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A2Dominion Housing Group Limited (202316314)

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REPORT

COMPLAINT 202316314

A2Dominion Housing Group Limited

17 February 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:

a.     Response to the resident’s request for a breakdown of service charges for the 2021–22 financial year.

b.     Complaint handling.

Background

  1. The resident has a shared ownership lease at the property, which is a 2–bedroom flat. The resident’s lease sets out that he has to pay a variable service charge. It is not clear if communal services are done by the landlord or a separate management company. The landlord has no vulnerabilities recorded for the resident.
  2. The resident submitted a complaint on 18 January 2023 and said that the landlord had not explained the service charge costs or why he was in a deficit. The landlord responded at stage 1 (17 February 2023) and said it had come across a matter that needed to be considered by a senior manager before it could respond. It apologised that its service had not met its expected standards and offered £50 compensation.
  3. The resident escalated the complaint on 23 June 2023 and said that the landlord had provided him with copies of invoices for “hundreds of thousands of pounds”. He asked how the landlord could accurately calculate the service charge without a breakdown of costs.
  4. The landlord responded at stage 2 (4 July 2023). It said that, due to the limitations of its systems, it was not straightforward to provide the documentation, and the information was not presented in a transparent way. It said it would provide the resident with accurate and clear information by 21 July 2023. It offered a total of £150 compensation, which was made up of £50 each for his inconvenience, its poor communication, and its delay.
  5. The resident referred his complaint to the Ombudsman on 3 August 2023 and said that the landlord had not provided documents which showed the costs. He asked for it to be open and provide a breakdown of the actual costs instead of sending him large invoices that did not show his service charge deficit was correct. The resident explained this caused him stress as he had to renew his lease but the landlord would only allow him to after he paid the deficit.

Correspondence following the referral to the Ombudsman

  1. The landlord provided the resident with a document on 25 January 2024. It said this listed all of the costs. (We have not seen this document). The resident was not satisfied and requested to see itemised invoices.

Assessment and findings

Scope of investigation

  1. The resident has raised concerns about the amount of the service charge and the appropriateness of part of it being paid to a named company. Paragraph 42.d. of the Scheme sets out that the Ombudsman is unable to investigate issues about the level, reasonableness, or liability to pay service charges. If the resident wishes to challenge these aspects, he may do so via the First Tier Tribunal (Property Chamber). While we are unable to assess the level or reasonableness of the service charge, we will consider whether landlord responded to the resident’s request for a breakdown of the charge in line with its policies and procedures, and whether this was fair and reasonable in all the circumstances.
  2. The resident advised that the situation had caused him constant stress. The courts are the most effective place for disputes about personal injury and illness. This is largely because independent medical experts are able to give evidence. They have a duty to the court to provide unbiased insights on the diagnosis, prognosis, and the cause of any illness or injury. When disputes arise over the cause of any such injury, testimony can be examined in court. While the Ombudsman cannot consider the effect of the landlord’s actions or inactions on health, consideration has been given to any general distress and inconvenience which the resident experienced as a result.
  3. The resident raised concerns that the landlord had not provided him with information regarding the service charges from 2020-21. In addition, following the completion of the landlord’s internal complaints procedure, the resident requested a breakdown of costs for the service charge deficit for 2022-23. As these were not part of the formal complaint made to the landlord, these are not matters that the Ombudsman can investigate at this stage. This is because the landlord needs to be provided with the chance to investigate and respond to the resident’s concerns as part of its internal complaints process. As such, the resident will need to contact the landlord and raise a separate complaint to have these matters investigated and resolved. After this, he can escalate the matters to the Ombudsman.

The landlord’s response to the resident’s request for a breakdown of service charges for the 2021–22 financial year

