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Clarion Housing Association Limited (202234940)

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REPORT

COMPLAINT 202234940

Clarion Housing Association Limited

19 June 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 resident’s concerns about the landlord’s:
    1. Communication about service charge payments.
    2. Live chat facility.
    3. Complaint handling.

Background

  1. The resident is a shared ownership leaseholder of the landlord, a housing association.
  2. For context, the landlord was subject to a cyber–security incident in June 2022. This created significant disruption to its IT systems and impacted the delivery of services to its residents at the time.
  3. On 23 September 2022, the landlord provided the resident with an update on the service charge costs that had been incurred during the 2021-22 financial year. It said that due to the cyber-security incident, it was not in a position at that time to provide the resident with actual costs but provided him with an estimated annual figure for his property.
  4. On 30 September 2022, the resident contacted the landlord via its live chat facility. He said he was “deeply concerned” about the increase in service charge payments (in comparison to the previous year). The landlord noted the resident’s concerns and explained that he was not required to make any payment at that time, and it would prepare and issue the final accounts in due course.
  5. Following the live chat conversation, the resident asked the landlord to provide him with a copy of the live chat transcript for his records. The landlord informed him that it had requested a copy from the relevant team, and it would forward it to him when it received it. The resident said he wanted to make a formal complaint because he was dissatisfied that he had to request a copy of the transcript and felt that it should be an automated service. The landlord sent the resident a link to its ‘make a complaint’ webform.
  6. The resident contacted the landlord again on the same day (30 September 2022) via live chat. He expressed his dissatisfaction that the landlord’s complaint webform was not working. The landlord told the resident that it had raised a complaint on his behalf about this issue and the live chat facility and that he would receive a response within 15 working days.
  7. On 7 February 2023, the landlord wrote to the resident to notify him of the service charge he would need to pay from 1 April 2023. Accompanying the notice, was a statement of the actual expenditure for the 2021-22 financial year. This showed there was a £909.56 increased variance between the estimated cost, and the actual cost. The evidence suggests that the resident requested the landlord to review the service charge calculations on 31 March 2023.
  8. At the request of the resident, we contacted the landlord on 23 June 2023. We asked it to open a complaint about its handling of the resident’s request for an explanation of the service charge increases. We also asked it to review its handling and delays of the resident’s formal complaint. The landlord issued its stage 1 response on 4 July 2023. It said:
    1. It upheld the resident’s complaint. This was because it had calculated the 2021-22 service charges incorrectly and had caused a delay in providing the resident with an explanation of the increased costs.
    2. It had since amended the service charges and credited the balance to the resident’s rent account.
    3. It offered the resident £100 compensation for its handling of the matter.
  9. The resident asked the landlord to escalate his complaint to stage 2 on 6 July 2023 (and sent a further email on 15 July 2023). In summary, the resident:
    1. Expressed further dissatisfaction with the landlord’s communication about the service charges. He said this was because:
      1. The landlord’s most recent calculation of the charges was “confusing”.
      2. He was concerned that the calculation included maintenance costs for other blocks of flats and his neighbours’ statement (who lived in the same building) showed different calculations.
      3. He was unhappy that landlord had returned his call in May 2023, but the staff member did not leave their name or telephone number. He said that the landlord was “deliberately attempting to avoid dealing with [his] case”.
    2. Remained unhappy with the landlord’s complaint handling. He said this was because his initial complaint was about his dissatisfaction with the landlord’s live chat service and website complaint form. He said he did not receive a response about this.
    3. Believed the landlord’s £100 compensation offer was not reflective of the inconvenience it had caused him.
    4. Had concerns about an alleged data breach, following the landlord’s cyber-security incident.
  10. The landlord issued its stage 2 response on 21 September 2023. It said:
    1. It acknowledged and apologised to the resident for failing to provide clarity and explanations for the increase in service charges. The landlord provided a revised statement of the 2021-22 service charges.
    2. It apologised to the resident for failing to answer the complaint he had raised in September 2022 regarding his dissatisfaction with the live chat function and website complaint form.
    3. It’s previous live chat service provider (before March 2023) did not offer the provision to automatically save live chat transcripts, but copies could be provided to customers upon request. It confirmed that its new service provider automatically saved the chats to customers records.
    4. It had liaised closely with the Information Commissioner’s Office (ICO) following the cyber–security incident and they had since formally closed the matter. It had “no reason to believe” that the cyber-security incident was the cause of the resident’s identity being stolen and offered him advice on where to seek further support in relation to the matter.
    5. It offered the resident £350 compensation (total £450), broken down as follows:
      1. £200 for its handling of the service charges (total £300 including stage 1 offer).
      2. £100 for failing to log a complaint about the live chat facility.
      3. £50 for its delayed complaint response.

