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The Guinness Partnership Limited (202234427)

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REPORT

COMPLAINT 202234427

The Guinness Partnership Limited

12 November 2024


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:
    1. Administration of the resident’s service charge account.
    2. Response to the resident’s request for a leaseholder panel.
    3. Complaint handling.

Background

  1. The resident is a leaseholder of a ground floor flat in a block of 8 properties. The landlord is the freeholder. The landlord has no recorded health vulnerabilities for the resident.
  2. On 27 November 2022 the resident raised a formal complaint with the landlord. She expressed dissatisfaction with inaccuracies in the landlord’s service charge communication sent on 3 October 2022. She asked it to establish a leaseholder panel, as a forum to raise and discuss such matters. She considered there had been similar issues in previous years.
  3. The landlord registered the residents complaint on 6 January 2023. It provided its stage 1 response on 21 February 2023. The landlord:
    1. Acknowledged a discrepancy with the section 20 documentation for the resident’s block. As such, it accepted it had over charged for recently completed major works.
    2. Said that it had taken the position to offer individual or scheme level support to leaseholders, rather than establishing a leaseholder panel.
    3. Apologised and offered £85 total compensation, broken down to £50 for her time and effort, £25 for its poor communication, and £10 for its complaint handling delays.
  4. The resident asked to escalate her complaint to stage 2 of the landlord’s internal complaints process (ICP) on 1 March 2023. She said she believed a leaseholder panel would be beneficial to improve the landlord’s services. Furthermore, the landlord had not sent her information about her estate charges as she had requested.
  5. The landlord provided its stage 2 final response on 1 April 2023. It repeated its apology and explanation about its service charge errors. It said it had identified the root cause of the discrepancy and assured the resident that it was confident it had corrected this. It apologised for the delay to provide her with information about estate charges. It summarised how it estimated these each year. It said its leaseholder panel decision had not changed but encouraged the resident to share her views. The landlord offered an additional £50 compensation for its delays handling the resident’s complaint and her request for information.
  6. In April 2023 the resident brought her complaint to us. She said she remained dissatisfied with the landlord’s final response. This included the time it had taken it to complete its ICP. Regardless of it upholding her complaint, she had asked it by way of the Section 22 process, to provide a breakdown of the estate charges. It had failed to supply this as she had requested. She sought reassurance that similar issues would not happen again.
  7. Following our contact to the landlord, it revisited the resident’s complaint and wrote to her on 8 March 2024. In which, it said while preparing evidence for us, it had identified failures in its complaint handling. It apologised, identified learning, and offered the resident an additional £450. £250 for its complaint handling failures and £200 for poor communication regards her request for service charge information.

Assessment and findings

Scope of investigation

  1. We note that the resident’s correspondence includes an expression of dissatisfaction regarding the landlord’s service charge calculation and apportionment.
  2. Any dissatisfaction regarding the reasonableness, liability, or the methodology used to calculate service charge contributions requires a decision by a court or tribunal service. Should the resident remain dissatisfied with this matter, we advise that this falls outside of our jurisdiction and is within the jurisdiction of the First-Tier Tribunal (Property Chamber). The resident may wish to discuss the matter further with the Leasehold Advisory Service (LEASE) www.lease-advice.org. Any matter about service charge costs will not form part of this investigation. We can consider how the landlord responded to the resident’s request for information.
  3. Within the resident’s correspondence she refers to assisting “a very worried” vulnerable neighbour. She says the landlord’s service charge errors also affected them. While we do not doubt this, she has presented the evidence alone and not raised matters as a group complaint. Therefore, any reference to other parties will be to provide context. We are unable to specifically comment on another resident’s circumstances where we have no consent to do so. She may wish to encourage her neighbour to raise a complaint directly to the landlord.
  4. In reaching a decision about the resident’s complaint, we consider whether the landlord has kept to the law, followed proper procedure and good practice and acted in a reasonable way. Our duty is to determine the complaint by reference to what is, in our findings, fair in all the circumstances of the case. Where we identify failure by a landlord, we can consider the resulting distress and inconvenience.