  1. The landlord’s service charge policy sets out that residents who pay a service charges will be sent a detailed summary of estimated costs. The actual costs will be issued to residents by the end of November of the following financial year. Service charge headings will be fully itemised on service charge summaries provided to residents.
  2. The landlord’s leaseholder management policy says that it will make sure service charge statements are clear, consistent, and costs are broken down by service. It will provide information to help residents understand the charges.
  3. The date is not clear, but in 2022 the resident received a service charge notice from the landlord saying he had not paid enough and was in deficit. He asked the landlord (on 12 October 2022) to clarify why and asked for a breakdown of the charges.
  4. The resident made a complaint on 18 January 2023 as the landlord had not provided this. The landlord responded at stage 1 on 17 February 2023. It acknowledged that it had not responded to the resident’s request, despite him having chased this. It said that it had come across something that it needed a senior member of staff to look into. This response lacked openness and the landlord did not say what it needed to check. It said that it hoped to provide the response by 1 March 2023. If offered £50 compensation for the delay in providing the information.
  5. The date is not clear, however the landlord provided some documentation to the resident about the service charge before 23 June 2023 (this has not been seen by the Ombudsman). The resident raised his dissatisfaction with the information (on 23 June 2023). He asked how the landlord could calculate the service charge without a breakdown of what it had spent in certain estates or blocks.
  6. The landlord responded at stage 2 (4 July 2023) and said that, due to its systems, it was not straightforward to provide the information. It also said that the information was not presented in an open way “at the push of a button”. While the calculation of service charges can take time, the Ombudsman expects landlords to be able to provide clear information about a charge, including what a charge is for. Such information, including summaries of costs, should be presented in an easy-to-understand format. This is mirrored in the landlord’s policy, however it failed to provide this. Where residents request additional information, such as invoices, the Ombudsman expects landlords to do so in line with sections 21 and 22 of the Landlord and Tenant Act 1985, as follows:

a.     Section 21 states that the landlord must provide the resident with details of the service charges, any associated service charges, and relevant costs relating to service charges.

b.     Section 22 states that a resident may, within 6 months of getting a summary of relevant costs relating to service charges, require the landlord to allow the inspection of accounts, receipts, and other documents supporting the summary. The landlord should make these available not later than one month after the request was made.

  1. The landlord’s stage 2 response was dismissive of the resident’s concern and it could not explain how the underpayment had occurred. It was unreasonable for the landlord to rely on the information not being clear as a reason for it being unable to respond to the resident’s query. This was not in line with the landlord’s policy or the Ombudsman’s expectations for good practice.
  2. Although the landlord noted that it was in the process of changing its systems, this did not benefit the resident at the time. The landlord said it would provide further clarity to the resident by 21 July 2023. This was over 9 months after the resident had raised his query in October 2022. This timeframe was unreasonable, particularly as the landlord had been unable to support its calculation that the resident had underpaid the service charge. There were missed opportunities for the landlord to investigate the resident’s concerns at an earlier stage.
  3. The landlord upheld the complaint at stage 2 and offered a total of £100 compensation. Of this, £50 was to acknowledge the delay in providing the information and the associated inconvenience. The other £50 was for its poor communication. (It also offered £50 for an unspecified delay. This amount had been considered in the complaint handling section below).
  4. The landlord had promised to provide additional information following its stage 2 response. However, it was only after the involvement of the Ombudsman in August 2023 that the landlord provided this on 25 January 2024. This was 15 months after the resident’s initial request in October 2022. This documentation was not provided to the Ombudsman, however the resident did not think it showed how the underpayment had occurred.
  5. When failures are identified, as in this case, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the all circumstances. In considering this, the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: Be Fair, Put Things Right, and Learn from Outcomes, as well as our own guidance on remedies.
  6. The landlord’s offer of in respect of its handling of the resident’s request, totalled £150 (£50 at stage 1 and £100 at stage 2). This was towards the lower end of the scale which the Ombudsman’s remedies guidance would expect to be offered where there has been maladministration by the landlord that adversely affected the resident. This amount was not proportionate given that the issue remained outstanding at the completion of the complaints procedure and it took 15 months to provide additional information to the resident that he still disputed as it was unclear. Although it acknowledged that its systems needed to be changed to make calculations clearer, the landlord did not fully consider how the limitations of its systems had prevented it from being able to clearly explain the deficit in line with its policy. As such, there was maladministration in the landlord’s response to the resident’s request for a breakdown of service charges for the 2021 to 2022 financial year.
  7. The Ombudsman has therefore ordered the landlord to apologise to the resident and pay additional compensation of £300. This is in line with the Ombudsman’s remedies guidance where there has been a failure that adversely affected the resident. The landlord has also been ordered to inform the resident of his right to inspect and take copies of its accounts, documents, and receipts relating to his service charges, review and provide a breakdown of his charge for 2021-22, and conduct a senior management review of the issues highlighted in this report. It has additionally been recommended to review and provide breakdowns of his service charges for 2020-21 and 2022-23, and to respond to his concern that he will be unable to renew his lease while in service charge deficit.

