Onward Homes Limited (202308396)

REPORT

COMPLAINT 202308396

Onward Homes Limited

21 March 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

The complaint is about the landlord’s:
1. Increase of the resident’s service charge costs.
2. Handling of the resident’s request for a breakdown of service charges and a copy of its annual report.
3. Complaint handling.

Jurisdiction

The Housing Ombudsman Scheme governs what we can and cannot consider and what is within our jurisdiction. When a resident brings their complaint to us, we must consider all the circumstances of the case, as there are sometimes reasons why we cannot investigate a complaint.
Paragraph 42.d. of the Scheme states that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, concern the level of rent or service charge or the amount of the rent or service charge increase.
As part of the resident’s complaint, he raised concerns regarding the reasonableness and liability for the increase to his annual service charge.
Any dissatisfaction regarding the reasonableness, liability, or the methodology used to calculate service charge contributions requires a decision by a court or tribunal service. This falls outside of our jurisdiction and is within the jurisdiction of the First-Tier Tribunal (Property Chamber).
After carefully considering all the evidence, in accordance with paragraph 42.d. of the Scheme the complaint about the Increase of the resident’s service charge costs is outside our jurisdiction.
If the resident remains dissatisfied with this matter, he may wish to seek independent legal advice and discuss it further with the Leasehold Advisory Service (LEASE). This matter will not form part of our investigation.

Background

At the time of this complaint, the resident was a shared owner of a 2-bedroom ground-floor flat. He purchased the property, within a block of 14 newly refurbished flats, in February 2021. He sold the property in June 2024.
The resident has given permission for an advocate to act on his behalf. For the purposes of this report, we will refer to both the resident and his advocate as ‘the resident,’ unless it is otherwise necessary to distinguish between them.
On 28 February 2023 the resident complained to the landlord. He considered that an increase of approximately £55 per month to the property’s service charges was unreasonable. He asked the landlord to review its estimates and proposed it froze all charges at the current annual rate. He asked the landlord to provide evidence of its actual spend for 2022 to 2023, justification of its estimates for 2023 to 2024, and a copy of its financial report.
The landlord sent its stage 1 response on 16 March 2023. It explained that a large proportion of the service charge increase was due to the rise in energy costs. It said:
1. It would reduce the estimate by 20% per month and arrange a further investigation of communal electricity use by its broker.
2. It would fix the annual management charge at the previous year’s amount.
3. It had provided an expenditure breakdown for 2021 to 2022.
4. It could not yet provide the actual expenditure for 2022 to 2023 until the financial year closed and the figures were calculated.
5. It would provide the year end accounts within 6-months from the year end accounting period and no later than 30 September 2023.
6. It had enclosed a copy of its financial report, inclusive of its profits, as requested.
On 21 March 2023 the resident expressed dissatisfaction with the landlord’s explanation for its service charge estimates. He did not consider the offered reduction reasonable and continued to question how it had calculated its annual estimates.
The resident chased the landlord for a complaint update between March to July 2023. On 16 August 2023 we wrote to the landlord on the resident’s behalf and requested it provide him with a stage 2 response.
On 3 October 2023 the landlord sent its stage 2 response. It noted it had provided the breakdown of service charge costs for 2021 to 2022. It had also provided its annual expenditure results for 2022 to 2023 and provided its company financial report as requested. Its response summarised discussions regarding a separate compensation payment regarding repairs. It also offered £100 for its delay in providing a stage 2 response.
The resident remained unhappy with the landlord’s response and brought the complaint to us. He said the landlord’s service charge costs were high for the services provided.

Assessment and findings

Scope of investigation

The resident’s service charge complaint overlapped a repairs and maintenance complaint. We determined the repair matters separately on 20 November 2024 under case reference number 202223887. The landlord’s stage 2 response commenting on a separate compensation payment relates to the repair case. Therefore, it will not form part of this investigation.
The resident said the landlord’s handling of the repairs and complaints affected the mental health of residents in the block. He also described experiencing financial loss when selling the flat. He considered the sale necessary as he became dissatisfied with the landlord’s actions and his experience as one of its residents.
Although we are an alternative dispute resolution service, we are unable to prove legal liability, nor award damages. Whether a landlord’s actions or lack of action have had a detrimental impact on a resident’s health or personal finances requires a decision by an insurance claim or through the courts. Our role is to investigate if the landlord acted fairly, reasonably, and in line with its policies and procedures. The resident may wish to seek independent legal advice if he wants to pursue any claims for damages.

Handling of the resident’s request for a breakdown of service charges and a copy of its annual report

