Newlon Housing Trust (202007792)

REPORT

COMPLAINT 202007792

Newlon Housing Trust

15 March 2022

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. response to the resident’s reports of overheating in the property.
   2. handling of repairs to the flooring outside the property and the associated drainage issue.
   3. administration of the service charge account.
   4. handling of the resident’s reports of noise coming from the energy centre at night.
   5. handling of the associated complaints.

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.
3. In December 2019, the landlord was advised by a new managing agent that it would be handling the service charge accounts going forward. The letter set out the increases in service charge and the reasons why.
4. During June to September 2020, the resident complained to the landlord about the cost of the service charge. The landlord explained that it had no direct control over this as the costs were set by the managing agent appointed by the developer and freeholder, Barratt Residential Asset Management (BRAM), for which it had no decision on the selection. It explained that the managing agent had advised of the cost, and it had relayed this to residents via the estimated expenditure. It advised that it would contact the managing agent to relay residents’ concerns and ask for further information on the costs. It noted it would support residents to set up a Resident’s Association, which would allow them to be more involved in questioning increases and changes at the development.
5. The landlord continued to chase the managing agent for a response and advised the resident it would ask its finance team for further information surrounding the calculation of VAT. It reiterated that it had no control over the cost of service charges as it merely passed these on from the managing agent. The landlord provided the resident with the information received from the managing agent surrounding the increase in service charge.
6. The landlord explained that the managing agents billed the landlord for the entire scheme and the landlord calculated the amount payable by each block and subsequently each leaseholder. The landlord explained the process in estimating service charges and that its previous estimation for 2020/21 had been updated to include full costs provided by the managing agent. It noted there had been a previous error made by it in not including full costs in the calculations for 2019/20 and therefore this had been included for the current year. It further explained that whilst there was an increase for the year, at the time of purchase the estimated service charges for 2016/17 was anticipated to be a third more than what they currently were. It noted it was usual for service charges to increase year on year, but that the costs still represented a lower value than envisaged.
7. In March 2021 the landlord noted that an error had been made in the estimated service charge for 2021/22 and it would provide the resident with a revised letter, noting the actual estimate which was lower than the incorrect letter sent.
8. In September 2021 the landlord further explained how service charges were calculated. It noted the complications given that the managing agent operated its service charge year as November to October, whereas it operated on an April to March basis. As such, it noted it had to use a combination of invoices and budgets to calculate figures and final accounts were supplied six months after its service charge year.
9. Whilst the landlord has explained how it administers the service charge, the resident’s ultimate concern is in relation to the amount of the service charge. After carefully considering all the evidence, in accordance with paragraph 39g of the Housing Ombudsman Scheme, which states ‘The Ombudsman will not investigate complaints which, in the Ombudsman’s opinion concern the level of rent or service charge or the amount of the rent or service charge increase’, the complaint about the level of the service charge is outside of the Ombudsman’s jurisdiction.
10. Should the resident wish to pursue the matter he should seek independent advice and can also contact the First Tier Tribunal (Property Chamber), as it is the right organisation to consider the validity of service charge increases. The Ombudsman is aware that the landlord has also advised the resident of the same.
11. The resident has also asserted that the heating issues have impacted on him and his family’s health. In considering the complaint, the Ombudsman is unable to make a causal link between matters complained of and any health issues alleged by residents. This is in line with paragraph 39i of the Housing Ombudsman Scheme, which states ‘The Ombudsman will not investigate complaints which, in the Ombudsman’s opinion concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure’.
12. In considering complaints about impact to one’s health liability/negligence must be established. These are legal aspects which the Ombudsman has no basis or scope to consider. As such it is better suited for consideration as an insurance claim or through the courts. Again, the Ombudsman advises the resident to seek independent legal advice, should he wish to pursue the matter.
13. For the reasons given above, in the course of this investigation the Ombudsman will not make any further comments on the aforementioned matters.

