A2Dominion Housing Group Limited (202319254)

REPORT

COMPLAINT 202319254

A2Dominion 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

The complaint is about the landlord’s handling of the resident’s concerns about its administration of her service charge account for 2022/23.
We have also considered the landlord’s:
1. record keeping.
2. complaint handling.

Background

The resident is a shared ownership leaseholder of a flat within a block. The landlord, a housing association, is the head leaseholder.
The resident’s lease sets out that, through a service charge, she will contribute to costs incurred by the landlord. A managing agent in place to provide estate services.
In February 2022 the landlord sent the resident notice of her rent and the estimated service charges for 2022/23. Later in February 2022 the landlord wrote again to the resident. It noted that some residents had raised concerns about the “significant increase” to estimated service charges compared with the previous year. It said it had raised these concerns to its managing agent team, who had now reviewed the matter and had determined an adjustment was required.
The landlord apologised for the distress caused by its error. It said:
1. its managing agent team had said estimates for the previous year (2021/22) were incorrect.
2. this had contributed to a “disproportionately high variance” with the 2022/23 service charge estimate.
3. it had attached an explanation to support the budget, which explained that there had been increases in the insurance and the reserve funds.
4. an adjustment had now been made which had reduced the service charge estimate for 2022/23.
On 14 April 2022 the landlord sent the resident a further notice about her estimated service charge for 2022/23.This set out that the estimated service charge was approximately £200 a month less than figures it had sent in February 2022.
On 20 May 2022 the landlord wrote to the resident again providing a further revision to the estimated service charge for 2022/23. This set out an estimated service charge of £190.14 a month higher than the amount advised in April 2022. In June 2022 the landlord wrote to residents. It said:
1. several residents had raised concerns about the revised estimated service charge.
2. it apologised for the error, which had occurred as its service charge team made some adjustments that were not processed in time.
3. the adjustments meant another revision had to be sent in May 2022.
4. it wanted to assure residents that the revised service charge estimate of May 2022 was correct.
5. it attached information it had sent to residents in February 2022, which set out how it had established service charges for the block.
The resident complained to the landlord in November 2022. She said:
1. the estimated service charge for 2022/23 represented a 30% increase on the previous year.
2. she and other residents had requested a detailed breakdown to explain this, but the landlord had not provided this.
3. it had told her she owed £190.14, and it was “unreasonable” that it put her in a position.
4. she had allocated her budget in line with the lower service charge.
5. she asked that the landlord remove the £190.14 charge and address the issue of the increase in service charge.
The landlord provided its stage 1 complaint response to the resident on 3 February 2023. It said:
1. it had spoken to its leasehold property manager, who said that residents had been updated on the service and why there had been an additional charge.
2. it should have provided the update sooner.
3. it apologised for the failing in service and the breakdown in communication.
4. it offered the resident £50 for the delay in responding to the complaint, and in its leasehold team advising that the service charge increase was correct.
5. it had also recommended an improvement in communications between its departments and residents and in record keeping and monitoring of requests.
The resident responded to the landlord on 7 February 2023 requesting escalation of her complaint to stage 2 of the complaints process. She said:
1. the error in the service charge, and £190.14 she owed, was caused by a miscalculation and administrative error by the landlord.
2. she wanted this amount refunded as she had not had the opportunity to manage her finances in advance.
3. she had not received any breakdown of costs to justify the 30% increase in service charge.
4. waiting 3 months for a complaint response had added to the distress and further delayed her managing her finances.
The resident sent the landlord emails on 31 March and 26 June 2023, chasing a response to her escalated complaint. In August 2023 the landlord noted that the resident had called to chase her complaint again. We contacted the landlord on 22 September 2023 asking that it respond to the resident’s concerns.
The landlord provided its stage 2 complaint response on 3 October 2023. It said:
1. the £190.14 service charge revision was applied following an extensive review of service charges.
2. it had explained on 13 January 2023 that the issue it experienced on a yearly basis was that its service charge setting years differed from the managing agent.
3. when it set its estimate for the next financial year, it was working with the managing agent’s previous year estimates.
4. the 2 adjustments made in 2022 were due to it having a dedicated resource to look at the charges that meant it was able to make sufficient changes to align costs as much as possible.
5. the change applied to the resident’s account in May 2022 was a valid adjustment to bring her account into line, and no refund was required.
6. it acknowledged that multiple adjustments to the account was “not ideal”, and it apologised for the inconvenience and stress caused.
The resident told us that her concern was around how the landlord had handled the increase in the estimated service charge. She said should not have had to pay the £190.14 deficit that accrued.

