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Peabody Trust (202223832)

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REPORT

COMPLAINT 202223832

Peabody Trust

29 February 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

  1. The complaint is about:
    1. The landlord’s handling of the resident’s concerns that service charge estimates were not an accurate reflection of the actual charges.
    2. The information provided to the resident by the landlord concerning his service charges.
    3. The landlord’s complaints handling.

Background

  1. The resident is a leaseholder of a 2 bedroom flat. The landlord is the freeholder. The landlord does not have any vulnerabilities listed for the resident on its systems.
  2. Towards the end of September 2021 the resident received a service charge actuals booklet from the landlord outlining the actual service charge costs for 2020-2021 financial year. The resident responded on 5 October 2022 raising concerns that the estimate had nearly doubled and requesting the landlord log a formal complaint. The landlord responded the same day confirming a complaint would not be logged but his query had been passed to the property accounts team to respond to. The landlord subsequently responded with an explanation of the charges.
  3. On 21 October 2021 the resident contacted the landlord again to state he was not satisfied with the landlord’s response. He outlined that it was unreasonable that the estimate was inaccurate and requested a formal complaint be raised. The complaint was not logged at stage one until 26 January 2022 and was subsequently responded to on 7 June 2022. The landlord’s response stated that the resident was informed of the additional works in July 2019 and that the estimated bill only included every day running costs.
  4. The resident escalated his complaint to the next stage of the landlord’s complaints process on 3 July 2022. He questioned why if the landlord was aware of the works in July 2019 it did not include them in the estimate. The landlord provided its final response on 4 August 2022. It concluded it should have been clearer with residents about the costs of the major works in July 2019. However, it was entitled to recharge for the costs it incurred.
  5. In bringing his complaint to this Service the resident has said:
    1. It is incumbent on the landlord to accurately estimate its leaseholders’ service charges.
    2. No information was provided about the additional cost until 6 months after the service charge period.
    3. The landlord should not seek to recover more than 25% above the estimated charge.

Assessment and findings

Policies and procedures

  1. The resident pays a variable service charge. The resident’s lease states “The Lessee hereby further covenants with the Lessor as follows: (1) To pay the Lessor in advance on 1st April in every financial year (1st April to 31st March) such sum on account of the Service Charge attributable to the flat in that year as the Lessor shall require in accordance with the provisions of the Fourth Schedule…(2)To pay the lessor on demand in accordance with the provisions of the Forth Schedule hereto a sum equal to the amount by which the Service Charge attributable to the flat in the relevant financial year exceeds the sum paid on account.”
  2. The resident’s lease also states “After the end of each financial year: (a) if the sum paid under paragraph 3 hereof shall be less than the Service Charge attributable to the flat in that year the Lessor may service a written demand on the Lessee requiring payment of the difference.”
  3. The landlord’s service charge policy states “In addition to rights under the agreement, we will, where appropriate and applicable: … Provide customer with a statement of actual service charge expenditure within six months of the year end”

Jurisdiction

  1. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint cannot be investigated.
  2. In making his complaint to this Service the resident has said that the increase in the service charge from estimate to actual was unreasonable. This Service has considered whether this falls within the Ombudsman’s jurisdiction and, after carefully considering all the evidence, in accordance with paragraph 42 (d) of the Housing Ombudsman Scheme, the increase in service charges for the property is outside of the Ombudsman’s jurisdiction. Paragraph 42 (d) of the Scheme states that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion … “concern the level of rent or service charge or the amount of rent or service charge increase.”
  3. The resident may be able to apply to the First Tier Tribunal, which has the expertise and authority to consider the reasonableness of the service charges and any increase.

Information provided to the resident

  1. On 29 July 2019 the landlord wrote to the resident outlining that it intended to replace the communal heating system located on the roof, with a communal heating system to be located on the ground floor. The letter said that once a time table had been fully agreed it would update the resident on all the plans and local arrangements for both projects. It also held a walk-in session to answer residents’ immediate questions on 3 September 2019.
  2. On 25 October 2019 the landlord served a section 20 notice to the resident for the heating system works. The resident responded on 30 October 2019 making observations and the landlord responded to these on 22 November 2019. The resident then wrote to the landlord again on 17 June 2020 raising concerns that works had commenced without him being provided further information.
  3. As part of his complaint to this Service the resident has raised concerns about charges associated with works to replace the communal heating system. The resident has said that as he was informed of the works in July 2019 the landlord should have included the charges in his estimated service charge notice prior to the start of the 2020-2021 financial year.
  4. In its stage one response the landlord has said “once the service charge year closes, in accordance with the landlord and tenant act 1985 we are allowed six months to reconcile, review and audit the expenditure incurred and whilst doing this the decision was taken not to recharge the full amount of these works to each leaseholder but instead to cap these jobs at £250 per job.”
  5. The landlord’s service charge policy states “We will consult and inform customers in line with legislation, best practice and tenancy and lease agreements, for the provision of additional and changes to existing services and therefore service charges.”
  6. Given this, it would have been reasonable for the resident to have expected to have been informed when the decision was taken not to recharge the full amount for works related to the communal heating. However, it is noted that the decision not to recharge the full amount for works or failure to do so through the section 20 process has benefited the resident. In that the landlord has capped the resident’s contribution.
  7. In its final response the landlord has accepted that it “could have made it clearer about the costs” however has not offered any apology for this. Had the landlord apologised to the resident for its failure to keep him informed the Ombudsman would have considered this reasonable redress. However, it did not. This amounts to service failure and an order is set out below.

