Clarion Housing Association Limited (202302666)

REPORT

COMPLAINT 202302666

Clarion Housing Association Limited

13 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

The complaint is about the landlord’s:
1. Response to the resident’s concerns about the increase in her service charge.
2. Administration of the resident’s service charges.
3. Response to the resident’s complaint about the managing agent.
4. Response to the resident’s request for improvements to the block.
5. Response to the resident’s request for evidence of works covered by her service charge.
The Ombudsman has also considered the landlord’s complaint handling.

Background

The resident is a leaseholder of the landlord. The lease commenced on 15 August 2024. The property is a 1 bedroom flat on the first floor of a block. The landlord has no vulnerabilities recorded for the resident.
The freeholder for the block is the developer and the landlord is its tenant. The resident has a lease directly with the landlord. The head lease between the freeholder and landlord says that the freeholder may appoint a managing agent to provide certain services and manage the block on its behalf. A management company is also in place for the block. The landlord pays service charges to the managing agent and recovers its costs from its residents.
The managing agent appointed by the freeholder changed during December 2022.
On 23 February 2023 the landlord wrote to the resident to set out the rent and service charge increases for the financial year 2023 to 2024.
The resident emailed the landlord on 6 June 2023 to set out her dissatisfaction in relation to service charges and the performance of the managing agent. In her complaint she:
1. Questioned the landlord’s basis for the 2023 to 2024 estimates.
2. Asked the landlord to provide invoices for all maintenance carried out between 2022 to 2023. She was concerned works had not been carried out.
3. Asked for changes to be made to the block to improve energy efficiency.
4. Set out her concerns about the “negligence” of the managing agent.
5. Asked the landlord to review the service charge per flat.
Following our intervention the landlord provided a stage 1 complaint response on 16 August 2023, the main points being:
1. It apologised for the delay which it said was due to high customer contact.
2. It explained how the actual charges for 2021 to 2022 and the estimates for 2022 to 2023 were calculated.
3. It provided a letter from the new managing agent which provided information on changes to improve energy efficiency.
4. The managing agent was appointed by the freeholder and it only became aware of the change when it received its first set of demands.
5. The quoted inflation figure was the September consumer price index figure which for September 2022 was 10.10%.
6. As the managing agent’s financial year ran June to June it would not expect to receive the final accounts for 2022 to 2023 until December 2023.
7. It attached a letter from the managing agent explaining how the budget was set, including the large increase in gas costs for the central heating plant.
8. The resident would need to contact the original managing agent to request copies of the invoices for all maintenance from 2022 to 2023. It advised that the final accounts would not be available until December 2023.
9. It identified a failure which was not part of the resident’s complaint. It also acknowledged the delay in its response to the service charge enquiry.
10. It apologised and set out its learning. It awarded compensation of £50 for each failure including its delay in responding to the service charge enquiry and its complaint response being out of time.
The resident emailed the landlord on 24 September 2023 to request to escalate her complaint to stage 2. She remained dissatisfied with the estimates it had provided. She also raised concerns about management of the gas and electric supply which had increased the service charge in a “short space of time.” She asserted that both the landlord and managing agent were “at fault of neglect.”
The landlord provided its stage 2 complaint response on 23 November 2023, as follows:
1. It provided a statement of actual costs for the year 2022 to 2023 which were based on budgets and invoices from the managing agent.
2. It provided a summary of the budget for year 2021 to 2022 and 2022 to 2023.
3. It attached copies of the budgets for each year. It advised that the increase was due to the additional gas costs of £155,000 and a £7,500 increase for lift maintenance.
4. The managing agent had advised there were no current plans to make the block more energy efficient as there were no funds available to do so.
5. It had raised the possibility of individual heating and hot water meters with the managing agent. They had confirmed they were waiting for further information from the freeholder.
6. It would write to the freeholder and management company to raise the issue of energy efficiency. It would also ask for the individual metering project to be progressed.
7. It offered to arrange a meeting with the resident and managing agent to discuss her concerns.
8. It upheld the decision to offer £150 compensation at stage 1 and offered a further £50 for the delayed stage 2 complaint response.
The resident emailed us on 1 December 2023 to request that we investigate her complaint.

Assessment and findings

Jurisdiction

On 6 June 2023 the resident set out her dissatisfaction with the increase in her service charge. In a further email to the landlord dated 24 September 2023 the resident said it had increased by 85% and she could not afford to pay it.
Paragraph 42.d. says the Ombudsman may not consider complaints which, in the Ombudsman’s opinion concern the level of rent or service charge or the amount of rent or service charge increase. Therefore this element of the complaint is outside the Ombudsman’s jurisdiction.
Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber) and the resident would be advised to seek free and independent legal advice from the Leasehold Advisory Service (LEASE) (https://www.lease-advice.org/) in relation to how to proceed with a case.

