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Aldwyck Housing Group Limited (201907614)

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REPORT

COMPLAINT 201907614

Aldwyck Housing Group Limited

15 February 2021


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 service charges added to the resident’s rent account by the landlord.
  2. The Ombudsman has also considered the landlord’s handling of the resident’s complaint.

Background and summary of events

Background

  1. The resident has been an Assured Non-Shorthold Tenant, in respect of the property, since 12 October 1998.
  2. The property is a two-bedroom terraced house.
  3. The resident’s concerns with the landlord’s application of service charges date back as far as 2007.  On 7 August 2007 the landlord explained, in its stage one response to the resident’s complaint at that time, that the resident would be excluded from any further charges payable for its gardening contract. The contractors therefore would not maintain the areas to the front or side of her property.

Legal and policy frameworks

Complaints policy

  1. The landlord has provided this Service with a copy of its complaints policy. This outlines the landlord’s three-stage process and indicates that:
    1. At stage one of the complaints process, a manager in the area concerned will investigate the complaint and offer a response within 25 calendar days of the complaint being received.
    2. At stage two, if the resident remains dissatisfied, a response will be provided by a Head of Service or Director within 14 calendar days.
    3. At stage three, if the resident is still unhappy and wish to request an appeal, they will be notified of the outcome within 40 calendar days.

Summary of events

  1. On 22 February 2019 the landlord issued the resident with a Notification of Rent Review (NRR) letter informing her that there would be changes to her rent and other charges as of 1 April 2019. It explained that the total charge would change from £90.61 per week to £90.50. This new amount was made up of a reduced rent cost of £89.70 plus a service charge of £0.80 a week (amounting to £41.60 annually).
  2. On 27 February 2019 the resident responded. She explained that service charges for Gardening Services should not be added to her account and wished to know why these had been added irrespective of the agreement that she had in place [as of 7 August 2007]. With this, the resident wished to know why this was the only time the landlord had included details of the service charge in the rent breakdown. She stated that she had previously asked for this and had been ignored.
  3. The resident asked the landlord to confirm that she had not been charged for Garden Services since 2006 and to provide the NRR letters from 2006 which included the service charge breakdown of costs.
  4. On 6 March 2019 the landlord wrote to the resident following her enquiry. The landlord explained:
  1. It had introduced a new administrative system which laid out financial information more clearly. It recognised that in the past there had been lots of different suppliers, and that charges were inconsistent, varying from location to location.
  2. In reviewing the service charges, it was noted that the removal of the gardening charge was an error as the gardeners maintained the communal lawn, bushes, and hedges, as well as undertaking litter picking and removing fly tipping. The landlord stated that it had not retrospectively charged the resident, but had added the gardening charge going forward.

 

  1. On 12 March 2019 the resident wrote to the landlord requesting that her correspondence be considered at stage two of the landlord’s process. She requested:
  1. Evidence that she had been notified of a new administrative system which she was now being charged for.
  2. Confirmation of the companies which carried out the above services as she stated she had never seen any cleaning or litter picking since 2005. She requested the dates that this had taken place.
  1. The resident explained that the charge was removed for the foreseeable future, following her earlier complaint, as the contractors were not cutting the lawn properly. She stated that the removal of the service charge had not been an error and she would not be paying it.
  2. With no response, the resident re-sent this letter on 5 April 2019.
  3. On 10 April 2019 the landlord confirmed that the complaint had been passed to the Service Charge Team for investigation.
  4. On 27 June 2019 the resident contacted the Housing Ombudsman Service. She explained that she had written to the landlord but had received no response.
  5. The Ombudsman contacted the landlord on 11 September 2019 and encouraged the landlord to offer a response by 2 October 2019.
  6. On 30 September 2019 the landlord wrote to the resident. It apologised that it had not provided the resident with a formal complaint response and explained:
  1. It had looked at the history of garden charges which seem to have been ongoing since 1998. The landlord noted that the resident had received various letters confirming that she would not be charged and at other times, refunded, but she was advised [in March 2019] that she would need to pay going forward.
  2. It would continue to exclude the resident from the charges and although it would not amend the estimate for 2019/20, a credit of £48.60 would be added to the resident’s account to cover the cost of this.
  3. It would ensure gardening costs were not included in the future.
  1. On 2 March 2020 the landlord provided the resident with a NRR letter for the period 2020-2021 indicating that the rent would be increasing from £90.50 to 99.12 per week. This included a service charge of £0.80 which would be increasing to £7 per week.
  2. Following contact from the resident on the previous day, on 27 March 2020 this Service contacted the landlord. It was explained that the resident was still dissatisfied, and the landlord was encouraged to offer a breakdown of the service charges dating back to 2008. This service requested that the landlord provide the resident with a response at the earliest opportunity.
  3. The landlord acknowledged receipt of this on 8 April 2020 and confirmed that a response would be provided with 20 working days.
  4. The Ombudsman notes that on 20 April 2020 the landlord emailed the resident with a response. The Ombudsman has not had sight of this response however, following conversation with the resident, this Service informed the landlord that the resident remained dissatisfied. The landlord was provided with additional clarification on the points she sought answers to, namely:
  1. A breakdown of all her rent and service charge statements from 2006 onwards as the resident was concerned that she had been incorrectly charged between 2006 and 2019.
  2. Reassurance that this would not happen again
  3. Compensation for stress and inconvenience.

