Orbit Group Limited (201908846)

REPORT

COMPLAINT 201908846

Orbit Group Limited

24 June 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:
   1. The landlord’s contractors not making appointments prior to attending the property to complete repairs.
   2. The level of rent and service charges.
   3. The landlord’s response to the resident’s complaint about the conduct of an officer during a visit to his home.
   4. The information provided by the landlord in relation to service charges.

Jurisdiction

2. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.

The landlord’s contractors not making appointments prior to attending the property to complete repairs.

3. Paragraph 39(a) of the Scheme says that the Ombudsman will not investigate complaints which are made prior to having exhausted a member’s complaints procedure.
4. The issue that the resident raised about contractors attending the property unannounced to complete repairs were not part of the resident’s formal complaint to the landlord. Therefore, this Service will be unable to investigate this aspect of the complaint, in line with paragraph 39(a) of the Scheme. The resident has written to this Service to advise that the landlord was aware that it should contact him to arrange appointments. However, as previously advised by this Service on 22 March 2021, the landlord needs to be given the opportunity to fully address these issues as part of its formal complaints procedure, before this Service can investigate.

The level of rent and service charges.

5. In line with paragraph 39(g) of the Scheme, the Ombudsman will not investigate complaints which concern the level of rent or service charge or the amount of the rent or service charge increase.
6. The resident has complained about the level of rent charged by the landlord, in particular its decision not to reduce his rent by 1%. He also remains unhappy with the level of service charges. In line with paragraph 39(g) of the Scheme, this Service is unable to investigate these aspects of the complaint. This Service can, however, investigate whether the landlord’s handling of the resident’s request for information about the service charges was reasonable.
7. If the resident wishes to dispute the actual charges themselves, as advised by this Service on 12 April 2021, the First-Tier Tribunal (Property Chamber) may be able to assist him. The First-Tier Tribunal considers disputes about the reasonableness of, or liability to pay rent or service charges.

Background and summary of events

8. There are two names on the tenancy agreement for the property, and both residents have been involved in this complaint. They are collectively referred to as ‘the resident’ in this investigation. Their home is a bungalow, which has its own private garden.  There is a service charge element in the rent the resident pays.
9. On 27 February 2019 the resident wrote to the landlord. He said that he had previously requested a detailed breakdown of his service charges and was sent a budget statement, which he was not satisfied with. The resident asked for further information regarding the charges for management and grounds maintenance. He said that he maintained the garden outside of his property, and asked the landlord to clarify which areas were covered by the charge and how often the grounds maintenance was carried out.
10. On 29 March 2019 the landlord responded. It explained that it previously charged a variable percentage fee to cover management fees, but it reviewed the costs involved in managing the calculation of service charges and found that the fee was not sufficient. Because of that, a fixed management fee was put in place in April 2017 (dependent on the services and tenure of residents). Due to the resident’s property being on a new development, the fixed management fee did not commence for him until April 2018. The landlord explained that the management fee went towards the costs of the service charge team, elements of the finance team, the building services team, the estate services team, and the associated costs such as IT and general office costs. It provided examples of functions that the management fee covered, such as: managing customer accounts, preparing budgets, and inspecting estates and blocks. The landlord advised the resident that its estates team would contact him regarding the grounds maintenance.
11. On 11 April 2019 the resident advised the landlord that he had not been contacted by the grounds maintenance team.
12. No evidence has been provided of the landlord’s estate team contacting the resident regarding the grounds maintenance charges.
13. The landlord wrote to the resident on 12 June 2019 regarding his “recent query regarding service charges”. It is not clear if the query that the landlord referred to was the resident’s email of 11 April 2019. The landlord attached its email of 29 March 2019 and said that it understood that the resident’s queries had been responded to. It attached the 2019-20 budget statement and 2017-18 end of year actual statement to show the services which the resident paid for.
14. On 28 September 2019 the resident wrote to this Service. He was unhappy with the landlord’s handling of several issues, including his requests for information on his service charges.
15. The landlord visited the property on 3 October 2019 and completed a ‘tenancy audit form’.
16. On 4 December 2019 the resident wrote to this Service regarding the conduct of the landlord’s employee, who arrived without notice to complete the tenancy audit.
17. On 13 February 2020 the landlord wrote to the resident and provided a copy of his ‘standard’ service charge statement for the period of 1 April 2020 to 31 March 2021. It also provided an additional statement for budget costs for the previous and current year, along with any variance in the budget, and commentary about the services.
18. Following contact from the resident, this Service contacted the landlord on 14 June 2020 to confirm that we had received a complaint from the resident about the behaviour of a member of staff when carrying out a tenancy audit check, and the landlord’s failure to provide explanations regarding the services charges. We asked the landlord to contact the resident within three weeks to advise the status of his formal complaint, and when it would respond by. The landlord replied on 15 June 2020 that it did not have a complaint open for the resident, and would contact him to log the details of this.
19. Following further contact from the resident, this Service asked the landlord, on 5 October 2020, to engage with him about the issues he raised and respond to the complaint within five working days.
20. The landlord responded to the complaint on 8 October 2020. It confirmed that the last tenancy audit check was completed on 3 October 2019, and it was unaware of any issues arising from it. Nonetheless, it said it could not investigate the matter due to the length of time that had passed. It also confirmed that the 2017-18 actual service charge budgets, and the 2019-20 predicted budget were sent to the resident by email on 12 June 2019. 
21. The landlord concluded that it had previously responded to the resident’s enquiries within a timely manner, but it had failed to respond to the complaint in a reasonable timeframe. The landlord said it would pass this feedback onto its complaints team, to ensure that complaints were responded to within the agreed timescales, and offered the resident £50 compensation.
22. On 12 November 2020, the resident wrote to the landlord and asked it to escalate his complaint. He felt that the landlord’s response was inaccurate, did not resolve the issues he had raised, and he was unhappy with the offer of £50 compensation.  The landlord acknowledged the resident’s letter on 23 November 2020 and asked to discuss it.
23. The landlord sent its final response to the complaint on 16 December 2020. It confirmed that, during a call with the resident, he said that he remained unhappy with several things, including the behaviour of an employee during his tenancy audit and the landlord’s failure to fully explain his service charges.
24. The landlord explained that, as the tenancy audit was completed over 12 months before, it was difficult for it to confirm exactly what happened. It explained that, in line with its policy and procedure, tenancy audits are attended without notice as these were used to check its records were up to date and to help prevent fraud. It was, however, up to the resident if he provided access at that time. The landlord confirmed that its previous response did not fully explain this. It apologised for the omission, and for any distress and inconvenience caused.
25. Additionally, the landlord confirmed that it had previously sent the resident budget and ‘actual service charge’ accounts; however, these did not detail exactly what works were done for these charges. The landlord explained that the works it completed for the grounds maintenance charges included general duties, grass cutting and edging, weed control, hedge trimming, tree maintenance, shrub/plant pruning and winter works. It confirmed that it attended approximately every 14 days, weather and season dependent, to do this.
26. The landlord offered the resident a total of £650. This included £250 for the overall poor complaint handling, £50 for failure to provide a breakdown of what services were completed for the service charge, £100 for the distress and inconvenience caused by the matter, and £250 for its handling of other issues raised in the complaint.

