London & Quadrant Housing Trust (L&Q) (202207331)

REPORT

COMPLAINT 202207331

London & Quadrant Housing Trust

29 September 2023

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

The complaint is about the landlord’s handling of service charges in respect of lighting and grounds maintenance.
The Ombudsman has also investigated the landlord’s complaint handling.

Background

Contextual information

The resident occupies a two-bedroom house classed as general needs, on an assured tenancy. The resident moved to the property in 2010 by way of mutual exchange.
Given the nature of the complaint, it is important to set out some important points about the property. Outside the front of the property, there is a small garden that is paved. Beyond that, there is a footpath which according to the title deeds, is owned by the landlord. Just beyond the small path, there is a grassed area. The title deeds suggest that is publicly owned land.
Under the tenancy agreement (clause 20) the resident is responsible for keeping any gardens for their sole use clean and tidy. They are required to keep communal gardens free from obstruction.
The tenancy agreement makes provision for a fixed service charge for ‘grounds maintenance’.

The events giving rise to the complaint

On 23 February 2021, the resident requested the landlord to send her a copy of the rent increase letters that included the service charges, for the last five years. The documents show charges for the following:
1. External electricity consumption.
2. Grounds maintenance.
3. Mobile caretaker.
4. Admin and management fees.
Save for the grounds maintenance, none of these are listed in the tenancy agreement. The landlord has not produced evidence that it followed the procedure to introduce charges.
The charges were as follows:
1. 2016/17 – £3.78 per week
2. 2017/18 – £3.54 per week
3. 2018/19 – £3.10 per week
4. 2019/20 – £2.39 per week
5. 2020/21 – £2.74 per week
On 18 February 2022, the resident contacted the landlord disputing the service charges. She advised the landlord that she lived in a house and not a flat or estate and should therefore not be charged for communal lighting and grounds maintenance. The resident states she heard nothing back and logged a formal stage 1 complaint on 31 March 2022.
On 5 April 2022, the resident was advised that upon further investigation, the landlord could confirm that she should not be paying a service charge for grounds maintenance. It confirmed the areas surrounding her property were not maintained by the landlord. It advised that it had requested the GIS map to be amended to reflect the changes and that it would consider a one-off credit adjustment.
The landlord acknowledged the stage 1 complaint on 11 April 2022 and provided a stage 1 response via email on 22 April 2022. The landlord confirmed that the communal electricity–street lighting was not the landlord’s responsibility, and it would refer it to the council, it did not respond to the concerns about the grounds maintenance.
The evidence provided is confusing and does not indicate when the resident asked for the complaint to be escalated or why. However, on 8 May 2022, the landlord’s records show that the landlord contacted the resident to advise that the stage 2 had been escalated and assigned. The documentary evidence confirms the landlord discussed the complaint internally. It wrote to the resident to apologise for a misunderstanding in the stage 1 response. It also stated that it would arrange with accounts to pay the compensation, it is not clear what misunderstanding or compensation it was referring to.
On 12 May 2022, the landlord emailed the resident to advise that once the service charges had been amended, it would notify her and return the payments. The evidence shows that the resident continued to chase the landlord for an update. On 14 June 2022, the landlord emailed the resident to state it was unable to resolve the matter at this time and told her to log a complaint.
On 11 July 2022, the resident emailed the landlord to explain that her complaints and enquiries were being closed without resolution. In that email, she was clear to explain that she should not be charged for ‘grounds maintenance’ under ‘block charges’.
The resident contacted this Service on 4 August 2022, as she was unsure what stage of the complaints process she was at. On the same date, the Ombudsman wrote to the landlord to explain that the complaint was about incorrectly charging for grounds maintenance.
On 5 August 2022, the landlord contacted the resident and acknowledged the escalation of her complaint to stage 2. It acknowledged that the stage 2 complaint was about:
1. The landlord’s handling of the service charges on the account.
2. The resident had received an email stating she should not be charged for grounds maintenance at block level.
3. That the resident had received correspondence from the landlord, but no formal stage 1 and stage 2 complaint response.
4. The resident was unsure where she was currently within the landlord’s complaint process.
The landlord provided its stage 2 response on 5 September 2022. It advised that it had discussed the charges with the service charge team. It stated the lighting was the council’s responsibility and not the landlord’s responsibility. It had requested clarity but had not received it at that time and would notify the resident once it had confirmed the position. It advised the resident that the issues regarding the grounds maintenance were part of the escalation on 9 June 2022, and as such, it was unable to provide a stage 2 and said that it would need to be raised as a separate complaint. It apologised for the oversight regarding not sending a stage 1 response and awarded £10 in compensation.
The resident remained dissatisfied with the outcome of the complaint. She felt the landlord had failed to address the complaint regarding the grounds maintenance. She was also dissatisfied with the level of communication and the landlord’s handling of the complaint and referred her complaint to this service. She felt the landlord had not resolved the complaint, and she had not received any refund for the charges that the landlord had confirmed she should not be paying.
On 7 June 2023, this service requested an update and further information regarding the service charges. The landlord responded on 14 June 2023. It now states that the initial information given to the resident, was incorrect and that she should be paying the charges. It has provided her with an explanation as to why this is the case. It states that for transparency, the charges were split into block and scheme in 2022/2023, but this was not communicated to the resident. The landlord has stated that although the charge is valid, it accepts that it should refund the resident as per the original decision on 5 April 2022.