The landlord was encouraged to offer a final response by 6 May 2020.

  1. On 6 May 2020 the landlord wrote to the resident at stage two of its complaints procedure. It stated:
  1. It had attached copies of the resident’s rent and service charge estimates. Some records were missing however it would seek to establish whether manual records existed when it returned to the office.
  2. It had seen correspondence going back to 2006 confirming that the resident would not be charged for grounds maintenance services. The landlord stated that it would arrange for the resident’s rent account to be adjusted, to remove all service charge costs and the adjustment would equate to £1,151.69. It stated that as the rent account had been in arrears of £758.50, the remaining credit would be returned to her.
  3. The resident would not be charged for ground maintenance costs in the future.
  4. It acknowledged that it had taken some time to deal with the issue, and in recognition of this, would offer £100.
  1. On 17 June 2020, following earlier letters in May and June 2020, the landlord wrote to the resident and explained that £1,353.22 remained outstanding on her rent account.
  2. On 1 July 2020 the resident contacted this Service and explained that she had written to the landlord on 26 May 2020. The Ombudsman has not had sight of this letter. She informed this Service:
    1. She had asked the landlord to credit her account with the £1,159.69 owed to offset the arears amount of £758.50 however this was ignored. Instead, she received several letters with the arears increasing.
    2. The amount overcharged [£1,159.69] was incorrect as it should have been higher to include £671.81 that was charged in April 2016 – March 2017. She stated that the document which was sent for the same period suggested there was no charge. She added that she still had not received the outstanding documents.
    3. She had enquired about the number of weeks that the arears of £758.50 covered, but this had not been done.
    4. She had calculated the weekly rent amount she was being charged based on the arrear letters she had been sent and it appeared she was still being charged for gardening and other services. She therefore concluded that the landlord had been dishonest in its final response letter.
    5. She had not received the compensation offered.
    6. She was displeased that the landlord had contacted Universal Credit (UC) to obtain her rent payment direct. She stated that the landlord had been manipulative by informing UC that she had been two months in arrears, but had not credited her account with the amount it had overcharged.
  3. The resident therefore requested that the outstanding documents be sent to her; a copy of the NRR document for the period April 2016-March 2017; details of the amended weekly rent; that the overcharged amount was reflected on to her account; the offer of compensation; and a copy of the letter sent to UC.
  4. On 9 July 2020 this service contacted the landlord and informed it that the resident had agreed to attempt to resolve the issue via Alternate Resolution / Early Resolution (AR/ER). The resident’s above concerns [reported on 1 July 2020] were also shared.
  5. On 22 July 2020 the landlord wrote to the resident. It acknowledged that the resident had opted to resolve her issue via AR/ER and noted in response to the outstanding matters:
  1. It had provided service charge statements dating back to February 2012.  It did not hold records which dated back further than this but had revisited the rent charges from 2006 and attached a table breaking down the dates, number of weeks, weekly rent, weekly service charges and total service charges.

 

  1. From May 2006 to present it had charged the resident £1,180.72 in service charges. It noted that it had attempted to resolve this at various times in the past, and had credited £347.36 back in an attempt to rectify the problem. The landlord stated that to ensure transparency, however, the full amount would be credited to her account, bringing the resident’s outstanding arears of £1,749.70 to £568.98.

