Hyde Housing Association Limited (202004890)

REPORT

COMPLAINT 202004890

Hyde Housing Association Limited

8 February 2022

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 (leaseholder) 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 response to:
   1. The leaseholder’s request for information regarding service charges.
   2. The leaseholder’s complaint.

Background and summary of events

2. The leaseholder owns a property in a block of which the landlord is the freeholder. The leaseholder lives elsewhere and has no vulnerabilities recorded.

The ‘service charges – summary of tenants’ rights and obligations’ leaflet

3. The information on service charges at Section 3 details the leaseholder’s right to ask a ‘First-tier Tribunal’ to determine whether they are liable to pay service charges. Section 9 says the leaseholder has the right to request a summary of the charges and this must be given within one month of the request.

The complaints policy

4. The landlord’s online complaints policy says stage one complaints will be answered within ten working days, and stage two within 20 working days.

The compensation policy

5. Section 9.19 covers service failure, and refers to Appendix 1, guidance notes for compensation tariffs to be used to calculate appropriate values. The guidance notes at section 2.4 states that for delays causing low impact, up to £100 may be paid, with £250 for medium and up to £500 for major impact. The same tariff is shown for distress and inconvenience, and up to £50 for time and trouble spent getting a resolution to a problem

Summary of events

6.  On 23 September 2019, a service charge invoice and breakdown was issued by the landlord to the leaseholder’s former address (not the account property) for costs actually incurred between 1 April 2018 and 3 March 2019, showing an increase against the estimated costs of £281.19. Also provided by the landlord was an explanatory leaflet with examples, a summary of service charge costs including bulk rubbish removal, cleaning costs and responsive repairs, an ‘understanding your actual service charge statement’ guide and a ‘Service charges – summary of tenants’ rights and obligations’ leaflet. Section 3 detailed the leaseholder’s right to ask a ‘First-tier Tribunal’ to determine whether they are liable to pay service charges.
7. There is no record of further correspondence before the leaseholder stated a letter was issued on 20 January 2020 which said £280.28 was owed on the property. The leaseholder accordingly wrote to the landlord on 5 February 2020:
   1. Referring to an unsigned letter dated 20 January 2020 asking for £280.28 for the service charge.
   2. Her correspondence address had not been updated despite several requests, and she had not received the letter dated 23 September 2019.
   3. No one from the service charge team had been available to speak to her.
   4. Call backs were not made despite assurances.
   5. The leaseholder asked for an explanation for what had happened and a summary of the service charge for 2018/19 and had queries about grounds maintenance, cleaning, and electrical maintenance.
8. A complaint webform was completed by the leaseholder and acknowledged on 18 February 2020.  The webform said that the leaseholder had called on 27 January 2020 but could not speak to anyone, called again 27 January 2020, emailed on 3 February 2020, wrote on 5 February 2020, and called the day before and had received no response. She was only then told the service charge team had 20 working days to reply to the initial query of 27 January 2020. The leaseholder asked why she was not told this before, asked for confirmation of the turnaround time and where this was stated, confirmation that her letters were being dealt with and when she would receive a response.  
9. This was chased by the leaseholder on 19 March 2020. She asked for a breakdown of the service charge in the next seven days as this should have been provided within one month of her request on 5 February 2020, and the landlord’s complaints policy said that complaints not responded to in 20 working days would be escalated to stage two and this was requested.
10. On 7 April 2020, the landlord emailed the leaseholder with a copy of the 2018/9 actual costs and a breakdown and apologised for the delay and inconvenience.
