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English Rural Housing Association Limited (202232931)

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REPORT

COMPLAINT 202232931

English Rural Housing Association Limited

9 September 2024


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 handling of the resident’s reports about grounds maintenance and an associated service charge refund.

Background

  1. The resident is an assured tenant of the landlord. The tenancy started on 11 November 1995. The property is a 2-bedroom house. The landlord confirmed it has no vulnerabilities recorded for the resident. The resident pays a service charge to the landlord for the provision of communal services including grounds maintenance.
  2. The landlord wrote to the resident on 21 October 2022 about a refund of service charges. This was in relation to a refund from the landlord’s grounds maintenance contractor for 3 accounting periods between 2020 and 2022. The refund followed reports from residents in 2022 about the standard of grounds maintenance which had not been completed. The landlord confirmed the refund for the accounting period 2020 to 2021 would be issued directly as overpaid charges. It said the refund for the accounting period of 2021 to 2022 would be deducted from the service charge to be collected for the next year as an overpayment on the next service charge statement. The refund for the accounting period 2022 to 2023 would be offset against the service charges payable for the financial year 2024 to 2025.
  3. On 9 December 2022, the resident sent a letter of complaint to the landlord. The resident said the following:
    1. She was dissatisfied with the unreliability of the work carried out on the communal grounds over several years. 
    2. The landlord had failed to put this right.
    3. The landlord agreed to refund the service charges for the grounds maintenance but she had not received a refund.
    4. She wanted the refunded amount back in full and not spread out until 2024.
  4. The landlord provided its stage 1 response on 5 January 2023. It said the following:
    1. It believed the point about the unreliability of work being caried out by its grounds maintenance contractor related to past issues where the contractor failed to attend. It apologised for this.
    2. It sent the resident a letter on 11 November 2022 to advise the contractor attended on 9 November 2022. The contractor was scheduled to attend again in December 2022.
    3. It was monitoring the contractor’s attendance to ensure it adhered to the schedule.
    4. It would ensure the issues reported by the resident were focused on.
    5. It was working with its contractor to ensure continual improvements in the grounds maintenance service.
    6. It was required to follow accounting practices when calculating service charges. As such, in a year where there had been an underspend this would be reflected on the accounts and then adjusted against future years payments for service charges.
    7. It was not able to pay the money into the resident’s bank account.
    8. Any money owed would be reflected in future service charge payments.
  5. The resident escalated her complaint on 23 January 2023. The resident said she was not satisfied with the stage 1 response.
  6. The landlord provided its stage 2 response on 15 February 2023. This was following a review by a complaints panel. It said the following:
    1. It was satisfied that due process had been followed in line with its existing policy and procedure.
    2. It recognised that the current rent review policy did not reflect specifically the handling of refunds for residents who had overpaid service charges in circumstances where a contractor failed to perform the required service. It said further consultation would be undertaken with all residents at the development.
    3. The consultation would invite residents to confirm their preference in either directly refunding residents or reducing ongoing service charges for the overpayment from previous years.
    4. The existing rent review policy should be updated to expand on the circumstances where a service charge refund can be made directly to residents. The panel recognised that the policy needed some clarity around how refunds were made to residents in relation to an overspend.
    5. In relation to the ongoing grounds maintenance, it was reassured that services were now resumed. It was working closely with the contractor to monitor ongoing attendance and performance.
    6. It would ask residents to continue to report any performance issues so these could be addressed as and when they occurred.
    7. It would contact the resident again once the consultation was concluded. A final response would be sent advising of the outcome of the consultation.
    8. Residents would asked to continue to report any performance issues so these could be addressed as and when they occurred.
  7. On 26 March 2023, the landlord sent a further letter to the resident about her complaint. It said the majority of residents had chosen to have the refund paid directly rather than deducted through future service charges. It said the resident was sent a letter to confirm this and with details on how to claim the refund.
  8. The resident remained dissatisfied with the landlord’s response. She contacted this Service in March 2023 to request an investigation. The landlord confirmed to this Service it paid a refund of £138.42 directly to the resident following the outcome of the resident consultation.

Assessment and findings

Scope of investigation.

  1. As part of the complaint, the resident raised issues related to the level of service charges. Paragraph 42.d. of the Scheme says that the Ombudsman may not investigate a complaint that concerns the level of rent or service charge or the amount of the rent or service charge increase. This report will therefore not determine whether the service charges are reasonable. While this Service is unable to decide on the matters above, the Ombudsman has investigated whether the landlord’s explanation into the queries, and communication were reasonable and appropriate.
  2. Complaints concerning the level of a rent or service charge are best suited to be considered by the First Tier Tribunal (Property Chamber), who can establish whether service charges are reasonable or payable. The resident may wish to visit the First Tier Tribunal (Property Chamber) website for further advice of this matter.
  3. The resident stated in her complaint that she had raised issues with the maintenance for over 2 years. This investigation has primarily focussed on the landlord’s handling of the resident’s recent reports from October 2022 onwards that were considered during the landlord’s recent complaint responses. This is because residents are expected to raise complaints with their landlords in a timely manner so that the landlord has a reasonable opportunity to consider the issues whilst they are still ‘live’, and while the evidence is available to reach an informed conclusion on the events that occurred.
  4. In raising her complaint to this Service, the resident also raised concerns about her current concerns with the grounds maintenance. In accordance with the Ombudsman’s jurisdictional authority under the Scheme, and in the interest of fairness, the scope of this investigation is limited to the issues raised during the resident’s formal complaint made in December 2022 up until its final response on 15 February 2023. This is because the landlord needs to be given a fair opportunity to investigate and respond to any reported dissatisfaction with its actions prior to the investigation of this Service. Any further issues that have not been subject to a formal complaint can be addressed directly with the landlord and progressed as a new formal complaint if required.