 

  1. The service charge for 2020/21 would be removed and therefore the resident would only pay £92.12 a week.

 

  1. As the resident had not paid rent since February 2020, it had applied to UC for direct payment of her housing costs and arrears in June 2020. The landlord stated that it would cancel this request if the resident preferred that it did not contact UC directly to obtain this payment.

 

  1. An offer of £100 compensation had been agreed. Usually this would be paid to the rent account where there were arrears, however the landlord was prepared to pay this directly to the resident. The landlord apologised for the confusion with the service charges.

 

  1. On 27 July 2020 the resident wrote to the landlord. She stated:
  1. Within the table enclosed in the landlord’s letter, the service charge was shown as £0.00 for the period 2016/17. This was incorrect as she held a statement for the same period and the statement confirmed that the account charged was £671.81.
  2. She wished to see proof of the £347.36 that had been credited to her account.
  3. The landlord had also ignored her request for a breakdown of rent charges from February 2020 to July 2020. She wished to know what she had been charged each week to account for the arrears figure of £758.50 and the arears figure of £1.749.70. She questioned whether this arears figure took into account the £436.35 paid by UC on 20 July 2020.

 

  1. The landlord had ignored her request to credit the overcharged amount of £1,151.69 (as indicated in the letter on 6 May 2020) to her account. She added that the letter dated 22 July 2020 now indicated that the amount owed was £1,180.72 – an increase of £29.03 without any explanation for the increase. She stated that this needed to be recalculated to include £671.81 for 2016/17.

 

  1. She was displeased that the landlord had informed UC that she had been £1000+ in arears in order to confirm direct payments, however failed to declare the amount owed to her. She explained that she did not want the payments to be paid directly to the landlord and requested that this arrangement be cancelled.

 

  1. Several service charge statements were missing from the bundle of documents she had been sent. She requested statements from March 2006 to March 2013 as well as April 2017 to March 2019.
  1. On the same day, the resident submitted her form, accepting the £100 compensation offered.
  2. This Service contacted the landlord on 11 August and advised that the resident was still dissatisfied. The landlord agreed to provide a final response by 21 August 2020.
  3. On 21 August 2020 the landlord wrote to the resident. The landlord thanked the resident for her letter dated 27 July 2020 and confirmed that it was received on 8 August 2020. The landlord:
  1. Apologised as it claimed it had sent the resident a copy of a reconciled service charge statement for April 2016-March 2017 previously. This subsequently showed a charge however the charge was not applied to her account. The landlord advised the resident to review her account and the rent review letters as these showed the actual charges. It enclosed copies of the rent review letters dating back to 2013 and a full copy of the resident’s account showing all transactions since 2006.

 

  1. Provided the resident with a summary table, showing the total amount of service charges raised had been £1,261.69 however £1,528.08 had been credited back to the resident’s account. The resident had therefore been credited £266.29 more than she had been asked to pay. The landlord noted that it had mistakenly debited the resident’s account twice in March 2011 (an amount of £79.65), and so in total, had paid the resident a surplus of £186.64 which it would not seek to recover.

 

  1. Apologised that it had applied to Universal Credit for direct deductions. It stated that this application had now been cancelled and compensation of £100 would be awarded. 

 

  1. The landlord apologised that there had been confusion and differing information provided over the years. It explained that it had now been firmly concluded that the resident would not be charged a service charge moving forward and that all the errors going back to 2006 had been rectified.

Assessment and findings

The service charges added to the resident’s rent account by the landlord.

