Leeds City Council (202226041)

REPORT

COMPLAINT 202226041

Leeds City Council

3 April 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

The complaint is about:
1. The landlord’s response to the resident’s queries in respect of the Section 20 consultation process.
2. The tendering process for the major works.
3. The cost of the major works.

Jurisdiction

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Scheme. When a complaint is brought to this service, the Ombudsman must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.
Paragraph 42(e) of the Scheme sets out that the Ombudsman may not consider complaints which concern the level of service charge, or the amount of service charge increase (as a result of major works).
The resident has disputed the reasonableness of the cost of the major works and leaseholders liability for these costs. A determination on these matters requires a decision on an appropriate level of service charge and is therefore outside of the Ombudsman’s jurisdiction in line with paragraph 42(e) of the Scheme.
In addition, the resident has challenged the landlord’s tender process and its application to the First Tier Tribunal Property Chamber (FTT) to proceed with one tender having been received. As this matter involves a determination of the FTT this matter is therefore outside of the Ombudsman’s jurisdiction in line with paragraph 42(e) of the Scheme.
The Ombudsman can however consider how the landlord responded to the resident’s queries in respect of the Section 20 consultation process and this is the basis of this investigation.

Background and summary of events

The resident has been a leaseholder of the property, which is a 1 bedroom flat on the second floor of a ten storey block, since 2014. For the purposes of this investigation the complainant shall be referred to as ‘the resident’, though it is not disputed that he has rented the property out to private tenants.
On 21 October 2021 the landlord sent the resident a Section 20 notice to his home address. This outlined its intention to carry out a number of works to the block. It invited the resident to make observations on the works outlined and gave the opportunity for the resident to nominate a person or company from whom the landlord should try to obtain an estimate. The notice stated that written observations must be received by 30 November 2021. It stated that observations received after this date would be disregarded. The landlord subsequently stated that the resident had acknowledged receipt of this Notice. (This acknowledgement has not been seen by this Service.)
On 31 March 2022 the landlord sent an email to the resident and stated as follows:
1. The consultation period had ended with no observations having been received.
2. The 2 contractors who had expressed an interest in the works had been invited to tender. One of the contractors opted out during the tendering process. It considered the remaining tender to represent value for money.
3. It invited the resident to make written observations on the proposal within 30 days. It stated that, allowing for posting, the consultation period would end on 5 May 2022.
4. Regulations required the landlord to provide leaseholders with at least 2 proposals from contractors. As this had not been possible, it would be applying to the First-tier Tribunal (Property Chamber) for a determination to dispense with the requirement to provide the second proposal (“the Dispensation Application”). This would be at the Tribunal’s discretion.
5. It would also be seeking dispensation from the need to carry out any further statutory consultation with leaseholders on the agreement or works (Schedule 3 consultations) as this would unnecessarily duplicate the right to make observations which the resident had.
6. It advised the resident that he would be a party to the Dispensation Application and could take part in it.
7. It would seek service charge contributions from leaseholders towards the costs of the major works. The estimated cost per leaseholder was £19,689.
8. It would offer appropriate payment options that were supportive and realistic over a period of time to assist leaseholders with this cost.
On 28 September 2022 the resident submitted a complaint and stated as follows:
1. The landlord had a duty to consult with leaseholders. He had not seen or received anything to do with the proposed works until he heard from a third party. The landlord only provided him with this information on 21 September 2022.
2. The consultation period had passed without him having the opportunity to scrutinise the contract.
3. The proposed cost to him was “worrying and mentally very stressful”.
The landlord responded at stage 1 on 12 October 2022 and stated as follows:
1. It had issued the first consultation notice (Notice of Intention) in October 2021 and had invited written observations. The resident had acknowledged receipt of this Notice. No observations had been received.
2. It subsequently sent a Notice of Proposal on 31 March 2022 to all leaseholders by post. This notice again asked for observations and invited observations on the proposal before 5 May 2022. It had received a number of observations and requests for information in response this, indicating that there had not been an issue with the posting process.
3. When the resident had contacted its Leasehold Team to advise he had not received the Notice of Proposal, it had issued him with a copy of the original notice. It also arranged for the Project Manager to call the resident to discuss the works and answer any queries.
4. It acknowledged that the resident stated he had not received the original Notice but it did not consider this to be through any deliberate fault of the landlord.
5. When the resident made it aware of the situation, it did all it could to ensure he received the notice and other relevant information.
On 17 October 2022 the resident requested to see a copy of his acknowledgement from October 2021. He reiterated that he did not know about the works until September 2022. He added that the staff member who had called him had been “rude and unprofessional”.
The landlord noted internally on 18 October 2022 that it would escalate the resident’s complaint. It noted that during the telephone conversation to explain about the works, the resident had stated that he believed he had received the first notice but not the second.
On 2 November 2022 the landlord responded at stage 2 and stated as follows:
1. It had checked the file and the resident had been sent a paper copy of the original notice. A copy of this had also been emailed to him on 26 October 2021. The resident had advised during a phone call with its staff member that he “vaguely remembered seeing the email”.
2. It had provided the resident with the opportunity to speak to a member of staff who was leading the project. This conversation covered the resident’s understanding of the terms of the lease agreement and he had been advised to familiarise himself with this. The statements made by its staff member were factual and were not rude or unprofessional.
On 26 January 2023 the resident referred his complaint to this Service. He stated as follows:
1. The landlord did not receive sufficient quotes.
2. It had caused him stress and sleepless nights.
3. He requested that the landlord provide more information about the payment structure and that it reconsider the cost being charged to the leaseholders.

