ReSI Homes Limited (202326115)

REPORT

COMPLAINT 202326115

ReSI Homes Limited

30 January 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 concerns the landlord’s handling of:
1. The resident’s request for a breakdown of the service charges.
2. The resident’s reports of antisocial behaviour (ASB).
3. Concerns about subletting.

Background

The resident is a shared owner of a 2-bedroom flat situated on the second floor of a low-rise block. The lease commenced in October 2008. The landlord has an appointed agent (‘Agent B’) which deals with matters on its behalf.
The landlord has no vulnerabilities noted for the resident.
The resident made an online complaint with the landlord on 19 June 2023 concerning the following issues:
1. The increase in the service charges with no explanation.
2. ASB from his neighbours.
3. Alleged subletting by him.
The landlord issued its stage 1 response on 17 July 2023. It said:
1. While the resident stated no explanation was provided about the 21.8% increase in the service charges, he was sent a letter by Agent B on 31 March 2023 which was titled “Service charge budget 2023”. This letter contained a detailed breakdown of the charges which the resident requested. The resident did not exercise any of the rights set out in the letter.
2. In relation to the resident’s dispute with his neighbour, Agent B wrote to him on 22 May 2023 to explain that as the properties (including those he was in dispute with) were shared ownership ones, it could not assist in the matter. The resident was informed in the email of alternative steps which could be undertaken, as well as other agencies he could contact.
3. Agent B had received several reports from other residents informing it that the resident had sublet his property. Due to the allegations, it had conducted an investigation into the matter. It could not provide the resident with evidence of the complaints made, as doing so could identify the individuals who had made the reports.
The resident requested his complaint was escalated to stage 2 on 26 July 2023. He said he remained dissatisfied with the response provided by the landlord.
The landlord issued its stage 2 response on 8 September 2023. It said:
1. Agent B provided the resident with a detailed service charge breakdown in the letter sent on 31 March 2023. The service charge costs were “based on the costs incurred in the previous year plus an estimated cost for the current year”. Therefore, it was not in a position to provide a detailed breakdown of the actual costs until the tax year ended (on 31 March 2024). It provided the resident with a comparison cost of the last financial year against the budget for the current year.
2. In relation to the ASB, Agent B advised the resident in its communication of 22 May 2023 of the steps he could take to escalate the matter with other agencies.
3. In terms of the allegations of subletting, it noted that the resident confirmed that he had relatives staying with him. However, he maintained that “no monies had ever changed hands”. Based on this acceptance from the resident, as well as reports received from other residents, it had a duty to investigate the allegations and issue a warning letter to the resident. It understood the matter had been resolved and that Agent B was satisfied with the outcome of its investigation.
The resident referred his complaint to this Service on 23 October 2023. He explained that, due to the ongoing issues with his neighbours while he remained a shared owner and continued to pay rent, he was not residing at the property.

Assessment and findings

Scope of investigation

As part of his complaint, the resident raised issues related to the level of service charges and the reasonableness of those charges in relation to the property. Paragraph 42d of the Scheme says that the Ombudsman may not investigate a complaint that concerns the level of rent or service charge or the amount of the rent or service charge increase. This investigation will therefore not determine whether the service charges are reasonable, or the amount charged is appropriate.
While this Service is unable to decide on the matters above, the Ombudsman has considered whether the landlord responded appropriately to the resident’s concerns and complaint about the breakdown of the service charge, and whether it treated him fairly in the circumstances.
Complaints concerning the level of rent or service charge may be best suited to be considered by the First Tier Tribunal (Property Chamber), which can establish whether variable as opposed to fixed service charges are reasonable or payable. The resident’s tenancy agreement should set out the nature of the service charges which he is liable for. The resident may wish to visit the First Tier Tribunal (Property Chamber) website for further advice of this matter.