Background and summary of events

Background

14. The resident is a shared owner of a 1-bedroom first floor flat.
15. The landlord is the vendor of the property and BRAM are the managing agents for the developers, responsible for all communal areas. Any changes to communal areas require explicit consent from BRAM.
16. The landlord’s Service Standards notes  when contacted by a resident it will always respond within two working days, give a full reply within 10 working days. It aims to respond within these timescales and the majority of enquiries will be dealt with more quickly.
17. The Complaint Policy notes the target for reviewing Stage 2 complaints is 30 days, the Panel meeting should be held within 30 days of the appeal with the documentation being sent out 10 working days in advance of the meeting.
18. The Compensation Policy notes poor service is when it has failed to provide a high quality of service in some way (e.g., failure to reply to letters, losing important documents, repeated broken appointments), a payment of £25 could be made in recognition of inconvenience caused.
19. The Lease Agreement states under the Landlord’s right of Inspection and right of Repair, the resident is to admit the landlord and its employees or agents at reasonable times to enter the Premises and examine their condition and also to take a schedule of Fixtures and Fittings in the Premises. The resident is responsible under Schedule one for internal fittings and fixtures including flooring.

Summary of events

20. Between 2017 and 2019 the resident raised the issue of overheating and low humidity in the property with the landlord. Inspections were carried out by the BRAM with the ventilation unit being fixed, vents in ceiling closed and opened and noted as working. Air handling unit settings corrected, heating controls in working order but filters identified as in need of a clean or replacement. It was highlighted that the resident’s property was above the boiler room (energy room) and communal pipes run through the flat feeding apartments above. BRAM recommended an investigation with thermal cameras on the floor and walls.
21. In March 2020, the landlord updated the resident following the work BRAM was carrying out to the energy centre beneath his property, was nearing completion. It advised that the system would be tested and commissioned. It further updated that whilst the ventilation system was operational, thermal imaging found that the temperature on the underside slab beneath the property was higher than that within the energy centre. It requested that the resident monitor the situation and it would request BRAM complete another check.
22. In April the resident demanded that the landlord do more to resolve the issues which was affecting his home life and that he had sought legal advice and contacted Watchdog.
23. The resident formally complained on 14 May, noting the landlord had been aware of the issue since 2017. He noted BRAM’s energy centre beneath his flat was causing the property to overheat and noise was emanating from the area. The complaint was acknowledged on the same day with the landlord noting that BRAM had carried out some work to the energy centre in the hope this reduced the rising heat. It queried whether this had resolved anything for the resident. It noted that due to the Covid-19 pandemic, its ability to provide full responses within its published timescales could be affected and apologised for this.
24. On 22 May, the landlord responded noting BRAM had accepted there were significant faults with the design of the property causing ventilation, heat, and humidity issues, of which it was aiming to resolve. It noted BRAM had carried out work to the energy centre, but access was needed to the resident’s property. It accepted the situation was unacceptable but that granting BRAM the opportunity to assess and confirm the situation, was reasonable. It advised that BRAM would contact the resident and sought the resident’s confirmation that he would allow the tests to go ahead.
25. The resident responded noting that he had sought legal advice and the evidence he had should be accepted. He noted compensation was required before he would grant access to fix the issue given the matter had continued for three years. The landlord noted it was vital that BRAM be provided access to consider whether works undertaken had had an impact. The landlord referenced its right of inspection under the lease. It noted if it was unable to inspect it could also not make any offers of compensation and would also seek legal advice. It asked the resident to confirm his position and that he could escalate the complaint if necessary.
26. In June the landlord noted BRAM’s contractor would attend to check the operation and airflow rates of the heating system. It would then install data loggers to take humidity readings. It explained the process and advised of the appointment date. The landlord continued to chase access to the resident’s property and reiterated that compensation would only be considered once the issues were resolved and it was unable to proceed if access was not granted, following which it would seek legal advice. The resident was angered by the landlord’s inaction and requested it explain how it would compensate for the three years and to fix the humidity issue. The landlord reiterated its position in relation to compensation and noted BRAM’s contractor had attended, replaced filters, and installed data loggers, which would have the data assessed.
27. The resident asserted that BRAM had not attended his property. The landlord later advised and apologised that BRAM’s contractor had attended the incorrect property and would reattend to complete the installation. The resident noted that the contractor attended but did not know the reason for attending and had no equipment. The resident reiterated that the actions performed were the same as had been in the previous three years, but the overheating and humidity continued. The landlord noted the resident’s frustrations but reiterated that BRAM was responsible for rectifying the defect and they were attempting to do so.
28. During July, the landlord communicated that it would discuss the findings with BRAM and its technical manager, and in order to resolve the issues BRAM and its subcontractor’s involvement was necessary. The resident later acknowledged that the errors had been caused by BRAM, but that he could not confirm whether or not the heating issue in the property had improved. He highlighted that the data loggers were yet to be installed, reiterated compensation was needed from BRAM and the property made habitable. The landlord advised that the complaint had been closed as it was unable to consider compensation until the works were completed. It noted it would reopen the complaint following this. The data loggers were later installed.