Assessment and findings

Preliminary issue

Under the Housing Ombudsman Scheme rules the Ombudsman can only investigate complaints which have exhausted the complaint procedure. In this case, there is some dispute as to whether the complaint about the communal charges has been through the complaint procedure. The Ombudsman has taken the view that it has on the basis that the resident raised complaints about the landlord’s handling of the charges for communal electricity and grounds maintenance. Therefore, this will be considered as part of this complaint. This is because the landlord has had a fair chance to consider this via its complaint procedure.

The landlord’s handling of the service charges

The landlord’s service charge policy states that service charges will be collected from those who receive services for the upkeep and maintenance of the communal areas around their home. Paragraph 5.1 of the policy states that the tenancy agreement sets out what service charges can be charged for the relevant estates.
Service charge terms and practices must be fair and the legal rules on consumer protection apply to service charge provisions. This means that tenancy terms which allow the landlord to claim a charge without providing the service, or where the landlord is entitled to decide if the service has been provided, could be unfair and not enforceable. The landlord is also not permitted to charge for items which would fall under its obligations under section 11 of the Landlord and Tenant Act 1985 (see sections 11(4) and (5)).
Even if that is not correct, the Ombudsman must decide what is ‘fair’ in all the circumstances under the Housing Act 1996 and the Housing Ombudsman Scheme. As a matter of fairness, service charges will only be payable where the service is ‘chargeable’ under the terms and conditions of the tenancy and where the landlord can demonstrate the resident has received the service or received the benefit of the service.
The charges levied for the grounds maintenance relate to a ‘scheme’ and a ‘block’. The resident does not live in a scheme or a block – but a terraced property. In its explanations to the Ombudsman, the landlord stated that references to ‘scheme’ and ‘block’ are nomenclature. It states it may claim this for the area outside the resident’s garden where it provides the service.
Based on the evidence provided by the landlord, the only area that the landlord could reasonably charge for, is for the maintenance and cleaning of the footpath just outside the resident’s garden. The area beyond that belongs to the council based on the landlord’s ordinance map. This indicates that some level of confusion has been caused to the resident. The position was also confusing for the landlord’s staff who charged the amounts and later said they were not due. The landlord’s final position is that it is due. This is not appropriate.
The landlord acted unfairly by charging the resident for communal lighting. It also acted unfairly in the way it handled the issues with the grounds maintenance charges because of the conflicting information given to her. For these reasons, it is responsible for maladministration.

The landlord’s handling of the resident’s enquiries

The resident raised her concerns about service charges on 18 February 2022. The evidence shows that she chased the landlord for a response on several occasions. Her initial complaint included the charges for both grounds maintenance and electrical consumption. Between then and 7 June 2023, the landlord has given conflicting information. In summary, the landlord confirmed that the resident should not be paying a service charge for grounds maintenance. The landlord was not able to explain why the resident had been charged for maintenance to a block and scheme. The landlord has now been explained block and scheme charges are names for the services provided for the area that is maintained around her home. The handling here has not been appropriate.
The service charge regarding lighting has been confirmed as something the council will need to respond to. The landlord states it passed this on to the council for clarification. On 5 September 2022 as part of the stage 2 response, it advised it had not received a response from the council. The evidence does not show if the landlord has continued to follow this up for the resident, or if it has informed her what action she can take to resolve this herself, this is a service failure by the landlord.
On 14 June 2023, the landlord informed the Ombudsman it had chased the council for a response. It said it was continuing to establish who was responsible for the lighting costs. This is not acceptable.

