Peabody Trust (202208808)

REPORT

COMPLAINT 202208808

Peabody Trust

30 January 2024

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:
1. The landlord’s response to issues the resident raised regarding the delivery of communal maintenance and housing management services;
2. The landlord’s response to the resident’s concerns about the increase in his service charge;
3. The handling of the associated complaint;
4. The level of the resident’s service charge.

Jurisdiction

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to this service, the Ombudsman must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.
The resident expressed concerns that his service charge had roughly doubled from one year to the next. Under paragraph 42(d) of the Scheme, we may not consider complaints which concern the level or increase in amount of a service charge.
Under paragraph 42(f) of the Scheme, we may not consider complaints that concern matters that, in our opinion, could be resolved more appropriately through the courts, or other tribunal or procedure. The First Tier Tribunal (Property Chamber) is able to decide whether the amount of a service charge is reasonable, and for this reason we have decided it provides a more effective route for the resident to challenge the level of his charge, should he wish to do so.

Background and summary of events

Background

The resident holds a shared ownership underlease for a two bedroom flat, which the landlord holds the headlease for.
The resident’s landlord, during the period of his complaint, merged with the named landlord on 3 April 2023. This was after the stage 2 complaint response was issued to the resident. References to ‘the landlord’ in this report will refer to whichever organisation had the legal responsibility for the resident’s lease at the time of the event.
The Housing Ombudsman has issued guidance to landlords which merge, urging them to take on board the lessons to be learnt from complaints even if they occurred under the previous landlord.
The landlord operated a two-stage complaint process, and its policy set out that stage 1 responses would be issued within 10 working days, and stage 2 responses within 20 working days. Its compensation policy gave guidance to its staff regarding the levels of redress it would offer in different circumstances and dependent on the impact on residents.
The landlord’s estate management policy set out its approach to maintaining its neighbourhoods “to a high standard”. It committed to:
1. Carry out regular visual checks of all neighbourhoods and monitor the progress on outstanding issues;
2. Enforce its communal areas fire safety policy;
3. Identify where standards could be improved, including an assessment of the condition of the neighbourhood against its standards and the calculation of a grade which would be placed on estate noticeboards;
4. Identify what action is needed regarding repairs and improvements, and when this should be done by;
5. Involve residents, including opportunities for them to attend estate inspections at least quarterly;
6. Respond to emergencies within 24 hours and all other reports of issues within five working days.
The resident’s lease sets out his obligation to pay service charges, which the landlord will bill him for in equal monthly instalments.
The lease sets out that the service charge comprises all expenditure reasonably incurred by the landlord in connection with the repair, management, maintenance, and provision of services for the building and property.
Section 7 of the lease explains that the landlord will confirm whether the actual spend during an account year has exceeded or fallen short of its estimated calculation, as soon as practicable after the end of the account year.
Section 21 of the Landlord and Tenant Act (1985) gives leaseholders the right to ask their landlord to supply a summary of the relevant costs, which make up their service charges for the last accounting period. A resident’s request must be submitted to their landlord in writing.
Section 22 of the Act gives leaseholders the right to inspect any receipts or invoices which support the landlord’s service charge figures. The request must be made within six months of the resident receiving the summary, and again must be in writing. The landlord must provide facilities for inspection of the information within one month of the request, and the facility must extend for the period of two months.
Section 4.22 of the landlord’s service charges policy confirmed it would comply with section 22 of the Act, as amended by section 154 of the Commonhold and Leasehold Reform Act (2002), to accommodate access to the required information, including from third party managing agents.
The fifth schedule of the resident’s lease sets out the landlord’s ability to increase his rent each year. We have seen documents which show the landlord increased the resident’s rent by the “November Retail Price (RPI) plus 2%” in 2020, 2021, and 2022.