Assessment and findings

Scope of investigation

  1. Paragraph 42.d of the Scheme states that, the Ombudsman may not consider complaints which concern the level of rent or service charge or the amount of the rent or service charge increase. Complaints concerning the level of a rent or service charge are best suited for consideration by the First Tier Tribunal (Property Chamber), which can make a decision on whether service charges are reasonable or payable. Accordingly, this report will not consider whether the resident’s service charges were reasonable or payable, or whether any reimbursement of the service charge was due. However, this investigation will consider the landlord’s communication with the resident and whether its response was reasonable in all the circumstances of the case.
  2. Paragraph 42.j of the Scheme sets out that we will not investigate complaints which, in our opinion, fall properly within the jurisdiction of another Ombudsman, regulator, or complaint-handling body. The resident has complained about an alleged data breach. The ICO is the body responsible for considering complaints about data protection, and therefore this aspect of the resident’s complaint is outside the scope of our investigation. However, we will address any complaint handling failings within the relevant section of this report.
  3. In November 2023, the resident told this Service that he was unhappy that the landlord had failed to provide him with copies of live chat transcripts after it had issued its stage 2 complaint response. In June 2025, the resident also informed us that he had concerns about the landlords handling of service charge queries between 2023 and 2025. Any new issues that the resident has raised since the landlord issued its stage 2 complaint response will not be considered as part of this investigation. This is accordance with paragraph 42.a of the Scheme which states that we may not investigate complaints which, in our opinion, are made prior to having exhausted the landlord’s complaints procedure. If the resident is unhappy with how the landlord has dealt with such issues, he may then refer this to this Service for separate investigation if he is dissatisfied with the landlord’s final response.

