Applications are open to join the next Housing Ombudsman Resident Panel – find out more Housing Ombudsman Resident Panel.

Notting Hill Genesis (202405804)

Back to Top

REPORT

COMPLAINT 202405804

Notting Hill Genesis (NHG)

24 July 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 landlord’s handling of the year-end service charge accounts for 2022-2023.
  2. The Ombudsman has also taken the decision to investigate the landlord’s handling of the resident’s complaint.

Background

  1. The resident is a leaseholder of the landlord. The property is a first-floor flat which the resident purchased on 21 November 2022. The landlord had no vulnerabilities recorded for the resident.
  2. On 25 September 2023 the landlord issued its year-end service charge statement for 2022-2023. It showed that after adjustments the resident owed £2,104.22 for that year.
  3. The resident made a complaint on 20 May 2024. He was dissatisfied that the concerns he had raised about the outstanding service charge balance for 2022-2023 had not been resolved within the timescale advised. The resident said he wanted the issues to be resolved and his service charge account to be refunded. He did not think he was liable for the whole year of service charges as he had not purchased the property until November 2022. The resident also wanted compensation for the stress and inconvenience he had experienced to get the matter resolved.
  4. The landlord issued its stage 1 response on 4 June 2024. It advised the resident that as per the terms of his lease, he was responsible for settling the arrears on the account. The landlord said it had recharged the costs incurred for the property in line with the terms of the lease. It referred the resident to the lease advisory service website which stated leaseholders may be liable for service charges even if they relate to a period prior to the property purchase. The landlord apologised for delays in acknowledging and dealing with the resident’s initial service charge queries and the complaint. It awarded the resident £75 compensation for these delays.
  5. The resident escalated his complaint on 24 June 2024. On 5 July 2024 the resident provided the reasons for his escalation request. He said the previous resident did not make him aware of any outstanding balance owed to the landlord. The resident said his solicitor advised that he was not liable for the service charge balance under Section 23(1) of the Landlord and Tenant (Covenants) Act 1995. He said that if he was liable, he needed proof from the landlord that the previous resident was aware of the service charge so he could go to the small claims court. The resident said the landlord was being unhelpful as it had stated it could not provide this information due to General Data Protection Regulation (GDPR). To resolve the complaint the resident asked the landlord to either provide a statement advising the previous resident was aware of a service charge owing, or to refund his service charge account with £1,800.
  6. The landlord issued its stage 2 response on 24 July 2024. It explained that there were 2 service charge elements, one set by the management agent and one set by the landlord. The landlord said it was billed by the management agent and then this cost was recharged to its residents along with its internal communal service charges. It said that the previous resident had paid the management agent charges directly to the management agent and had not paid anything to the landlord. The landlord said there had been a credit for the management agent charges so no charges for these had been incurred in the statement it had issued. The landlord advised when it had reconciled its year-end accounts there had been a deficit for its internal communal services.
  7. It stated that Section 23(1) of the Landlord and Tenant (Covenants) Act 1995 did not apply as the previous resident was not in breach of the lease when the property was sold as there were no arrears on the account. It said that the previous resident had sold the property before the year-end accounts were produced. The landlord stated that the resident was liable as he was the current leaseholder when the demand was issued. It said solicitors dealing with the sale of properties normally agree a retention amount to cover the likely service charges for the months a buyer does not own the property. The landlord referred the resident to his solicitor regarding retention monies. It said it was unable to provide the resident with the outcomes he wanted for his complaint.
  8. The landlord awarded the resident £100 compensation as there was a delay in escalating the resident’s complaint to stage 2. It said it would deduct the stage 1 and stage 2 compensation which totalled £175 off the service charge account balance. The landlord offered a repayment plan to clear the remaining service charge balance.
  9. On 15 July 2025 the resident advised the Ombudsman that he thought the landlord was acting unfairly. He said he should not be liable for the entire service charge for the financial year 2022-2023. He felt he should only be paying from November 2022 when he moved in. The outcome the resident wanted was for his service charge account to be refunded for April 2022 – October 2022.

Assessment and findings

Scope of investigation

  1. The resident told the Ombudsman that he thinks the previous resident may have been in breach of their lease because they were not paying the service charge to the landlord. The resident also stated that the landlord was negligent in its dealings with the previous resident. The Ombudsman is unable to consider these matters in the investigation as these relate to another party. We can only consider matters regarding the resident’s relationship with the landlord. This investigation will look at whether the landlord issued the year-end statement and payment demand appropriately and fairly in line with its lease, policy and legislation.

The landlord’s handling of the year–end service charge accounts for 2022-2023.