Summary of Events

The resident’s monthly service charge payments were:
1. £215.35 in 2018 to 2019;
2. £201.03 in 2019 to 2020;
3. £218.66 in 2020 to 2021;
4. £118.51 for 2021 to 2022.
On 23 February 2022 the landlord sent the resident the summary of the rent and service charge he would need to pay from April 2022 to March 2023. It advised his rent would rise by 9.1% and his service charge payments would roughly double from the previous year, to £230.07 per month.
On 17 March 2022 the resident contacted the landlord and expressed his shock and disappointment at the increase of his service charge. He explained:
1. He did not understand what the service charges covered, and highlighted that the internal cleaning of his block was poor;
2. His block had not been cleaned externally, when others on his estate had;
3. The intercom system had not worked since he moved in, in 2016;
4. He had “ongoing issues” with his upstairs neighbour, and had had to spend three months in temporary accommodation he paid for, after being flooded four times from their property;
5. The landlord had advised it would not replace the cladding on his block until 2026, which the resident said made his flat “unsellable”;
6. He had made a formal complaint and had not received a response.
On 22 March 2022 the landlord emailed the resident and advised that most of the costs covered by his service charge had “not increased significantly”, with the exception of legionella testing. It added that his previous year’s service charge payments had been a lower amount, in part because his account had been in credit by £95.45 a month. It offered to refer him to its wellbeing team if he was facing any difficulties.
Later on 22 March 2022, the resident emailed the landlord and set out his dissatisfaction with the service charge. He said:
1. The intercom had not worked since he purchased the property;
2. The “whole door” had been jammed since 17 March 2022, which prevented him from accessing the building;
3. “Things break and nothing is done about it”;
4. His neighbours above had stored rubbish on their balcony, and rubbish had fallen on to his, along with pigeon droppings. They had flooded his flat five times in two years, and on one occasion he had found them on his balcony. The landlord had “washed [its] hands” of these issues, because he and his neighbours were leaseholders;
5. His fob did not allow him access to the car park, which meant he could not access his car if the lift was broken, and could not store his bike in the basement;
6. He was not getting the service he was paying for, including window cleaning and “external building cleaning”;
7. He had not been given a date that his flat “would be made safe to live in due to cladding and insulation”.
The landlord responded to the resident on 24 March 2022. It told him he would be refunded for the window cleaning in September 2022, and that the issues he raised “should have been resolved by the relevant departments”. It added that “there seems to have been a service failure on a lot of the occasions”, and the complaints team would investigate.
The landlord’s internal correspondence detailed a conversation it had had with the resident on 1 April 2022, in which it explained that it would refund him for the window cleaning charge when it reconciled its charges in September 2022. It had advised him that it had been unable to recruit staff to carry out the window cleaning.
The landlord’s internal correspondence of 1 April 2022 shows it had recognised it had received a complaint from the resident.
On 25 August 2022 the landlord issued its stage 1 complaint response to the resident by email. It:
1. Apologised for “several delays” in responding to his complaint, which were “not in line” with its customer service standards;
2. Explained it had raised the resident’s case with the relevant manager, who had advised the “situation” had been resolved;
3. Explained it had carried out staff training on record-keeping as a result of the resident’s complaint. It had reminded staff of the importance of keeping “clear, accurate and up to date” records, and of the customer service standards it expected;
4. Offered the resident £150 compensation for his distress and inconvenience, and £50 for the delay in its response;
5. It advised the resident he could contact the Housing Ombudsman, or request it escalated his complaint to stage 2, if he remained dissatisfied.
The resident thanked the landlord for the response on 28 August 2022, and explained he would still like a breakdown of the service charges. He advised that window cleaning had just started at his building, but he had been paying charges “for a prolonged period”. He also asked for an update regarding access to his building, and told the landlord he wanted to be reimbursed for the cost of a hotel stay due to a “door fault”. He suggested that the issue would be “less problematic” if his fob allowed access to the car park.
On 8 September 2022 the resident told this Service that he had been flooded by his neighbour, for the fifth time since 2016.
On 30 September 2022 the resident asked the landlord to escalate his complaint to stage 2, and said he had not received the promised compensation or service charge breakdown.
Also on 30 September 2022, the landlord sent the resident a letter with a reconciled service charge and statement for April 2021 to March 2022. It showed that there was no charge for window cleaning for that period, and also provided information about the resident’s right to take a dispute to the First Tier Tribunal (Property Chamber).