11. A stage one complaint response was sent to the account address (the property), and by email to the leaseholder on 20 April 2020 as follows:
    1. The leaseholder’s complaint concerned the arrears she was notified about, poor customer service and her request for a written summary of the 2018/2019 charges.
    2. The landlord said it had not done enough to communicate after the leaseholder’s email of 27 January 2020 and failed to meet the service level agreement (SLA).
    3. It offered £100 for the delay in sorting this out and apologised.
    4. The service charge statement for 2019/2019 showed that the landlord underestimated the charge by £280.20 which would be applied to the leaseholder’s account as arrears.
    5. The landlord said it would then adjust the leaseholder’s direct debit from October 2019 to cover this. The arrears on the account had now been paid and the account had a 45p credit.
    6. While the landlord understood this was confusing, it had made the necessary contact to advise her of the changes so there was no service failure in this aspect of the complaint.
    7. The leaseholder had made contact on 27 January 2020 and throughout February 2020 but did not get a satisfactory response.
    8. The relevant managers had been advised and the staff involved would be spoken to. Apologies were made for the level of service and the distress and inconvenience caused.
    9. On 5 February 2020 the leaseholder had requested a written summary of the service charges for 2018/19 to understand whether the charges were reasonable. This was not received and therefore outside of the landlord’s SLA, a copy of which was attached.
    10. Escalation contact details were given.
12. The leaseholder sent an email with the following questions on 22 April 2020: 
    1. Were the accounts checked by an auditor?
    2. What did the charges for electrical inspection relate to?
    3. Why were bulk rubbish charges under maintenance and cleaning costs?
    4. Why were two costs shown on the same day if for different items?
13. Later the same day, the leaseholder sent a detailed email to the landlord referring to its email and complaint response letter dated 20 April 2020 as follows:
    1. There was no response to her letter asking for a written summary of the costs.
    2. No response to her complaint in 20 working days.
    3. No response to her email of 26 February 2020.
    4. No response to her letter of 19 March 2020.
    5. The £100 compensation not adequate.
    6. There was no explanation why she owed £280.
    7. She asked about the increases from estimated to actual costs for grounds maintenance, cleaning and electrical.
    8. She requested confirmation of the 20 days turnaround time with evidence. 
    9. She requested evidence that her other letters had been received and were being dealt with and confirmation of when she would receive a response.
    10. She asked why the estimated costs were stated as more than the actual, yet the service charge increased (per letter 23 September 2019).
    11. She had not been advised her direct debit would be adjusted.
    12. The landlord had said there was no failure as it contacted the leaseholder, she asked which section of the complaint this responded to.
    13. She did get the breakdown of the service charge but outside the statutory timescales of a month and this had not been recognised.
    14. She wanted a copy of the landlord’s compensation policy and for the complaint to be reviewed at stage two.
14. In its response of the following day, the landlord stated as follows:
    1. No audit charges were applied to the 2018/19 accounts for the leaseholder as they were not chosen by the auditors as part of the sample.
    2. The electrical supplies were checked every few years, but no recent charges for this could be found, so the landlord was checking to see when the previous inspection took place.
    3. The landlord would change the heading for bulk rubbish removal charges in the future to make this clearer.
    4. Dates were clarified for jobs in July and August 2018 and apologies were given for the delay.
15. The leaseholder emailed the landlord’s Chief Executive Officer (CEO) on 1 June 2020 and stated that she had no response to her queries bar an automated reply.  The CEO raised the question internally and was advised that the landlord had contacted the leaseholder twice. The issue was then escalated as part of the complaints process. 
