Clarion Housing Association Limited (202332494)

REPORT

COMPLAINT 202332494

Clarion Housing Association Limited

10 January 2025

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 resident’s concerns around:
1. The level of service charges associated with the resident’s property.
2. The landlord’s communication with the resident about service charge payments.
The Ombudsman has also considered the landlord’s complaint handling.

Background

The resident is a leaseholder through a shared ownership scheme and has held the lease since October 2018, the landlord is a housing association. The landlord does not hold a record of the resident having any vulnerabilities.
The property is a one-bedroom flat in a block of flats. The landlord instructs a management agent to manage and maintain the communal facilities.
On 23 February 2023 the landlord notified the resident that from 1 April 2023 the resident’s rent and service charges were increasing. On 13 March 2023 the resident contacted the landlord to query the increase to their service charge. The resident chased the landlord for a response on several occasions, but the landlord did not address the resident’s enquiry.
On 6 July 2023 the resident raised a complaint. In their complaint the resident said:
1. They were dissatisfied that the landlord had not responded to their enquiry dated 13 March 2023.
2. They felt the landlord should be transparent with answering questions from residents, and by supplying a breakdown of costs to residents.
3. They felt that leaseholders and private tenants were bearing the brunt of the increased service charges, while social tenants were paying minimal service charges.
On 2 August 2023 the landlord responded to the resident’s complaint via a stage one response. The landlord’s stage one response included:
1. An apology for the time it had taken to respond to the resident’s complaint. The landlord said this had been due to high customer demand.
2. An apology for the time it had taken to respond to the resident’s original enquiry. The landlord said the reason for this delay was because the resident’s email had been sent to the landlord’s rent team rather than the service charge team.
3. The landlord provided a breakdown of the management agent’s budget for the resident’s block.
4. The landlord supplied the resident with a breakdown of costs from 2021. It advised the resident to contact the management agent for a breakdown of the service charge estimated costs for 2023.
5. The landlord said it would not provide details about the service charges others were paying due to data protection considerations.
6. The landlord offered the resident £150 in compensation for the time it had taken to respond to the resident’s original enquiry.
On 8 August 2023 the resident asked for their complaint to be escalated to a stage 2 complaint for the following reasons:
1. The resident felt the cost breakdowns supplied were not current and they were difficult to understand. They were also dissatisfied as the figures supplied related to the whole block rather than the resident’s property.
2. The resident expressed concerns that the increased service charge was being incorrectly used to fund cladding repairs to the building.
3. The resident said their heating had not been working for over a year, so they wanted an explanation about how their service charge had increased despite them not using the heating.
4. The resident felt the landlord had not addressed their concerns around their views that they were paying higher service charges than others living in the block.
On 23 November 2023 the landlord provided the resident with a stage 2 complaint response. The landlord’s stage 2 response included:
1. An apology for the time it had taken to respond to the resident’s complaint. The landlord said this had been due to high customer demand.
2. A breakdown of the heating and water costs, administration costs and the management agent’s costs which the landlord used to calculate service charges. The landlord explained the increase to the service charge had been mainly down to the increased costs of heating and hot water.
3. The landlord told the resident their service charge amount related to their own property, and they were not covering costs for others. The landlord confirmed the amount that the resident was being charged was correct, and they were not due a refund.
4. The landlord provided the resident with additional information and resources around service charges.
5. The landlord felt the explanation within its stage one response around the time it took to respond to the resident’s initial enquiry was satisfactory.
6. The landlord offered the resident a further £100 in compensation as it had not supplied the stage 2 response within its expected timescales.
On 14 December 2023 the resident contacted this service as they remained dissatisfied with the landlord’s response to their complaint.

Assessment and findings

Jurisdiction

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme (the 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.
Paragraph 42.d. of the Scheme notes as follows:
1. The Ombudsman may not consider complaints which in the Ombudsman’s opinion concern the level of rent or service charge.
Paragraph 42.f. of the Scheme notes as follows:
1. The Ombudsman may not consider complaints where the Ombudsman considers it to be quicker, fairer and more reasonable for the resident to seek remedy through the courts or a tribunal.
The resident has raised concerns about increases to their service charge. The resident has also expressed concerns about the level of service charge they pay in comparison to other residents, and how the landlord uses the service charges it collects.
After carefully considering all the evidence, in accordance with paragraphs 42.d. and 42.f. of the scheme, the resident’s concerns about their service charge are outside the jurisdiction of this Service. Should the resident continue to be concerned about their service charges, then the resident should consider bringing a case to the property division of the first-tier tribunal.