Assessment and findings

27. The resident raised several points of complaint which were resolved by the landlord’s final complaint response, as part of his original complaint. These include the landlord’s handling of his request for a refund of £240 for bedroom tax, repairs to the property’s guttering, and decision to send a notice of seeking possession letter. The resident sent this Service an annotated copy of the final response, in which he highlighted what issues were outstanding. The scope of the investigation, and complaint definition have been based on that correspondence.

 The landlord’s response to the resident’s complaint about the conduct of an officer during a visit to his home.

28. The resident’s tenancy agreement states that “We will give you the keys to your home at the start of the tenancy and we will not interrupt your right to live there peacefully whilst the tenancy continues” and “We will seek to enter your home during the tenancy should we need to carry out an inspection of its condition…You must give us access for this purpose on reasonable notice.” It also says that “From time to time we may ask you to prove to us that your home is currently occupied by you and your family and that it has not been unlawfully sublet.”
29. The landlord’s tenancy audit procedure explains that it will schedule audits of its properties each year. These involve completing home visits and checking and recording several things, including who is in occupation; whether there is any evidence of subletting, fraud, or other illegal activity; to assess the condition of the property; and to ensure that the landlord’s records are up to date. If there is no response, a calling card will not be left for the resident as future visits will be unannounced. It also confirms in the landlord’s tenancy fraud policy that these visits will be unannounced and will require residents to prove their identity.
30. The procedure recognises that, as residents are not informed of the visit in advance, there may be occasions when they refuse access. It notes that most of the landlord’s tenancy agreements state that access is to be given on 24 hours’ notice; therefore, it cannot insist on gaining access unannounced. The procedure, however, says that the officer attending should explain to the resident that “this is a routine process, their compliance would be appreciated and if they do not allow access further attempts will be made”.
31. The resident has made it clear that the officer’s unannounced visit caused him distress and inconvenience. The landlord provided an explanation for the visit, in line with its tenancy audit procedure, and tenancy fraud policy. It explained that the resident could have declined access when the staff member visited, in line with the tenancy agreement. Because the landlord’s explanation was in line with the relevant policies and procedures, and tenancy agreement, this was reasonable.
32. The landlord acknowledged that it could have provided further information on its tenancy audit procedure at an earlier stage of its complaints investigation; for example, why it needed to attend unannounced. It offered an apology and compensation (towards the overall complaint handling and distress and inconvenience caused) as an attempt to put things right, which was proportionate and therefore reasonable to the shortcomings in its initial response.
33. The landlord took adequate steps to investigate the resident’s concerns by checking its records and speaking to the staff member involved. The landlord was unable to identify any issues being raised at the time of the tenancy audit visit, but nonetheless acknowledged and apologised for any distress and inconvenience caused to the resident.
34. The actions taken by the landlord in response to the complaint (an apology, compensation, and provision of further information about the tenancy audit procedure) were proportionate and reasonable.