On 13 October 2022 the landlord issued its stage 2 complaint response to the resident. It:
1. Summarised the resident’s complaint;
2. Promised to carry out further investigation into why the resident’s key fob did not provide access through the car park door, and to let the resident know what it found out;
3. Apologised for the “poor communication” the resident had received. It explained the upcoming merger would give it an opportunity to review its communication processes;
4. Offered the resident £400 compensation for his time, trouble and inconvenience;
5. Advised it had now concluded its complaint process, and signposted the resident to the Housing Ombudsman if he remained dissatisfied.
On 14 October 2022 the resident wrote to the landlord and told it he thought the compensation was “fair”, however he also noted he had not received a breakdown of the service charge. He reiterated that he wanted an explanation of the rise in costs.
The landlord raised a repair for the fob access system to its contractor on or around 18 October 2022.
The landlord’s contractor attended on 25 October 2022, to investigate the issue with fob access. It reported that it had found the car park gate open, and it was not working. It found that there was no issue with the fob radio receiver unit, and advised the landlord to ask the contractor responsible for the gate to investigate and repair it.
The landlord raised a repair for the car park gate on 26 October 2022, and its records suggest this was subsequently carried out by its repairs team.
On 2 November 2022 the landlord wrote to the resident, and provided an update:
1. “Overall” service charges had increased, due to rising costs and inflation. It gave the example of gardening services, and explained the cost of weed killer, van hire and petrol had increased;
2. It had “credited back” the charge for window cleaning in 2021/22, because window cleaning was done in that year [it is assumed this should have said no window cleaning was done that year];
3. It had capped the cost of the resident’s service charge for maintenance at £100 for the year, and for each repair at £250 during the year;
4. It had raised a repair for the car park gate, and an inspection was carried out on 25 October 2022. As of 2 November 2022, the gate had been fixed;
5. It was “difficult” for it to say whether the cleaning had been done to standard, without any specific examples from the resident. It advised the resident to report any future issues to it;
6. It understood the “cladding issue” was a concern for the resident. However, it would not address this under its complaints process;
7. It reminded the resident it had previously offered him £400 compensation, and asked for his bank details so it could pay this;
8. It advised it had concluded its complaint process, and signposted the resident to the Housing Ombudsman if he remained dissatisfied.
On 7 November 2022 the resident explained to the landlord he had received its latest service charge breakdown, but that it had not answered the questions he had. He wanted to know what the charge for the block managing agent “encompassed”, if the cost for the car park entry and fob system was split between the four blocks with access to it. He also queried whether other residents could access his block with their fobs, as he had found people charging items from phones to mobility scooters and was concerned this added to the electric charges.
On 7 December 2022 the landlord sent the resident “accounts, invoices and expenditure” related to the actual spend on his service charge. These included a list of charges for the period 1 January 2022 to 31 December 2022, details of the charges invoiced by the management company for the block, and an invoice for a lift repair in February 2022. It asked the resident to send over his bank details so it could pay the compensation it had offered, and asked him to raise any specific issues with the service charge or neighbourhood team in future, including his concerns about people charging items in his block.
The resident supplied the landlord with his bank details by email to a member of staff at the landlord on 23 December 2022. The landlord responded on 20 January 2023 and advised the payment would be in his account within the next week.
On 20 February 2023 the landlord confirmed that the resident’s monthly service charge payments for 2023 to 2024 would be £355.05. It also told him that his rent was “due” to increase by 16% under the terms of his lease, but it exercised its discretion in view of the “exceptionally high increase in interest rates”, and would raise this by a maximum of 7%.
The resident has explained that he believes the increases to his service charge to be a way for the landlord to increase its revenue, and pointed to the fact it rose “way above” inflation.
The resident has explained that he feels “trapped” due to issues around cladding on his building, and he believes the landlord is taking advantage of this situation because he and his neighbours will not be able to move away. He says the landlord has told him it will start works on the cladding in 2026.
For its part, the landlord has told us the services it provided would have “cost a lot more” if it had not applied the previously mentioned caps to residents’ service charges.