29. The resident continued to raise issues with the property and in October the landlord reopened the complaint, noting it would consider matters relating to the humidity and temperature in the property, flooding and works to the outside wall.
30.  In November the landlord apologised for the delay in responding, further noting the data loggers and survey of the energy room were being considered to determine next steps for BRAM. It noted it was chasing this but had been advised it had no right of access to the energy centre to investigate itself. It advised that the drainage issues were possibly a defect and the responsibility of BRAM, but it had raised works to resolve the blockage. It noted that as advised, in relation to any damage to the flooring from flooding caused as a result of the drainage issue, the resident would need to pursue this via the insurance arranged for the property. It reiterated its position relating to compensation. It confirmed it would continue chasing BRAM to resolve the heating and humidity issue.
31. On 16 November, the resident responded escalating the complaint to panel stage. He asserted that the floor needed to be replaced as it was caused by the flooding and was now a tripping hazard. He noted he was not willing to pay an excess or claim from the insurance for something caused by a third party. He reiterated that the issue with heating and humidity had gone on for longer than three years and no resolution had been found. The landlord acknowledged the escalation noting whilst it aimed to respond within its service timescales, it would refer the complaint to the panel once the issues and handling of the heating and humidity was clear and that this could be several months.
32. In December, the landlord updated the resident that the data loggers had been incorrectly installed but readings had been taken from those properly installed in the neighbouring flat. It pointed that the temperature reading was high, but the humidity was in the normal range. It advised it was seeking an opinion from its own contractors, but BRAM had advised the temperature in the energy room had been reduced. It acknowledged that the resident had advised the temperature was still high. It advised that in relation to the noise issue BRAM’s managing agent had advised of the issue, but needed to attend his property to confirm that was indeed the noise as the description given did not match the noise heard. It explained if this was the case the part would be replaced. It noted that in relation to flooring whilst the damage was caused by the failure with the drain, it was still his responsibility to repair the flooring  as per the lease.
33. In January 2021, the landlord advised the resident of a change in its complaints process following the launch of the Ombudsman’s Complaint Handling Code. It noted it could proceed with the panel, but this was delayed.
34. In April 2021, the landlord provided its final response following the panel meeting held in March. It summarised the responses previously provided and noted the current position was that the humidity monitors had been incorrectly installed by BRAM and as such the data was not being released to it in case of inaccuracy. It noted BRAM had not passed on the correct information to the operatives installing the devices and had carried out works to its energy centre to lower the temperature, but this had not seemed to resolve the issue. It advised that the landlord had commissioned its own investigation, and this was taking longer due to BRAM delaying access to required information.
35. It confirmed that in relation to the noises from the energy centre, the energy supplier was investigating the issue but had advised the landlord that it had difficulty gaining access to his property and could attend anytime during working hours. The panel noted that this could be difficult given the noise occurred at night, but given the length of time, it would monitor  the outcome of this. It also confirmed that the flooring would be replaced, and an inspection had been held the previous week and it would also monitor the progress of the work.
36. The panel confirmed that the heating issue was a result of the design of the property and therefore the responsibility of BRAM, but that it continued to pursue a resolution. It noted that any compensation due as a result of the design fault would be calculated outside of the complaints process and with BRAM directly.
37. The panel acknowledged the delay in the complaint being escalated to panel stage and apologised for the service failure. It also noted that the resident on multiple occasions had had to chase for updates and further information. It accepted that the landlord was reliant on BRAM investigating and resolving the heating issue but that it could have taken further steps to support the resident by offering temporary solutions such as temporary accommodation. It offered £100 compensation- £50 for poor communication, £25 delayed panel hearing and £25 for the handling of the complaint. It noted it would monitor all outstanding issues to completion.
38. The Ombudsman is aware that the landlord commissioned its own simulation and on 6 April it was provided with the results. These noted that the property reached high temperatures, but these were still compliant with the relevant compliance model for residential properties. Its contractor advised that the results had given a pass rate, but given the high temperatures it could run further simulations to identify what remedial action could be taken to improve this and lower the peak temperature (i.e., increased insulation to plantroom), it could simulate what changes were required in the energy room to provide/create a fail or it could leave things as is given the pass result. The landlord chose to continue with the investigations.
39. The investigations later found that the temperatures within the property was unacceptable. The landlord noted that BRAM had still not given it permission to carry out any works as it had not responded to any of its contacts. It noted the managing agent had no issue with it completing the works, but permission was still required from BRAM as freeholder. It further advised that the cost of the works and ongoing running costs were significant and neither it nor the resident should be expected to bear these. It noted it would continue chasing BRAM.
40. In August, the landlord subsequently formally instigated the defect clause within the lease it holds with BRAM. It made clear the history and action that was necessary, noting it could do the works, but consent was still required, and, in any event, BRAM should be responsible for the installation and running costs. It provided copies of reports and illustration of the proposed cooling system. BRAM responded noting it had issues with the proposal, given that the required work sat outside of the landlord’s site boundary and in the communal area for which BRAM was responsible and the landlord had no right to. It sought to discuss the matter further, which the landlord welcomed.

