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One Housing Group Limited (202014420)

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REPORT

COMPLAINT 202014420

One Housing Group Limited

24 May 2021


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 refers to:
    1. The landlord’s response to the resident’s requests for a breakdown of the service charges for the 2018-19 and 2019-20 periods.
    2. The resident’s concern that the landlord has not acted in line with its legal obligations regarding her request for information.
    3. The landlord’s handling of the associated complaint.

Jurisdiction

  1. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
  2. After carefully considering all the evidence, in accordance with the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.

The resident’s concern that the landlord has not acted in line with its legal obligations regarding her request for information.

  1. Paragraph 39(i) of the Scheme states that the Ombudsman will not investigate complaints which “concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure”.
  2. If the resident has concerns about the landlord’s legal obligations in relation to its administration of her service charge, she may wish to seek legal advice and pursue this matter with First-Tier Tribunal (Property Chamber), who can make determinations on disputes about the liability to pay a service charge and whether a service charge is reasonably incurred. It can also consider the landlord’s legal obligations in regard to the information it provides about service charges.
  3. This Service cannot make a legally binding decision about whether the landlord followed its obligations, nor can we order the landlord to provide the resident with the relevant end-of-year accounts nor fine the landlord for the delay. This report will, however, consider the landlord’s communication regarding the delays and whether its offer of compensation was reasonable in recognition of the inconvenience this may have caused the resident.