Assessment and findings

Scope of the investigation

The resident subsequently made a further complaint to the landlord about a deficit in the service charge paid for the year 2021/22. That complaint is being investigated by us under a separate case. The focus of our consideration under this investigation is the landlord’s handling of the resident’s service charges for the period 2022/2023.
The Ombudsman cannot investigate complaints about the level of service charge or the amount of service charge increase. Concerns about the level or reasonableness of service charges are more appropriately dealt with by the First-Tier Tribunal (FTT). It is noted that the resident’s estimated service charge letter included information about her right to take a case to the FTT.
We can consider complaints about a landlord’s handling of the service charge account and the resident’s enquiries about these charges.

Policies and procedures

The landlord’s service charge policy sets out that:
1. residents will receive a detailed summary of costs in an estimated service charge that will accompany the rent notice.
2. actual service charge will be issued to resident by the end of September of the following financial year.
The landlord’s compensation policy says it can make compensation awards to shared owners of between £50 and £150 according to the detriment caused. The landlord can also consider a separate award for time and trouble compensation starts at £35 for 1 month of impact, up to £240 for 6 months plus of impact.
The landlord has a 2-stage complaints policy. It aims to respond to stage 1 complaints within 10 working days and to those at stage 2 within 20 working days.

The landlord’s handling of the resident’s concerns about its administration of her service charge account for 2022/23

We recognise in this case that the administration of the service charge was complicated by the managing agent having a different accounting period to the landlord. The landlord said in its stage 2 complaint response that adjustments it made to the resident’s estimated service charge 2022 were due to it having a dedicated resource to look at changes it could make to align costs as much as possible.
Records we have seen do not show exactly why the landlord needed to adjust the estimated service charge twice following its initial notice in February 2022. However, it explained at the end of February 2022 that it had identified an adjustment was needed. Later, in June 2022 it explained that a further change was needed as some adjustments had not been process in time. The landlord apologised in both February and June 2022 for the error that had occurred in its estimates. It also apologised again for this in its stage 2 complaint response, and for the stress and inconvenience this had caused. That was appropriate.
The resident said she wanted the landlord to refund to her the £190.14 payment she needed to make due to the earlier adjustment underestimating the level of service charge. In line with her lease, the resident is required to contribute to service costs, and the landlord had confirmed in June 2022 that the revised estimated service charge notice it had sent her in May 2022 was correct and that no refund was due. However, we acknowledge that the different notices the resident received over a 3-month period would inevitably have caused her some concern and difficulty in planning and budgeting.
The resident complained that the landlord’s communication with her about the matter was poor. We have not seen the letter the landlord sent about the additional outstanding payment of £190.14 that the resident needed to pay, but she said she called the landlord on 11 July 2022 after receiving this. The landlord told us it had a log of that call and had noted the resident wanted to discuss the contents of the letter. It said that while a message was left for its income team to call the resident back, it had no evidence it did so. That was a failing in communication, which meant the landlord missed the opportunity to provide timely guidance and support to the resident about the matter.
The resident complained to the landlord in November 2022. In its initial complaint response of February 2023, the landlord said the resident had been updated about why there had been an additional charge. The landlord has since told us that it was referring to updates it had sent the resident prior to her complaint. The landlord may have considered the information it had provided previously explained the reason for the adjustments. But the resident was clearly still concerned about this. In her complaint she questioned the reasons for the increase in the service charge and said she had requested a detailed breakdown to explain this. The landlord’s stage 1 complaint response did not adequately address this point. It should have been apparent to the landlord that further explanation was needed. That it did not attempt to provide further clarity was a failing.
When the resident requested escalation of her complaint, she said the landlord had sent no evidence or breakdown of the costs to explain the increase. The landlord’s stage 2 complaint response explained the revision to the estimated service charge had been applied after an extensive review. It also directed the resident to correspondence it had sent her on 13 January 2023, which explained issues it had experienced with underestimating the service charges in previous years. But this did not address the resident’s request for it to send her a breakdown of the service charge.
As the service charges for 2022/2023 was an estimate of the service charge for that year, the landlord may not have been able to provide a detailed breakdown of actual charges earlier. But it should reasonably have explained this and directed the resident on when that information would be available. It could also have directed her to budget information from the managing agent it had previously sent in communication of February 2022.
By the time of its stage 2 complaint response the resident would have received the actual service charge for 2022/2023, which was due to be sent to her by end of September 2023. Given that the resident clearly wanted a breakdown of charges, the landlord should reasonably have explained to her how she could request this information if she remained concerned. That it did not was a failing.
Overall, we have found maladministration in the landlord’s handling of the resident’s concerns about its administration of her service charge for 2022/23. The landlord has already acknowledged some failings and delays in explaining that the service charge estimate was correct. We have found additional failings. It failed to provide timely guidance and information in response to the resident’s repeated request for a breakdown of charges. Doing so could have provided some reassurance to the resident about the level of charge she was paying.
So far, the landlord has awarded the resident £50, part of which was for the delay in responding to her complaint. This does not adequately recognise the impact of its failings. With consideration to the circumstances, and with reference to the Ombudsman’s remedies guidance, we have ordered additional compensation.