The information provided by the landlord in relation to service charges.

35. In line with the resident’s tenancy agreement, his weekly rent includes a variable service charge. The landlord is entitled to recover payment of both the rent and other charges in the same manner as if they were all rent. The tenancy agreement says that the variable service charge is calculated based on how much the landlord expects the services provided to cost during the financial period, considering the reasonable costs incurred during the previous year, estimates for future years, and allowing for any surplus or deficit from the previous accounting periods. The landlord may vary, add to, suspend, or cancel any service charge items.
36. The landlord’s service charge policy confirms that it levies a service charge towards the costs of services, insurance, general maintenance, repairs, or reserve and sinking funds. A management fee will also be included and is based on the services provided to each development.
37. The policy says that the landlord will ensure that residents paying service charges are aware of the procurement arrangements for their scheme or development, and the standards to which the contractor or service provider should be working. The policy says that the landlord will manage service charges in a transparent way, compliant with all statutory obligations to provide annual service charge statements and accounts, and will provide residents with clear up–to–date information. This information can include budgeting and accounts information and bespoke information relevant to each scheme and, if applicable, each property.
38. The landlord’s service charge procedure says that, following receipt of a query, it has ten days to make initial contact with the resident. This will either be with a resolution of the query or an update. The landlord’s complaints policy says that it aims to fully respond to complaints within ten workings days and where there are future actions needed to resolve a complaint, it will agree this with residents.
39. There were some shortcomings in the landlord’s response to the resident’s queries about the grounds maintenance charges, in particular. For example, when querying the charges, the resident specifically asked what area the grounds maintenance covered because he was responsible for his own private garden, and the landlord does not appear to have addressed this. The landlord also did not respond to the resident’s query of 27 February 2019 with an update or response until 29 March 2019, which was outside of the timescale of ten days given in the landlord’s service charge procedure. It did not follow up on nor contact the resident regarding his query about the grounds maintenance charges until the resident pursued a complaint regarding the matter.
40. In addition, the landlord unreasonably delayed in responding to the complaint, raised in June 2020, until four months later. This was outside of its complaint response timescales.
41. However, the landlord’s overall response to the resident’s requests for information on his service charges was a reasonable attempt to resolve his queries. The landlord provided the resident with information on the budgeted and actual accounts for the estate grounds maintenance and management fees. It has also provided information about the kind of work carried out for the estate grounds maintenance, and the purpose of the management fee and why it is charged the way that it is.  The information provided was in line with the landlord’s service charge policies and procedures, and appear to be in line with the tenancy agreement which says that the landlord may vary the service charges.
42. The landlord has also taken steps to address its delays in responding to the resident’s queries about his service charges and his subsequent complaint. It has acknowledged and apologised for these failures; offered to compensate the resident a proportionate amount, in line with this Service’s remedies guidance; and attempted to resolve the resident’s query by providing more information on the grounds maintenance charges. This was a reasonable attempt by the landlord to resolve the complaint.

Determination (decision)

43. In accordance with paragraph 55(b) of the Scheme, the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, satisfactorily resolves the complaint about:
    1. the landlord’s response to the resident’s complaint about the conduct of an officer during a visit to his home.
    2. the information provided by the landlord in relation to service charges.

Reasons

44. The landlord’s employee visiting the property, unannounced, to complete a tenancy audit was in line with its tenancy audit policy and tenancy agreement. While the landlord was unable to substantiate the resident’s complaint about the conduct of its employee, it provided further policy information, apologised for any distress and inconvenience caused, and offered compensation towards this. It has also apologised for any delay in providing the resident information regarding the purpose of the visit. This was a reasonable attempt to resolve the complaint.
45. The landlord made a reasonable attempt to resolve the resident’s queries about his service charges, and his subsequent complaint, by providing the service charge budgets and accounts and explaining how the service charges were used. It has provided a reasonable level of compensation and an apology for its delay in providing these details, and in responding to the subsequent complaint.

Recommendation

46. Because there appears to still be some confusion surrounding what area the landlord completes ground maintenance to, it is recommended that the landlord consider writing again to the resident to provide an explanation on this point, making clear, if necessary, which parts of the estate are communal areas it maintains and is responsible for.