The landlord’s handling of the resident’s reports about grounds maintenance and an associated service charge refund.

  1. The tenancy agreement says the landlord will provide communal services for which the resident shall pay a service charge. It says the landlord agrees to keep the exterior of the property and any common parts in a good state of decoration. The resident agrees to pay the rent and other charges weekly.
  2. The landlord’s rent setting policy at the time of the resident’s complaint said a significant number of its properties are subject to a variable service charge. These charges relate to agreed communal services, provided by the landlord such as grounds maintenance. It said under the variable service charge system an estimate is made each December, of the expected cost of delivering services over the next financial year from 1 April to the following 31 March. This estimate is then advised to residents by the end of February each year and charged from the following April to March.
  3. After the end of the financial year, a comparison is made between the actual cost of delivering services and the estimated cost that had been charged. Where the actual cost is higher or lower than the estimate, then an adjustment is made to the following year’s estimate to either recover any under-charge or refund any overcharge. The outcome of this comparison is notified to residents by 30 September each year.
  4. It was not clear from the evidence provided to this Service, when the resident first raised concerns about grounds maintenance. The resident told the landlord on 21 October 2022 that the grounds maintenance contractor had not attended as planned. The landlord confirmed to the resident on 11 November 2022 that its contractor had attended on 9 November 2022. It apologised for the delay which was appropriate.
  5. The landlord demonstrated that it had taken into consideration and investigated previous concerns raised by the resident about the grounds maintenance works. Its internal review in February 2023 stated it had arranged meetings with the grounds maintenance contractor in 2022 to review concerns raised. During its investigation it had identified the contractor was unable to fully fulfil the contractual requirements. Following this, the landlord arranged a refund of all overcharged works from the contractor. It also agreed with the contractor to recommence works in November 2022 and to commence full visits from April 2023. This was an appropriate response by the landlord to address the concerns raised.
  6. The landlord confirmed to the resident in its final response that it would continue to monitor the ongoing attendance and performance of the contractor. This demonstrated the landlord was taking steps to monitor and manage the contract going forwards. The landlord also asked the resident to continue to report any performance issues and offered reassurance that these could then be addressed. The landlord confirmed to this Service in June 2024 that it was continuing to monitor the site to ensure regular attendance. The landlord took appropriate action here to manage its contractor.
  7. The landlord confirmed to this Service in June 2024 that following resident feedback and results from its customer satisfaction survey, it had identified that residents were not satisfied with its grounds maintenance contractor. It said it was in the process of going out to tender for a new contractor. This demonstrated the landlord continuing to monitor and take into consideration the feedback received from residents.
  8. The landlord confirmed to the resident on 21 October 2022 its calculation of the service charge refund for the grounds maintenance charges it had received back from its contractor. It explained how it was applying the refund to the resident’s service charge account. The landlord applied the refund it had received from its contractor for the 3 separate accounting periods between 2020 and 2023 in accordance with its rent setting policy at the time of the resident’s complaint. The explanation provided was consistent with the information provided in its policy and also the service charge statement information sheet it provided to residents annually.
  9. The landlord demonstrated that it had responded to the resident’s queries about the way the service charge payment would be refunded. It communicated with the resident on the matter on 21 October 2022 and 11 November 2022, prior to her complaint. The landlord’s stage 1 complaint response on 5 January 2023 also provided a full explanation of its process in applying the refund to the service charge account in line with its policy.
  10. Following the resident’s escalation of her complaint, the landlord took the action of consulting with the residents at the development about the refund of overpaid service charges. On 14 February 2023, it wrote to the residents asking them to confirm a preference of either a direct refund or a deduction from future service charge payments for the overpaid service charges for the grounds maintenance. The landlord confirmed this action to the resident in its final response on 15 February 2023.
  11. The landlord’s stage 2 review of the resident’s complaint recognised that its current rent setting policy did not cover the specific circumstances of the resident’s refund of charges due to a failure by a contractor to deliver on contractual arrangements. This review demonstrated the landlord had taken learning from the resident’s complaint. It had considered the limitations of its current policy, and looked to make improvements to the way it handled the refund of overpaid service charges. The consultation was actioned within a reasonable timeframe, with the outcome being communicated to residents on 26 March 2023. The landlord took a customer focused approach here to put things right for the resident.
  12. Furthermore, the landlord confirmed to this Service it had updated its rent setting policy in October 2023 to allow for refunds to be issued where for example services have not been delivered in line with agreed specification of works and the landlord had been refunded by the service provider. This demonstrated the landlord using the learning from the resident’s complaint to improve its service offer to residents.
  13. In summary, the landlord took actions to investigate and respond to the resident’s concerns about the grounds maintenance provided. It demonstrated that it had worked with its contractor to identify the grounds maintenance contract was not being fulfilled fully. It put things right for the resident by agreeing a refund of the charges from its contractor for works not completed. The landlord then worked with the contractor and agreed to recommence the maintenance works which it continued to monitor.
  14. While this Service acknowledges the resident had taken the time and trouble to raise her complaint in order to receive the direct refund of the overpaid ground maintenance charges, it was evident the landlord’s initial response to refund the charges through the service charge account was in line with its policy at the time.
  15. The landlord’s actions in providing a consultation for the affected residents about the repayment of the overpaid charges was fair. The landlord took the further action of updating its policy in response to this. This demonstrated learning from the complaint and a proactive customer-based approach. Therefore, there was no maladministration in the landlord’s handling of the resident’s reports about grounds maintenance and an associated service charge refund.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration in the landlord’s handling of the resident’s reports about grounds maintenance and an associated service charge refund.