The landlord’s level of communication and complaint handling

The landlord’s complaint process is a two-stage process. It states when it receives a complaint:
1. That it will make contact by the end of the next working day and respond within 10 working days.
2. At stage 2 – someone not involved at stage 1 will respond within 20 working days.
The Ombudsman’s Complaint Handling Code states:
1. (4.10) Landlords should keep residents regularly updated about the progress of the investigation even where there is no new substantive information to provide.
2. (4.15) A full record must be kept of the complaint, any review, and the outcomes at each stage. This must include the original complaint and the date it was received, all correspondence with the resident, correspondence with other parties and any reports or surveys prepared.
The resident contacted the landlord on 18 February 2022 to dispute her service charges. She asked the landlord to review this before the new rent review letter was issued stating what service charges she would be paying. The resident states she has been asking about service charges for several years and that each year, she had to contact the landlord to try to sort the charges out.
The resident logged her complaint on 31 March 2022. The landlord acknowledged the complaint on 11 April 2022. In line with its policy, it should have done this within two working days, but it failed to do so.
The landlord provided an email response on 22 April 2022. The response stated that the resident raised two queries about her service charges, but it only addressed the issue regarding communal electricity. The landlord advised the resident to continue to pay the service charge and if it was incorrectly charged, it would repay it. This was not acceptable. The landlord was required to ensure it was permitted to make the charge under the tenancy and that the resident had received the benefit of what she was paying for. It failed to do this.
The landlord contacted the resident on 8 May 2022 to advise it had assigned her stage 2 complaint. This service has not seen evidence of the request to escalate or the reasons why. It is the landlord’s responsibility to maintain records and it has failed to provide this information. This was a failure by the landlord.
There is evidence of the landlord contacting the resident on 9 May 2022 to acknowledge the escalation to stage 2.
There is evidence of some communication between the landlord and resident between 12 May 2022 and 9 June 2022. On 10 June 2022, the landlord contacted the resident by email to advise it would investigate the service charge query and provide a response. It said if there were any delays, it would update the resident. By that time, the landlord had already acknowledged the stage 2 request on 8 May 2022. It is clear from the evidence that the landlord was not aware of its own complaints handling policy and continued to cause confusion as to what stage of the process the resident was at, this is not acceptable.
On 14 June 2022, the landlord contacted the resident to advise it was unable to resolve the matter at that time. It advised the resident to log a complaint via its website. It is not clear why the landlord advised the resident to take this action when a complaint was already ongoing. This was not appropriate.
The resident again contacted this service for support. We contacted the landlord on 4 August 2022, the landlord again acknowledged it would escalate the complaint to stage 2.
The landlord unreasonably delayed providing a final response from at least 8 May 2022 to September 2022. That was unacceptable. Importantly, in its response it provided no more information than it had on 22 April 2022, five months previously, this is not acceptable.
The Complaint Handling Code requires all grounds of a complaint to be responded to. Of significant importance is that the resident raised her issues with service charges in February 2022, which included grounds maintenance. The complaint raised in March 2022 and escalated in May 2022, was predicated on the charges for ground maintenance and electricity charges. The landlord’s decision that it would not address the grounds maintenance in the stage 2 response was unacceptable. This will only have sought to cause further and additional delays and confusion for the resident.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the service charges for street lighting and grounds maintenance. This is primarily because the landlord’s communication has been unclear and confusing.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord for its communication and complaint handling.

Orders

The Ombudsman orders the landlord to, within 28 days of the date of this determination:
1. Pay the resident £700 as follows:
  1. £450 to recognise the distress, inconvenience, and time and effort the resident experienced in having her concerns regarding service charges considered and addressed.
  2. £250 for poor communication and complaint handling.
2. Refund the charges for electricity. The landlord must refund this back to the date the resident took up occupation. The landlord must add to the payments interest at a rate of 2% simple (which is average RPI) from the date the resident made each payment until the date the landlord repays the resident. This is to consider that the landlord will have benefitted from the money from interest in its accounts when the resident was not able to. The landlord must produce evidence to the Ombudsman as to how it has worked this out within 28 days of the date of this determination.
3. The landlord must refund the charges it promised in respect of grounds maintenance.
The landlord must no longer claim the charge for communal electricity until it can confirm the landlord pays for or provides this service.
Within 45 days of the date of this determination, the landlord must:
1. Conduct a full review of the service charges the resident has paid since she moved into the property and decide:
  1. If the landlord was permitted to charge for them under the tenancy (does the tenancy allow for it, and are they excluded under s.11 of the Landlord and Tenant Act 1985); and
  2. Even if it was permitted to charge under the tenancy, whether it was fair to charge for them based on whether the resident received the services or the benefit of the services.
  3. It must seek competent legal advice on whether it is permitted to make the charges. It must provide a copy of this report to its lawyers for context.
2. This must assess the charges relating to:
  1. Electricity for lighting;
  2. Building and scheme grounds maintenance; and
  3. Admin and management fees.
It must write to the resident with the outcome of its review within 45 days of the date of this determination. It must provide a copy to this service.

Recommendations

The landlord should conduct a full review of the service charges of all its tenants and leaseholders on the estate to determine:
1. What it can charge for under the contracts (tenancies or leases);
2. Whether the specific leaseholder/tenant has received the benefit of those services; and
3. Whether it would be fair to continue to charge for the services.
This service strongly recommends that the landlord train its staff on its process, including the Complaint Handling Code. It needs to ensure that it learns from the mistakes it has made in this case, to ensure any future complaints are handled in line with the complaint handling code, and its own complaints process.