  1. The Landlord and Tenant Act 1985 sets out the basic rules for service charges. Section 18 (1) of the act defines a service charge as “an amount payable by a tenant of a dwelling as part of or in addition to the rent which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord’s costs of management; and the whole or part of which varies or may vary according to the relevant costs”.
  2. The evidence showed that after the resident moved into the property in November 2022 there was a delay in setting up the resident’s service charge account and this was not addressed until March 2023. It was unclear why there was this delay.
  3. In an email dated 2 April 2024 the landlord explained to the resident that the service charge consisted of 2 service charge elements. One was for the estate costs set by a managing agent that managed the wider estate. The second was for the internal communal areas that were managed by the landlord. The landlord said the managing agent billed the landlord for the wider estate charges and it recharged the leaseholders for these costs through the service charge.
  4. The landlord acknowledged in its email of 2 April 2024 and its stage 2 response dated 24 July 2024 that the previous resident had paid her estate service charges directly to the managing agent. It stated this should not have happened and service charges should only be paid to the landlord. The service charge bill showed an accrual credit on the account for the recoverable service charge for the managing agent. The landlord confirmed that the service charge balance that the resident had was only for costs related to the landlord’s communal service charge.
  5. The lease states that year-end accounts with adjustments to show actual expenditure must be issued “as soon as practicable after the end of each Account Year”. The landlord issued its final accounts for financial year 2022-2023 on 25 September 2023. This was in line with best practice which states year-end service charge statements should be issued within six months of the end of the accounting year.
  6. This was also in line with the landlord’s service charge policy which states it will ensure residents who pay a variable service charge are sent a summary of accounts. The landlord’s policy says this summary shows expenditure for the previous financial year against the estimated budget.
  7. The year-end service charge accounts and application for payment were issued to the resident as he was the leaseholder at the time of the demand being issued. This was in line with the lease which includes a “covenant to pay” for the leaseholder under service charge provisions.
  8. The resident disputed that he should pay the whole service charge bill for the final year 2022-2023 as he did not become the leaseholder until 21 November 2022. The landlord correctly advised the resident that he was responsible for the bill. This was due to him being the leaseholder at the time the payment demand was issued. The landlord also appropriately explained that the conveyancing process should have identified the service charge payments, and a retention amount should have been arranged for this between the 2 solicitors. A retention is used to cover any demands for the period prior to the resident owning the property.
  9. The resident advised the Ombudsman that a retention was agreed for the estate service charge. However, as the conveyancing process did not identify that there was an internal communal service charge payable to the landlord, that this amount was not covered. As this matter does not relate to the resident’s landlord tenant relationship this is not something the Ombudsman can investigate. This is a matter for the resident to address with his conveyancer.
  10. The Leasehold Advisory Service states, “It may seem unfair to have to pay service charges for a period before you owned a property, but there are instances where this could arise, such as for any outstanding service charges (arrears) or for a new demand”.
  11. It also states, “When service charges are estimated in advance, the landlord may issue a demand for the balance based on the actual costs many months later. If you buy a property part way through an accounting year, you may get a demand for charges relating to a period before your purchase date. If this is a possibility, your solicitor should arrange for the seller to set aside some money to cover their part of the period, called a retention. The size of the retention is open for negotiation”.
  12. The landlord awarded the resident £50 compensation in its stage 1 response for failing to deal with his concerns about the service charge in a timely manner. This is because the resident had raised queries about the service charge prior to making a complaint. This included an email to the landlord on 4 April 2024. The landlord acknowledged it had failed to respond in a timely manner to this email and the resident’s subsequent attempts to contact it. This compensation was appropriate and in line with the Ombudsman’s remedies guidance.
  13. Considering the above, the Ombudsman finds that the landlord made an offer of redress which was satisfactory in resolving the landlord’s handling of the year-end service charge accounts for 2022-2023. This is because the landlord’s handling of the year–end service charge accounts and application for payment were issued in line with its policy, the lease and legislation. It delayed responding to the resident’s queries about the service charge, but it acknowledged this delay and awarded £50 compensation. This compensation was credited to the resident’s service charge account.

The landlord’s handling of the resident’s complaint.

  1. The landlord’s complaint policy states there are 2 stages to its complaints process. The policy states the landlord will acknowledge complaints within 5 working days. It will respond to stage 1 complaints within 10 working days and stage 2 complaints within 20 working days. This is in line with the Housing Ombudsman’s Complaint Handling Code (the Code).
  2. In its stage 1 response the landlord awarded the resident £25 compensation for failing to acknowledge the complaint and for not responding in a timely manner within the deadline. It was appropriate for the landlord to acknowledge this and to award compensation.
  3. The landlord stated in its stage 2 response that the resident escalated his complaint on 24 June 2024. It said it had failed to formally escalate the resident’s complaint until 10 July 2024. The landlord awarded the resident £100 compensation to acknowledge service failure in the way it handled the resident’s escalation request.
  4. While the Ombudsman has not seen the evidence of the escalation request dated 24 June 2024, it was appropriate that the landlord acknowledged this delay and awarded compensation. This is because delaying the resident’s escalation meant the resident was delayed in being able to progress his complaint through the landlord’s complaints procedure. Therefore, delaying the resident being able to bring his complaint to the Ombudsman.
  5. Considering the above, the Ombudsman finds that the landlord made an offer of redress which was satisfactory in resolving the complaint handling failures. This is because the landlord acknowledged the delays the resident experienced and awarded the resident compensation which was in line with the Ombudsman’s remedies guidance. The landlord awarded a total of £125 for complaint handling failures which was credited to the resident’s service charge account.

Determination

  1. In accordance with paragraph 53b of the Scheme, in relation to its handling of the year-end service charge accounts for 2022-2023, the landlord made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.
  2. In accordance with paragraph 53b of the Scheme, in relation to its handling of the resident’s complaint, the landlord made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.