service charge for 2023-24 not increased as originally calculated.
  5. In addition, the landlord offered the resident compensation which included discretionary compensation totalling £200. Although the offer was made prior to the late issue of the letter of 14 July 2023, it was still proportionate to the delays in responding to the resident service charge queries. The offer also accorded with the landlord’s Compensation Policy at that time. This stated compensation between £50 and £250 can be offered in cases where there is a “failure to meet service standards for actions and responses but where the failure had no significant impact.” The landlord provided further redress for the late issue of the letter of 14 July 2023 by apologising in the covering email. An explanation also contributes to providing redress and in this case the landlord also explained that due to a backlog of adjustments this letter was put on hold until the resident’s account had been updated.
  6. The landlord’s complaint procedure in effect at the time stated that it aimed to respond to new complaints received since 17 June 2022 within 20 working days of the complaint being logged. The second stage is a peer review where the landlord aimed to resolve the complaint within 40 working days. After being asked by the Ombudsman to log a complaint the landlord sent the first stage response within the required timeframe. The landlord did not send the second stage response within the timeframe of 40 working days. However, it provided redress by offering compensation of £50. This offer was more than proportionate given the response was late by 7 working days.
  7. In summary, the landlord exercised its discretion to the resident’s benefit by revising her service charge and refunding her the difference. In doing so, it ensured that the resident was in the position she would have been in had the service charge for 2023-24 not increased as originally calculated, and that therefore she had no financial detriment. It also provided compensation that remedied its delays in addressing her queries and formal complaint. The Ombudsman therefore finds that the landlord offered redress to the resident which resolves her complaint satisfactorily.
  8. The Ombudsman notes that the landlord in the stage 2 response confirmed that the meter was linked to the door entry system as well as three communal lights. The Ombudsman recommends that the landlord reviews the service charge heading of “communal lights” to reflect this. There is also no evidence that the landlord has diagnosed why the meter reading and electricity bill was higher than expected. The Ombudsman recommends that the landlord investigate further to prevent potentially higher electricity bills in future.

Determination

  1. In accordance with paragraph 53.b. of the Scheme the landlord offered reasonable redress that satisfactorily resolved the resident’s complaint about its administration and communication of the service charges for 2023-24, in particular the increase of the communal electricity costs within the service charges.

Orders and recommendations

  1. The Ombudsman recommends:
    1. The landlord reviews the service charge heading of “communal lights” to reflect that the communal electricity also powers the communal door.
    2. The landlord investigates further why the meter reading and electricity bill was higher than expected.
    3. The landlord pays the resident the £250 compensation offered within its complaints procedure if it has not done so already.