The landlord’s communication with the resident about their service charge increase:

The landlord operates a service charge policy which explains that the service charges residents pay are made in relation to anticipated costs, rather than backdated payments for services a resident has already received. The landlord calculates the anticipated cost of its service charges by considering previous costs and factoring in the rate of inflation. At the end of the year the landlord will work out the actual cost of the service charge, and any surplus or deficits will be added onto the resident’s rental account.
Under this policy the landlord commits to notifying residents in writing of any changes to service charges 4 weeks before the change is due to occur. When the landlord communicates a change to a resident’s service charge, it will also provide the resident with supplemental documents to aid their understanding of the upcoming changes.
The residents lease outlines the landlords, and the residents, responsibilities around payment of service charges. Under the lease the landlord is responsible for providing the resident with updates of reserve and future expenditures twice a year, and the landlord is permitted to instruct a managing agent to calculate its service charges.
Under the lease the resident has the right to object to a service charge which they consider to be unreasonable, or that the service the landlord provides is unreasonable. If this occurs, then the leaseholder has a right to instruct a chartered surveyor who can determine what service charge what the costs service charge should be.
The landlord operates a compensation policy, this policy outlines the ranges of compensation it will offer residents after considering the relevant circumstances. The landlord notes it will offer residents compensation in the range of £50 to £250 on occasions when the landlord has failed to deliver a service, and this has had some impact on the resident. Examples of the impact on residents included in the policy are distress, disappointment and inconvenience from the landlord’s actions.
On 23 February 2023 the landlord wrote to the resident and informed them their service charge payments would be increasing from 1 April 2023. The landlord’s letter explained how the service charge had been calculated and included a breakdown of the services their payment covered. The landlord’s letter also contained a links to websites where the resident could obtain further information about service charges, and about the management agent.
The Ombudsman considers the landlord’s letter notifying the resident of the service charge increase to be reasonable. The letter dated 23 February 2023 was sent to the resident with more than 4 weeks notice of the payment increase, this was inline with the landlord’s legal requirements. The letter also contained supplemental information about the changes which was appropriate and in accordance with its own policies.
On 13 March 2023 the resident contacted the landlord to enquire about the increase to their service charge, as they felt there had been insufficient explanation about why the charge had increased significantly. On 17 April 2023 the resident asked the landlord to provide a breakdown of the service charge in relation to their property.
The resident asked the landlord on multiple occasions for a breakdown of the service charge in relation to their property. The landlord did not provide this information to the resident. In its stage one response the landlord provided a breakdown of the costs associated with the wider block. This data detailed the percentage of the cost for the block which the resident was responsible for. The landlord did not explain to the resident how this percentage had been calculated, and they did not provide a breakdown of costs as the resident had requested.
Section 21 of the Landlord and Tenant Act 1985 requires landlords to provide a summary of their service charges. They are to provide this within one month of a request or within 6 months of the service charge period ending. Section 22 of the Landlord and Tenant Act 1985 provides the resident with the right to inspect supporting documents which have been used to calculate a service charge payment. On this occasion the landlord’s correspondence with the resident did not meet its obligations under the Landlord and Tenant Act.
Considering the resident had said they were concerned that their service charge had been incorrectly calculated, the landlord could have been more transparent in its response. The landlord did not directly respond to the resident’s request would have caused them distress, and caused them to continue to be concerned that their service charges were incorrect. The Ombudsman considers the landlord’s decision not to supply this information to be a failure.
Under the resident’s lease they were entitled to instruct a chartered surveyor to review and determine if the level of the resident’s service charge was reasonable. The landlord did not tell the resident this, nor did it advise the resident to review their lease to consider their rights and obligations. This was inappropriate.
After the resident sent their initial enquiry on 13 March 2023, they chased the landlord for a response on multiple occasions. Prior to formally complaining, the only response the resident received from the landlord was on 16 May 2023 the landlord told the resident the enquiry had been sent to its service charge team. On 6 July 2023 the landlord said the enquiry was with its service charge team, and this team had been experiencing delays.
The resident then decided to submit a complaint to the landlord as they felt it was not acceptable that after 4 months the landlord had not responded to their enquiry.
In its stage one response dated 2 August 2023 the landlord apologised for its delay in responding to the resident’s initial enquiry. It said the reason for the delay was because the resident’s enquiry had been incorrectly sent to the landlord’s rent team, rather than the service charge team. While this action would have caused some delay, the landlord had confirmed on 16 May 2023 that the enquiry was sent to the service charge team.
At the point in which the landlord sent its stage one response, it had been 56 working days since the resident’s initial enquiry had been sent to the correct department. This was an unreasonable amount of time for the landlord to respond to the resident’s enquiry.
The landlord apologised to the resident for the time it had taken to respond to their enquiry and offered them compensation of £150. The compensation offered was in-line with the landlord’s compensation policy, when considering the landlord’s actions would have caused the resident stress and inconvenience. As such the Ombudsman determines the compensation offered by the landlord in this regard to be appropriate.
When considering the evidence supplied to this service, the Ombudsman is of the view that the landlord’s offer of compensation and an apology appropriately addressed its failure to respond to the resident within a reasonable timeframe.
Regarding the resident’s request for a breakdown of the service charge costs, the Ombudsman considers that the landlords response required improvement. The landlord did not appear to consider its obligation to provide the resident with a detailed breakdown of the service charge or to allow the resident to review documentation. As such the Ombudsman considers this to be a service failure, separate to the landlord’s failure to respond to the resident within a reasonable timeframe. The landlord’s failings would have caused the resident distress and inconvenience, after considering this the Ombudsman has ordered the landlord to pay compensation of £100.
In this instance Ombudsman has made a finding of a service failure due to the landlord’s appropriate offer of redress for the time it took to respond to the resident. Had the landlord not recognised its own failures in this regard, the Ombudsman would have considered a finding of maladministration.
The Ombudsman finds a service failure occurred after considering:
1. The landlord did not directly address the residents request to provide them with a breakdown of the costs associated with their property.
2. The landlord did not explain to the resident how it had calculated their service charge.
3. The landlord appeared not consider its obligations under the Landlord and Tenant Act.
4. The landlord did not advise the resident to review their lease.
5. The landlord provided the resident reasonable redress for the time it took to respond to the resident’s enquiry.
In light of the finding of a service failure, the Ombudsman has ordered the landlord to pay the resident £250 compensation after considering the detriment caused to the resident. This compensation the landlord previously offered can be deducted from the ordered compensation, if already paid.

