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One Housing Group Limited (202318433)

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REPORT

COMPLAINT 202318433

One Housing Group Limited

27 March 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

  1. The complaint is about the landlord’s handling of the resident’s request for a breakdown of service charges and communication about those charges.

Background

  1. The resident is a shared ownership leaseholder of a flat. The landlord is the head leaseholder, but not the freeholder of the building. A managing agent, appointed by the freeholder, manages the service charges for both the building and the wider development.
  2. On 3 September 2022, the resident asked the landlord to explain why she had received a demand for underpaid service charges relating to the 2021 accounting period. She requested a breakdown of the charges and an explanation of how the underpayment had happened.
  3. On 29 December 2022, the resident raised a complaint with the landlord, as she had not received a response to her concerns. She said that charges on her service charge statement were all listed under ‘estate management’, which was too vague and did not allow her to properly scrutinise the charges or budget. She said her service charges had increased to over £4000 a year, which she felt was inappropriate and showed a lack of control over spending. She also said she was unhappy with the landlord’s response time to enquiries and its general communication.
  4. The resident said it was her right to request a written summary of costs making up the service charges, but the landlord’s previous responses had been overly long and did not address her concerns. She asked the landlord to provide copies of the budget and actual expenditure for 2021, 2022 and 2023, and explain why the estimated charges for 2023 had increased by around 30% compared to the previous year.
  5. On 13 January 2023, the landlord issued its stage 1 complaint response to the resident. It explained that services to the housing development were listed under ‘estate management’ on the resident’s service charge statements. It acknowledged that it did not routinely share the managing agent’s anticipated or actual costs with leaseholders, which could appear ambiguous, but confirmed this information could be provided on request.
  6. The landlord said the managing agent had not submitted its end–of–year accounts for 2021, so it could not provide a breakdown of actual spending. Instead, the costs passed onto leaseholders were based on the payments it made to the managing agent throughout 2021. It explained that without a section 20B notice from the managing agent, it was not required to recover any costs from leaseholders that were above the agent’s anticipated costs.
  7. The landlord said it had asked the managing agent to provide its end–of–year accounts for 2020 and 2021. If the managing agent failed to provide this information, the landlord would raise a formal complaint and refer the matter to the First–Tier Tribunal (FTT) for a determination on the reasonableness of the charges.
  8. It explained that because it did not receive the managing agent’s anticipated costs when setting estimates, it relied on figures from previous years. This applied to the 2021, 2022 and 2023 accounting periods. For 2022, it increased estimates by the inflation rate of 3.8%. For 2023, it used 2021 figures without applying an inflationary uplift and shared a table of 2021 invoices. It said it recognised that its estimates had not been clearly linked to the managing agent’s costs and that it aimed to improve this. It expected to provide the 2022 end-of-year accounts by June 2023 and finalise the 2023 accounts by the end of 2024.
  9. The landlord said it would update the resident monthly and apologised for its poor communication. It explained that customer service staff found it difficult to respond to service charge queries, so it had arranged for a service charge team member to support them. It offered the resident £100 compensation as a goodwill gesture for not addressing her concerns effectively.
  10. On 18 February 2023, the resident asked the landlord to escalate her complaint to stage 2 of its complaints process. She said the landlord had still not explained how an underpayment occurred and that she still needed to see a breakdown of actual costs to understand how the budget was being managed.
  11. On 8 March 2023, the resident informed the landlord that another resident had told her ground rent charges were being included on their service charge statements, even though they were not liable for these.
  12. The landlord issued its stage 2 complaint response to the resident on 5 April 2023. It apologised that ground rent charges had been included on the resident’s service charge statements in the past and confirmed she was not liable for them. It said the charges would be removed from her account by 17 April 2023, and that it would write to her once the amendment had been made. It also offered £50 in compensation for the error. It said the managing agent had recently been replaced by a new provider but that it remained committed to obtaining accurate cost information.