Assessment and findings

41. It is abundantly clear that the resident has experienced conditions which have continued for a significant period of time. Various works have been completed to address the issue and several reports have been carried out. Whilst the issue remained in existence once the resident referred his complaint to the Ombudsman, the Ombudsman has considered the landlord’s actions leading up to the position as noted above.
42. Firstly, it is important to note that the lease agreement between the landlord and BRAM sets out that BRAM is responsible for the energy system and certain communal areas. As such the action the landlord can take is predetermined and can only be altered with express permission. The Ombudsman understands the resident’s frustration with the matter but must also acknowledge that the landlord is limited in the actions in which it can take. However, the Ombudsman notes that the final action taken by the landlord in pursuing its own independent report could possibly have been carried out sooner. Having said this, there is no way to determine that had this been the case, BRAM would have granted permission, seeing as, as of August 2021 permission was still not forthcoming.
43. Whilst at times there was delay in communication with the resident, the landlord was awaiting responses from BRAM, its managing agents and contractors and therefore was limited in the information it could provide the resident. This did not mean that it was ignoring the situation, however it is also accepted that an update advising that the landlord was still awaiting a response, would have been helpful.
44. The Ombudsman must balance the landlord’s entire consideration of the complaint and actions and responses to the issue raised. Whilst it is clear the defect causing the heating and humidity issues are the responsibility of BRAM, the landlord has ultimately advised that it is willing to pay for the installation and continued running costs of a system which would resolve the heating issue. Whilst the landlord notes this should be a cost which is borne by BRAM, nevertheless it has clearly stated it would, if necessary, bear these costs in order to resolve the issue and therefore its response in the whole does not amount to maladministration. As such the problem lies with consent for which the Ombudsman will recommend that the landlord pursue this down more formal routes.
45. The drainage defect was the responsibility of BRAM, but the landlord reasonably raised works to resolve the issue. Whilst the Ombudsman accepts that the flooding and subsequent damage was of no fault of the resident, the advice given about the resident claiming through his insurance was valid. As noted, the issue was the responsibility of BRAM and therefore the landlord was not obligated to carry out any work but did so. Additionally, in an effort to further assist, the landlord later accepted to replace the flooring in the property, and this was therefore reasonable, given the difficulties the resident had experienced before and throughout the course of the complaint.
46. The landlord has also reasonably considered the noise issues reported and has sought assistance not only from BRAM but also the energy supplier. During inspections of the energy room a noise was heard, however it did not fit the description given by the resident therefore it was reasonable that the landlord request the resident grant access to BRAM and the energy supplier to determine the noise. Again, this issue was a matter which the landlord was not responsible for resolving, but it engaged with those that were, in an attempt to resolve matters. This was reasonable in the circumstances.
47. In relation to complaint handling, it is clear that there was a delay in the second stage 1 complaint, however given the Covid-19 pandemic and impact this had on all businesses, the 2-week delay whilst an inconvenience, did not cause a significant detriment. The Ombudsman notes the landlord advised the resident the complaint response was delayed, but this update was provided after the target date, doing so beforehand would have been more effective.
48. However, in relation to the stage 2 escalation request, given that the landlord was aware of the length of time already taken by BRAM in addressing the resident’s concerns, and the delays it faced in gaining updates, there was no valid reason for delaying the complaint for panel consideration. This is especially compounded by the fact that even after the three-month delay, the issues with the heating and humidity were no further forward. As such there was service failure by the landlord in not referring the complaint for panel consideration sooner. The Ombudsman notes that this was also accepted by the panel within the stage 2 response, and it offered £25. Whilst this may have been in line with its policy, given the timeframe which the resident had been complaining this was not a reasonable amount.
49. In considering what is reasonable the Ombudsman has to take into consideration the impact of the delay and had this not occurred, the position the resident would have been in. Given that the primary issue complained of still existed at the time the final response was provided, it is therefore clear that there would have been no difference had the panel convened sooner. However, the Ombudsman notes that the panel also highlighted that the landlord could have offered more support and therefore had the panel convened sooner, this support could have been offered sooner. As such there was a failing which did have a detriment on the complainant.