Complaint handling

  1. The landlord has a 2 stage complaints policy. This states that at stage 1 it will acknowledge the complaint within 5 working days. The landlord will then respond within 10 working days from the acknowledgement. At stage 2, the landlord will respond within 20 working days. This can be extended by up to 10 working days with a resident’s agreement. This is in line with the requirements of the Housing Ombudsman’s Complaint Handling Code (the Code).
  2. The resident submitted his complaint on 18 January 2023. It took the landlord 9 working days to acknowledged this. This was almost double the stated timeframe. The landlord responded at stage 1 on 17 February 2023. This was 13 working days after the acknowledgement so also outside of its and the Code’s stated timeframe. The landlord failed to acknowledge the delay in responding within its stage 1 response.
  3. The resident escalated his complaint on 23 June 2023 and noted that the landlord had closed his complaint against his wishes. He also said that the compensation had not been paid or offset against his account. The landlord responded at stage 2 on 4 July 2023. This was within the timeframe of its complaints policy and the Code. The landlord addressed the resident’s concern that the complaint had been closed. It apologised for the confusion. It, however, failed to address his concern about the compensation not having been paid. The landlord also did not clearly address that there had been a delay in it responding at stage 1, although it did offer an additional £50 for “the delay”. It was not clear what this other delay was for. This should have been made clear to the resident within the response to avoid confusion.
  4. As the landlord did not address the delay at stage 1, offer appropriate compensation, or provide clarity over its compensation, there was service failure in the landlord’s complaint handling. To acknowledge the frustration caused to the resident by this, the Ombudsman has ordered an apology and a total of £100 compensation to be given by the landlord to the resident for the effect of its complaint handling failures. This is in line with Ombudsman’s remedies guidance where there has been a minor failure by the landlord and it did not appropriately acknowledge this.

Determination (decision)

  1. In accordance with paragraph 52. of the Scheme, there was maladministration in the landlord’s response to the resident’s request for a breakdown of service charges for the 2021–22 financial year.
  2. In accordance with paragraph 52. of the Scheme, there was service failure in the landlord’s complaint handling.

Orders and recommendations

Orders

  1. The landlord is ordered to take the following action within 4 weeks of this report and provide evidence of compliance to the Ombudsman:

a.     Apologise in writing to the resident for the failures identified in this case.

b.     Pay a total of £550 compensation to the resident. This figure includes the landlord’s earlier offer of £200, which does not need to be paid again if this has already been paid. The compensation is made up of:

  1. £450 to acknowledge the effect on the resident of the landlord’s failures in respect of the resident’s request for a breakdown of service charges for the 2021–22 financial year.
  2. £100 to acknowledge the effect on the resident of the landlord’s complaint handling failures.

c.      Inform the resident of his right to inspect and take copies of its accounts, receipts, and documents relating to service charges within a specified period under section 22 of the Landlord and Tenant Act 1985. It should include details of how he can exercise this right and local arrangements for inspecting invoices (for example, attending its offices at a particular address, and any costs for making copies).

  1. The landlord is ordered to take the following action within 8 weeks of this report and provide evidence of compliance to this Ombudsman:

a.     Review the resident’s service charge for the 2021-22 financial year to determine its accuracy, clarifying to the resident the process that it used in reviewing these charges and the evidence that it relied upon. Once this is complete and pending any changes, the landlord is to provide a full explanation of the breakdown of the charges, including how the deficit occurred. If receipts, invoices, or other relevant documentation is available, copies should be provided to show transparency. If such documents are not available, this should be clearly stated and why.

b.     Conduct a senior management review of the issues highlighted in this report, summarising identified improvements. This should be shared with its relevant staff and the Ombudsman. This should include consideration of how service charges are presented to residents and what changes are required in order to make sure that such information is easily accessible and understandable. This should also focus on making sure that deficits can be explained and evidenced to residents within a reasonable timeframe.

Recommendations

  1. The landlord is recommended to review the resident’s service charge for the 2020-21 and 2022-23 financial years to determine its accuracy, clarifying to the resident the process that it used in reviewing these charges and the evidence that it relied upon. Once this is complete and pending any changes, the landlord is to provide a full explanation of the breakdown of the charges including how the deficit accrued. If receipts, invoices, or other relevant documentation is available, copies should be provided to show transparency. If such documents are not available, this should be clearly stated and why.
  2. It is recommended that the landlord respond to the resident’s concern that he will be unable to renew his lease while in service charge deficit.