Background and summary of events

  1. The resident is a shared-ownership leaseholder of the property. The resident owns 40% of the property and the landlord owns the remaining 60% as the head lessee and is not the freeholder. The freeholder employs a managing agent who is responsible for the maintenance of the property.
  2. On 26 September 2019 the landlord issued a Section 20(b) notice to inform the resident that it would not be making a service charge demand within 18 months of expenditure being incurred as the end-of-year accounts had not yet been finalised. It confirmed that the full cost details were not available and provided the provisional account figures for the resident’s scheme. It apologised for the delay and confirmed that a finalised service charge booklet would be sent as soon as the required information was available.
  3. On 22 June 2020 the resident emailed the landlord and asked for it to provide the breakdown of her service charge for the 2018-19 and 2019-20 periods.
  4. The landlord responded on 24 June 2020 and attached copies of the service charge information for her property. It confirmed that all costs were at the estimated stage as it had yet to finalise the accounts. It explained that the year-end accounts which provided the actual expenditure were normally issued by September each year following the end of the financial year on 31 March. It said that there had been a delay in finalising the 2018-19 accounts. It confirmed that it hoped to issue both the 2018-19 and 2019-20 accounts by the end of September 2020.
  5. The resident sent a follow-up email on 5 November 2020 and asked when she would receive the breakdown of her service charge for the 2018-19 and 2019-20 financial years. She stated that it was a legal requirement for the landlord to provide these documents, especially for the 2018-19 account as this was overdue. She expressed dissatisfaction that it had been over a year since the landlord had issued the Section 20(b) notice and it had not provided a further update or explanation of the delay.
  6. The landlord responded to the resident on 10 November 2020 and explained that the case was under review and she would receive a response in the next ten working days. The resident sent a follow-up email on 24 November 2020 as she had not received a response.
  7. On 25 November 2020 the resident asked for a formal complaint to be raised in line with the landlord’s complaints procedure. She confirmed that she had not received a breakdown of her service charges since she had moved into the property in 2018 despite numerous requests.
  8. The landlord emailed the resident on 30 November 2020 and explained that it was currently reviewing its 2019-20 accounts as there had been some anomalies due to a system error and these needed to be investigated to ensure that the correct information was published. It said that once it had completed the 2019-20 review, it could then look at the 2018-19 accounts but it could not confirm a timeframe for when the reviews would be completed. It apologised for any inconvenience caused and said it hoped to provide an update as soon as possible. It said that the resident’s case query would now be closed and explained that if she had any further questions, a new case could be assigned.
  9. The resident responded to the landlord on the same day and explained the following:
    1. She said that she had asked for a formal complaint to be raised and was not satisfied with the landlord’s statement: that it could not provide a timeframe for when the reviews would be completed.
    2. She said that the landlord was legally required to provide its residents with the relevant information regarding their service charges and it would therefore be criminal offence not to do so.
    3. She noted that Section 21 of the Landlord and Tenant Act 1985 stated that landlords must provide residents with a breakdown of the service charge within one month of the request (or six months of the end of the 12-month accounting period, whichever is later). She summarised that the 2018-19 accounts should therefore have been legally provided by September 2019.
    4. She advised that the notice was sent to all residents confirming that these accounts were late but that was over a year ago and there had been no further explanation of the delay. She expressed dissatisfaction that the 2019‑20 accounts had also not been provided despite numerous requests.
    5. She asked the landlord to escalate her complaint to the next stage of its formal complaints process. She explained that she would begin legal proceedings if this information was not provided.
  10. The landlord emailed the resident on 1 December 2020 and asked whether she would like to proceed with the formal complaint, given the response which had been provided on 30 November 2020. The resident later confirmed that she did, as she was unhappy with the response and did not feel the landlord was meeting its legal requirements.
  11. The landlord’s records show that it emailed the managing agent of the property on 1 December 2020 and requested the year–end actual accounts from 2018 to date.
  12. The landlord emailed the resident the following day and asked her the same question in regard to proceeding with the formal complaint. The resident again answered that she would like to proceed.
  13. The landlord issued its complaint response to the resident on 23 December 2020 and explained the following:
    1. Regarding the 2018-19 end-of-year accounts, the landlord apologised that it had not provided the resident with a response about Section 21 of the Landlord and Tenant Act. It explained that it was required to provide the resident with a breakdown of her the service charge within one month of request or within six months of the end of the 12-month accounting period. It said it was not able to produce the end-of-year accounts in September 2019 and issued a Section 20(b) notice to inform the resident of this.
    2. It confirmed that the managing agent provided communal services at the resident’s building and the landlord required its accounts for the year to be able to provide the resident with further details. It had received the managing agents end-of-year accounts for the 2018-19 period at the beginning of December 2020 and had begun work to analyse these. It said that this process could take some time to complete and the resident would be provided with a summary of the amount incurred by 15 January 2021.
    3. It apologised that it had not yet sent the 2019-20 end-of-year accounts or a Section 20(b) notice. This was because it was reliant on the end-of-year accounts being provided by the managing agent and had not yet received them. It confirmed that it would be serving a Section 20(b) notice to let the resident know that it intended to recover the actual cost incurred. It would not know the actual cost it could charge the resident until it had attended the end-of-year accounts but acknowledged that it would only be able to charge the resident for costs incurred within the 18 months before the notice was served.
    4. The landlord upheld the resident’s complaint and offered £50 compensation in recognition of the inconvenience caused by its failure to respond to her queries and provide her with the information she had requested. It confirmed that this response concluded its internal complaints process.
  14. The landlord asked the managing agent to provide the year–end service charge for 2019-20 on 23 December 2020. It responded the following day and provided the budget running to March 2021 and the accounts for 2019.
  15. The resident sent a follow-up email to the landlord on 21 January 2021 and said that she had returned the compensation slip via email on 23 December 2020 but had not yet received her payment. She also explained that she had not received an update in relation to her service charge for the 2018-19 period by 15 January 2021 as promised. She asked the landlord to provide an update on both of these matters. The resident sent further emails and messages via social media between 29 January 2021 and 9 February 2021 asking for a response but did not receive a response.

Assessment and findings

The landlord’s response to the resident’s requests for a breakdown of the service charges.