The complaint is about the landlord’s administration of the resident’s service charges.

On 23 February 2023 the landlord issued the resident with a rent and service charge increase letter for 2023 to 2024. The letter explained that the resident’s lease allowed rent to be increased in line with inflation. It advised that the current consumer price index figure was 10.5% and said it had made the decision to cap the increase at 7% for the coming financial year.
In the resident’s email to the landlord of 6 June 2023 she set out her dissatisfaction that its service charge increase was based on an out of date budget from the original managing agent. She said it also included an “unexplained” inflation figure.
The landlord’s stage 1 complaint response of 16 August 2023 appropriately explained that it used the consumer price index figure as a basis for its inflation figure. It also provided a reasonable explanation for how service charges were calculated, including that it was not in control of setting the budget which was the responsibility of the managing agent.
The Ombudsman’s spotlight report on landlord’s engagement with private freeholders and managing agents states that residents should be able to hold the professionals responsible for the quality, safety and management of their homes to account. In turn, landlords should also be able to hold third party freeholders and managing companies to account in relation to discharging their responsibilities. This is because residents have no legal relationship with freeholders, management companies or managing agents meaning their only recourse is through the landlord.
Therefore, while its position regarding the settings of budgets was accurate, it should have considered how it could assist the resident to raise her queries with the managing agent. That it did not do so amounts to service failure because it may not have affected the overall outcome for the resident. The landlord has been ordered to pay the resident £50 which is in line with the Ombudsman’s Remedies Guidance.

The complaint is about the landlord’s response to the resident’s complaint about the managing agent.

In the resident’s email to the landlord of 6 June 2023 she said that the contract with the original managing agent had been terminated due to “negligence and malpractice.” This included mismanagement of gas bills which meant residents were left on the highest tariff resulting in an increase in service charges.
In its stage 1 complaint response of 16 August 2023 the landlord advised that the managing agent had been appointed by the freeholder. Therefore, the termination of the contract was between those parties and it could not investigate the issues.
Its position that it could not investigate the matters itself was reasonable. However, for the reasons set out above it should have considered liaising with the freeholder to be able to provide an appropriate update to the resident. It did not do all it could to resolve the issue for the benefit of the resident which was a failure.
There was service failure in the landlord’s response because the failure may not have affected the overall outcome for the resident. The landlord has been ordered to pay the resident £50 which is consistent with the Ombudsman’s Remedies Guidance where the failure was of short duration.

The complaint is about the landlord’s response to the resident’s request for improvements to the block.

The head lease sets out that the landlord is responsible for keeping the premises in a good and tidy condition. Therefore any improvements to the block would be the responsibility of the freeholder, not the landlord.
In the resident’s email to the landlord of 6 June 2023 she asked it to consider making changes to the block to improve energy efficiency. Its stage 1 complaint response dated 16 August 2023 referred to a letter from the current managing agent dated 26 June 2023. However, as set out above the resident had no recourse to the managing agent. Therefore, she was not able to contact them directly to discuss any queries she may have. That the landlord failed to consider how it could assist the resident in light of this information was a failure.
Its error was put right to some extent by its stage 2 complaint response of 23 November 2023. While it noted its stage 1 response was correct to say it could not control the plans for energy efficiency, it could request updates on future plans and make recommendations.
It appropriately said it would write to the freeholder and managing agent regarding the issue. It also offered to arrange a meeting with the relevant parties. However, it is unclear whether it fulfilled its commitments which is inappropriate.
There was a failure in the landlord’s stage 1 response which was put right to some extent by its stage 2 complaint response. There was a further failure because it did not evidence that it had carried out the actions set out in its stage 2 complaint response.
The landlord’s failures amount to service failure because they may not have affected the overall outcome for the resident. The landlord has been ordered to pay the resident £75 for the distress and inconvenience caused.

The complaint is about the landlord’s response to the resident’s request for evidence of works covered by her service charge.