Policies

The landlord’s ASB policy sets out that it applies to all persons living in homes owned or managed by the landlord as well as all visitors to properties and estates owned or managed by it. The policy defines ASB as:
1. Conduct that has caused, or is likely to cause, harassment, alarm or distress to any person.
2. Conduct capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.
3. Conduct capable of causing housing-related nuisance or annoyance to any person.
The landlord’s ASB policy says that its approach to ASB is to “achieve a balance between prevention, enforcement and support”. The policy explains that if a resident reports ASB, its first step is to request that they keep a record of incidents, and in the event of emergencies that they contact the police. It adds that where it cannot solve the problem alone, it will work with other partners – including the police – to tackle ASB. If the ASB continues and there are no other options to stop it, the landlord will take legal action (where appropriate).
The ASB policy adds that where the landlord cannot take action, it will:
1. Offer residents mediation.
2. Signpost them to other agencies.
3. Liaise with partner agencies to see if they can assist.
The landlord’s income management policy sets out its approach to the collection of leasehold charges and the management of arrears. The policy explains that the key objective is to manage the income effectively and to keep debt to a minimum. The income includes rent, service charges, ground rent, court costs and all other applicable charges under the lease or shared ownership agreement.
The income management policy states that “where there is a service charge due under the terms of the lease, the leaseholder is responsible for making service charge payments in accordance with the terms of the specific lease (including contributions to any sinking funds)”.
The income management policy explains that residents “can request a copy of the rent and service charge statement with a clear breakdown of charges at any time”. It also says that residents “will be informed of changes to rent and other charges in accordance with the specific terms of the lease or at least one month before these charges come into effect”.

The landlord’s handling of the resident’s request for a breakdown of the service charges

The resident’s lease sets out details of the service charge provisions under schedule 8. This explains that both the estate service provision and building service provision are comprised of the “expenditure estimate by the landlord as likely to be incurred in the account year” as well as an “appropriate amount as a reserve” for or towards matters which are likely to give rise to expenditure. The schedule adds that for both provisions, after the end of each account year the landlord will determine and certify the amount by which the estimate has “exceeded or fallen short of the actual expenditure in the account year”. It will “supply the leaseholder with a copy of the certificate” and the leaseholder “shall be allowed or as the case may be shall pay forthwith upon receipt of the certificate the specified proportion of the excess or the deficiency”.
The landlord has provided a letter dated 1 March 2023 which set out the current and new charges which applied from 1 April 2023. This letter informed the resident that the service charge was split between an eligible amount, which was increasing from £58.56 to £113.63, and a non-eligible amount relating to the building’s insurance, which remained unchanged at £10.24. Together with the rent, this meant the charge increased from £252.68 to £307.75 (an increase of 21.8%). The letter provided the resident with a notice period of 1 month before the increase was due to be implemented. This was in keeping with the landlord’s income management policy.
The letter issued by Agent B on 1 March 2023 did not provide any breakdown of how the service charge was estimated. This was because the letter was merely intended to provide the resident the adequate notice of the impending change in the service charge. The letter did, however, contain a summary of the resident’s rights and obligations, which was appropriate. It confirmed that he had the right to write to the landlord to request a written summary of the costs which made up the service charges. The letter explained that the summary should be provided either 1 month after his request or 6 months from the end of the period to which the summary related, whichever was later. It also said that the summary should “cover the last 12-month period used for making up the accounts relating to the service charge ending no later than the date of your request”.
The landlord has provided a further letter, issued by Agent B on 31 March 2023, containing the service charge budget for the period from 1 April 2023 to 31 March 2024. The letter stated that the budget “shows the services we plan to provide, and how much they are predicted to cost. They are based on the actual expenditure incurred last year, together with an estimate of what we predict they will cost this year”. The letter added that “unlike previous years, the budget is specific to your property and what you pay for”.
The resident said in his complaint to the landlord that he was only made aware of the new service charges on 28 March 2023, and that after being informed of the new charges he asked the landlord on the following day for a breakdown of them. The resident had been living at the property for a number of years and as a result would have been aware of when during the year the landlord normally sent the annual review letters. While the Ombudsman cannot say with certainty that the letters were received by the resident shortly after the date on them, the 2 letters from Agent B issued in March 2023 were correctly addressed to the resident, containing his full address including the postcode, and there was no indication these were returned to the landlord as being undelivered. The resident did confirm receipt of the letter dated 31 March 2023, as this was referenced in his communication with his MP in regard to a different matter.
The resident said that although the letter from Agent B dated 31 March 2023 contained details of the service charges’ costs, he had asked for an explanation as to how the figures given by the landlord had been calculated. This extended to whether the landlord’s costs were based on in-house or external contactors as well as “an explanation of where monies go when not needed”.
The landlord’s communication to the resident was in keeping with its income management policy. While the resident explained that he wanted an explanation of the charges calculated by the landlord, the information provided by Agent B was a breakdown of the charges which were applicable to him and his property. In addition to the breakdown by each service, including those for which no service charge was payable such as a management agent or play area, Agent B had also supplied details of what each service title covered.
In addition to providing the resident with this information, the landlord stated it also sent him a comparison setting out the differences between the amounts covered by the service charge in the previous year compared to that year. This was a reasonable and helpful course of action in the circumstances.
In summary, the landlord took appropriate action to investigate the resident’s concerns over the issue of the service charges payable by him. It provided him with details of the charges relevant to his property, which were broken down into the areas covered with valuations on how much each service was estimated to cost the landlord. The landlord acted in accordance with its income management policy, and from the evidence provided, its communication on the matter was satisfactory. Therefore, there was no maladministration in its handling of the resident’s requests for a breakdown in the service charges.