  1. As included in the Background section of this report, in 2007 the landlord confirmed to the resident that she would no longer be charged for Gardening Services. With the exception of the correspondence sent by the landlord on 6 March 2019, the Ombudsman cannot see that the resident was advised at any point that this agreement had been rescinded. It is therefore unclear why the landlord continued to apply these charges, over several years.
  2. The Ombudsman notes that upon learning of these charges, and following receipt of an NRR letter, the resident challenged these charges on 27 February 2019. In the Ombudsman’s opinion, the landlord should have taken this opportunity to review the resident’s account / its previous agreement, and to adjust the resident’s rent account to put the resident back in the position she should have been in. Instead, however, the Ombudsman can see that the landlord informed the resident that the removal of the charge [in 2007] had been a mistake. In the Ombudsman’s view, this was inappropriate and contrary to the resolution previously proposed.
  3. On 12 March 2019 the resident highlighted to the landlord that she had previously been informed that charges would be removed for the foreseeable future. The Ombudsman notes that this was recognised by the landlord in its stage one response [on 30 September 2019] and as well as offering the resident a refund for the period 2019/20, the landlord confirmed that gardening costs would not be included moving forward. Still, however, on 2 March 2020, the Ombudsman can see that the landlord wrote to the resident detailing a further cost estimate for the period 2020/21. This was unreasonable and contrary to the reassurance it had offered.
  4. As a result of the continued service charges and the resident’s subsequent loss of confidence in the landlord, the resident made several requests for a breakdown of her rent costs / service charge statements dating back to 2006 (and the accompanying NRR letters). The Ombudsman appreciates that due to the amount of information requested and with staff working away from the office, the landlord was delayed in providing this information. The Ombudsman is concerned, however, that the landlord failed to acknowledge the resident’s request and to reasonably manage her expectation with regards to the timescale. The Ombudsman notes that the resident requested a breakdown of her service charge costs as early as 27 February 2019, however the landlord failed to make its first disclosure [in part] until 6 May 2020. In the Ombudsman’s view, this length of time was unreasonable.
  5. Furthermore, the Ombudsman notes that the landlord was unable to fully accommodate the resident’s request. While the resident sought a full record of service charge statements dating back to 2006, the landlord was unable to offer records that dated back further than March 2013 and was also unable to provide details for 2017/18 and 2018/19. In the Ombudsman’s view, the records – particularly those from 2017/18 and 2018/19 – should have been accessible, and where the landlord was not able to provide this, a reasonable explanation as to why should have been offered. The Ombudsman is satisfied however, that along with the records shared on 22 July 2020, the landlord revisited the rent charges from 2006 and attached a table breaking down the dates, number of weeks, weekly rent, weekly service charges and total service charges. The landlord also, in its final response in August 2020, attached a full copy of the transactions on the resident’s rent account, dating back to 2006. In the Ombudsman’s view, this was acceptable and offered the resident the transparency she desired.
  6. The landlord did fail to offer the resident clear and consistent figures within some of its correspondence and this added to the resident’s dissatisfaction. On 6 May 2020 the landlord outlined that an amount of £1,151.69 was owed, accounting for all service charge costs previously added to the resident’s account. This figure was increased to £1,180.72 in the landlord’s correspondence on 22 July 2020 and, as the resident noted in her response on 27 July 2020, the landlord failed to provide an explanation for this increase. The Ombudsman has considered this and in the Ombudsman’s view, the landlord should have offered an explanation where the resident requested clarification.
  7. On a number of occasions, the resident raised that the charges for the period April 2016 to March 2017 were incorrect. She asserted that she had been charged £671.81 during this time however this had not been reflected on the information she had been sent. The Ombudsman has reviewed the transactions for 2016/17 and cannot see that there were any service charges during this time. Moreover, the Ombudsman is satisfied that the confusion surrounding this amount was sufficiently explained to the resident, in the landlord’s final response. 
  8. It is unclear why the landlord had not paid the amount owed to the resident’s account until 17 August 2020. This would have reduced the resident’s arrears and provided a more accurate picture of the resident’s situation. Still, the existence of an owed balance did not justify the resident’s missed rent payments. It was therefore reasonable for the landlord to apply to UC to arrange for payments to be made directly.  The Ombudsman notes that the resident was dissatisfied with the way in which the landlord did this. The Ombudsman is satisfied however, that the landlord confirmed in its final response that it had cancelled this application and offered an apology. This was appropriate.
  9. In the Ombudsman’s opinion, soon after the landlord learned that the charges should not have been applied to the resident’s account, it should have made the appropriate adjustments within good time (and offered the resident a full record of transactions). Its failure to do so resulted in an excessive level of involvement from the resident and subsequent inconvenience caused to her. The Ombudsman notes, however, that on 22 July 2020 the landlord acknowledged this and made an offer of compensation (£100) which the resident accepted on 22 July 2020. The Ombudsman is therefore satisfied that the landlord had satisfactorily recognised its failing at this point. The Ombudsman recognises that there was still some confusion and a number of outstanding queries (as seen in the resident’s correspondence on 27 July 2020). Much of this was, however, addressed in the landlord’s final response on 21 August 2020 in which it sufficiently explained (and evidenced) that the resident’s account had been appropriately adjusted. The Ombudsman recognises that along with the compensation, the resident’s account had been credited with a larger amount than had been debited and the landlord confirmed that it would not seek to recover this amount. In the Ombudsman’s view, this was fair. The landlord also provided the reassurance sought, in its final response, that the resident would not be charged moving forward.

