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Accent Housing Limited (202309515)

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REPORT

COMPLAINT 202309515

Accent Housing Limited

31 January 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:
    1. the increase in rent and service charges.
    2. the landlord’s communication and information regarding service charges.

Background

  1. The resident lives in a 2-bedroom end terraced house under a shared-ownership lease agreement. The resident lives with her husband and 2 children, 1 of which has a disability. The landlord said it has no recorded vulnerabilities for the resident or her household.
  2. The resident pays a variable service charge to the landlord. On 28 February 2023 the resident contacted the landlord to ask why it had added £49.86 to her service charges for communal repairs. The landlord informed her that this related to potential fencing repairs for 2023/24 and if this work was not carried out it would credit the amount back to the resident’s account when it completed the final accounts for that year.
  3. The resident was not happy with the landlord’s response and raised a complaint that she wanted the landlord to clarify why the rent had increased and why it had added the cost of communal repairs to her account. The resident also complained that she had found it difficult dealing with the landlord about this issue, she said she had to chase for updates and the information the landlord had provided had not been clear.
  4. On 24 March 2023 the landlord sent its stage 1 response, in which it said:

Service charges

  1. it had reviewed the resident’s service charges again and found that it should not have charged her for the communal repairs
  2. it apologised for its error and said it had made its service charge team aware to ensure it did not add these to the service charges the following year
  3. it explained that it was only able to issue one service charge estimate per financial year and was unable to amend the 2023/24 estimate
  4. it gave the resident 2 options to consider in relation to recovering this cost, as follows:
    1. to keep her direct debit for 2023/24 the same and within the end of year accounts, to be issued in September 2024, it would credit the £49.86 back to the resident’s account
    2. amend her direct debit to take off the charge, but this would mean that £49.86 would show as arrears on the resident’s account until the end of year accounts, when the landlord would credit the amount back

Response from the landlord

  1. it apologised if the resident had found its employees to be unhelpful
  2. it acknowledged that receiving incorrect information was not the service the resident should receive
  3. it had reviewed its communication with the resident and identified some training needs
  4. it advised that all items in section 3 of the lease would be the resident’s responsibility

Rent increase

  1. it confirmed it calculated the rent by using the calculation set out in the lease
  2. it appreciated the cost-of-living crisis had on residents
  3. the rent increase was inline with guidance from the National Housing Federation
  4. it had capped the increase for shared owners to 7%, which was inline with the government cap for rented residents
  1. The resident remained dissatisfied with the landlord’s response. She said she had complained about errors in service charges every year. The landlord had said it would not happen again but it always did. She was not happy that her account would be in arrears due to no fault of her own. She was not happy that she had to wait until year end for the landlord to credit the money back to her account. She wanted to pay the correct amount for 2023/24. She requested the landlord escalate her complaint to stage 2.
  2. The landlord sent its stage 2 response on 13 April 2023, in which it reiterated what it had said regarding service charges in its stage 1 response. However, it noted the resident did not want her account to go into arrears or wait until year end. It therefore agreed to credit the account with £49.86 so that the account would not go into arrears. It apologised again for the poor service the resident had received.
  3. In communication with this service the resident said she was unhappy with the increase in service charges. She felt the landlord had taken too much time in admitting the charge was incorrect and that it would not correct the amount. She also said that information provided by the landlord had not been clear and communication had been poor resulting in her having to chase the landlord for updates.

Assessment and findings

Jurisdiction

  1. What we 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 the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
  2. In this case, the resident had raised concerns around the increase in rent and service charges for 2023/24. After carefully considering all the evidence, in accordance with the Scheme, the Ombudsman cannot consider the resident’s complaint regarding the increase in rent and service charges. This is because, under paragraph 42.d. of the Scheme, the Ombudsman may not consider complaints, which in the Ombudsman’s opinion, concern levels of rent or service charge or the amount of the rent or service charge increase. In addition, under paragraph 42.f. of the Scheme, the complaint concerns matters where the Ombudsman considers it quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, other tribunal, or procedure.
  3. The First Tier Tribunal (FTT) can make determinations on all aspects of liability to pay a service charge, including by who, to who, how much and when a service charge is payable. In order to decide liability, the FTT also decides whether service charge costs have been reasonably incurred and, if so, whether the standard of any services or works for which the costs are charged is reasonable. Accordingly, where there is a dispute about such matters it is more appropriate for the matter to be considered by the FTT. However, we have assessed the landlord’s communication and information provided to the resident regarding the service charges.

Scope of the investigation

  1. The resident has said that this was not the first time she had raised these issues with the landlord and referred to previous years when there had been errors in service charges.
  2. In the interest of fairness, the Ombudsman has limited the scope of this investigation to the issues raised in the resident’s complaint in March 2023. This report will focus on events from March 2023 onwards and whether the landlord’s actions were fair and reasonable in all the circumstances. Events from earlier than this date may be described where they provide important context.