The landlord’s handling of the resident reports of ASB

Prior to raising his complaint in June 2023, the resident contacted the landlord in April 2023 about ASB related to CCTV which had been installed by his neighbour. The landlord informed the resident that the CCTV camera would be taken down. The resident then reported further instances of ASB via email on 17 May 2023. These included an incident involving his granddaughter, who had been disposing of some rubbish in the communal bin. He said his neighbour had slammed the entry door in her face, leaving her outside, and despite requests to re-open the door the neighbour had refused to do so. The resident also raised issues of bullying from the neighbour, the use of foul language in front of children, dogs being allowed to run loose as well as incidents of dog fouling, the playing of loud music, the neighbour challenging anyone coming into the resident’s property, and allegations of drug use by the neighbour in the communal areas of the building.
The landlord responded to the resident on 22 May 2023, within 5 days of receiving his report. This was an appropriate initial response by the landlord. Its response to the incident involving the resident’s granddaughter was that the matter was not one which it could get involved with at that stage. The landlord explained that the appropriate bodies to raise the matter were either the local authority or the police. In relation to the other points raised by the resident, the landlord acknowledged the resident’s comments and set out that it would discuss the matter with the neighbour with regards to the issues of drugs, the dogs, and her challenging anyone coming into his property. It added that in terms of the resident’s concerns over the level of noise, if the resident felt that this amounted to a statutory disturbance, he should contact the local authority’s environmental health service.
It was appropriate for the landlord to commit to taking actions focused on resolving the situation, and to inform the resident of this commitment. It was also correct to signpost the resident to other relevant agencies. However, it could have done more to assess and document the risk level, and to ensure the resident had access to suitable support. It could also have liaised with partner agencies such as the police and local authority to facilitate a joined-up approach.
The landlord has not provided this Service with any evidence showing that it subsequently held any discussions with the neighbour. Neither was there any evidence provided which shows that it issued any form of written communication to the neighbour. Instead, in its stage 1 and stage 2 responses, the landlord set out that as the properties concerned were shared ownership, it was “not in a position to take any action to resolve the issue”. This was not appropriate, and the landlord acted contrary to its earlier email in which it said it would discuss some of the incidents with the neighbour.
While the landlord said that it was not the appropriate body to deal with the incident of the entry door being shut in the resident’s granddaughter’s face, it did not explain the reasons why it believed this to be the case. The landlord’s ASB policy set out examples of what it considered to be ASB, and this included harassment, violence, threats of violence or abusive behaviour. Harassment was defined as “any unwanted behaviour affecting a person’s well-being or dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment”. The ASB policy also explained that it applied to both residents and visitors to properties/estates either owned or managed by the landlord. This was the case here. Although the landlord provided the resident with details of other agencies to take the matter to, its actions meant it did not investigate the matter in keeping with its ASB policy. This was a missed opportunity by it.
Following the resident escalating the complaint to stage 2, as he said the matter had not been resolved, the landlord was given a further chance to look into the matter. However, despite this its response to the issue of ASB at stage 2 merely repeated that it had informed the resident of the other agencies that he could contact. It added that it had acted in accordance with its ASB policy. This was despite there being no reference in the policy to it excluding any shared owners.
Overall, the landlord’s actions were inappropriate. It failed to investigate the resident’s concerns, despite initially saying that it would discuss some of the reported matters with the neighbour. Instead, it signposted the resident to contact other agencies about the matter, and did not adequately explore risk or relevant support. These omissions caused the resident avoidable uncertainty, distress and inconvenience. The Ombudsman considers that an award of £150 is appropriate given the failure by the landlord over the matter in the absence of any compensation policy having been provided to this Service by the landlord. This award is based on our remedies guidance for maladministration, where there was no permanent impact on the resident.

