Two Rivers Housing (202306729)

REPORT

COMPLAINT 202306729

Two Rivers Housing

14 October 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 the landlord’s handling of the resident’s concerns about:

a.     The level and reasonableness of service charges for 2022-2023.

b.     The quality of services relating to the removal of rubbish from the estate and waste bins in the area.

c.      The administration and communication of service charges for 2022-2023.

d.     The quality of services provided by the landlord’s management services including green space maintenance, hedge trimming and filling flagpole holes.

2. The Ombudsman has also considered the landlord’s complaint handling.

Background

3. The resident is a shared owner with a leasehold agreement that began in 2020. The property is a three-bedroom detached house. The landlord said it was aware the resident has anxiety and difficulty processing information.
4. The leasehold agreement requires the resident to pay a service charge for maintaining communal areas. This includes tending and renewing any grassed or cultivated areas, shrubs, trees, boundary hedges or fences. It also includes keeping the paths and landscaped areas tidy, clean and in good repair. The charge is paid to the landlord who pays the management company.
5. In February 2023, the landlord wrote to the resident to explain his service charges were going to increase. The resident told the landlord he was unhappy with the amount his service charges had increased and the quality of the services of the management company. He said that he wanted the landlord to investigate this.
6. On 20 March 2023, the resident raised a complaint. He said:

a.     he was unhappy with the increase in the level of the service charges.

b.     he felt he should have had more notice of the increase because other individuals had received theirs sooner than he did.

c.      he asked for the landlord to reduce the service charges to assist him with the cost of living.

7. On 22 March 2023, the resident also told the landlord that he had specific concerns over:

a.     the open fields and hedges.

b.     general rubbish from residents on the estate.

c.      holes in the ground where flagpoles used to be which had piping left inside.

8. On 3 April 2023, the landlord issued its stage 1 response. It said:

a.     it had sent the resident a rent review letter that had not initially contained the correct service charge amount. It had rectified this by issuing a new letter with the correct amount.

b.     it had enclosed the invoices from its management company to show how it had calculated the service charges.

c.      it had issued the service charge within 18 months of incurring the charge from its management company. This was in line with its statutory obligations.

d.     the management company sent invoices directly to homeowners on the estate, rather than through a landlord. This was why they received notice about the service charge increase earlier than the resident.

e.     the service charges levied were correct and could not be offset because of the resident’s cost of living. However, it had arranged an appointment with its tenancy support, wellbeing, and debt officer on 24 March 2023 to discuss his financial concerns.

f.        it had referred the resident’s concerns about the flagpole sticking out of the ground and items in the vicinity of his home to the management company to address.

9. On the same day, the resident expressed his dissatisfaction with the rise in the service charges and the level of service provided by the management company. The resident re-reported the rubbish on the estate, the grass and hedges being overgrown and the piping from the old flagpoles. He also said he felt the landlord was not managing the contract properly and had not conducted any site visits.
10. On 24 May 2023, the landlord issued its stage 2 response. It said:

a.     the service charge increase in 2022-2023 was larger than expected as it had only passed on half of the costs to residents in 2021-2022. However, it had agreed for the resident to pay off the service charges over 3 years as he had requested.

b.     it had legally notified the resident of the increases however it would contact the resident sooner if there was another substantial annual increase in the future.

c.      it had reviewed the quality of the services after the management company had provided a specification for its services. It would monitor this service more effectively.

d.     it had received confirmation from the management company that it had assessed the holes made by the flagpoles.

e.     it was not in a position to ask the management company to reduce its fees.

f.        it would continue to liaise with the management company over any concerns or missed work. If they reduced the service charge costs in the future, this would be passed on to residents.

g.     it accepted it should have had a better understanding as well as information of the services being provided by the management company.

h.     it said it should have monitored the services with more frequent site inspections.

i.        it offered the resident £50 to recognise this.