16. On 16 June 2020 the leaseholder emailed and said that since January 2020 she had been trying to get an explanation regarding the service charges for 2018/19. She had called, emailed, and written to various managers including the CEO.  Internally, the landlord said all issues had been resolved.
17. The landlord issued a stage two complaint response on 26 June 2020.  It increased the compensation offer to £150 and apologised for the delay of a month in the leaseholder’s letter being answered. The landlord’s SLA was to respond to enquiries within 20 working days. It said this was the landlord’s final response, and appeal rights to this Service were given. 
18. No contact from the leaseholder for this period has been seen, but on 19 July 2020 the landlord asked the leaseholder to provide bullet points of the outstanding issues and the solution she required. The leaseholder responded on 20 July 2020 and listed the outstanding issues as:
    1. The leaseholder required a written explanation of why she owed money for the 2018/19 charge, as requested on 27 January 2020.
    2. A response to the complaint submitted 18 February 2020
    3. A full and comprehensive response to the specific issues raised in her various correspondence, the lack of customer service having caused disruption and inconvenience. The compensation offer of £150 was inadequate, and the leaseholder asked for a reconsideration. 
    4. The leaseholder also asked about the issue of repairs to windows. She had received a text to say that the landlord would visit but it had not given enough notice so was rescheduled to 4 August 2020.
19. On 19 August 2020 the leaseholder informed the landlord that she had been calling to speak with a staff member regarding the review of her complaints. The landlord apologised and said contact would be made as a matter of urgency. 
20. There is then a gap in correspondence until the leaseholder approached the Ombudsman in January 2021. Following contact from this Service, the landlord issued a further stage two complaint response on 8 February 2021:
    1.  The landlord thanked the leaseholder for her patience as the investigation had taken longer than was acceptable.
    2. The investigation focused on the previous service charge statements, clarification of charges and ensuring all charges could be evidenced, and the outstanding repairs to windows.
    3. The landlord had identified multiple failures in relation to complaint handling, keeping the leaseholder informed and delays in providing a resolution.
    4. The complaint was upheld and in line with the complaints and compensation policy, £450 compensation was offered for the delays and inconvenience relating to the management of the complaint.
    5. The leaseholder had asked why she owed £280; the landlord explained again the difference between what had been estimated and incurred.
    6. The landlord explained the line of the statement which referred to the total cost for services across the block and the estate.
    7. While the cost on the estimate was higher due to higher estate charges, the share of the total was shown as less than the actual charge and for this reason there was a deficit.
    8. The grounds maintenance was incorrectly attributed to the estate when estimated and should have been calculated at block level. The landlord apologised for this mistake.
    9. The charge for cleaning had increased from the estimate due to six instances of bulk rubbish removal.
    10. The electrical maintenance figure had increased due to an electrical inspection.
    11. There were unacceptable delays progressing repairs to the leaseholder’s windows which had been booked for 25 February 2021 after the matter was escalated. The landlord apologised for this.
    12. The landlord said it had now insisted on better checks and proactive communication in relation to service charges and that these enquires were given a higher priority within the organisation.
    13. The issue would also be highlighted with the leadership team and the landlord had installed an internal system which would ensure that significant increases were investigated. It had formed a new team to provide a direct point of contact for customers.
    14. No appeal rights to this Service were given.