Administration of the resident’s service charge account

  1. Section 20 of the Landlord and Tenant Act 1985 (LTA 1985) sets out the consultation process which landlords must follow when carrying out works to a building where the contribution from any lessee exceeds £250. The landlord acknowledges this obligation in paragraph 6.b. of its service charge policy.
  2. The resident does not dispute that the landlord completed this process prior to appointing a contractor and starting external and communal redecoration of the block. Furthermore, there is evidence on 20 April 2021 that it issued the resident a section 20B notification due to “incurred costs” for year ending 31 March 2020.
  3. Section 20B of the LTA 1985 states that a landlord cannot recover service charge costs incurred more than 18 months before it formally demands them. The exception to this rule is if it writes to the leaseholder within 18 months of incurring the costs informing them that it will demand payment in due course. Therefore, at this stage, the landlord acted appropriately and met its obligations under LTA 1985.
  4. There is evidence that the resident raised concerns about the landlord’s administration of the service charge account in January and February 2022. She considered the landlord had charged her “thousands of pounds” more than it should. She chased it for a response via its social media channels. It is therefore unclear why we have been unable to identify how and when the landlord addressed the resident’s concerns at this stage.
  5. During September and October 2022 there is evidence within the landlord’s internal correspondence that it identified errors with its service charge calculations. In particular, how it had calculated the recovery of costs in the 2019 to 2020 accounting year. It recognised that it could only recover costs from 2 of the 8 properties in the resident’s block. This was due to whether the tenancy or lease was subject to variable or fixed service charges.
  6. While it was appropriate for the landlord to recognise and adjust this error, its communication with the resident at this stage remained poor. On 3 October 2022 the resident says the landlord provided “actual” service charge cost statements for the previous accounting year. In which, she continued to question the landlord’s calculation based on its original section 20B.
  7. There is evidence the resident chased the landlord for information and an explanation on 5 October 2022 and 11 November 2022. Other than it issuing several changed service charge statements, we have been unable to identify how the landlord addressed the resident’s concerns. Given it had discussed internally errors with its calculations, it is unclear why the landlord did not take steps to communicate and reassure the resident that it was correcting the identified issues. Nor did it confirm which of its changed statements was correct. This did nothing to improve the landlord and resident relationship.
  8. Dissatisfied with the lack of communication from the landlord, the resident requested further information on 23 November 2022. She made her request under section 22 of the LTA 1985. Her request asked that it explain the costs and charges on her account.
  9. The landlord’s failure to effectively acknowledge her request or communicate the steps it planned to take to resolve matters, led to her complaint on 27 November 2022. It was unreasonable that she needed to take these actions to gain a satisfactory response from the landlord. Particularly as she had started her queries in or around January 2022. This caused her time, trouble, distress, and inconvenience as she was understandably concerned about a large, incorrect, service charge bill.
  10. Paragraph 40 of the landlord’s service charge policy says it will provide customers paying variable service charges, access to relevant records if they wish to inspect these. This is appropriate and a requirement of section 22 of the LTA 1985. This is a legal provision that gives leaseholders the right to inspect and copy the documents relating to their service charges.
  11. After receiving a request to see a summary of the service charge accounts, landlords should respond with the summary within 1 month of the request or within 6 months of the end of the period the summary relates to (whichever comes later). Failure to meet this deadline is a criminal offence.
  12. The resident does not dispute that the landlord sent her invoices by email. However, these came with little explanation and no means to work out whether the costs were correct. During this time, she says the landlord chased her for payment, even though the sum remained in dispute. This did not demonstrate the landlord effectively communicating or monitoring the resident’s situation.
  13. The landlord’s stage 1 complaint response offered an apology and compensation for its delayed response and poor communication. The landlord repeated this apology in its stage 2 response. This demonstrated that the landlord had failed to learn from outcomes and it made no improvement to how it communicated with the resident.
  14. Furthermore, the landlord failed to offer proportional redress or put things right within its ICP. Its offer failed to address her efforts and the detriment experienced. This caused the resident further time and trouble as she chased it in hope of progressing matters.
  15. On 8 March 2024 the landlord demonstrated taking steps to recognise its administration and communication failures. It offered additional compensation to put things right. However, while we encourage the landlord to revisit its complaints, we have to consider that it made its revised compensation offer 11 months after its stage 2 final response. In such circumstances, our outcome guidance is clear that a finding of reasonable redress cannot therefore be determined.
  16. When there has been an admission of failure, as is the case here, our role is to assess whether the landlord offered proportionate redress. In situations, of maladministration, our guidance on remedies recommends that a compensation payment should be £100 to £600 to put things right.
  17. The total compensation offered for this complaint point during its ICP and on 8 March 2024 amounts to £350. We find this offer proportionate and in line with our remedies guidance. Therefore, we order it pay its compensation offer totalling £350.

Response to the resident’s request for a leaseholder panel

  1. Within the landlord’s complaint responses, it provided an explanation of its position on the suggested leaseholder panel. It said, in its experience, the needs and requirements of each leaseholder varied. Each being very individual and unique depending on the property and or scheme. As such, it identified from satisfaction surveys, shared with its executive team and board, for the need to differentiate its service offer to leaseholders. Therefore, it created a pilot scheme managed by property managers.
  2. The landlord considered its property managers best placed to have individual or scheme based conversations to address matters specifically relevant to them. It considered this model a means of assessing the benefits to improve service delivery and customer satisfaction. As such, while it had previously considered introducing a panel, it had no immediate plans to do so.
  3. This was a reasonable explanation, which demonstrated the landlord’s steps to answer the resident’s question.
  4. The Tenant Involvement and Empowerment Standard, superseded on 1 April 2024 by the ​Transparency, Influence and Accountability Standard, set out guidelines established by the Regulator for Social Housing. While the standard does not explicitly mention leaseholders, it aims to ensure landlords are open with tenants, treat them fairly, and provide access to services to influence decisions and raise complaints.
  5. Given that the landlord’s response encouraged the resident to provide feedback, so that it can improve its services, or raise complaints, it demonstrated its willingness to hear from the resident individually. Therefore, the landlord was not excluding her from being able to engage with it.
  6. Each lease governs the landlord’s responsibilities and how it calculates service charges, which vary from resident to resident. Therefore, its explanation that it had considered a panel but was pursuing alternative routes at this stage was reasonable.
  7. Therefore, based on our findings, we find no maladministration with this complaint point.

