London Borough of Lambeth (202324382)

REPORT

COMPLAINT 202324382

Lambeth Council

19 December 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 response to the resident’s request for information about his service charge.

Background

2. The resident is the leaseholder of the property, which is a flat within a block. The landlord is a local authority.
3. On 4 January 2018, the landlord issued a notice under Section 20 of the Landlord and Tenant Act (1985). This was a “Notice of Intention to carry out works under a long-term agreement”. It was not disputed that the major works were completed in 2019.
4. The landlord issued a final bill for the major works to the resident on 26 January 2023. It reissued this on 1 February 2023 because it overcharged the residents of the block for the fire safety aspect of the major works. The total amount due was reduced from £19,102.27 to £8,123.43. On 27 February 2024 the resident, together with other residents of the block, disputed the costs of the major works with the landlord and requested invoices and descriptions of the work it was charging for.
5. It was not disputed that the landlord sent a breakdown of costs to the resident at the end of April 2023 which he asked for further clarification on. This correspondence has not been provided to the Ombudsman.
6. On 13 August 2023 the resident raised a stage 1 complaint with the landlord.  He said it had not yet given him information to substantiate the invoice such as contractor invoices and an explanation of why costs “differed from line totals”. The resident added that it had not responded to him since 9 May 2023. He said his intention was to pay the invoice upon receiving a reasonable explanation of the costs.
7. The landlord issued its stage 1 complaint response to the resident on 11 September 2023. It apologised for the delay and said it had raised the matter to the team responsible, which would contact him. The resident escalated his complaint to the final stage of the landlord’s procedure later that day. He said he was dissatisfied that its stage 1 response did not provide the information he requested, nor did it provide a timeframe within which he could expect it.
8. The landlord provided its final stage complaint response to the resident on 16 October 2023. It referred to a response from its staff member on 28 September 2023 which it believed provided the resident with an explanation and breakdown of costs. The landlord noted that the resident had asked for further clarification, and he was awaiting a reply. It apologised for its delays in responding to the resident’s queries.
9. On 19 January 2024 the resident told the Ombudsman that he still had not received invoices to support the costs in the service charge invoice. On 19 April 2024 he informed us that he had received the invoices. However, these were for the entire estate and there was no explanation of how the costs were apportioned nor any description of the work apart from job numbers. This left him unable to cross reference the work with his service charge.

Scope of investigation

10. Paragraph 42.f. of the Housing Ombudsman Scheme states that we may not consider complaints which “concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure”.
11. As part of his desired resolution to the complaint, the resident sought a reduction of the service charge requested by the landlord for the cost of the major works. In accordance with paragraph 42.f. above, this is a matter better suited to consideration by the First Tier Tribunal (Property Chamber) (FTT). The FTT considers complaints that relate to the level, reasonableness, or liability to pay rent or service charges. The resident may wish to seek independent legal advice on bringing a case to the FTT if he wishes to pursue this. He may also wish to seek advice from the Leasehold Advisory Service (LEASE).