Complaints handling

  1. On 5 October 2021 the resident contacted the landlord to make a formal complaint concerning the service charge actuals booklet he received towards the end of September. The landlord responded on the same day stating that as no service failure had occurred, it was unable to treat his email as a formal complaint. It said it would have to allow time for the property accounts team to respond before a complaint could be raised.
  2. On 18 October 2021 the resident contacted the landlord to outline his frustration that a formal complaint would not be logged. He requested that if the landlord was unwilling to log a formal complaint it should put this in writing.
  3. The landlord’s complaints policy states ‘We define a complaint as an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the organisation, our employees or those acting on our behalf.’ Given this, it was unreasonable the landlord did not log a stage one complaint on 5 October 2021. This resulted in delays for the resident and was not in line with the Ombudsman’s Complaint Handling Code.
  4. It is unclear when the landlord’s property accounts team responded to the resident as its letter is undated. However, it appears to have been within its stated timescale of 15 working days, as the resident references its response in his email of 21 October 2021. At this time the resident further requested his concerns were logged as a formal complaint.
  5. The landlord did not respond to the resident’s email of 21 October 2021, this was unreasonable and resulted in delays. It also resulted in time and trouble to the resident chasing the landlord for a response, which he did in January 2022.
  6. On 24 January 2022 the resident contacted the landlord by email stating that his complaint had not been responded to. The landlord responded on 26 January 2022 confirming it had now raised a stage one complaint and apologising for the stress this had caused the resident. The Customer Services Officer commented that she hoped that it would be resolved promptly for the resident.
  7. This was an appropriate response given the circumstances and afforded the landlord an opportunity to get the resident’s complaint resolved. However, the landlord again did not respond to the resident. This was unreasonable and resulted in further unnecessary delays and time and trouble for the resident.
  8. On 21 March 2022 the resident contacted the landlord again to chase a response to his complaint. The landlord responded on 24 March 2022 apologising for the delay and advising that the issue had been raised to a manager. The resident further chased the landlord for a response on 14 April 2022 and received a response on 22 April 2022 which said that the landlord was awaiting information from another team.
  9. The landlord responded to the resident’s complaint at the first stage of its complaints procedure on 7 June 2022. The landlord’s complaints policy states ‘new complaints are logged within 5 working days as a stage one complaint and a response will be provided within 10 working days, unless an extension is notified and agreed with the complainant’. However, the landlord took 8 months to respond to the resident’s complaint and did not request or agree an extension. It was unreasonable, outside of the landlord’s policies and resulted in a detriment to the resident.
  10. It is noted the landlord’s stage one response does not acknowledge or deal with its delays in responding to the complaint. The Ombudsman would expect, where there are substantial delays in a complaint being responded to, that this is acknowledged and remedied as part of the landlord’s complaint response. It was unreasonable the landlord did not address this or offer redress to the resident.
  11. On 3 July 2022 the resident requested his complaint was escalated to the next stage of the landlord’s complaints process. The resident’s email of the same date confirms this was, in part, due to the delays in addressing his complaint at the first stage. The landlord provided its final response on 4 August 2022 which was 2 days outside of its stated timescale of 20 working days.
  12. In its final response the landlord has acknowledged that the delays in responding to the complaint at the first stage of its process were unacceptable. It also offered the resident £75 compensation for this. While good that the landlord acknowledged the delay, it’s the Ombudsman’s opinion it has not offered a sufficient remedy to the resident for the inconvenience caused.

Determination

  1. In accordance with paragraph 42 (d) of the Housing Ombudsman Scheme, the increase in service charges for the property is outside of the Ombudsman’s jurisdiction.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in respect of the information provided to the resident about his service charges.
  3. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in respect of the landlord’s complaints handling.

Orders and recommendations

  1. The landlord should take the following actions within 4 weeks and provide evidence of compliance with these orders to the Ombudsman:
    1. Pay the resident a total of £150 compensation for the time and trouble caused to the resident by the landlord’s delay in responding to his complaint. (Please note this can be reduced to £75 if the £75 previously offered has been paid)
    2. Issue complaints handling staff with training covering the landlord’s internal complaints process. The training should include the definition of a complaint, identifying and registering complaints at the earliest opportunity and responding within set timescales.
    3. Offer an apology to the resident that it did not keep him updated regarding its decisions around applying charges for the communal heating upgrades.