Events after the conclusion of the complaints process

  1. On 22 August 2023, the resident escalated her complaint to this service. She said that she was still trying to obtain a breakdown of actual costs, and that the landlord did not appear to have control over spending on the development.
  2. On 4 September 2023, the landlord informed the resident that the ground rent charges had been removed from her account, reducing the underpayment for the 2021 accounting period.
  3. In February 2024, the newly appointed managing agent provided the landlord with the 2021 and 2022 end-of-year accounts from the previous agent.
  4. In March 2025, the resident confirmed that she had received the end-of-year breakdown information for 2021 and 2022. However, she said she was still not receiving details of the budget and actual costs with her annual service charge review statements and end-of-year statements. She said that poor communication from the landlord remained at the root of her complaint and that she found it extremely difficult to speak directly about her service charge concerns. She said other leaseholders in the development received a breakdown of spending directly from the managing agent, but those in shared ownership properties with the landlord did not.

Assessment and findings

Scope of the investigation

  1. Part of the resident’s complaint concerns the level and reasonableness of her service charge. Under paragraph 42 (d) of the Housing Ombudsman Scheme, available on our website, we will not consider complaints about the level of rent or service charges, or the amount of any increase. The FTT (Property Chamber) is better placed to assess whether a service charge is reasonable or payable. The resident may wish to contact the FTT if she wishes to pursue this aspect of her complaint further. She can also seek free, independent advice from the Leasehold Advisory Service on how to proceed with a case, should she wish to do so.
  2. We have, however, considered how information about service charges was communicated and the delays the resident experienced in receiving a breakdown of charges. We have also reviewed whether the landlord took appropriate steps to obtain service charge information from the managing agent and whether its responses were timely, clear, and reasonable.

Legal and policy framework

  1. Under the terms of her lease, the resident is liable to pay a service charge to the landlord. This charge is based on the amount the landlord estimates will be spent during the upcoming accounting year on services to the resident’s building.
  2. The lease states that, as soon as possible after the end of each financial year, the landlord must provide a statement detailing actual expenditure. The resident is liable for any difference between the estimated and actual service charge costs.
  3. The landlord’s service charge policy states that estimated charges are based on a combination of known and anticipated costs, including an allowance for inflation. If there are delays in receiving cost information from managing agents, a Section 20B notice must be served to preserve the landlord’s ability to recover those costs later.
  4. Under Section 21 of the Landlord and Tenant Act 1985 (LTA 1985), a leaseholder is entitled to request a written summary of the costs making up their service charge. The landlord must provide this within 1 month of the request, or within 6 months of the end of the accounting period, whichever is later.
  5. The landlord will respond to queries and complaints relating to service charges within 10 working days. If the resident remains dissatisfied with the information provided, a manager will issue a final response within a further 10 working days.

The landlord’s response to the resident’s request for a breakdown of service charges