Determination (decision)

50. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was no maladministration by the landlord in relation to its:
    1. response to the resident’s reports of overheating in the property.
    2. handling of repairs to the flooring outside the property and the associated drainage issue.
    3. handling of the resident’s reports of noise coming from the energy centre at night.
51. In accordance with paragraph 39g of the Housing Ombudsman Scheme the complaint about the service charge account is outside of the Ombudsman’s jurisdiction.
52. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the landlord in relation to its handling of the associated complaints.

Reasons

53. The landlord has clearly set out that it is not responsible for the defect to the building, which is causing overheating in the property, this is a matter for BRAM to resolve, however it has been in constant communication with BRAM and consideration is now being given to putting BRAM on notice.
54. The landlord again is not responsible for the defect to the drainage system but raised works in order to resolve the issue. In relation to the damage caused to the flooring, the landlord offered to replace the floor.
55. Again, the landlord has sought to inspect the energy centre but has been advised it has no right, therefore again this is a matter for BRAM to resolve. The landlord as such engaged with the managing agent and energy supplier and sought access to the resident’s property to determine the issue.
56. The level of service charge increase should be raised directly with the First Tier Tribunal as it is the correct body to consider such matters.
57. The landlord delayed in responding to the complaint and could have offered additional support in the course of considering the complaint.

Orders and recommendations

Orders

58. The Ombudsman orders that the landlord pay the resident £250 comprised of:
    1. £100 offered in its stage 2 response.
    2. £150 for the delay in convening the panel and for the inconvenience caused by this.
    3. Payment should be made within four weeks of this report
59. The Ombudsman orders that the landlord assist the resident with pursing compensation from BRAM given it is responsible for the heating and humidity issues. This can be by referring the matter directly to BRAM/its insurer, for financial consideration.
60. The Ombudsman recommends that the landlord:
    1. Consider offering alternative accommodation to the resident whilst the heating issue is resolved.
    2. Consider pursuing consent from BRAM via more formal routes in order to move forward with the installation of the cooling system, or pursuing it to complete any necessary works itself.