The landlord’s handling of the resident’s complaint.

  1. While the resident considered her correspondence on 27 February 2019 to be a complaint, it was appropriate for the landlord to categorise and respond to this as a service enquiry. On 6 March 2019 however, the resident indicated that she wished for the matter to be considered as a stage two complaint and clearly expressed dissatisfaction with the landlord’s response. In the Ombudsman’s view, at this point, the landlord should have confirmed for the resident that her complaint would be considered [at stage one] under its complaints process. As per the landlord’s complaints policy, the resident’s correspondence should have been acknowledged and a response provided within 25 calendar days however Ombudsman cannot see that this was done. The Ombudsman recognises that on 10 April 2019 following a further prompt from the resident, the landlord explained that its Service Charge team would investigate the matter. Still, no response was provided until 30 September 2019. This was inappropriate. 
  2. Due to the resident’s preferred communication method and the level of involvement required by this Service (including at AR/ER stage), the Ombudsman appreciates that parts of the complaints process were slower than usual. Still, in the Ombudsman’s view, it was unclear at several points what stage of the landlord’s process the resident’s complaint was at. The Ombudsman has therefore made a recommendation below for future cases of a similar nature.

 

Determination (decision)

  1. In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, in respect of the service charges added to the resident’s rent account by the landlord, the landlord made an offer of redress to the resident which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.
  2. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was a service failure in respect of the landlord’s handling of the resident’s complaint.

Reasons

  1. The Ombudsman has arrived at the above determination as:
    1. While the Ombudsman has recognised that there was a service failure, the Ombudsman is content that the landlord took reasonable steps to restore the resident to the position she should have been in, had she not been charged. The landlord made the appropriate adjustments to the resident’s rent account and confirmed for the resident that no further charges would be applied to her account moving forward. This was appropriate. The Ombudsman is also satisfied that while the landlord was delayed in provided the resident with information she had requested, along with its final response the landlord attached a full transaction history, offering the resident transparency and a detailed breakdown of all transactions dating back to 2006. This enabled the resident to view many of her transactional queries for herself and provided assurance that any outstanding balances were correctly calculated.

The landlord’s failure to act promptly to review and adjust the resident’s rent account resulted in an unreasonable delay (of more than a year) and subsequent inconvenience for the resident. There was also a lack of clarity and accuracy in the information that had been provided to the resident, and this created further distrust and confusion. The Ombudsman is content, however, that the landlord recognised this, offered an apology, and made a suitable offer of compensation which the Ombudsman can see the resident accepted. The Ombudsman also notes that in adjusting the resident’s account, the landlord made an overpayment and confirmed that it would not seek to recover the surplus. The Ombudsman has therefore considered this, coupled with the compensation awarded, to be a fair and proportionate response. 

 

  1. In the Ombudsman’s view, the delay in responding to the resident’s complaint at stage one was inappropriate and contrary to the landlord’s complaints policy. This delayed the resident in progressing through the landlord’s complaints process and ultimately in achieving resolution. The Ombudsman notes that the resident had sent her complaint twice, therefore offering the landlord two opportunities to respond at stage one, however it was not until this Service encouraged the landlord to respond, that it did so. This was unacceptable. Additionally, and as noted above, in the Ombudsman’s opinion the landlord’s process was also unclear and this resulted in further unnecessary involvement from this Service and the resident.

Orders and recommendations

Orders

  1. In recognition of the landlord’s service failure, the Ombudsman orders the landlord to award the resident £50 to reflect its failure to act in accordance with its complaints policy.
  2. The landlord should make the above payment within four weeks of receiving the Ombudsman’s determination.

Recommendations

  1. The landlord should, where it has proposed and agreed a remedy within its complaints process [such as a removal of charges], ensure that it upholds this remedy. This may require leaving appropriate records to reflect the information on the resident’s account, allowing it to prevent later issues such as that witnessed in this case.
  2. The landlord should also ensure that it maintains appropriate records relating to resident charges and fees, and share this information with residents, within good time, upon request.
  3. The landlord should be clear, within in its complaint responses, the stage of the complaints process that the resident’s complaint is at and the available options for escalation if the resident remains dissatisfied.