  1. The landlord took 4 months to respond to the resident’s original request for a breakdown of service charges. As her request related to the previous year’s charges, it fell within the scope of Section 21 of the LTA 1985, which required the landlord to provide a summary of costs within 1 month. Its failure to do so was a breach of this obligation. The lack of a timely response likely caused the resident frustration, uncertainty, and a loss of confidence in the landlord’s handling of her concerns.
  2. When the landlord did respond, it explained that it could not provide a breakdown of estate management expenditure because it had not yet received the managing agent’s 2021 end-of-year accounts. While the landlord was not responsible for the agent’s delay, it remained responsible under the lease for issuing a statement of actual costs. It was therefore appropriate that it outlined its intention to escalate the matter to the FTT and confirmed it would not recover additional costs from leaseholders without a Section 20B notice. This showed the landlord was taking steps to protect residents’ interests where information was delayed.
  3. However, the landlord confirmed that the managing agent’s 2020 end-of-year accounts were also outstanding. This raises concerns about why the issue was not escalated sooner, and suggests that the landlord’s actions were reactive, prompted by the resident’s complaint rather than ongoing oversight of service charges.
  4. In her stage 1 complaint, the resident asked for a breakdown of actual costs for the 2022 and 2023 accounting periods. The landlord explained that it had not yet completed the end-of-year accounts for those years. This was a reasonable response and in line with Section 21 of the LTA 1985. At the time of the resident’s complaint, the 2022 accounting period had just ended, and the 2023 period was still ongoing. The landlord was not yet under a legal obligation to provide actual cost summaries for either year.
  5. Although the landlord was not yet required to provide actual costs for 2022 and 2023, it still had a duty to explain how the estimates were calculated. It said that, in the absence of anticipated costs from the managing agent, it relied on figures from previous years. This was consistent with its service charge policy, which allows for the use of previous years’ figures where anticipated costs are not available. The landlord also said it was working to improve this process, though it could only rely on the managing agent’s goodwill, as there was no obligation for the agent to provide its anticipated costs at the same time.
  6. While this was a reasonable position, the resident’s relationship was with the landlord, and her request to scrutinise budgets remained outstanding. The delay in providing this information prevented her from fully understanding how her service charge was being spent and limited her ability to challenge the charges or escalate the matter further.
  7. The resident’s original enquiry also asked the landlord to explain why she had received an underpayment demand for the 2021 accounting period. In its stage 1 complaint response, the landlord attributed this to the way it estimated charges, which it said could lead to differences between estimated and actual costs. While the explanation was reasonable in principle, it later confirmed that the underpayment figure had included ground rent charges that the resident was not liable for. This meant the landlord’s original explanation was inaccurate. Although it apologised and took steps to remove the charges, the error should have been identified earlier. Mistakes of this nature raise concerns about the accuracy of service charge accounting and can undermine leaseholders’ confidence in the information they receive.
  8. In its stage 1 complaint response, the landlord said it would provide monthly updates while it worked to obtain service charge information. However, there is no evidence it sent any updates to the resident until its stage 2 complaint response, 3 months later. In that response, the landlord said it would confirm when the ground rent charges had been removed, but its records show the adjustment was made in April 2023, and it did not update the resident until 5 months later. This shows that the landlord did not follow through on its commitment to improve communication, and support remained difficult to access even after the complaint had been escalated. Furthermore, the resident has recently told us that there is no direct contact with the service charge team and that she is still waiting for information requested last year.
  9. We recommend that the landlord review how residents access its service charge team and ensure appropriate and accessible contact arrangements are in place, such as a dedicated email address or named contact where possible. It should also review its service charge policy and ensure that staff are responding to service charge queries in line with its stated response times, and that the policy clearly sets out how and when residents will be updated where information is delayed or unavailable.
  10. The resident’s complaint to the landlord also said that its responses were overly long and did not address her concerns clearly. This is supported by the stage 1 complaint response, which included detailed background information but failed to directly answer key questions. While some of the information provided may have been accurate, it was not well structured or tailored to the resident’s needs. This reduced its effectiveness and likely contributed to the resident’s ongoing confusion. Clear, concise communication is especially important when discussing service charges, and the landlord did not meet this standard.
  11. The landlord apologised for the delay in responding to the resident’s enquiry and awarded compensation to recognise the impact. It offered £100 for its poor handling of the resident’s service charge concerns and £50 for the error in applying ground rent charges to her account. Where a landlord accepts failings, our role is to assess whether the redress was fair and resolved the complaint appropriately. This includes considering whether the offer aligned with the Ombudsman’s Dispute Resolution Principles: be fair, put things right, and learn from outcomes.
  12. While the landlord’s compensation acknowledged the inconvenience and errors caused by some of its own service failings, it did not fully reflect the broader communication issues identified in this investigation. These included the failure to follow through on its commitments, long and unclear responses, and the resident’s continued difficulty accessing support. As such, further compensation is required to fairly reflect the cumulative impact on the resident.
  13. In addition to these failings, the resident also experienced wider delays in receiving full service charge information due to the managing agent’s failure to provide end-of-year accounts – a factor outside of the landlord’s direct control. The landlord’s records confirm that it received the managing agent’s 2021 and 2022 end-of-year accounts in February 2024, over 2 years after some of the information had become due. The change in managing agent may explain some of the delay and is a mitigating factor. However, it still had a clear impact on the resident’s ability to understand and scrutinise her charges. While she has now received the breakdowns she originally requested, she continues to receive annual service charge statements without clear detail on budgeted and actual costs. This suggests that the issue is ongoing and likely to recur unless the landlord takes further action to put things right.
  14. As part of this investigation, we asked the landlord whether it would be willing to authorise the managing agent to provide the resident with service charge breakdowns directly. The resident believed this could offer a practical and lasting solution, particularly as she had been told other leaseholders in the development receive such information. The landlord did not respond to this request. While it may not have direct control over the managing agent and cannot compel it to provide such information, its failure to engage with a reasonable and constructive proposal suggests it has not fully reflected on the complaint or taken steps to learn from the outcome.
  15. Considering these factors, we have determined maladministration by the landlord in this case. The landlord’s failings had a sustained impact on the resident, affecting her ability to understand and challenge her service charges, undermining her trust in the landlord, and creating a lasting sense of unfairness.
  16. The landlord is ordered to write to the resident confirming whether it is willing to authorise the managing agent to provide her with service charge breakdowns upon request. If it is not willing to do so, it must provide a clear explanation as to why this is not possible and set out what steps it will take to ensure the resident can access the information she needs in a timely manner, to understand her service charges.
  17. The landlord is ordered to review the service charge information it provides to leaseholders and update its process so that, where full budgeted or actual costs are not available at the time of issuing statements, it includes a clear explanation of why this information is missing and when it expects to receive it.
  18. The Ombudsman’s Remedies Guidance, published on our website, sets out our approach to resolving disputes. Where we have determined maladministration by a landlord that has caused distress and inconvenience to a resident, landlords should offer residents a financial remedy of £100 to £600, to put things right. In this case, the landlord must pay the resident an additional £150 in compensation. This reflects the further distress and inconvenience caused by the communication failures identified in this section of the report. It is separate from and in addition to, the landlord’s previous offer of compensation, bringing the total compensation to £300.
  19. We recommend that the landlord continues to take steps to strengthen its working relationship with the managing agent, including seeking a formal agreement or process for sharing anticipated and actual service charge costs. This will help ensure that leaseholders receive timely and transparent information, even where the landlord does not directly control the service provision.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the resident’s request for a breakdown of service charges and communication about those charges.