Since the final response

21. The leaseholder has told this Service that the landlord had not addressed issues 2 and 3 in her complaint, there was no recognition of its persistent service failures, no explanation or apology for delays. She wanted these issues resolved and more than £450 compensation.

Assessment and findings

Service charges

22. This investigation does not discuss the level of service charges for the property, as this is something that the leaseholder would address to the First -tier Tribunal, information of which has been provided by the landlord. This investigation has looked at the communication from the landlord around the service charge.
23. In this instance, the landlord has acknowledged its failings overall and has made an offer of compensation to recognise the inconvenience caused by its delays in providing the leaseholder with the information she requested.
24. The initial error was that the landlord sent the service charge bill to the leaseholder’s previous address, despite the leaseholder stating that she had updated it. As the landlord has not responded to this issue, this investigation has assumed that the address change was notified, and the landlord did not update its records. Later letters were addressed to the account address instead of the residential address provided by the leaseholder, albeit they were emailed as well. This points to a failing in the record keeping of the landlord.
25. The stage one response of 20 April 2020 acknowledged it did not do enough to communicate and failed to meet the SLA. It offered £100 which was reasonable in the circumstances. It had also by this time provided a copy of the 2018/19 actual costs. The landlord said it had not found a service failure in respect of informing the leaseholder of the changes in the service charge, which the leaseholder queried. The landlord would appear to refer to the direct debit change form issued by a third party, however there is no evidence of where this letter was sent to or when, so it may not have been seen by the leaseholder, but this was not clarified by the landlord.
26. The landlord responded promptly to the leaseholder’s email of 22 April 2020 and apologised for the delay. However, the leaseholder’s second email that day, which asked for further details about her previous correspondence, and refusing the £100 compensation, was not processed by the landlord as a stage two complaint as it should have been. Understandably, the leaseholder escalated the matter, but stated that she had not had a response to her queries, bar an acknowledgment, when she had replied to emails from the landlord so had appeared to have received the previous responses issued.
27. Once the landlord responded at stage two of the complaint process, on 26 June 2020 and increased the £150, the leaseholder was able to bring the matter to this Service. However, the landlord said it would revisit the issue and asked for further information in July 2020 which it then failed to answer until the Ombudsman intervened.
28. The Ombudsman recognises that it was frustrating for the leaseholder not to get a response to all her enquiries, particularly during that time, as the country began the first national lockdown. Had the landlord informed the leaseholder at the outset about the SLA of 20 days to provide to the breakdown of the service charge, this may have managed the leaseholder’s expectations better. However, the landlord has since apologised several times, acknowledged that the service was not what it should have been and said that managers and staff would be spoken to. Whilst the leaseholder’s distress is not underestimated by this Service, it would not have added materially to the outcome had the landlord detailed each item of correspondence and why it had not responded to it, even if it had such an explanation. It was reasonable therefore that it has acknowledged its failure overall, apologised and offered compensation.

The complaint

29. All the landlord’s complaint responses were outside of the timescales given in its complaints policy. The delay in the first response was not particularly unreasonable in the context of the first national lockdown, but by the later dates it would have been reasonable for the leaseholder to be advised that deadlines had been extended if required.
30. The stage two response of 26 June 2020 could have been the end of the landlord’s internal complaints process, but the landlord offered to revisit the matter again, then failed to respond to the leaseholder’s further response of 20 July 2020, despite the acknowledgment.
31. The second stage two response of 8 February 2021 was again very late and identified multiple failings in relation to the complaint handling and with providing a resolution to the leaseholder. However, the Ombudsman notes that the landlord was candid about what had happened, apologised for errors in the service charge accounts and explained new procedures which would be put in place. It increased the offer of compensation offer for failing to respond to the complaint to £450. It did not give appeal rights to this Service but by this time the landlord was aware that the leaseholder had approached the Ombudsman, so this did not impede the complaint process.
32. The landlord has failed on several fronts in the handling of the complaint, which grew directly from its earlier failure to respond to the communication regarding the service charge. The £150 initially offered in respect of the landlord’s failings to address to leaseholder’s legitimate questions about the service charge was reasonable. Once that grew into a repeated failing to process the leaseholder’s complaint it was fair and reasonable in all the circumstances that a higher sum was awarded.
33. The landlord’s final offer of £450 is near the maximum of its published range of compensation (which is up to £500) for major impact for delay or distress and inconvenience. This range would include compensation for failings which may affect a resident’s day to day living and wellbeing, for example a delay in heating being repaired. As such, it is at or above that which would have otherwise been recommended by this Service in this instance, had an offer not already been made.
34. Although this case has been ongoing for far longer than was necessary due to the failings of the landlord, it did then take appropriate action to respond to the leaseholder’s concerns. Also of note, is that the landlord has reviewed its processes and cited learning from this investigation to avoid this happening to others.

Determination (decision)

35. In accordance with paragraph 55 (b) of the Scheme, in respect of:
    1. The leaseholders request for information regarding service charges.
    2. The leaseholder’s complaint.

The landlord made an offer of redress, prior to the investigation, which satisfactorily resolved the complaint.

Reasons

Service charges

36. The landlord has offered redress to the complainant prior to the investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

The complaint

37. The landlord has offered redress to the complainant prior to the investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Recommendations

38. It is recommended that the landlord pay the sum of £450 already offered in resolution of the complaint, if it has not done so already, as this recognised genuine elements of service failure and the sufficient redress finding by this Service is made on that basis.