Assessment and findings

12. Section 22 of the Landlord and Tenant Act (1985) (the Act) provides for the following:
    1. When a landlord issues a summary of costs to a resident, such as an invoice, within 6 months they may request supporting information for those costs.
    2. The landlord must provide “reasonable facilities” for “inspecting the accounts, receipts and other documents supporting the summary”.
    3. The landlord must make this information available to the resident within a month from their request, and the information should be available for 2 months after that.
13. The resident, along with his neighbours, requested supporting information on 9 February 2023 for the charges in its invoice dated 1 February 2023. The landlord therefore should have provided this by 9 March 2023 to comply with the Landlord and Tenant Act. The landlord did not respond to the resident until 41 working days after his request. This was a failure by the landlord to comply with the timeframe under the Act. When the landlord did not comply with its obligation to provide the requested information within a month, it should have explained why to the resident. There was no evidence it did.
14. Despite the Ombudsman’s requests, the landlord has not provided the details of its response to the resident from the end of April 2023. The resident did not consider it was sufficient and we cannot confirm if it was or not as we have not seen it. However, it was the landlord’s responsibility to show it was sufficient and it has not done so, which was a failing. The resident said, in his stage 1 complaint, that the information the landlord had provided contained figures which were inconsistent with those in the invoice. Further, he said it had not provided the invoices from its contractors he had requested to support the figures. The landlord did not challenge these assertions. The resident was inconvenienced by having to request information from the landlord again as its original response did not fully address his concerns.
15. The landlord’s stage 1 complaint response to the resident was unreasonable. It said it was “sorry to learn that you were not satisfied with the response previously provided and are requesting a further detailed breakdown and copies of invoice associated with the final bill”. It did not recognise that it had not fulfilled his request since 9 February 2023. It was unreasonable that it then said it would contact him to provide this information without giving any timeframe in which to expect it. The landlord failed to fully acknowledge its failings and failed to manage the resident’s expectations.
16. The landlord’s final complaint response referred to correspondence between its staff member and the resident, on 28 September 2023. It said its correspondence provided a breakdown and explanation of the service charge costs. Despite the Ombudsman’s requests, the landlord has not provided this correspondence to us. Therefore, we are unable to conclude that it provided an adequate response to the resident. To date, there is no evidence that the landlord provided the resident with the invoices he requested, a reasonable explanation of the charges, or a reasonable explanation why it has not been able to provide these.
17. The landlord is expected to keep robust records of its repair works, invoices, and correspondence with residents. When there is a dispute between itself and resident, it is responsible for providing documentary evidence showing how it satisfied itself that it had acted reasonably. Because the landlord did not provide evidence to show how it responded to the resident’s request for information, it has not demonstrated that it provided a reasonable response.
18. The landlord’s inability to provide the evidence it relied on to respond to the complaint, together with the excessive time it took to retrieve information for the resident, indicate poor knowledge and information management by the landlord. The Ombudsman’s “Spotlight on: Knowledge and Information Management” report states that, “without good information management, a landlord is unable to fully comply with legal and regulatory requirements” or “provide a high-quality service to residents”.
19. Considering the significant amount of the invoice, the landlord’s long delay in meeting its statutory obligation, and that the matter remains unresolved, the failures identified amount to severe maladministration by the landlord. The invoice for £8,123.43 was a significant sum of money which had the potential to cause long-term financial detriment to the resident. The landlord should have responded promptly to the resident to reassure him that it was acting fairly and transparently. Its delays and lack of clear information were likely to have caused him uncertainty and distress.
20. To recognise the distress and inconvenience experienced by the resident, and the time and trouble he spent in pursuing clarification from the landlord, it should pay him compensation. Our remedies guidance, available to view on our website, provides for awards of compensation between £600 and £1,000 where the circumstances for severe maladministration apply. Therefore, it should pay the resident £600 compensation for his distress and inconvenience.
21. The Ombudsman will order the landlord to provide the supporting invoices from the major works to the resident. The landlord should explain how the resident’s portion of the service charge has been calculated. If it cannot provide all or some of this information, it should provide a valid reason why to the resident and the Ombudsman.
22. The Ombudsman notes that several of the resident’s neighbours queried the service charge invoice for the major works with the landlord. The evidence provided by the landlord also seems to show that the major works were carried out to a significant number of properties on the resident’s estate. Since the landlord did not meet its statutory obligation to the resident, the Ombudsman is concerned that it did not meet its obligation to other similarly affected residents. We have therefore decided to issue a wider order under paragraph 54.f of the Scheme. This is for the landlord to review its policy or practice in relation to the service failures identified in this determination, which may give rise to further complaints about the matter. We have set out the scope of the review below.

Determination

23. In accordance with paragraph 52. of the Housing Ombudsman Scheme, there was severe maladministration by the landlord in its response to the resident’s request for information about his service charge.

Orders and recommendations

Orders

24. Within 5 weeks the landlord must provide evidence to the Ombudsman that it has complied with the following orders:
    1. Write to the resident to apologise for the failings identified in this report. The apology must come from a senior member of staff at director level or higher and must be in line with our remedies guidance for apologies, which is available online.
    2. Pay the resident £600 compensation for distress and inconvenience caused by its failures in providing information to him. This must be paid directly to him and not credited to his rent or service charge account.
    3. Provide the requested invoices and documents to the resident and explain how his service charge invoice from 1 February 2023 was calculated from these. If it cannot do this, it must write to the resident and the Ombudsman to provide a reasonable explanation why.
25. Within 13 weeks, in accordance with paragraph 54.f. of the Scheme, the landlord must carry out a review of its practice in relation to responding to requests for information about its service charges. The review should be conducted by a team independent of the service area responsible for the failings identified by this investigation and should include as a minimum (but not limited to):
    1. An exploration of why the failings identified by this investigation occurred.
    2. Identification of all other residents who may have been affected by this matter and similar issues, but not necessarily engaged with its complaint procedure, for the period from January 2023 to present.
    3. A review of its staff’s training needs to ensure all relevant officers:
       1. Respond to requests for service charge information appropriately and within the time limit set out in law.
       2. Provide accurate timeframes for providing information and able to explain why when something is unavailable.
       3. Explain how service charges are calculated.
    4. A review of its record-keeping practices to ensure there are appropriate recording, handling, and retrieval procedures for information relating to service charges.
    5. Considering, if has not done so already, implementing a knowledge and information management strategy, in line with the Ombudsman’s spotlight report on knowledge and information management.
26. Following the review, the landlord should produce a report setting out:
    1. The findings and learning from the review.
    2. Recommendations on how it intends to prevent similar failings from occurring in the future.
    3. The number of other residents who have experienced similar issues from January 2023 to present.
    4. The steps it proposes to take to provide redress at the earliest opportunity to the residents who have been similarly affected by the identified failings. This should include an apology to the residents affected, and consideration of compensation commensurate to the level of detriment a particular resident has experienced if caused by a failing on the part of the landlord.
27. The landlord should embed the recommendations in the report within its wider transformation programme, to inform practice in other areas of service delivery, where relevant, with appropriate oversight.
28. The landlord should provide a copy of the final report to its governing body and member responsible for complaints, if appointed, for scrutiny. The governing body should agree how it will provide oversight of the implementation of any recommendations made following the review. The landlord should also provide a copy of the report to the Ombudsman.
29. The landlord should commit to revisiting the issues 6 months after the report has been finalised to check whether changes in practice have been embedded.