Complaint handling

The landlord’s initial complaint response was delayed. While it received the resident’s complaint on 4 November 2022, it did not respond until nearly 3 months later. That is far outside the 10-working day timescale set out in its complaint policy. There is also no evidence the landlord communicated with the resident at all during this time to explain the delay. The landlord apologised for delay in its eventual stage 1 complaint response. However, in line with the Ombudsman’s complaint handling code, and the landlord’s own complaints policy, it should have contacted the resident in advance to agree an extension. That it did not do so was a failing.
The resident provided evidence that she contacted the landlord in February, March and June 2023 escalating and chasing a response to her complaint. The landlord did not take steps to escalate the complaint until we contacted it in September 2023. That there is an absence of any documentation within the landlord’s records regarding the resident’s earlier escalation requests is a record keeping failing. The landlord should reasonably have had adequate systems in place to make sure that complaint communication was appropriately logged and acted upon.
The landlord took steps to provide a stage 2 complaint response to the resident only after contact from us. It should reasonably have acted to respond to her earlier requests and chasing emails. That it did not do so resulted in her spending additional time and trouble chasing the matter, with the landlord and through us. This would have caused her unnecessary frustration. It also meant the complaints process was unduly protracted. We have ordered that the landlord review whether it has adequate systems and guidance in place to log and monitor complaint and escalation requests through to completion.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was:
1. maladministration in the landlord’s handling of the resident’s concerns about its administration of her service charge for 2022/23.
2. maladministration in the landlord’s record keeping.
3. maladministration in the landlord’s complaint handling.

Orders and recommendations

Orders

Within 4 weeks of the date of this report the landlord should:
1. write to apologise to the resident for the failings identified in this report.
2. pay the resident compensation of £250, made up of:
  1. £50 it previously awarded to the resident.
  2. £100 further payment for the impact of additional failings identified in its handling of the resident’s concerns about her service charge.
  3. £100 for the impact of its complaint handling failings.
3. contact the resident to clarify if she still requires further information about the breakdown of charges for 2022/2023 and take appropriate steps to action this.
Within 6 weeks of the date of this report the landlord should:
1. consider failings identified in this report, and review whether its staff have adequate training and guidance about how to respond to requests for service charge account information.
2. review whether it has adequate systems and guidance in place to log and monitor complaint and escalations requests through to completion.