Orders and recommendations

Orders

  1. Within 4 weeks of the date of this determination, the landlord must:
    1. Pay the resident the following compensation:
      1. £150 it previously offered during its complaints process, if it has not done so already
      2. £150 for the distress and inconvenience caused by the communication failures identified in this report
    2. Write to the resident confirming whether it is willing to authorise the managing agent to provide her with service charge breakdowns upon request. If it is not willing to do so, it must provide a clear explanation as to why this is not possible and set out what steps it will take to ensure the resident can access the information she needs in a timely manner to understand her service charges
    3. Review the service charge information it provides to leaseholders and update its process so that, where full budgeted or actual costs are not available at the time of issuing statements, it includes a clear explanation of why this information is missing and when it expects to receive it
  2. The landlord is ordered to provide evidence of compliance with the above orders to the Ombudsman within 4 weeks of the date of this determination.

Recommendations

  1. We recommend that the landlord reviews how residents access its service charge team and ensure appropriate and accessible contact arrangements are in place, such as a dedicated email address or named contact where possible. It should also review its service charge policy and ensure that staff are responding to service charge queries in line with its stated response times, and that the policy clearly sets out how and when residents will be updated where information is delayed or unavailable.
  2. We recommend that the landlord continues to take steps to strengthen its working relationship with the managing agent, including seeking a formal agreement or process for sharing anticipated and actual service charge costs. This will help ensure that leaseholders receive timely and transparent information, even where the landlord does not directly control the service provision.