Royal Borough Of Greenwich (202127512)

REPORT

COMPLAINT 202127512

Royal Borough Of Greenwich

29 April 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. Handling of the resident’s request to pay her service charge bill over an extended period.
2. Handling of the resident’s queries about the administration charge.

Background

The resident is a leaseholder. She lives in a 2-bed ground floor flat. The flat is within a block of similar properties.
The block of flats has fob-controlled entry system and a lift in the internal communal areas. As her property is on the ground floor and has its own separate entrance, the resident does not have use of the entry system or lift.
The terms of the resident’s lease require her to pay a proportion of the cost of services and capital works carried out by the landlord to the building or estate.
In April 2021 the landlord issued the resident with an estimated invoice for the cost of works to renew the lift in the block. The invoice was for approximately £6,900.
In January 2022 the resident asked the landlord if she could pay the invoice for the lift works over a 12-year period.
The landlord replied and asked her to complete an income and expenditure form (IE form). It explained extended payment plans were based on individual circumstances.
The resident told the landlord she was paying for the door entry system and the lift which she did not have use of. She said it was “intrusive” of the landlord to request her to complete an IE form.
On 28 February 2022 the resident made a complaint to the landlord (Complaint 1). She said:
1. The landlord had sent her an estimated invoice for lift replacement works. This included an admin fee.
2. She had asked for a breakdown of the invoice but it had not provided this.
3. She had also asked to pay the bill over 12 years.
4. It had asked her to complete an IE form “demanding minute details” of her spending and income.
The landlord provided its stage 1 response to Complaint 1 on 24 March 2022. It said:
1. The invoice it had issued for the lift works was an estimated invoice. It was unable to provide the receipts requested by the resident until it finalised the accounts.
2. It had provided her with an itemised breakdown of the estimated costs in May 2021. It provided this breakdown again.
3. When a resident requested payment terms outside those it offered, its procedure was to ask them to complete and IE form. It had sent the resident this from and awaited its completion.
The resident remained unhappy and asked the landlord to escalate her complaint. The landlord provided its stage 2 response to Complaint 1 on 24 May 2022. It said:
1. It had provided an estimated invoice. When it received the final accounts, it would provide her with further information.
2. It recognised that bills for major works put financial pressure on leaseholders and tried to be flexible with repayment plans.
3. It needed to be fair and consistent when offering extended terms. It had therefore asked her to complete an IE form. It would make a decision about her request for an extended payment period when she returned the form.
In December 2022 the landlord offered the resident a repayment plan over 6 years. It again asked the resident to return a completed IE form. The resident refused the 6-year repayment term and said she would not complete the form as she objected to the landlord deciding whether she “qualified…as deserving poor”.
In January 2023, having taken advice from the Leasehold Advisory Service (LAS), the resident agreed “under protest” to the 6-year repayment plan. She asked the landlord to justify its administration charges.
The landlord replied in early February 2023. It said it charged the administration fee in accordance with the terms of the lease. It said it was a percentage charge to cover the costs of carrying out statutory consultation, answering leaseholder observations, and preparing and managing the service charge accounts.
On 30 May 2023 the resident made a complaint (Complaint 2) about the landlord’s decision not to extend the payment period beyond 6 years. She also said it had not “fully accounted” for the administration charge.
The landlord provided its stage 1 response to Complaint 2 on 28 June 2023. It said:
1. It had dealt with the resident’s concerns as a formal complaint in 2022.
2. In February 2023 she had agreed to a 6-year repayment plan.
3. As it had previously explained, if she wished to extend the repayment term, she would need to complete an IE form.
4. This would allow it to assess any “hardship issues” and review her repayment plan with a view to offering “more flexibility”.
On 12 September 2023 the resident asked the landlord (via the Ombudsman) to escalate Complaint 2. She said the outcome she was seeking was for the landlord to extend the repayment period to longer than 6 years and for it to update its IE form.
The landlord provided its stage 2 response to Complaint 2. It said:
1. Refusal to extend the repayment period
  1. It had previously offered the resident the opportunity to complete the IE form.
  2. This was so it could decide whether it could apply “additional flexibility” to her repayments.
  3. She had refused to complete the form so it did not uphold this part of her complaint.
2. Dissatisfaction with the IE form
  1. It agreed the form required some corrections. However, it was satisfied the form was suitable for demonstrating and analysing individual financial circumstances.
  2. It did not uphold this part of her complaint.