Assessment and findings

Jurisdiction

11. 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 will not be investigated.

The level and reasonableness of the resident’s service charges for 2022-2023

12. The resident complained to the landlord because he felt the increase in service charges for 2022-2023 was unreasonable. He also queried the landlord’s calculations for the service charges. He asked for it to consider reducing his service charges to assist him with the cost of living. The landlord confirmed in its stage 2 response the charges levied were correct following the invoices issued by its management company. It said it would not consider reducing the resident’s service charges.
13. Paragraph 42.d. of the Scheme states:

“The Ombudsman may not consider complaints which, in the Ombudsman’s opinion: concern the level of rent or service charge or the amount of the rent or service charge increase.”

14. The resident’s concerns about the increases and the impact on him are acknowledged. However, the Ombudsman is unable to decide on whether the resident’s service charges were correct and/or fair. In addition, this Service is unable to decide complaints where residents believe the billing and/or calculations are incorrect. As such this is outside of the Ombudsman’s jurisdiction to investigate. The resident may have recourse through the First Tier Tribunal or the County Court to challenge the level of the service charges.

The quality of services relating to the removal of rubbish from the estate and waste bins in the area

15. The resident explained the waste bins on the estate were overflowing and not regularly emptied. The landlord is not responsible for maintaining the waste bins in the area.
16. Paragraph 41.b. of the Scheme states:

“The Ombudsman cannot consider complaints which, in the Ombudsman’s opinion: concern matters which do not relate to the actions or omissions of a member of the Scheme.”

17. The landlord is not responsible for the quality of services relating to the removal of rubbish from the estate and the waste bins in the area. This is a function of the local authority. Therefore, this element of the resident’s complaint is outside of the Ombudsman’s jurisdiction to investigate. The resident may have recourse through the Local Government and Social Care Ombudsman for this matter.

The administration and communication of the resident’s service charges for 2022-2023

18. The resident told the landlord he was unhappy with the administration and communication of his service charges because he felt the landlord delayed in issuing its notification of the upcoming service charges for 2022-2023.
19. According to Section 20B of the Landlord and Tenant Act 1985, landlords have 18 months to notify residents of service charges after they have been incurred or to demand payment. If it fails to meet the time requirement it is unable to recover the charges from its leaseholders.
20. The landlord indicated that it received an invoice for the services of its management company in February 2022. The landlord notified residents of the costs of the service charges in February 2023. This was 12 months after the landlord had incurred the costs. This was in line with the landlord’s statutory obligations. While it is acknowledged that the resident may have wished to be notified of the increases sooner, the landlord did communicate the costs within a reasonable timeframe.
21. In addition, the landlord said it would arrange to contact the resident at the earliest available opportunity in the following year, ahead of the confirmation of any change to the service charges. As the landlord was not obligated to contact the resident earlier than the statutory timeframes set out above, this was positive to note.
22. The resident explained he was unhappy that other residents living in his development had received a notification of increased service charges for the 2022-2023 period before he did.
23. The resident’s estate consists of both shared ownership and freehold properties. The shared ownership residents pay their proportion of the service charges to the management company through their landlord. This is because their leases obligates them to pay their service charges in this way. The freeholder residents (homeowners) pay their service charges directly to the management company as they do not have a landlord. The landlord explained in its stage 2 response that the other residents had likely received a notification before the resident because they were homeowners. The landlord also added that they would receive information about their service charges directly from the management company.
24. The Ombudsman considers that it is reasonable to expect that residents who pay their service charges directly to the management company may be issued service charge notifications at different times to those who do not. The Ombudsman is unable to find fault with the landlord’s handling of this element of the resident’s complaint.
25. The resident said that his mental health was suffering because of the increase in the service charges. He explained to the landlord he was worried that he could not afford this and that he might lose his home.
26. The landlord demonstrated that it maintained regular contact with the resident throughout the complaint, and referred him to its tenancy support, well-being and debt officer who met with him on 24 March 2023. This was also the landlord’s safeguarding officer. The landlord assessed the resident’s financial situation as well as his reports about the state of his mental health. The resident was signposted to other support agencies to support him with his mental health.
27. Separately, the landlord agreed to accept a payment plan from the resident to pay the increase in the service charge for 2022-2023 across 3 years. This was fair and reasonable in the circumstances.
28. The Ombudsman considers the landlord listened to the resident to understand his concerns, and appropriately referred him for further support through its support services. It also agreed on an alternative way for him to pay the service charges. This was reasonable in the circumstances.
29. Overall, the Ombudsman finds that there was no maladministration in the landlord’s administration and communication of the service charges.