The resident’s lease sets out what services it can recover from leaseholders, including, but not exclusively limited to, grounds maintenance, cleaning, window cleaning, electricity, and communal repairs.
The resident’s lease states that the landlord will calculate service charges for any account year before the beginning of the new account year. It states this will consist of an estimate of the costs the landlord is likely to incur in the accounting year 1 April to 31 March. The landlord says it will inform residents of any service charge changes in advance. The lease is silent in terms of how much notice the landlord will provide.
The resident’s lease states that as soon as practicable after the end of each account year, the landlord will provide the actual expenditure for the account year. The landlord states it will do this within 6-months of the end of the account year.
In February 2023 the landlord sent its annual estimated service charge statement for 2023 to 2024. This was consistent with the terms of the resident’s lease. The resident queried the reasonableness of the increased service charges on 28 February 2023. Collectively with other occupants of the building, the resident asked the landlord to justify the increases.
The landlord’s stage 1 response on 16 March 2023 explained the service charge increases. While it is not our role to assess the reasonableness of, or liability for, the service charges, it demonstrated it considered the resident’s concerns and offered to:
1. Reduce the estimated communal energy charge.
2. Fix the annual management fee.
3. Arrange a further investigation of the buildings communal energy use.
The landlord’s stage 1 explained that the increased estimated costs of energy use in particular, was based on the buildings annual consumption for previous years. While any increase would be upsetting, it is reasonable that the landlord explained wholesale energy price rises had increased its costs. We encourage the resident to raise this matter with LEASE if he remains dissatisfied with the landlord’s explanation and decision to pass on these costs.
The landlord’s stage 1 response gave the resident a copy of its company annual report, as he requested. It explained that it was unable to provide a breakdown of the 2022 to 2023 actual service charge expenditure until after the year end. This was reasonable in the circumstances and consistent with the resident’s lease agreement.
On 27 March 2023 the landlord issued a revised service charge and annual rent review letter. It included a breakdown of the total service charges and cost for the resident. The letter explained the resident’s right to ask the First-Tier Tribunal to determine whether he was liable to pay the proposed service charges. This demonstrated the landlord provided the resident with information regarding his rights and obligations if he remained dissatisfied.
The landlord’s stage 1 response said it would send its actual expenditure for the 2022 to 2023 account year by 30 September 2023. It was therefore reasonable that it sent a summary of its annual expenditure on 20 September 2023. Its letter included confirmation of deductions and credits made due to it not providing various services during the year. This demonstrated the landlord taking action to correct charges between the estimated and actual expenditure.
The landlord’s stage 2 response on 2 October 2023 explained it had completed its final accounts and it was happy to provide the resident with a breakdown of all cost and invoices. It said it would prepare these for the resident within 4 weeks. This was reasonable and remained within 6 months of the end of the account year.
The evidence shows the resident had complained to the landlord about its failure to provide various services to his satisfaction. It is therefore reasonable that he says he experienced distress and inconvenience due to the service charge increases. That said, we considered the failure to provide services under case 202223887. Furthermore, any dissatisfaction regarding the reasonableness of these increases or the liability to pay them is a matter for the First-Tier Tribunal.
There were gaps between the resident’s request for information to the landlord’s response. That said, it was reasonable that it was unable to provide information until the account year ended and all expenditure calculated. The evidence demonstrates the landlord achieved its response times and provided the information requested.
Based on our findings, we find no maladministration with the landlord’s handling of the resident’s request for a breakdown of service charges and a copy of its annual report.

Complaint handling

At the time of the complaint, the landlord operated a 2-stage complaints process. It would acknowledge complaints at stage 1 and 2 of its internal complaints process (ICP) within 2 working days. At stage 1, it would respond to complaints within 10 working days and within 20 working days at stage 2. This was appropriate and in line with the Housing Ombudsman’s Complaint Handling Code (the Code), 1 April 2022.
The landlord’s remedies and financial redress guide states it will pay compensation of up to £100 if it fails to adhere to its complaint resolution policy. This may include poor communication and or failure to respond within its policy timescales.
The resident complained on 28 February 2023. We have been unable to identify how or when the landlord acknowledged this complaint.
The landlord sent its stage 1 response on 16 March 2023. This was 2 working days later than its policy response times. We have been unable to identify if the landlord informed the resident of its response delay. This was not appropriate and not consistent with its policy or the expectations of the Code.
The Code states a landlord must define a complaint as an expression of dissatisfaction, however made. The landlord’s acknowledgements must also set out its understanding of the complaint and the outcomes the resident is seeking.
The resident expressed dissatisfaction by email on 22 August 2023. It was therefore reasonable that this should have been considered a complaint escalation request. If the landlord had any uncertainty, it should have clarified this with the resident. While the landlord recorded this date on its complaint records, it is unclear if it acknowledged his request.
Furthermore, it sent its stage 2 response 73 working days late, and only after we wrote to it requesting an update. This caused the resident avoidable time and trouble trying to progress matters. This was not appropriate and not consistent with the Code.
The landlord’s stage 2 response apologised for its complaint handling delays and offered £100 compensation. This demonstrated that the landlord was taking steps to put things right.
When there has been an admission of failure, as is the case here, our role is to consider whether the redress offered by the landlord put things right and resolved the complaint satisfactorily. In considering this, we take into account whether the landlord’s offer of redress was in line with its own policies and with our remedies guidance.
The landlord acknowledged it failed to meet the expectations of its complaint policy and apologised. Its offer of compensation for a complaint handling failure was consistent with its remedies and financial redress guide and our remedies guide. We would therefore have made a finding of service failure but for the steps it took to put things right. Therefore, we find the landlord has offered reasonable redress in this matter.

Determination

As noted above, in accordance with paragraph 42.d. of the Scheme the complaint about the Increase of the resident’s service charge costs is outside our jurisdiction.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration with the landlord’s handling of the resident’s request for a breakdown of service charges and a copy of its annual report.
In accordance with paragraph 53.b. of the Housing Ombudsman Scheme, the landlord made an offer of redress which, in the Ombudsman’s opinion, satisfactorily resolves the matter of the landlord’s complaint handling.

Recommendations

We recommend the landlord reoffer the resident £100 compensation for its complaint handling, if not already paid.