The landlord’s handling of concerns about subletting

The resident stated that while he did have family members staying with him, there had been no subletting undertaken by him and “no monies had changed hands”. He considered the landlord’s actions over the matter to be “libellous” and “unfounded”.
The resident’s lease sets out under section 3.14, relating to use only as private residence, that the property should not be “used for any purpose whatever other than as a private residence in single occupation only”. The lease also states under section 4.1 that the resident is “not to assign, underlet, mortgage, charge or part with possession of part only of the premises and not to assign, underlet otherwise than by way of mortgage or part with possession of the whole of the premises”.
The landlord contacted the resident by phone on 16 May 2023 after receiving reports that the resident may have been subletting his property. It explained the allegation had been from a number of individuals, although it did not provide details of those parties. This Service has not had sight of the notes from the telephone call which the landlord had with the resident on 16 May 2023. However, the landlord followed this up with a letter to the resident on 22 May 2023. This communication explained that while the resident disputed that he was subletting the property, on the basis that he was not charging any rent and was covering the bills himself, the landlord did not view the other family members staying with the resident as simply being “guests”. It was of the view that these individuals had been residing there for over 2 years and not for the short term as guests would normally be expected to reside. It noted that one of these individuals had been involved in incidents with one of the resident’s neighbours which resulted in police attending. The landlord added this was unacceptable and was a breach of the lease.
The landlord’s communication to the resident was appropriate. While it acknowledged the resident’s comments that no money had been exchanged, it set out the basis on which it believed the property was being sublet by him, in breach of the lease. The letter also provided a warning to the resident, and it gave him a 2-week period in which to resolve the matter. The resident explained that following receipt of the letter, while he disagreed with the comments, he made arrangements for the family members to leave, and he informed the landlord of this before the end of the 2-week period. The resident explained that the family members had been supporting him as he had been ill with stress, and he now needed to access support elsewhere. The landlord acknowledged that the guests had left but reiterated that the resident’s actions had been a breach of his lease. As a result, it maintained it acted appropriately.
The resident asked the landlord to provide details of the allegations which were made against him. The landlord said that it could not do this as this would divulge the identity of the parties who had raised the concerns. This was appropriate, as the landlord had a duty to protect anyone raising a concern with it. The landlord would also be expected to investigate all concerns which were raised with it. The manner in which it investigated such concerns was not prescribed, and this allowed it the option of trying to resolve the matter informally initially rather than by proceeding down a more formal route. It is clear that the landlord tried to go down that route in this case, initially by speaking to the resident. It then followed up in writing, making the resident aware of the reasons why it believed the actions (of possible subletting) were still ongoing. This was a reasonable and proportionate approach in the circumstances.
In summary, while the resident remained unhappy with the allegations made, there is no evidence that his dissatisfaction was due to a failing by the landlord. The Ombudsman accepts that the nature of the communication by the landlord over the issue may have been upsetting for him. However, on the basis of the evidence available, the Ombudsman finds that there was no maladministration by the landlord in its handling of concerns about subletting.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was:
1. No maladministration in the landlord’s handling of the resident’s request for a breakdown of the service charges.
2. Maladministration in the landlord’s handling of the resident’s reports of ASB.
3. No maladministration in the landlord’s handling of concerns about subletting.

Orders

Within the next 4 weeks the Ombudsman orders the landlord to:
1. Apologise to the resident for the failings identified in this report.
2. Pay the resident compensation of £150 for its failures in its handling of the resident’s reports of ASB.
3. Contact the resident in relation to the current situation with his neighbours. It should then investigate any recent or ongoing issues in line with its ASB policy and offer relevant support. If this involves working in conjunction with other agencies, it should do this.