The quality of services provided by the landlord’s management services including green space maintenance, hedge trimming, and filling flagpole holes

30. On 27 February 2023, the resident told the landlord he wanted it to investigate the services of the management company because:

a.     the grass and hedges on the estate were not being maintained.

b.     there were concrete support posts left on the estate by the developer and the grass around this area was overgrown.

c.      there was rubbish around the estate including rabbit hutches and discarded packaging that had discoloured with time.

d.     there was rubbish in the children’s play area of the field on the estate.

e.     there were discarded hedges and grass trimmings on the estate.

31. The resident contacted the landlord on 4 occasions during March 2023 to report the same issues.
32. It is best practice for landlords to conduct regularly scheduled checks to confirm the works levied under its service charges have been completed. It is also good practice for landlords to ensure that the service has been provided and that the standards are appropriate. Landlords are encouraged by the Ombudsman to make notes and take photographs as evidence of the standards provided to assist with managing supplier contracts.
33. The evidence indicates the landlord arranged a site visit to assess the quality of the services provided by the management company. This was on 24 March 2023. The landlord found:

a.     there were overgrown hedges, and the grass was overgrown or dead in some parts.

b.     there was rubbish in quite a few areas around the estate, including a car tyre.

c.      there were overflowing dog waste bins.

d.     there was an animal hutch in the hedge.

e.     there was grass trimmings left on the ground.

f.        a hill on the estate had a lot of weeds.

g.     there were old flagpole holes that still had piping inside and were in the ground.

34. The Ombudsman considers it reasonable for the landlord to conduct a site visit to assess the resident’s concerns about the quality of the services around the estate. However, there is no evidence the landlord was clear at this stage about which services would not fall under the management company’s services such as the waste bins and general rubbish around the estate. This was a failure to manage the resident’s expectations about the scope of the services levied under the service charge. This caused the resident time and trouble complaining about services unrelated to the service charges.
35. Following its visit, the landlord contacted its management company on 4 April 2023 and asked the management company to comment on its findings. On 19 April 2023, the management company responded and said:

a.     hedge-cutting on the estate was not allowed during the nesting season (March to August).

b.     the estate was coming out of the winter months meaning that most sites would not be “looking their best”. The grass would likely recover into spring/summer.

c.      it cut the wildflower meadow twice a year.

d.     it had referred the landlord’s concerns about general rubbish to its directors, but individuals should take responsibility for any excess rubbish that is being disposed of.

e.     it was only responsible for the waste bins in the play area which it emptied fortnightly. This was reviewed by the directors and was not overflowing during their visit.

f.        the hill the landlord referred to was part of the wildflower meadow. The “weeds” were part of this and must be untouched in line with planning agreements. It also said when the area was maintained it had to be left for 2 weeks before the trimmings were collected.

g.     the ground was not cut in the winter months (October to March)

h.     there should not have been trimmings left over from the grounds team, but if this is noted during the growing season, this would be managed appropriately.

i.        it agreed to inspect the piping left from the flagpoles.

