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Peabody Trust (202209431)

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REPORT

COMPLAINT 202209431

Peabody Trust

19 September 2024


Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman Scheme. The Ombudsman must determine whether a complaint comes within their jurisdiction. The Ombudsman seeks to resolve disputes wherever possible but cannot investigate complaints that fall outside of this. 

In deciding whether a complaint falls within their jurisdiction, the Ombudsman will carefully consider all the evidence provided by the parties and the circumstances of the case.

The complaint

  1. This complaint is about the landlord’s management of the sinking fund, in relation to its consideration of the impact of inflation on projected future works.

Determination (jurisdictional decision)

  1. 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 will not be investigated.
  1. After carefully considering all the evidence, I have determined that the complaint, as set out above, is not within the Ombudsman’s jurisdiction.

Summary of events

  1. The resident is a leaseholder of the landlord.
  2. Landlord A merged with landlord B in 2019. In 2022, a merger took place with landlord C.
  3. Landlord C is the resident’s current landlord.
  4. In February 2022, the resident’s committee made a complaint to landlord B about concerns over the deficit in the sinking fund and landlord A and landlord B’s management of said fund.
  5. Landlord B issued its final complaint response to the resident’s committee on 7 June 2022. It rejected the complaint.
  6. The resident’s committee referred the complaint to this Service; however, we do not accept complaints directly from resident’s committees or similar representative groups acting on behalf of several residents.
  7. In January 2023, we asked landlord C to confirm if the final complaint response issued by landlord B to the resident’s committee reflected its final response had the resident made a complaint as an individual leaseholder.
  8. Landlord C opted to record a new complaint and respond directly to the resident.
  9. Landlord C issued its stage 1 response on 2 March 2023. It did not accept that the sinking fund had been mismanaged and provided more information about the potential projected deficit.
  10. The resident escalated his complaint to stage 2. He felt the landlord (and legacy landlords) had not considered the impact of inflation when considering future works. Ultimately, he was of the view that the landlord had breached a covenant in the lease as there were insufficient funds in the sinking fund to cover future expenditure.
  11. Landlord C issued its stage 2 response on 12 May 2023. It said its rent and service charge team had reviewed the complaint and reached the same conclusion as landlord B’s final response to the resident’s committee in June 2022. However, it recognised there was a delay responding to the complaint. It offered £150 compensation to the resident to reflect its service failure.
  12. The resident has not asked this Service to consider the landlord’s complaint handling. Rather, the crux of the matter is the complaint definition as defined in paragraph 1 of this report.
  13. To resolve this complaint, the resident wants the landlord to pay £813,655.88 to the sinking fund, with the caveat that this should be increased when costings are provided.

Reasons

  1. Paragraph 42(f) of the Scheme states the Ombudsman may not consider complaints which, in the Ombudsman’s opinion concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure.
  2. The resident’s concern about increased sinking fund contributions and shortfalls are understandable. However, it may help to explain that, unlike a court, the Ombudsman is unable to establish liability. We are therefore unable to determine whether the landlord mismanaged the development’s sinking fund or acted unreasonably in the way it calculated contributions to the fund. Nor can we order it to cover any shortfall or decide whether it breached a covenant in the lease. The resident could seek independent advice if he wanted to pursue these concerns.
  3. Within the resident’s correspondence, he referenced increased service charges as a result of the deficit in the sinking fund. Complaints that relate to the level, reasonableness, or liability to pay service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber). It is open for the resident to seek free and independent legal advice from the Leasehold Advisory Service for more information about this.
  4. Accordingly, the Housing Ombudsman Service will not consider the resident’s complaint about the landlord’s management of the sinking fund, in relation to its consideration of the impact of inflation on projected future works. This is outside of our jurisdiction under paragraph 42(f) of the Scheme.