Applications are open to join the next Housing Ombudsman Resident Panel – find out more Housing Ombudsman Resident Panel.

Clarion Housing Association Limited (202319221)

Back to Top

REPORT

COMPLAINT 202319221

Clarion Housing Association Limited

7 April 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 a request for a breakdown of the service charge.
  2. The Ombudsman will also consider the landlord’s complaint handling.

Background

  1. The resident is a shared owner of a 1-bedroom flat. The landlord is a housing association, and has a management agreement in place with a managing agent, who provide all communal services on its behalf.
  2. The landlord wrote to the resident about rent and service charge estimate increases on 23 February 2023. It said the new sums were applicable from 1 April 2023. The service charge was increasing from £120.69 to £310.28.
  3. The resident contacted the landlord on 27 February 2023 to ask about the service charge increase. She wanted to know the actual service charge as she felt the estimate was unaffordable. She asked why it had increased, and how she could appeal it.
  4. The landlord wrote to the resident on 3 March 2023 to explain the various things the service charge is used for. It explained how estimates were calculated and that it was not involved with how budgets are set. It said it raised the increase with the managing agent. It provided reasons for the increase, and said that unused funds will be reconciled as part of the year end.
  5. The resident responded to the landlord on 12 March 2023. She believed the service charge was incorrect and that it covered costs associated with rental flats, not shared owner flats. This included heating, cleaning, staff, and maintenance of communal areas which she was not allowed to access. She said the managing agent needed to breakdown the service charge to the landlord.
  6. The resident chased the landlord for a response on 31 March 2023 as her service charge payment was due and she said she could not pay the increase. She said she did not receive an explanation as to where the charges came from. She raised a complaint. It acknowledged her complaint on 13 April 2023 and said it would contact her again within 10 working days.
  7. The landlord emailed the resident on 3 May 2023. It provided a breakdown of the service charge and a copy of the letter it sent to her on 3 March 2023. The resident responded the following day and confirmed it had already sent her the service charge breakdown. She confirmed she was querying the increase in various costs, resulting in the monthly service charge increase from £104.96 to £293.61. She wanted a breakdown to show what the managing agent was charging the landlord. She felt that any costs associated with the managing agent’s rental units, and with facilities unavailable to shared owners, should not form part of her service charge.
  8. The landlord sent its stage 1 complaint response to the resident on 15 May 2023. It apologised for the delay in responding and was upholding the complaint. It confirmed:
    1. It responded to the resident’s 27 February 2023 enquiry on 3 March 2023, but did not respond to her second query, for which it apologised.
    2. Its 3 March 2023 letter explained the purpose of the administration fee, and the basis for the estimated service charge.
    3. The service charge increase was due to internal cleaning, window cleaning, engineering insurance, building insurance, site office costs, and staff costs.
    4. The breakdown provided to her was as much as it could provide, as it did not have control over the budgets.
    5. Electricity was charged per block, and the resident could raise her queries about other costs with a different team.
    6. It was offering £50 compensation for delays in responding to her service charge enquiry, and a further £50 for its delayed complaint response.
  9. The resident asked the landlord to escalate her complaint on 19 May 2023. She said it was not right for the managing agent to pass their costs to the service charge of shared owner residents. She wanted the landlord to break down the service charge further and apportion it correctly. She asked it to challenge the managing agent as they were not responding to her enquiries directly. The landlord acknowledged the escalation request on 22 May 2023. It said it would respond in 20 working days.
  10. The landlord contacted the resident on 14 June, and 11 and 25 July 2023. It apologised for the delay on each occasion, and set new response dates. It sent its stage 2 final complaint response to her on 28 July 2023, again apologising for the delay. It confirmed:
    1. The resident wanted the managing agent’s charges linked to its rental properties removed from her service charge.
    2. Its stage 1 response was accurate, but apologised that it did not address her concerns about the service charge increase and appropriateness.
    3. It should not have told her to re-raise her service charge request with another team, for which it apologised.
    4. Shared owner residents were not paying towards facilities only available to rental flats, such as the gym.
    5. It was offering a further £150 compensation for delays in responding to the service charge enquiry, and delays in providing its stage 2 response.
    6. The resident could take her complaint to the Service.