36. There was no evidence the landlord communicated the information from the management company to the resident. This was unreasonable given the resident had raised concerns. This was a missed opportunity to be transparent about which services the resident could expect and when. This caused time and trouble for the resident because he continued to ask the landlord to clarify the scope of the work associated with the service charges. If the landlord had communicated this to the resident, this could have mitigated some of the resident’s complaint.
37. On 20 April 2023, the landlord asked the management company to confirm if there was a schedule of works showing which services it provided and the frequency of them. The management company said:

a.     ground maintenance would be on site once a month in the winter (October to March) and fortnightly in the summer (April to September).

b.     it would cut the grass on the estate and the internal hedges in the summer months.

c.      it would maintain the external boundaries and wildflower meadow twice a year.

d.     it would hold a meeting in the summer for residents to involve the community in its services and it would invite the landlord.

38. The evidence shows there was a lack of knowledge in the landlord’s understanding of the scope of the obligations of the management company. This was a failing because the landlord ought to have already been aware of the obligations of its management company at the outset of the resident’s tenancy.
39. The Ombudsman would have expected the landlord to be in a position to answer basic queries from residents about this matter including the cyclical schedules related to associated work. The landlord should also have been able to explain how it monitored the services on the estate to ensure that they were carried out to a good standard. This caused distress and inconvenience because the landlord was not transparent or accountable to the resident for the management company’s services.
40. In its stage 2 response, the landlord said that it ought to have had a better understanding of the services provided by the management company at an earlier stage so it could have monitored this more effectively. It said it should have conducted more frequent site visits and it offered the resident £50 to try to put things right. Although the landlord had identified it needed to review the quality of the services by carrying out more frequent visits, there is no evidence it went on to do this.
41. The Ombudsman considers the landlord tried to put things right but failed to resolve the substantive issue. This is because there is no evidence that it had put anything in place to monitor the quality of the services, for example by scheduling regular visits or creating a framework detailing how it would assess quality standards. This was a failure because the landlord was unable to demonstrate that it had acted on the complaint and changed its service provision to implement any wider learning.
42. Throughout April 2023 and May 2023, the resident continued to express to the landlord on numerous occasions that he was concerned about the quality of services on the estate. He also said that the landlord had not told him or the other residents which services the management company provided. The landlord conducted a visit on 26 April 2023. However, the evidence does not show the landlord’s findings or any associated actions it intended to take. The landlord also responded to the resident’s concerns during its stage 2 response. It said that the management company had provided it with specification details about its services, which it would use to monitor the contract more effectively.
43. The Ombudsman considers this was a further missed opportunity to provide specific details to the resident about the services provided by the management company as well as the standards it expected to see on the estate. This caused uncertainty and distress to the resident because he remained unclear about the obligations of the management company. He was also unclear about what action the landlord was taking to address his concerns over the quality issues he was reporting.
44. In addition, there was no evidence it had used the information it had to monitor the contract with the management company. The Ombudsman asked the landlord to comment on this aspect of the complaint. It said that it had carried out ad hoc visits, but it did not have evidence of having done this during the time of the resident’s complaint. The Ombudsman would have expected to see evidence of the landlord’s findings and assess these against the services the management company were expected to carry out. This was a failure to demonstrate it acted on the resident’s concerns or to take action to monitor the quality of the services being provided to the estate.
45. Overall, there was maladministration with this element of the complaint. This is because:

a.     the landlord failed to demonstrate it communicated the scope of the services of the management company to the resident at the earliest opportunity.

b.     the landlord failed to demonstrate it had taken action to resolve the substantive issue going forward by ensuring it had an action plan to monitor the quality of the services.

c.      the landlord failed to demonstrate it acted reasonably to address the resident’s reports over the quality of the services being charges for between April and May 2023.

46. With consideration being given to the Remedies Guidance, the Ombudsman considers the landlord should pay the resident an additional £250 to recognise the distress and inconvenience caused by its failures.