The landlord’s complaint handling

The landlord operates a complaints policy which outlines the process in which the landlord responds to complaints. Under this policy the landlord commits to:
1. Acknowledge and respond to a complaint within 10 working days.
2. When a resident requests for a complaint to be escalated to a stage 2 response it will acknowledge this request within 20 working days.
3. Produce its stage 2 complaints within 40 working days of an escalation request.
When the landlord is unable to respond to a resident within the above timescales it will supply them with an action plan, and if possible, a timescale for when the landlord will issue a complaint response.
The landlord’s complaints policy was not in-line with this Service’s Complaint Handling Code (the Code). However, at the time the landlord was recovering from a cyber security breach which affected their ability to conduct complaint investigations in a timely manner. The landlord has since updated its complaints policy to be in-line with the Code.
Within the landlord’s compensation policy it outlines circumstances where its own failures might warrant compensation payments to residents which are in the range of £50 to £250. This includes occasions where the landlord has repeatedly failed to respond to a resident.
On this occasion, the landlord acknowledged the resident’s complaint on the same day it was received. The landlord then provided its stage one response to the resident 20 working days after it acknowledged the complaint. This was in-line with the landlord’s own policies.
On 8 August 2023 the resident requested that their complaint be escalated to a stage 2 complaint. The landlord sent its stage 2 response to the resident on 23 November 2023, 78 working days after the resident had escalated their complaint. The time it took for the landlord to complete its stage 2 response was inappropriate and not in-line with its complaint policy.
When the stage 2 response was outstanding, the resident chased the landlord on several occasions. Suggesting the landlord’s actions caused the resident stress and inconvenience. The landlord told the resident on six occasions that it was waiting on a response from its head of service before it could complete its stage 2 response.
The landlord should have been more proactive in updating the resident on the progress of the stage 2 response and supplied them with anticipated timescales. In this instance it appeared the landlord updated the resident when they were prompted to do so when the resident chased the landlord for a response.
The landlord recognised its own failures in delivering its stage 2 response within the timescales outlined in its own policies. It offered the resident an apology and an additional £100 in compensation.
When considering the evidence supplied to this service, the Ombudsman is of the view that the landlord’s offer of compensation, and an apology, appropriately addressed the failings identified in this report.
The Ombudsman finds the landlord offered the resident reasonable redress after considering:
1. The landlord recognised its own shortcomings.
2. The landlord’s compensation policy outlines that compensation in the region of £50 to £250 is applicable for occasions where the landlord has failed to respond to residents, and where its own actions cause a resident distress.
3. The landlord offered the resident an apology.

Determination

In accordance with paragraphs 42.d. and 42.f. of the Scheme the resident’s concerns around the amount of service charge they pay is outside the jurisdiction of this service.
In accordance with paragraph 52 of the Scheme, there was a service failure in relation to the landlord’s communication with the resident about how their service charge had been calculated.
In accordance with paragraph 53b of the Scheme, the landlord offered the resident reasonable redress in respect of its complaint handling.

Orders

Within 4 weeks of this determination, the landlord is ordered to pay compensation of £250 for its communication with the resident about their service charge. The compensation previously offered of £150 can be deducted from this sum, if already paid. This figure is comprised of:
1. £150 for the time in which the landlord took to respond to the resident’s enquiry about their service charge.
2. £100 for not providing the resident with a comprehensive and complete response about their service charge and how it had been calculated.
Within 4 weeks of this determination the landlord is to provide this service with evidence of compliance with this order.

Recommendations

The Ombudsman’s determination of reasonable redress for the landlord’s complaint handling is made on the understanding that the compensation offered of £100 is paid to resident within 28 days of this report, if it has not already been paid.