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The Riverside Group Limited (202317321)

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REPORT

COMPLAINT 202317321

The Riverside Group Limited

27 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

  1. The complaint is about the landlord’s handling of the administration of, and queries regarding, service charges.

Background

  1. The resident was the assured tenant of the property, which is a one-bedroom flat within a retirement living scheme. The landlord is a housing association. The resident has been supported by her son, as her representative, throughout her complaint to the landlord, with this Service, and following her death. He will also be referred to as the resident in this report for ease of reading.
  2. During a residents’ meeting with the landlord on 24 March 2022 the landlord said it had arranged for a supplier to visit to discuss options for replacing the communal laundry equipment. In a letter to all residents on 12 April 2022, the landlord said this had taken place on 4 April 2022. It wrote to all residents again on 22 April 2022 with a copy of the quote it had received to lease the laundry equipment and asked if they consented to this. Between 24 and 25 April 2022 the resident asked the landlord for details on the cost to residents and the landlord replied. It said it was a leasing agreement but that it would own the laundry equipment after 3 years, with the cost to residents spread over 8 years at 85 pence per week per property.
  3. On 27 April 2022 the resident emailed the landlord to ask it why laundry equipment was not part of its depreciation policy similar to boilers or central heating systems. He also asked if other funds could be used to pay for it rather than charging residents. The landlord provided 2 holding responses and then replied on 27 June 2022, to explain its “usage model” of charging, which it said it would use for the new laundry equipment following the consultation. The resident emailed the landlord to ask further questions about funding on 15 July 2022. He also asked it for information about its financial support scheme on 28 July 2022.
  4. The landlord wrote to all residents on 19 August 2022 to consult them on the leasing options for the new laundry equipment. It presented 2 options with different costs and asked for their preference. The resident emailed it on 23 August 2022 to ask further questions about how it administered the service charges. It provided a partial response on 31 August 2022 and said it had received feedback from its consultation. The resident asked it further questions on 7 September 2022. He asked again about its financial support scheme on 19 September 2022 and told it on 2 October 2022 it had not replied.
  5. On 2 October 2022 the resident asked to make a stage 1 complaint, which was about the landlord’s lack of response and partial responses to his emails. The landlord acknowledged the complaint the following day and then offered to visit the resident to discuss his complaint, and other complaints he had made, as it said there was some confusion about these. On 7 November 2022 the resident told the landlord that, while it had responded to his complaint on 1 November 2022 (not provided to the Ombudsman), it had not raised his other complaint. The landlord raised and acknowledged a new stage 1 complaint on 15 November 2022. The landlord provided its stage 1 response on 22 November 2022, in which it:
    1. Explained it had not previously raised the complaint due to confusion between the previous complaint, other complaints, and questions he had asked it.
    2. Answered the resident’s questions that he asked within his email of 7 September 2022.
    3. Explained why it could not use other funding sources, or discretionary funds, to pay for the new laundry equipment.
    4. Said as it was leasing the laundry equipment it would not be using the usage model of charging it had previously described.
    5. Explained the difference in its original costing of 85 pence per week, with the options it offered during the consultation of £1.35 or £3.60 per week, due to the first being the cost of purchase and the others being the cost of leasing over different periods. It explained it leased all laundry equipment across all its applicable estates.
  6. The resident asked to escalate his complaint on 4 December 2022. He said his questions had not been fully answered. The landlord provided its stage 2 response on 23 December 2022, in which it:
    1. Explained that decisions about the Social Landlord’s Discretionary Reduction of Service Charges would be a board level decision, which cannot be taken estate by estate. However, it did have a financial support scheme for residents who needed assistance.
    2. Said it could not offset the cost of the new laundry equipment against previous service charges paid, as those were for the previous equipment.
    3. Explained the benefits of leasing laundry equipment rather than buying it.
    4. Admitted there had been an error in its service charge budget document it previously provided and said it would remove a charge and re-issue it.
  7. On 30 December 2022 the resident emailed the landlord to ask further questions, following its stage 2 response. The landlord replied to these questions on 20 January 2023.