Assessment and findings

Scope of the investigation

The resident has stated that she accepts that under the terms of her lease she is required to pay for services such as the lift and door entry system. She has however stated that she does not feel it is fair that she pays for services she does not benefit from the use of.
This investigation has not considered whether the service charge the landlord has charged the resident is reasonable. This is because the level of service charge and the amount of the service charge increase is a matter more reasonably and effectively considered by the First Tier Tribunal (FTT). The resident should contact the FTT if she wants a binding determination as to whether the charge is reasonable and payable.
This investigation has however considered whether the landlord responded appropriately to the resident’s request to pay her service charge over an extended period. We have also assessed its response to her queries about the administration fee. In doing so we have considered whether the landlord treated her fairly in the circumstances.

Handling of the resident’s request to pay her service charge bill over an extended period.

In January 2022 the resident asked the landlord to allow her to pay the costs of the lift works over 12 years. The landlord responded and requested that the resident complete and IE form to allow it to assess whether it could offer her an extended payment period.
The resident said it was “intrusive” of the landlord to ask her to complete the IE form. She said the charge amounted to an “unreasonable proportion of [her] income” which was from a state pension.
The landlord told the resident that requesting an IE form was “part of its process” when a resident requested an extended repayment term.
We have not seen a copy of the landlord’s debt recovery procedure for leaseholders. We therefore cannot confirm that this includes a requirement for the resident to complete an IE form. However, we do not consider that such a requirement would be unreasonable. Indeed, this would be financially responsible.
We acknowledge the resident’s concerns that the landlord requesting such information felt “intrusive”. However, we consider that this was an appropriate and proportionate method for it to use to determine whether she had a financial need to extend the terms of the repayment.
In April 2022 the resident asked to repay the charges at £500 a year. The landlord responded almost 4 weeks later and said it could not accept this repayment plan as leaving the debt unpaid may cause further financial difficulties. It asked the resident again to complete the IE form so it could assess her request for an extended repayment term.
While the landlord’s response was reasonable, it is unclear why it took so long to reply. We note however that it did apologise for the delay. This was appropriate.
In its stage 2 response to Complaint 1 the landlord explained that it needed to be “fair and consistent” in its use of repayment arrangements. It asked the resident again to complete the IE form to allow it to consider her request. This was an appropriate response.
In December 2022 the resident contacted the landlord having received what she described as an “officious and bullying” demand for payment of the lift charge. She again asked to pay over 12 years.
The landlord responded and explained that it had sent the letter as part of its debt recovery procedure. It reiterated that it was waiting for the resident to complete an IE form.
The resident again refused to complete the form stating only that her main source of income was her state pension. We consider that the resident was within her rights to refuse to complete the form and disclose her financial information. However, we also consider that the landlord was within its rights not to change its decision regarding the repayment term without the requested information. Without further information about the resident’s financial status, the landlord could not ensure it was fairly exercising its discretion in varying the repayment terms.
At the end of December 2022 the resident asked the landlord to give a reason for refusing to accept her repayment offer of £500 per month. The landlord replied reiterating that it had rejected her offer and stating it would take action to recover her debt.
While the landlord was within its rights to refuse the resident’s offer, it did not respond to her request for a reason for its refusal. We acknowledge that the landlord had provided its reasoning previously but consider that it would have been reasonable and not onerous for it to repeat this explanation. It did however provide the resident with the details for the LAS and the FTT. This was appropriate.
In May 2023 the resident again complained that the landlord had refused to extend the repayment period. The landlord again reiterated that it would consider offering “more flexibility” if she completed the IE form. It again explained that this would allow it to assess any hardship issues. This response was clear and reasonable.
The landlord repeated its stance in its final response to Complaint 2 in December 2023. We consider that the landlord has clearly and consistently communicated its position regarding extending the repayment period throughout the period of investigation. The resident was aware that it required her to complete the IE form so it could assess whether she had a financial need for paying over a longer period.
The landlord has acknowledged the resident’s comments that some of the categories on the IE form were outdated. It has updated the form and said it felt the form served its purpose of allowing it to analyse residents’ financial circumstances. This was a reasonable position.
Overall, the landlord acted reasonably and responsibly in requesting the resident to provide details of her income and expenditure. The IE form was an appropriate and proportionate method for it to use to assess her request to extend her payment term. As the resident did not complete the form, the landlord was unable to confirm that she would struggle to pay the charge over the 6 years it proposed. It was therefore reasonable that it refused to extend the term. We find no maladministration in the landlord’s handling of the resident’s request to pay her service charge bill over an extended period.