Communication about service charge payments

  1. The landlord’s service charge statement explains that service charges paid by residents are made in relation to anticipated costs, rather than backdated payments for services a resident has already received. The landlord calculates the anticipated cost of its service charges by considering previous costs and factoring in the rate of inflation. At the end of the financial year, the landlord will calculate the actual cost of the service charges, and any surplus or deficits will be added onto the resident’s rent account.
  2. On 23 September 2022, the landlord issued the resident with a notice of service charge costs incurred for the financial year 2021-22. This was in accordance with Section 20B (2) of the Landlord and Tenant Act (the Act), which is a formal notification that landlords must provide to leaseholders regarding service charges during a specific period. Alongside the notice of costs, the landlord appropriately provided the resident with a frequently asked questions page.
  3. We acknowledge the resident’s concerns about the increase in costs. During the live chat conversation on 30 September 2022, we find the landlord’s response was sympathetic of the resident’s situation and it appropriately advised him that it had a dedicated team to support him with his financial concerns. It is accepted that the landlord was limited in what update it could provide the resident at this point, until access to its IT systems had been restored following the cyber-security incident.
  4. It was positive that the landlord contacted the resident on 5 October 2022 to provide him with further assurance about the service charges. It reiterated that he was not required to make any payments at that stage, and it was “working hard” to reinstate its IT systems so it could provide him with the full breakdown of costs and actual service charges.
  5. The landlord’s service charge statement states that it will notify residents in writing of any changes to service charges 4 weeks before the change is due to occur. When the landlord communicates a change to a resident’s service charge, it will also provide them with supplemental documents to aid their understanding of the upcoming changes. The landlord wrote to the resident on 7 February 2023, notifying him of the service charge he would need to pay from 1 April 2023. Accompanying the notice was a statement of the actual expenditure for the 2021-22 financial year (which showed a variance of £909.56). This was appropriate.
  6. Under the lease agreement, the resident has the right to object to a service charge which they consider to be unreasonable, or that the service the landlord provides is unreasonable. If this occurs, the leaseholder has a right to instruct a chartered surveyor who can determine what the costs of service charges should be. Within the landlord’s correspondence with the resident (on 7 February 2023) it did not inform him of this, nor did it advise him to review his lease agreement to consider his rights and obligations. This was inappropriate.
  7. Section 22 of the Act gives leaseholders the right to inspect any receipts or invoices which support the landlord’s service charge figures. The request must be made within 6 months of receiving the summary, in writing. The landlord must provide facilities for inspecting the information within 1 month of the request. It is reasonable to assume that the resident disputed the level of service charges. This is because within the landlord’s stage 1 response, it confirmed that the resident had contacted it about the service charges on 31 March 2023. However, we have not seen any evidence of this contact. This is a record keeping failure in the landlord’s handling of the service charges.
  8. On 12 May 2023, the landlord wrote to the resident to inform him that his rent account was in arrears of £909.56. It is noted that the landlord has a legal obligation to inform its residents of any rent or service charge arrears. However, as also highlighted within the case studies presented in our 2020 Spotlight Report on leasehold, shared ownership and new builds, the landlord made no reference to his queries from 31 March 2023, nor did it acknowledged that he was currently in a dispute process about calculation of service charges and was not expected to pay the amount during this process. This was inappropriate and again highlights the importance of communication.
  9. On 17 May 2023, the resident contacted the landlord via telephone to express his dissatisfaction about receiving the arrears letter. The landlord’s internal records show that as the team responsible for managing service charge payments were unavailable at that time, a call back was requested on the resident’s behalf. It appropriately returned the resident’s call the next working day (on 18 May 2023) and left him a voicemail. In later correspondence (on 6 July 2023) the resident said he was unhappy that the staff member who left him the voicemail had not left their name or contact number. This was inappropriate and caused the resident further frustration with the landlord’s handling of the service charges. However, within the landlord’s stage 2 response, it was positive that it apologised to the resident for this failing and that it had raised the “training issue” with the staff member responsible.
  10. On 30 June 2023, the landlord provided the resident with an update on the service charge calculations. This was 62 working days from the date that the resident had requested the landlord to review its calculations. We find this unreasonable delay and at odds with Section 22 of the Act.
  11. Within the landlords update to the resident, it confirmed that it had incorrectly overcharged him £190.45 for the “block caretaking service”. This is concerning and it is reasonable to assume that the landlord may not have realised that it had overcharged him, had he not disputed the calculation. It is noted that the landlord appropriately apologised to the resident for the error and confirmed that it had credited the amount to his rent account.
  12. The landlord’s compensation policy sets out the circumstances under which it may consider making an offer of compensation. In instances of service failure resulting in some impact on the resident, the landlord may offer between £50 and £250. Examples include failure to meet service standards for actions and responses, but where the failure had no significant impact. In instances where there had been considerable failure but no permanent impact on a resident, the landlord may offer between £250 and £700. Examples include, a resident repeatedly having to chase for the landlord for responses and to correct mistakes, necessitating an unreasonable level of involvement by that resident. The landlord offered the resident £100 compensation at stage 1 (4 July 2023) for the delay in providing him with an update and the incorrect charges being applied. Taking all facts into account, we find the landlord’s offer of compensation at stage 1 was too low.
  13. The resident raised further concerns to the landlord on 6 July 2023 and 15 July 2023 about the service charge calculations (that he received on 30 June 2023). The resident requested an update from the landlord on 19 September 2023 and stated that “to date, [he] had not received a single attempt [from the landlord] to discuss the service charge calculation”. We have seen no evidence that the landlord provided the resident with any further explanation of the calculation until it issued its stage 2 response on 21 September 2023. This was a further 78 working days, which was inappropriate. It is evident that the delays in responding were caused by a protracted complaints process (which will be assessed with the complaint handling section of this report). However, it is our opinion that the landlord’s service charges team should have endeavoured to respond the resident about his queries, rather than wait for the outcome of the stage 2 complaint.
  14. The landlord’s explanation of the service charges (within its stage 2 response) was detailed and provided some transparency to the resident about its calculations. However, it is noted that there was a further overcharge (of £6.52) for the “day to day repairs” and the landlord advised the resident it would credit his rent account. It is positive that the landlord found this additional overcharge and aimed to put things right. However, given that it had already reviewed the calculations in June 2023, it is our opinion it should have identified the error sooner.
  15. At stage 2, the landlord apologised to the resident and offered him an additional £200 (total £300) for its “poor communication” about the service charge payments. We find that this was a reasonable offer of compensation from the landlord, mirrored the awards made in similar cases determined by this Service, and ultimately reflected the high-level of input required from the resident throughout the case. The landlord also mentioned that it had highlighted the findings from its complaint investigation to the relevant service area. This was encouraging and shows that the landlord was taking responsibility for the failings it had identified.
  16. Taking the full circumstances of the case into account, we find that the landlord’s offer of compensation sufficient to resolve this complaint satisfactorily. We have therefore made a finding of reasonable redress.
  17. We recently made recommendations to the landlord in a similar case (202306996). The landlord provided evidence that it had utilised the learning from the case into service improvements which included introducing a cyclical scheme of reviewing service charges where there has been a significant increase in year-on-year actual costs. As such, we will not made any further recommendations in relation to this case.