Events after the landlord’s stage 2 complaint response

  1. The resident responded to the landlord on 8 August 2023. She said she was unhappy with its stage 2 complaint response as it did not give her a full breakdown of costs. She felt it was unclear why the service charge was the level it was, and that the managing agent was charging an unfair and unjust split to her block. She wanted to know the managing agent’s full costs and then see what the landlord’s block was being charged. She said the full costs of the managing agent should not be split evenly as their staff were dealing with rental flats, maintenance in the rental flats, and maintenance to areas that shared owners could not access. The landlord responded on 15 August 2023 to confirm it had exhausted its complaints procedure, and reminded her that she could go to the Service.
  2. The landlord emailed the resident on 29 January 2024.  It said it was providing access to invoices relating to the service charge costs. It said the managing agent told it that costs relating to the gym and lounge facilities are funnelled through a separate account and are not included in the budget or year end accounts of Block B residents. It said that maintenance and repairs costs linked to other blocks included in the 2021 actual expenditure report will be reversed. They will then be applied as credit to the 2022 year end accounts. It was still waiting for these accounts to be released. It confirmed it also asked the managing agent to provide a revised expenditure report with costs only relating to Block B. The managing agent said its budget was set up in such a way that it was not possible to have a separate one for Block B. However, they would set up a separate schedule for Block B. The managing agent told it that staff costs for shared owner residents were for managing the communal and estate area, not for concierge services. Property Wages related to recruitment fees incurred in employing new staff members. Window cleaning costs increased due to use of a spider lift with a driver. External cleaning costs were for the façade of the building, done every 2 years, and not included in that years budget. Internal cleaning was only for the common parts of the building and did not include individual cleaning of properties. The individual cleaning of properties was invoiced and paid for by a team from the managing agent. This was a separate lettings account. The cost for internal repairs and maintenance did not include upkeep and decoration of the managing agent’s rental apartments. The costs were processed through separate accounts. It said it would continue to work with the managing agent to try and find other areas where it could reduce costs.

Assessment and findings

Scope of investigation

  1. 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.
  2. Paragraph 42 of the Scheme states that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion:
    1. concern the level of rent or service charge or the amount of the rent or service charge increase
  3. The Housing Ombudsman does not have the authority to decide on some matters relating to service charges. The First-Tier Tribunal (Property Chamber – Residential Property) has the jurisdiction to consider complaints about the level of the service charge, the level of a service charge increase and whether the charges are reasonable. The Tribunal can determine the appropriate level and amount of service charges recoverable by a landlord; decide if the charges were reasonably incurred; by whom they are payable; and when.
  4. We can assess whether the landlord followed proper procedure, followed good practice, and responded reasonably to the concerns the resident raised in the timeframe of her complaint – which this investigation goes on to do.

The landlord’s policies and procedures

  1. The landlord’s website says that it will provide shared owners with estimated services charges before the beginning of the financial year (1 April). It estimates this based on how much it thinks it is likely to cost, which is based on how much the services cost in previous years. It will also consider what services may need to be provided in the coming year.
  2. Its complaint policy states that when a complaint is made, it would acknowledge and logged this at stage 1 of it complaints procedure within 10 working days of receipt. It would aim to respond within 20 working days of the complaint being logged. If a resident is unhappy with the outcome at stage 1, it will escalate the complaint to stage 2 in 10 working days. It would aim to resolve stage 2 complaints within 40 working days.
  3. The Ombudsman’s Complaint Handling Code (the Code) relevant to the time of the complaint says that landlords should respond to a stage 1 complaint within 10 working days, and stage 2 complaints within 20 working days. Extensions at stage 2 should not exceed 10 working days without good reason.
  4. The landlord’s compensation policy says that it will consider compensation for a failure to meet service standards for actions and responses. This can included complainants repeatedly having to chase responses, a team not taking overall responsibility, and not addressing all relevant aspects of a complaint.