Assessment and findings

Scope of investigation

  1. The Ombudsman’s Dispute Resolution Principles are to be fair, put things right and learn from outcomes. This Service will apply these principles when considering its decisions. However, some matters fall outside of what the Ombudsman can make a determination on.
  2. Under paragraph 42.d of the Scheme, the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, concern the level of rent or service charge or the amount of a rent or service charge increase. If a resident wishes to challenge the amount of their service charge, they may do so by making an application to the First Tier Tribunal (FTT). The FTT also decides whether service charge costs have been reasonably incurred and if so whether the standard of any services for which the costs are charged is reasonable. Therefore, the Ombudsman cannot determine the reasonableness of amounts charged but can consider the landlord’s administration of service charges.
  3. The resident has also told the Ombudsman about other concerns and queries he has about the landlord’s handling of service charges after the end of its complaints process. Under paragraph 42.a of the Scheme, the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, are made prior to having exhausted a member’s complaints procedure. Therefore, this investigation has solely focused on matters raised as part of the complaint the landlord has responded to.

 

The landlord’s handling of the administration of, and queries regarding, service charges

  1. Under the tenancy agreement the resident paid a variable service charge. Under clause 6.4.3 the landlord can vary, add, or remove, charges for services it provides. It will notify the resident of proposed variations and consult before making any changes. Under its service charge policy, the landlord will administer service charges in a fair, reasonable, transparent and consistent way.
  2. When the landlord decided to replace the laundry equipment, which the resident estimated to be 40 years old, it started a consultation process in line with its obligations under the tenancy agreement. It arranged a visit to the estate by its supplier to answer residents’ questions about proposed new laundry equipment, which was positive. It then wrote to residents about the proposal. However, the information it gave could have been clearer, which led the resident to ask it for better information. The landlord replied promptly, however, the responses it gave initially were changed later in the process. Its initial provision of information was inaccurate which was a failing.
  3. Positively, the landlord consulted residents again in August 2022 and provided more detail and information about the cost of each proposed option. It gave residents the opportunity to have their say which was in line with its obligations under the tenancy agreement, was fair and transparent in line with its policy.
  4. Throughout the consultation period, and complaints process, the resident asked the landlord multiple questions across several emails. There were delays in providing responses. The landlord took 2 months to reply to the resident’s email sent on 27 April 2022. While there is no response timeframe set out within its service charge policy, a delay of this length was not reasonable. It did not reply to his later emails which led to the stage 1 complaints, where the landlord accepted it had become confused about those questions it had and had not responded to, and which had been included within his complaints. This was a failing and the result of its delays in responding. It also failed to respond on 3 occasions when asked about its financial support scheme.
  5. Within its stage 1 response the landlord answered the questions the resident had raised. Its response regarding its usage model of charging was confusing, and it contradicted its previous responses, meaning the information it had provided about how it would charge for the new laundry equipment was not clear. It did however explain the difference between its initial quoted weekly charge and later consultation amounts. Within its stage 2 response it also appropriately accepted it had made an error in a document it provided and said it would correct this.
  6. As set out above, the Ombudsman cannot determine whether the landlord’s decision on how to charge for the new laundry equipment was reasonable, as this would be for the FFT. This includes its decisions around discretionary reductions, or use of other funds to pay for the equipment. Considering its administration of the new charge for laundry equipment the landlord followed its obligations under the tenancy agreement. It also, within its complaint responses and consultation approach, followed its policy in being transparent and consistent about how it leased and charged for laundry equipment.
  7. However, there were failings in the landlord’s communication. It did not respond promptly to the resident’s enquiries and provided incorrect or contradictory information at times. Therefore, there was service failure. To reflect the inconvenience, time and trouble caused to the resident, an order had been made that the landlord pay £100 compensation, which is in line with our guidance on remedies.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was service failure in relation to the landlord’s handling of the administration of, and queries regarding, service charges.

Orders

  1. Within 4 weeks of the date of this report, the landlord is ordered to:
    1. Provide a written apology to the resident’s estate for the failings detailed in this report.
    2. Pay directly to the resident’s estate £100 compensation to reflect the inconvenience, time and trouble caused by its failings.
    3. Confirm compliance with these orders to this Service.