In her email to the landlord of 6 June 2023 the resident expressed concern about the lack of evidence of works carried out in areas of spending for 2022 to 2023. She advised she had not seen any invoices relating to such works including repairs and gardening.
The landlord’s stage 1 complaint response of 16 August 2023 set out that the managing agent’s financial year ran from 24 June to 23 June. Therefore, they would not have yet prepared the actuals for the end of year account. Consequently it was reasonable that it was not able to provide invoices for the financial year in question at that time.
However, it also said that the resident would need to contact the managing agent to request the invoices when they were available. Given that the resident had no legal relationship with the managing agent, who was no longer employed by the freeholder at the time, its response was inappropriate.
Furthermore, the landlord’s stage 2 complaint response of 23 November 2023 provided a statement of actual costs for 2022 to 2023. It said they were based on budgets and invoices provided by the managing agent. It is therefore unclear why it did not provide copies of the invoices to the resident at that time meaning its response was inappropriate.
The landlord’s failures amount to maladministration because they had an adverse effect on the resident. The landlord has been ordered to pay the resident £100 which is in line with the Ombudsman’s Remedies guidance where there was no permanent impact.

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

The landlord’s Complaints Policy says that it will make it easy for residents to let it know about their dissatisfaction. It aims to respond to stage 1 complaints within 10 working days and to stage 2 complaints within 20 working days.
The resident emailed the landlord on 23 March 2023 to say she had been trying to log a complaint online but was getting an error message. She set out the details of her complaint. She did not receive a response so she emailed again on 6 June 2023 to raise a further complaint.
The landlord failed to respond to the resident’s attempts to raise a complaint and therefore failed to comply with its Complaints Policy. This caused distress and inconvenience to the resident who contacted us on 2 August 2023 to seek our assistance.
We wrote to the landlord on 2 August 2023 to request that it reply by 15 August. The landlord emailed us to say it had agreed an extension with the resident to 16 August 2023. It provided its response within the agreed timescale.
While this was just 1 day over the deadline we set it was 100 days after the resident first raised her complaint on 23 March 2023. The landlord’s response far exceeded its response target and the delay was unreasonable.
On 24 September 2023 the resident emailed the landlord to request to escalate her complaint. There is no evidence that the landlord responded causing her further inconvenience when she emailed again on 27 September 2023 to chase.
The landlord issued its response on 23 November 2023, 43 working days after the complaint was raised. This was 23 working days outside of its 20 working day response time set out in its Complaints Policy.
The landlord’s stage 1 complaint response offered £50 for the delay in responding to the service charge query and £50 for the delayed complaint response. Given that the response was provided by the complaints process this investigation considers that £100 was offered for the delay in its stage 1 complaints response. The landlord offered a further £50 for the delay in its stage 2 complaint response.
The compensation offered is in line with the Housing Ombudsman’s Remedies Guidance where there was no permanent impact. Therefore, this investigation considers that while the landlord’s complaint handling could reasonably have been improved, it has recognised the impact on the resident and has taken proportionate steps to put things right. As such, an offer of reasonable redress has been made in the circumstances.

Determination

In accordance with paragraph 42.d. of the Scheme, the resident’s complaint about the increase in service charges is outside of the Ombudsman’s jurisdiction.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure in the landlord’s administration of the resident’s service charges.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure in the landlord’s response to the resident’s complaint about the managing agent.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure in the landlord’s response to the resident’s request for improvements to the block.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s response to the resident’s request for evidence of works covered by her service charge.
In accordance with paragraph 53.b. of the Housing Ombudsman Scheme, the landlord has made an offer of redress in relation to its complaint handling which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Orders

Within 4 weeks of the date of the determination the landlord is ordered to:
1. Write to the resident to apologise for the failures identified in this report.
2. Pay the resident £275 compensation comprised of:
  1. £50 for the inconvenience caused by its failure in its administration of the resident’s service charges.
  2. £50 for the distress caused by the failure in its response to the resident’s complaint about the managing agent.
  3. £75 for the distress and inconvenience caused by its failures in the landlord’s response to the resident’s request for improvements to the block.
  4. £100 for the inconvenience caused by its failures in its response to the resident’s request for evidence of works covered by her service charge.
3. If the invoices for the actual costs for 2022 to 2023 have not yet been provided it should provide them. In the event it is unable to do so it should write to the resident to provide an explanation.
4. Contact the resident to establish if she requires support to liaise with the managing agent and/or freeholder on any outstanding issues. If so, it should write to her with an action plan.
The landlord should provide evidence of compliance with the above orders to the Ombudsman, also within 4 weeks.
Within 6 weeks of the date of the determination the landlord is ordered to carry out a review of the failures identified in this report in relation to the managing agent/freeholder relationship. It should identify what went wrong and what it will do differently. The outcome of the review should be confirmed to the resident and the Ombudsman in writing, also within 6 weeks.

Recommendation

The reasonable redress finding is dependent on the landlord paying the resident £150 compensation as offered in its stage 2 response if it has not already done so.