The landlord’s communication and information regarding service charges

  1. When a resident raises a request with a landlord, the Ombudsman expects the landlord to consider this, and provide a timely and clear response, setting out its position. In this case, as well as being unhappy about the increase in rent and service charges, the resident had raised concerns about the way in which the landlord had communicated with her about these issues and the information she had been given.
  2. The landlord’s service charge (homeowners) policy sets out that it will estimate variable service charges at the beginning of a financial year and then produce a final account once the year is complete. Where costs are higher than the estimate, the landlord can recover the shortfall. Where costs are less than the estimate, a refund will be given when the end of year accounts are finalised. This is supported by clause 7 of the lease.
  3. On 28 February 2023 the resident contacted the landlord to enquire what the communal repairs on her service charge estimate related to and asked the landlord to call her. She contacted the landlord again on 2 March 2023 because she had not received a response.
  4. The landlord updated the resident on 6 March 2023 and explained that it had added a small budget to the account for potential fencing repairs for 2023/24. It said this was an estimate and therefore, if no works were carried out, this amount would be credited back to her account when the landlord finalised end of year accounts.  The resident informed the landlord that she did not have any communal areas or fencing and should not be charged for maintaining these.
  5. On 10 March 2023 the landlord emailed the resident and referred to clause 3(3)(b) of her lease, which it said set out that the landlord was responsible for boundary fences, which it then recharged via the service charge. The resident responded and reminded the landlord that her property was a house and not a flat and she did not have any communal areas or communal fencing. Upon not receiving a response from the landlord, the resident raised her complaint on 16 March 2023.
  6. In its complaint response on 24 March 2023 the landlord said it had made a mistake in adding these charges to the resident’s service charge account. The landlord offered the resident 2 options in relation to the overcharge. The resident contacted the landlord on the same date and advised that its complaint response had not been clear. She asked it to clarify if it had added the service charge to her account incorrectly. The landlord confirmed that it should not have added the service charge for the communal repairs to the resident’s account.
  7. Having considered the evidence in this case, it is the Ombudsman’s opinion that the 2 options to recover the £49.86 provided to the resident in the landlord’s stage 1 response were appropriate. This is because it was consistent with the landlord’s policy and the lease. Further to this, when the resident escalated her complaint, the landlord took on board what she had said about not wanting her account to show as in arrears and offered to credit the £49.86 back to her account to ensure this did not happen. This was reasonable in the circumstances because it put the resident back to the position she was in before she made the complaint.
  8. However, we have identified some issues regarding information provided to the resident both before and during her complaint. In its correspondence to the resident on 10 March 2023 the landlord referred to clause 3(3)(b) which was incorrect. This clause was a leaseholder covenant and not related to service charges.
  9. Further to this, in both its complaint responses the landlord provided misleading information relating to the lease. The landlord indicated that the resident was not responsible for service charges relating to repairs to communal areas. While we are not determining that the resident was obliged to pay this charge, there are clauses in section 7 of the lease which refer to payment of service charges for repair and maintenance of the landlord’s estate and common areas.
  10. In accordance with the Ombudsman’s insight report on service charges from December 2023, the Ombudsman expects landlords to be able to provide clear information in a timely manner and in a consumer-friendly format. The landlord should be able to explain:
    1. its power to charge under the lease
    2. what a charge is for, when general terms are used such as ‘communal repairs’
  11. The Ombudsman is of the opinion that the landlord did not do this in this case, which left the resident feeling confused about the information she had been given. The landlord failed to provide clear and accurate information both prior to and during the resident’s complaint.
  12. The resident complained about the time taken for the landlord to respond to her concerns. She said there were delays and she had to chase it for responses. In this case, we can see that the resident initially contacted the landlord on 28 February 2023 and the landlord responded on 6 March 2023, which was 4 working days. The resident said there was then a further delay between 6 March 2023 and 10 March 2023, which again was 4 working days. During this time the landlord also offered a call to the resident to explain the service charges. Although the resident felt that the landlord was not responding to her in a timely manner, the Ombudsman would not consider the time taken for the landlord to respond to be unreasonable. This is because, although we do not know the service standard the landlord has in place to respond to resident contact, the general timeframe across the sector to respond to non-urgent calls or emails would be between 3-5 working days.
  13. With regards to the time taken for the landlord to respond to the resident’s complaint, this service’s Complaint Handling Code (the Code) (2022) sets out the Ombudsman’s expectations for how landlords should handle complaints, including timeframes. Both complaint responses were sent within the timeframe set out in the Code. We would therefore consider the time taken for the landlord to respond to the resident’s complaint to be reasonable in the circumstances.
  14. In conclusion, as outlined above, there were failures by the landlord regarding the information provided to the resident both prior to and during her complaint. The Ombudsman would consider this to amount to service failure.
  15. The Ombudsman’s remedies guidance, which is available online, provides awards of compensation between £50 and £100 when there is evidence of a service failure by the landlord which may not have significantly affected the overall outcome for the resident. The Ombudsman has therefore made an order that the landlord pay the resident £50 compensation to reflect the distress and inconvenience caused due to the information provided to the resident regarding the service charges.

Determination

  1. In accordance with paragraph 41.d of the Housing Ombudsman Scheme, the resident’s complaint about the increase in rent and service charges is not within the Ombudsman’s jurisdiction to investigate.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in the communication and information regarding service charges.

Orders and recommendations

Orders

  1. The landlord must, within 28 days of the date of this determination:
    1. pay the resident compensation of £50 in recognition of the distress and inconvenience caused by the landlord’s handling of communication and information regarding the service charges
    2. apologise in writing to the resident for its failings in this case
    3. provide the resident with a clear written explanation as to what, if any, communal repairs she is responsible for under the terms of the lease
  2. This award replaces any offer made to date by the landlord through its internal complaints process. The landlord is entitled to offset against this sum any payments already made to the resident. All payments must be paid directly to the resident and not credited to the rent account unless otherwise agreed by the resident.
  3. The landlord must provide the Ombudsman with evidence of how it has complied with the above orders within 28 days of the date of this determination.

Recommendations

  1. The landlord should update its systems to reflect the resident’s household vulnerabilities, subject to the resident agreeing.