  1. In accordance with Section 21 of The Landlord and Tenant Act 1985, a landlord would be obliged to provide information regarding its service charge accounts within one month of a request from a tenant, or six months of the year-end, whichever is later. In this case, the landlord has explained that it would usually provide a finalised service charge booklet to residents by the end of September each year. At the time of the resident’s complaint on 30 November 2020, the 2018-19 accounts had been delayed by 14 months and the 2019-20 accounts had been delayed by two months. 
  2. The landlord has explained that all service and maintenance charges for the property were managed by the managing agents, employed by the freeholder. The landlord would not be in control of the delay caused by the freeholder’s managing agent’s failure to provide information; however, it would be responsible for following up with the managing agent, asking for the relevant information and keeping its residents updated.
  3. The landlord had taken appropriate steps to manage the resident’s expectations by writing to her in September 2019 and explaining that there would be a delay; however, there is no record of any further communication regarding the delay until the resident’s contact in June 2020 where the landlord said it would keep her updated on the progress of its accounts. The landlord confirmed that it contacted the managing agents on 1 December 2020 for a copy of the 2018-19 accounts; these were provided promptly and had been signed off by the managing agent on 19 October 2020.
  4. Given its obligation to provide this to leaseholders in September 2019, the landlord has not acted reasonably as there is no evidence to suggest that it had actively pursued this matter with the managing agent at the time of the resident’s request on 24 June 2020 or provided her with an update at this time as promised. Whilst the landlord’s investigation at this time might not have resulted in the managing agent providing the information sooner, the landlord would have been expected to attempt to gain further clarity on the matter and update the resident regularly on its progress, which it has not done. The landlord has not satisfactorily managed the resident’s expectations of when she might receive this information effectively.
  5. This Service cannot comment on the resident’s claim that she had raised several requests for this information in the past as these requests have not been provided to this Service for review, and we would not usually consider events that had happened more than six months before a formal complaint was raised.  It is evident, however, that the resident has spent time and trouble pursuing this matter since June 2020. 
  6. In summary, there has been service failure by the landlord. It has apologised for its failure to provide its year-end summaries for the 2018–19 and 2019-20 financial years and failure to respond to the resident’s previous requests; it has also offered £50 compensation in recognition of the inconvenience caused to the resident. However, this level of compensation is not proportionate to the length of time the landlord has taken to provide the account summaries, nor does it take into consideration the time and trouble spent by the resident in pursuing this matter. In view of this, the landlord should offer a further award of compensation and write to the resident and either provide the requested documents, or explain why it cannot provide these and its current position on the matter.

The landlord’s handling of the associated complaint.

  1. The landlord has confirmed that it was operating a single-stage, formal complaints process at the time of the complaint. It’s complaints policy states that a resident’s concerns would be considered informally in the first instance and the resident should receive a response within three working days. If the resident was dissatisfied with the outcome, the complaint would then be escalated to its formal complaints process. At this stage the complaint should be acknowledged within two working days and a formal response should be issued within 15 working days.
  2. The resident initially said that she wanted a formal complaint to be raised on 25 November 2020. The landlord provided an informal response via email to the resident on 30 November 2020 which was reasonable as this was within its three working-day timeframe. The resident confirmed that she wanted her complaint to be considered under the landlord’s formal complaints process on 30 November 2020. The landlord issued its complaint response to the resident on 23 December 2020, which was two working days outside of its complaint-handling timescale. This Service has not seen any evidence to suggest that this had a significantly impact on the resident.
  3. Following the landlord’s complaint response of 23 December 2020, the resident has spent considerable time and trouble pursuing the landlord for the £50 compensation and did not receive an update on the status of the 2018-19 or 2019-20 accounts by 15 January 2021 as agreed. No further evidence has been provided to this Service to confirm whether the resident has now been paid the compensation and it is clear that the resident pursued this matter on a regular basis via email and social media until 9 February 2021 with no satisfactory response. Having agreed to take action, the landlord’s lack of action to follow up on these matters was not appropriate and resulted in the resident experiencing evident further inconvenience and frustration.
  4. In view of this, the landlord should offer further compensation in recognition of the additional time and trouble the resident had spent pursuing this matter, its lack of communication following the complaint, and failure to carry out actions as agreed. It is also recommended that the landlord carries out staff training for complaint handlers to ensure that agreed actions are carried out in a timely manner following its final response to a complaint. 

Determination (decision)

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its response to the resident’s requests for a breakdown of the service charges.
  2. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its handling of the associated complaint.

Reasons

  1. There has been a considerable delay in providing the resident with the 2018-19 and 2019-20 service charge account summaries. There was delay by the landlord in obtaining information from the managing agent and it has not kept the resident regularly updated on the progress of these documents appropriately. The landlord’s offer of compensation was not proportionate to the inconvenience experienced by the resident.
  2. The landlord did not pay the resident £50 compensation or update her on the progress of her request in January 2021, as agreed in its complaint response. The resident spent time and trouble pursuing this and the landlord has not provided any evidence to show that it had responded appropriately.

Orders

  1. The landlord shall take the following action within four weeks of the date of this report:
    1. Pay the resident compensation of £225, comprised of:
      1. £150 in recognition of the inconvenience caused by the delay in providing the requested documents and the landlord’s communication regarding this (this includes the £50 previously offered).
      2. £75 for the time and trouble the resident had spent pursuing the complaint.
    2. If the landlord has not provided the information sought by the resident, write to her to provide it or explain its current position on the matter and a timescale for providing this information.
  2. It is recommended that the landlord carries out staff training for complaint handlers to ensure that agreed actions are carried out in a timely manner following its final response to a complaint.