Assessment and findings

The intercom system and fob access

The resident raised in March 2022 that the “intercom” system was not working and his fob would not allow him proper access to the car park and bike storage area. He said that this had been the case since he had moved in.
The landlord asked its contractor to attend and investigate these issues in October 2022, and it confirmed on 25 October 2022 that there were no problems with the fob receiver unit. The landlord promised to check the resident’s fob in its stage 2 response. It also offered the resident a total of £400 redress for his time and trouble at stage 2, which in our opinion was of a reasonable level to put things right on the matter of the fob access.

External clean of the block

The resident asked the landlord why his block had not received an external clean (and new “boards”) when this was done to neighbouring blocks.
It was a reasonable question from the resident, and the landlord acted inappropriately in not providing the requested explanation. His current landlord should now do this.
It would be appropriate for the landlord to pay the resident compensation for his time and trouble in having to escalate the matter further and wait for a response.

Internal cleaning in the block

The resident reported that the interior of his block was cleaned to a poor standard, in March 2022. The landlord’s estate management policy said it would regularly inspect its neighbourhoods, would invite comment from residents, and would publish the gradings it had applied after the inspections.
The landlord has not provided us with evidence that it took action as a result of the resident’s report, or that it had carried out its own inspections of the cleaning.
It is noted that there is a third party managing agent in place at the resident’s block. The landlord is expected to raise any issues it becomes aware of to the agent, on behalf of the resident, and to ensure that appropriate action is taken.
As with the matter above, it would be appropriate for the landlord to pay the resident compensation for the impact of its failure to respond.

Housing management services

Similarly, the landlord has not demonstrated that it responded to the specific issues the resident reported regarding the behaviour of his neighbours, including water ingress, rubbish on his balcony, and an incident of trespass.
It is understandable that these issues would cause the resident distress, and that he would seek advice and support from the landlord.
The landlord should now establish whether these matters are ongoing, and if they are it should provide the resident with appropriate support in line with its anti-social behaviour policy.
It would be appropriate for the landlord to pay compensation for the distress the resident experienced in waiting for the landlord to acknowledge the concerns he raised with his neighbours, and its failure to do this at either complaint stage.

Window cleaning

The landlord has provided the resident and us with evidence that it did not charge the resident for window cleaning in the year 2021-22, as it had promised. We are satisfied that it acted reasonably in relation to this matter.

The landlord’s response to the resident’s concerns about the increase in his service charge

The central issue that the resident raised in his complaint was his concern that he was improperly charged for services that he had not benefitted from. He explained his concern arose when his service charge nearly doubled in April 2022.
The evidence we have seen shows that his charge in 2021 to 2022 had been unusually low compared to the preceding years, and the landlord had explained in March 2022 that this was because the resident had built a surplus in his account.
The resident is entitled to see evidence of the costs incurred by the landlord that are then charged to him through his service charge. He should be given access to this evidence (such as receipts or invoices) within a month of his request.
The landlord appeared to provide the resident with relevant evidence of this nature on 7 December 2022. That was over seven months after he had submitted his complaint, and was an unreasonable delay.
The resident had asked the landlord to explain what his charge covered, beyond the list included on his annual service charge statements. Additionally, he asked the landlord to confirm that the services had actually been delivered.
The landlord did not offer this clarity to him during its complaint process. This added to his distress, and it is understandable that his trust in the landlord was affected. The landlord had a comprehensive estate management policy in place, and it is not clear why it did not provide the resident with evidence of how it reassured itself that the services such as cleaning had taken place to the correct standard.
The landlord should now take steps to explain the services the resident should be receiving under his service charge, and to make sure he has been provided with all appropriate evidence of costs incurred for the year 2022 to 2023, so that he can decide whether he is minded to challenge this through the channels open to him.