Complaint handling

  1. At the time of the resident’s complaint, the landlord operated a 2–stage complaint procedure. Its relevant policy said it would acknowledge a complaint within 2 working days. At stage 1 it would provide a response within 10 working days and within 20 working days at stage 2.
  2. The relevant complaints policy states that the landlord will respond within 10 working days of the date of the resident’s complaint, “unless there is a good reason,” it may take longer than this. In such cases, the landlord’s policy says it will explain this to the resident and not exceed a further 10 working days unless it first agrees an additional extension with the resident. This is appropriate and demonstrates the landlord’s complaints policy was in line with the Housing Ombudsman’s Complaint Handling Code (the Code), 1 April 2022.
  3. However, paragraph 1.2 of the Code (1 April 2022) states that a complaint is an expression of dissatisfaction however made. It is clear from the resident’s correspondence on 27 November 2022 that she was unhappy with the service provided by the landlord. Therefore, it should have treated this as a complaint and responded accordingly. Not doing so was not appropriate. By not registering her complaint until 6 January 2023, the landlord did not act in line with the expectations of the Code.
  4. The landlord’s complaint handling failures between 27 November 2022 to 11 April 2023 include:
    1. Not acknowledging the resident’s complaint in line with its complaints policy timescales.
    2. Failing to record the residents original complaint at stage 1 of its ICP on 27 November 2022.
    3. Delay to provide the resident with a stage 1 response.
    4. Failing to agree and extension date with the resident to provide a response.
    5. Delay in the escalation of the resident’s complaint to stage 2 of its ICP.
    6. Failure to appropriately address or remedy the resident’s request for service charge information.
    7. Failing to demonstrate learning from outcomes.
  5. The landlord does not dispute that there were failings in its handling of the resident’s complaint. While it offered redress during both its stage 1 and 2 responses, it revisited the question of compensation on 8 March 2024. This came following our intervention.
  6. Given the identified delays and communication failures, it was reasonable that the landlord revisited its stage 2 final response and compensation offer. In doing so, it offered an additional £200 specifically to recognise its complaint handling failures. This increased its compensation for complaint handling failures to £235.
  7. It also identified learning and reassured the resident of action it had taken to prevent similar situations happening again. This included:
    1. Increased the number of complaint handling staff to reduce complaint handling delays.
    2. Delivered organisation wide complaint handling training to provide updated guidance and ensure it manages complaints in line with the Code. It was also committed to delivering further training following the introduction of the statutory Code in April 2024.
    3. Introduced a mandatory complaint handling training schedule for all complaint handling staff to ensure consistency. It would deliver this from 1 April 2024.
    4. Reviewed its approach to remedies against orders made by the Ombudsman. This was to ensure it fully considered the personal impact of complaints to residents or the household.
    5. Revised its service charge policy in April 2023. And since the time it investigated the resident’s complaint, it had provided refresher training to its rent and service charge team on how to correctly apportion the costs across its schemes to prevent similar failings.
  8. It was fair for the landlord to apologise, demonstrate learning, and revisit its offer of compensation. However, as explained in the complaint above, in such circumstances, our outcome guidance is clear that a finding of reasonable redress cannot therefore be determined.
  9. As such, we find maladministration with the landlord’s complaint handling and we order it pay £235. This is made up of its stage 1, stage 2, and post ICP compensation offers.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration with the landlord’s administration of the resident’s service charge account.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration with the landlord’s response to the resident’s request for a leaseholder panel.
  3. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration with the landlord’s complaint handling.

Orders and recommendations

Orders

  1. We order the landlord to take the following action within 4 weeks of the date of this report. The landlord must provide us with evidence that it has complied with these orders:
    1. Pay the resident £585 compensation. The landlord can deduct the full sum of £585 if already paid. The compensation is made up of:
      1. £350 for the time, trouble, distress, and inconvenience caused by the landlord’s administration of the resident’s service charge account.
      2. £235 for the time, trouble, distress, and inconvenience caused by the landlord’s complaint handling.

Recommendations

  1. The landlord should consider issuing a customer satisfaction survey to the block. This will provide an opportunity to assess how things are now and whether further improvements are necessary.