Live chat facility

  1. We acknowledge the resident’s frustrations that the landlord was unable to automatically provide him with a transcript of live chat conversations. However, we have seen no evidence to show that the landlord was obliged to provide this feature. It is outside the Ombudsman’s remit to instruct the landlord to include any specific provisions within its live chat functionality, and it has commercial freedom to make its own decisions about its IT systems.
  2. The resident asked the landlord to provide him with copies of the live chat transcripts from 30 September 2022. The landlord provided the resident copies of 2 separate transcripts. It emailed him the first transcript on the same day (30 September 2022) and the second within 2 working days (4 October 2022). This was slightly outside of its 1-day target timescale (that it had informed the resident of during its conversation on 30 September 2022). However, it is not considered an excessive delay that was likely to cause significant detriment and therefore does not warrant an adverse finding.
  3. We will make a detailed assessment of the landlord’s complaint handling in relation to the substantive issue within the complaint handling section of this report. However, we find that it was positive that the landlord explained (in its stage 2 response) that its new live chat system (implemented in March 2023) automatically saved chat transcripts, and it had taken steps to ensure the information was readily available for residents in the future.
  4. Overall, we find there was no maladministration in the landlord’s handling of the resident’s concerns about its live chat facility.

Complaint handling

  1. The Ombudsman’s Complaint Handling Code (‘the Code’) at the time of the complaint said landlords should acknowledge stage 1 complaints within 5 working days and respond within 10 working days. It also stated that landlords should respond to stage 2 complaints within 20 working days of the escalation request. The Code did not become statutory until April 2024.
  2. Following the cyber–security incident, the landlord introduced an interim complaints policy on 17 June 2022. It stated that it would acknowledge stage 1 complaints within 10 working days and respond within 20 working days. It would acknowledge peer reviews (stage 2 complaints) within 10 working days and respond within 40 working days. The Ombudsman appreciates the effect a cyber incident can have on an organisation. It is reasonable that an organisation may need to pause its normal processes while it puts plans in place to deal with the effects of a cyber incident. In this context, the landlord’s interim timescales for complaint responses were reasonable at the time.
  3. The resident initially made a complaint (in relation to the landlord’s live chat facility and complaint webpage not working) on 30 September 2022. The live chat transcripts indicate that the complaint was forwarded to the landlord’s complaint team the same day. However, we have not seen any documentary evidence of this, which is a record keeping failure.
  4. The landlord’s interim complaints policy states that it would not consider a complaint from its customers if it was feedback about its policies or procedures, but it would record the feedback and use it to form part of future reviews of service delivery. Therefore, given that 1 element of the resident’s complaint was about the functionality of its live chat facility, it would have been appropriate for the landlord to set his expectations about what it could investigate and why.
  5. The landlord’s interim complaints policy also states that a complaint can be made via its online ‘make a complaint’ webform. As the resident informed the landlord that the webform was not working, we find that it would have been appropriate for the landlord to raise the issue with its relevant IT teams as soon as possible. This action would have ensured that the webform was operating correctly and other residents were able to make a complaint via this method. It is noted that the resident informed the landlord that he had attempted to use the webform “a few weeks later and it was still not working”. We accept that approximately 12 months had passed between the resident first raising the issue, and the landlord issuing its stage 2 response. However, we find that it would have been appropriate for it to reassure the resident within its complaint responses that the webform was working correctly.
  6. The landlord contacted the resident on 7 October 2022 and 26 October 2022 to acknowledge the complaint and apologise to him for the delays in providing a response. It said that it would aim to provide him a response within 10 working days (9 November 2022). This would have been 28 working days from the date the resident had first raised his formal complaint. This was reasonable as it was in line with the stage 1 timescales outlined its interim complaints policy (30 days). However, we have seen no evidence that the landlord provided a response to the resident’s complaint. This was inappropriate and at odds with the Code which states that if a landlord decides not to accept a complaint, it must provide a detailed explanation to the resident setting out the reasons why the matter is not suitable for the complaints process.
  7. As mentioned earlier, the evidence suggests (and the landlord confirmed later in its stage 1 response) that the resident contacted it about the service charges on 31 March 2023. The resident told us in June 2025 that he had made a complaint on this date via the landlord’s ‘make a complaint’ webform. While we do acknowledge the resident’s comments, we are unable to make an assessment on this. This is because as an impartial service, our findings must be made on documentary evidence.