Complaint handling

The landlord provided only a brief response to the resident regarding the understandable concerns he raised about cladding on his block. It said it would not respond through its complaint process, but did not explain why this was or how the resident should raise this matter instead.
It is our opinion that the landlord offered the resident a reasonable level of redress for the delays in responding to his complaint. The landlord should also compensate the resident for the failure to appropriately respond to the main issues of the resident’s complaint.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in the landlord’s response to the issues the resident raised regarding the delivery of communal maintenance and housing management services.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in the landlord’s response to the resident’s concerns about the increase in his service charge.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in the landlord’s handling of the associated complaint.
In accordance with paragraph 42(e) of the Housing Ombudsman Scheme, the level of the resident’s service charge is outside our jurisdiction.

Reasons

The landlord should have recognised that the resident had expressed dissatisfaction with its service delivery regarding several issues, and it should have responded directly on these matters.
The landlord did not appear to act within its estate management policy, which suggested that it should carry out regular inspections, and respond to matters raised with five working days.
The landlord did not meaningfully engage with the core issue the resident had raised, which was that he did not believe that the service charge was calculated properly.
The landlord should have recognised this to be a request for evidence of the costs it had incurred, and provided access within a month.
The landlord’s failures to engage with the substance of the resident’s complaint caused him unnecessary distress.

Orders and recommendations

Orders

Within two weeks of the date of this report, the landlord should apologise to the resident for the distress he has been caused by the failure to appropriately respond to his complaint. It should provide us with a copy once complete.
Within four weeks of the date of this report, the landlord should directly pay the resident a total of £900 compensation, comprising:
1. The £400 compensation it previously offered, if not already paid;
2. £100 for the time and trouble the resident was caused by the landlord’s failure to respond to his query regarding the external clean of his building;
3. £100 for the time and trouble caused to the resident by failing to investigate his reports of poor interior cleaning;
4. £100 for the distress caused by its failure to address the issues the resident had raised regarding his neighbours in its complaint responses;
5. £200 for the distress and inconvenience caused by the delay in providing access to evidence of costs incurred through the service charge.
Within two weeks of the date of this report, the landlord should contact the resident and check whether he is currently experiencing ASB from his neighbours. If he is, it should provide the resident with appropriate support in line with its ASB policy.
Within five weeks of the date of this report, the landlord should provide the resident with an explanation of why his block was not cleaned externally when the other blocks in the neighbourhood were. It should also confirm whether this forms part of regular cyclical works, and if so, when his block will next be cleaned. If it is not part of regular works paid for by the resident’s service charge, the landlord should confirm whether it considers the building in need of a clean, and how it came to that decision. It should provide this information to the resident in writing, and provide us with a copy.
Within four weeks of the date of this report, the landlord should contact the resident and explain the services he should be receiving under his service charge, and details of any inspections and other methods its uses to check that these are being delivered to standard. It should explain to him which contracts fall under the managing agent’s responsibility to manage, and how he can raise concerns about these. We encourage the landlord to consider how it may do this verbally so that the resident has an opportunity to ask questions, and how it could then confirm the details discussed in writing to him. It should confirm to us when this action is complete.
Within four weeks of the date of this report, the landlord should confirm with the resident that he has been provided with appropriate evidence of the costs incurred for the year 2022 to 2023. It should confirm to us when this action is complete.

Recommendations

It is recommended that the landlord provide the resident with information about the appropriate channel for him to raise his concerns regarding the replacement of cladding on his block.