The landlord’s handling of a request for a breakdown of the service charge

  1. When investigating a complaint, the Ombudsman applies its Dispute Resolution Principles. These are be fair (treat people fairly and follow fair processes), put things right and learn from outcomes. The Ombudsman must first consider whether there was a failing by the landlord and, did this lead to any adverse effect or detriment to the resident. If yes, we will consider whether the landlord has taken enough action to ‘put things right’ and ‘learn from outcomes’. When failings are identified, our role is to consider whether the redress offered by the landlord has put things right and resolved the resident’s complaint satisfactorily in all the circumstances of the case.
  2. The resident first contacted the landlord about the service charge increase on 27 February 2023. She wanted to know the actual service charge and how to appeal the increase. The landlord responded on 3 March 2023, which is in a reasonable time. It explained that it was not responsible for setting the budgets, but confirmed what the service charge was used for. It would have been helpful for the landlord to address the resident’s wish to appeal the service charge increase and saying how she could do this, referencing the First-Tier Tribunal.
  3. The resident’s query to the landlord on 12 March 2023 was not responded to until 3 May 2023. She believed the service charge was incorrect and that it covered costs associated with rental flats, not shared owner flats. She wanted the managing agent to breakdown the service charge to the landlord. She chased the landlord for a response on 31 March 2023. This is because she had not received a response from the landlord’s service charge team, which it had directed her to. The landlord responded on 3 May 2023, but provided a breakdown of the service charge it had already sent to her. She had to reiterate that she wanted to see what the managing agent was charging the landlord.
  4. It would have likely been frustrating to the resident to not only have to chase the landlord for a response, but to confirm that the response did not address her concerns. If the landlord did not have that information from the managing agent, it should have explained this to the resident. It did so in its stage 1 complaint response, approximately 1 month after she raised her query. The time to respond to her specific query was a failing, which the landlord acknowledged. It also acknowledged that it should have addressed her query directly in the first instance, rather than refer her to its service charge team. It acknowledged this failing in its stage 2 complaint response.
  5. The resident contacted the landlord on 19 May 2023 to confirm she still wanted to see a breakdown of the managing agent’s costs. She asked it to challenge the managing agent as she was not receiving a response from them. The landlord responded to these concerns in its stage 2 complaint response letter from 28 July 2023, explaining what was and was not covered. It was a failing for the landlord to respond to the resident’s concerns over 2 months since she raised them. It could have responded to her service charge query earlier, whilst processing her complaint. It acknowledged the delays it caused in its stage 2 complaint response, and offered £100 compensation.
  6. It is encouraging to see the landlord continue to update the resident after its complaint process. This is because her concerns were about the managing agent’s records, as well as the landlord’s records. This information was not readily available to the landlord, which was not its fault. However, it explained that it was obtaining additional information, and that financial records would be logged so as to distinguish Block B from other blocks in the future. It was reasonable for the landlord to continue to work with the managing agent to make future financial records more transparent.
  7. On balance, the Ombudsman is satisfied that there has been reasonable redress by the landlord about its handling of a request for a breakdown of the service charge. It responded to the resident’s concerns with as much information as it could, and still continued to work with the managing agent for greater transparency of records in future. It offered a total of £150 specifically for delays in responding to her service charge queries. This is a reasonable amount as it tried to put its failings right. It also reflects the inconvenience the resident likely experienced having to chase the landlord for a response, and to clarify exactly what information she wanted to see. The landlord contacted the managing agent for more information on the resident’s behalf, and it was not at fault for being unable to provide financial data that was not present in the accounts.

Complaint handling

  1. The landlord’s complaint handling timescales did not reflect the Code relevant to the time of the complaint. We have therefore considered the landlord’s complaint handling in line with the Code, as these contain the timescales a complaint handling policy should have adhered to.
  2. The resident raised her complaint on 31 March 2023, which the landlord did not acknowledge until 13 April 2023. It sent its stage 1 response on 15 May 2023. Though these timescales were closer to the landlord’s published complaint handling timescales, they did not reflect the Code in force at the time. These delays were failings in the landlord’s complaint responses.
  3. The resident asked the landlord to escalate her complaint on 19 May 2023, which it acknowledged on 22 May 2023. It then sent its stage 2 response on 28 July 2023. This was approximately one month outside of timescales set by the Code. The landlord has sent extension notifications to the resident 3 times before its stage 2 complaint response, which was appropriate. However, the delay in sending its stage 2 complaint response was a failing.
  4. The landlord acknowledged its complaint handling delays at stage 1 and 2, and that it had not addressed all complaint points adequately. It offered £50 for delays at stage 1, and £50 for delays in responding to her service charge enquiry. It offered another £50 for complaint handling delays at stage 2, and £100 for inconvenience and telling her to contact another team.
  5. On balance, the Ombudsman is satisfied that there has been reasonable redress by the landlord about its complaint handling. It addressed all complaint points by the end of its complaint process, and acknowledged its complaint handling failures. The complaint handling delays did not affect the substantive issue regarding the service charge increase. It also acknowledged its failings in how it handled the resident’s information request, and compensated for this. The Service would not ask the landlord to increase the amount of compensation offered.

Determination

  1. In accordance with paragraph 53(b) of the Scheme, there was reasonable redress in relation to the landlord’s handling of concerns about the request for a breakdown of the service charges.
  2. In accordance with paragraph 53(b) of the Scheme, there was reasonable redress in relation to the landlord’s complaint handling.

Orders and recommendations

  1. It is recommended that the landlord:
    1. Pay due regard to published complaint handling timescales in future.
    2. Continue to update the resident with any new information the managing agent provides regarding a breakdown of the service charge.