  8. On 23 June 2023, we asked the landlord to provide the resident with a stage 1 complaint response by 28 July 2023. It was therefore appropriate that the landlord issued its response on 4 July 2023.
  9. Within our email to the landlord on 23 June 2023, we asked it to investigate its handling of the resident’s formal complaint. We therefore find it inappropriate that the landlord did not reference this within its stage 1 response. In mitigation, we have seen no documentary evidence that the resident responded to the landlord’s complaint acknowledgement email on 28 June 2023, when it asked him to confirm there were “other areas of the complaint” that it had missed.
  10. On 6 July 2023, the resident asked the landlord to escalate his complaint to stage 2. The landlord issued its response 78 working days later (on 21 September 2023). This was inappropriate, as it exceeded the maximum timescales outlined in the landlords interim complaints policy (50 days, including 10 days to acknowledge). This caused the resident further unnecessary delays in resolving the substantive issue. In mitigation, we find that the landlord kept the resident informed throughout this period and apologised to him for the complaint handling delays. The landlord also offered the resident £50 compensation in recognition of this. For this failure alone, we find it an appropriate offer of redress and in line with the landlord’s compensation policy.
  11. Within the landlord’s stage 2 response, it appropriately apologised to the resident for its failure to previously address his complaint about the live chat facility and make a complaint webform (in September 2023). For this failure, the landlord offered the resident £100 compensation. We find this a reasonable offer and in line with the landlord’s compensation policy.
  12. The resident first mentioned his concerns about the alleged data breach within his request to escalate his complaint to stage 2 (on 6 July 2023). This was a potentially serious data-related allegation that carried wider implications if proven and so warranted a proper response from the landlord. Overall, we find that the landlord’s response was reasonable, and it signposted the resident to the relevant agencies that could support him further with regards his concerns. However, the applicable Code states that if a resident raises additional complaints after the stage 1 response has been issued, the complaint should be logged as a new complaint. As this issue had not yet been through stage 1 of the landlord’s complaint procedure, we find that it would have been more appropriate for it to open a new stage 1 complaint to investigate the issue.
  13. An effective complaint resolution requires a process designed to put things right. Within the landlord’s stage 2 response, it told the resident that it would contact him within 4 weeks to arrange a resident meeting to discuss the wider concerns about service charges with all the residents who lived in his building. This was a positive action from the landlord and showed that it was taking its residents’ concerns seriously. However, while we accept that a meeting with several participants may take some time to arrange, the evidence suggests that the meeting did not take place until approximately 4 months later (in January 2024). As the landlord has provided no evidence to explain why there was a delay, we find its lack of action and ownership to arrange the meeting was inappropriate. This was unreasonable and caused further inconvenience in what was already a protracted complaints process for the resident.
  14. Overall, it was positive that the landlord recognised and apologised to the resident for some of its complaint handling failures. However, we consider that the amount of compensation offered for the landlord’s complaint handling (£150) did not account for all the failings identified within this report. It is for this reason that we have found service failure in the landlord’s handling of the resident’s complaint. We will order additional compensation which is proportionate to the failings identified. It has been calculated in accordance with the landlord’s compensation policy as well as the Ombudsman’s remedies guidance.

Determination

  1. In accordance with paragraph 53.b of the Scheme, the landlord offered reasonable redress to the resident for its communication about service charge payments.
  2. In accordance with paragraph 52 of the Scheme, there was no maladministration in relation to the landlord’s live chat facility.
  3. In accordance with paragraph 52 of the Scheme, there was service failure in the landlord’s handling of the resident’s complaint.

Orders and recommendations

Orders

  1. The landlord is ordered to do the following within 4 weeks of the date of this report and provide evidence of compliance to the Ombudsman by the same date:
    1. Provide a written apology to the resident for the complaint handling failures identified within this report.
    2. Pay the resident £200 compensation for its handling of his complaint. This includes the £150 offered at stage 2, plus an additional £50 in recognition of the failures identified in this report. If any of the £150 has been paid, it can be deducted from the total of £200. For the avoidance of doubt, this would mean £50 is due to the resident.

Recommendations

  1. Our reasonable redress finding is made on the basis that the resident receives the £300 that the landlord previously offered at stages 1 and 2 (£100 plus £200) in relation to the service charges. This is in addition to the £200 ordered above. Therefore, if it has not already done so, the landlord should pay this directly to the resident and provide evidence to this Service it has made the payment within 4 weeks of the date of this report.