Handling of the resident’s queries about the administration charge.

The lease allows the landlord to charge the resident costs for “the administrative and labour costs” of managing the building and estate. The lease does not specify how the landlord should calculate the administration costs incurred.
On 29 January 2022 the resident asked the landlord to provide a breakdown of its charges and fees. She said she wanted it to provide “number of hours and hourly rate”.
The landlord replied that it charged a home ownership service administration fee and an asset management fee. It explained the home ownership service administration fee covered the costs of carrying out Section 20 consultations, responding to observations from leaseholders, and preparing and managing the service charge accounts. It said the asset management administration fee covered the day-to-day costs of managing and supervising the capital works.
We consider that the landlord provided a reasonably detailed explanation of what its administration fees were for. It did not however respond to the resident’s request for the number of hours worked and the hourly rate. This was unreasonable.
In Complaint 1 the resident again asked the landlord to provide a breakdown of the charges and fees.
The landlord explained in its complaint response that the cost of capital works was not calculated by hourly rate. It said it was calculated in accordance with the terms of the lease by ‘rateable value’. The landlord attached an itemised breakdown of the estimated costs. This showed the cost of items such as removal of the old lift, new equipment, electrical works, and building works. It also stated that the administration fee was 8% of the total cost and the management fee was 5%.
The landlord explained that it had issued an estimated invoice and would provide receipts when it received the final account. We therefore consider that it provided all the cost information that it could at that time and that the detail it provided in this respect was reasonable and proportionate. However, it would have been reasonable for it to provide further information about what it meant by ‘rateable value’ and how this calculation worked in practice. That it did not was a missed opportunity.
In December 2022 the resident stated that she felt the landlord’s charges were “disproportionate”. She did not specify whether she was referring to the cost of the lift works, other services, or the administration fees. As previously mentioned, the level of service charge is a matter more reasonably and effectively considered by the FTT. The resident can bring a case to the tribunal if she believes she should not have to pay the charges.
Having taken advice from the LAS the resident asked the landlord in January 2023 to justify its administration charges. The landlord replied and said that it charged the administration fee in accordance with the terms of the lease. It said it was charged as a percentage of the costs of the works and covered carrying out Section 20 consultations, responding to observations from leaseholders, and preparing and managing the service charge accounts.
The resident was not satisfied with the landlord’s explanation. In May 2023 made a further complaint as she said it had “refused to fully account for the charge”.
In its complaint response the landlord said it calculated the charges “as prescribed in the terms of the lease”. While we acknowledge it had done so previously, we consider the landlord could have provided a more thorough and detailed response.
Overall, the landlord explained to the resident several times what the administration fee and management fee were for. It also provided a sufficiently detailed itemised breakdown of the estimated charges and explained it would provide more detailed receipts when the account was finalised. However, the landlord did miss several opportunities to provide further information about what it meant by ‘rateable value’ and how this calculation worked in practice. This may have helped the resident to understand the charges. We therefore find service failure in the landlord’s handling of the resident’s queries about the administration charges.

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 to pay her service charge bill over an extended period.
2. Service failure in the landlord’s handling of the resident’s queries about the administration charge.

Orders

Within 4 weeks of the date of this report the landlord must:
1. Apologise to the resident for the shortcomings identified in this report.
2. Pay the resident £50 compensation for time and trouble in relation to its handling of the resident’s queries about the administration charge.
3. Provide the resident with further information regarding the rateable value of the property and how it applies this to apportion the charges.