Complaint handling

47. The Complaint Handling Code (‘the Code’) states landlords must respond to complaints at stage 1 within 10 working days of the date of acknowledging and logging the complaint. Landlords must also respond to escalation requests at stage 2 within 20 working days. The landlord’s complaint policy aligns with the Code.
48. The resident raised his complaint on 20 March 2023. The landlord said in its stage 1 response that this was a phone call from the resident. There was no evidence of the notes from the phone call detailing the resident’s points of complaint. This was a failure because the Ombudsman expects the landlord to keep a full record of complaints, including the details of the original complaint. Keeping a clear record not only ensures that the landlord has maintained an accurate audit trail, it also helps to ensure that all complaint points have been responded to, which is another requirement of the Code.
49. The landlord provided its stage 1 response on 3 April 2023. This was 10 working days later. This was appropriate and in line with the timeframes set out in the Code.
50. The resident escalated his complaint on 3 April 2023. The landlord provided its stage 2 response on 24 May 2023. This was 34 working days later. The reason for the delay is unclear from the evidence provided to this Service. However, the landlord failed to issue its response in accordance with the timescales as set out in its policy or the Code. This was inappropriate.
51. There is no evidence the landlord notified the resident of its delay. This was a failure because the Code sets out that landlords must inform residents if an extension is required and the reasons behind this. The landlord also failed to acknowledge its delay in its complaint response or try to put things right. This impacted the resident because he was delayed from seeking recourse from this service.
52. Overall, there was maladministration with this element of the resident’s complaint because:

a.     the landlord failed to demonstrate it had kept a full record of the resident’s original complaint on 20 March 2023.

b.     the landlord delayed issuing its stage 2 response and did not notify the resident of its delay with the reasons behind this.

c.      the landlord did not acknowledge its delay or try to put things right.

53. The Ombudsman has considered the Remedies Guidance and considers the landlord should pay the resident an additional £150 to recognise the distress and inconvenience caused by its failures.

Determination

54. In accordance with 42.d. of the Scheme, the level and reasonableness of the resident’s service charges for 2022-2023 are outside of the jurisdiction of the Ombudsman to investigate.
55. In accordance with 41.b. of the Scheme, the quality of services relating to the removal of rubbish from the estate and waste bins in the area are outside of the jurisdiction of the Ombudsman to investigate.
56. In accordance with paragraph 52 of the Scheme, there was no maladministration in the landlord’s handling of the administration and communication of the resident’s service charges for 2022-2023.
57. In accordance with paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of the quality of services provided by the landlord’s management services including green space maintenance, hedge trimming and filling flagpole holes.
58. In accordance with paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of the resident’s complaint.

Orders and recommendations

Orders

59. Within 28 days of the date of this determination, the landlord must:

a.     write to the resident to apologise for the failures found in paragraphs 45 and 52 of this report.

b.     pay the resident £400 compensation comprised of:

1. £250 for the distress and inconvenience caused by the landlord’s failures relating to its handling of the resident’s concerns over the quality of the services provided by its management company.
2. £150 for the distress and inconvenience caused by the landlord’s failures in its complaint handling.

This is in addition to the compensation the landlord offered the resident during the complaints process.

c.      provide training to relevant colleagues about its contract with the management company. This must include the scope of services provided and how to manage reported concerns over service standards.

d.     provide evidence to the Ombudsman of compliance with the orders listed above.

60. In accordance with paragraph 54.g. of the Scheme, the landlord is ordered to write to all applicable residents on the estate and provide details of the services levied under its service charges for the communal parts of the estate. This must include:
    1. which services are being provided.
    2. how often residents can expect those services to be carried out over the year.
    3. how residents can report any concerns they have over the quality of the services.

It must write to the Ombudsman within 28 days of the date of this determination to confirm it has complied with this order.

Recommendation

61. The Ombudsman recommends that the landlord liaise with its management company to clearly define the quality standards expected from its service agreement. This will ensure the management company is accountable to it and the residents who pay for service charges.