Correspondence following the referral to this Service

On 28 June 2023 the resident advised this Service that one of the sub-contractors doing the major works had gone into liquidation. He stated this was a result of the landlord not doing “due diligence” and only getting one quote.

Assessment and findings

The landlord’s response to the resident’s queries in respect of the Section 20 consultation process

The landlord’s information for leaseholders states that at times it will be necessary for it to carry out major repair works or improvements to the block or grounds. The value of these works can result in a contribution from leaseholders of several thousand pounds. It is required to consult with all those leaseholders affected by the works where their contribution will be £250 or more. A proportion of such costs will be passed to the leaseholder as part of the service charge.
Section 20 of the Landlord and Tenant Act 1985 requires landlords to consult leaseholders who are required to contribute costs for “any qualifying works or qualifying long-term agreement”. Qualifying works are those that are over a certain threshold (£250).
The landlord acted appropriately in commencing the Section 20 process as the cost per leaseholder was expected to exceed the threshold of £250. Knowing that the resident did not reside at the property it appropriately sent the Section 20 notice to the resident’s home address by first class post. It is noted that the landlord also stated it had emailed a copy of this to the resident, although this Service has not seen a copy of this email. Once the notice had been posted by the landlord it would not be expected to be aware that the resident may not have received it. This notice sent to the resident appropriately outlined the works and provided him with an opportunity to make written observations by a defined date.
It is understandable that the proposed cost of £19,689 per leaseholder caused distress to the resident. The landlord however demonstrated a supportive approach towards this cost in its offer of payment options. This demonstrated an understanding of the financial implications of the work to the resident.
The landlord responded appropriately to the resident’s concerns that he was unaware of the major works by resending him the Section 20 documents and arranging for a member of staff to speak to him to explain the works. This was reasonable and demonstrated that the landlord had taken the resident’s concerns seriously. As the landlord appropriately responded to the resident’s queries in respect of the Section 20 consultation process there was no maladministration.

Determination (decision)

In accordance with paragraph 42 (e) of the Housing Ombudsman scheme, the following matters are outside the jurisdiction of this Service:
1. The tendering process for the major works.
2. The cost of the major works.
In accordance with paragraph 52 of the Housing Ombudsman scheme there was no maladministration in the landlord’s response to the resident’s queries in respect of the Section 20 consultation process.

Reasons

The landlord followed the Section 20 consultation process and sent a copy of the notice to the resident’s home address. Once it became aware that the resident was not aware of the major works it took steps to explain the works to him. It acknowledged the impact the financial cost would have on the resident and offered him payment options to support him.