Hyde Housing Association Limited (202011024)

REPORT

COMPLAINT 202011024

Hyde Housing Association Limited

30 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 leaseholder 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

The leaseholder complains about:
1. The liability to pay for services delivered by the landlord which the leaseholder does not consider reasonable, the level of service charges, and alleged ongoing and extensive errors in service charge accounts.
2. The classification of the property.
3. Complaint handling.

Jurisdiction

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.
Paragraph 39 (g) of the Scheme states that 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.
Paragraph 39 (i) of the Scheme sets out that the Ombudsman will not investigate complaints that 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.
Much of the leaseholder’s complaint is focused on her belief that services are being provided and charged for that are unnecessary. For example, she has said that some services invoiced by the landlord were not necessary as they were already carried out by a different contractor, and so have been duplicated.
Essentially, this complaint is about the level of the service charges. The First Tier Tribunal Property Chamber (the FTT) deals with residential leasehold disputes between leaseholders and their landlords. The FTT can make determinations on all aspects of liability to pay a service charge, including how much and when a service charge is payable. In order to decide liability, the FTT also decides whether service charge costs have been reasonably incurred, and if so whether the standard of any services or works for which the costs are charged is reasonable. Therefore, in line with paragraph 39 (g), the complaint about the service charges is outside of the Ombudsman’s jurisdiction.
The leaseholder also complains about errors in the accounts. While the Ombudsman can consider the administration of service charges, the FTT is better placed than this Service to examine service charge accounts in detail. Given that the leaseholder is alleging that there are extensive and ongoing errors in the accounts, this is something that the FTT is better placed to determine. Therefore, in line with paragraph 39 (i), this complaint is outside of the Ombudsman’s jurisdiction.
As such, this investigation focuses on the classification of the property, and the landlord’s complaint handling.

Background

The landlord’s complaint policy (as was in place at the time of the matters complained about) set out a two-stage complaint process. Stage one was a full investigation. If the customer was not satisfied with the response at stage one, a manager more senior than the person who made the response would review the case to determine if it warranted review.
At stage two a Head of Service or a Director would review the stage one response, with an aim to respond as soon as possible. The policy states, ‘We will always try to provide a prompt response to a customer with a complaint…In most cases, we expect to provide a full response to a complaint investigation within 20 working days. Customers can expect to receive regular updates from a named person. We reserve the right to take a reasonable amount of additional time to investigate a complaint at each stage where the issues are complex. If we are unable to provide a full response within the target timescale we will advise the customer additional time is required and ask how frequently they would like us to provide updates.’

Summary of events

The Ombudsman understands that the leaseholder had raised concerns/complaints with the landlord about her service charge account for a number of years, and in particular about the property being incorrectly categorised as sheltered or supported housing and having additional services provided and charged for because of this.
On 24 December 2019 a Housing Manager (the Manager) issued a stage one response to the leaseholder, explaining that the property was not categorised as sheltered accommodation, and that she did not pay additional service charges because of the categorisation of the building. It said that the landlord had facilities for over 55’s which required the services provided, all of which were rechargeable to leaseholders.
The leaseholder continued to raise these same concerns, and also concerns about a new scheme coordinator service. On 3 February 2020 the Manager emailed the leaseholder stating that, as had been explained previously, the property had not been misclassified, and the scheme coordinator service was provided to ensure the compliance of the building, and was not a duplication of services.
In June 2020 the leaseholder emailed the Manager noting that the landlord had previously confirmed that the property was not categorised as sheltered or supported, rather, it was ‘Older Persons Leasehold’. She said that this had not filtered down to the services provided and subsequent service charges. In response the Manager said ‘Please note that the matters you have raised have been investigated and responded to in full. I have advised you of the outcome of your enquiries and this information has been further reiterated though Hyde’s complaints process, which has been concluded. [The property] is correctly categorised as Leasehold Retirement and Hyde are compliant with our landlord testing of the telecare and communal fire alarm systems.’
The leaseholder also raised concerns about the accuracy of the estimated service charges for 2020/21, asking the landlord to ‘immediately look into their accuracy.’
On 7 August 2020 the leaseholder made another stage one complaint about the property being incorrectly categorised as supported accommodation, and service charges such as cleaning and the scheme coordinator. The landlord discussed this with her and provided a written response on 21 September 2020, explaining that the leaseholder’s concerns had been investigated previously, and the conclusions from that investigation still stood. Records from around this time detail the leaseholder’s ongoing concerns about service charges being applied as if her property was ‘sheltered’ whereas in fact it was not. She also raised concerns that no one checked invoices and that they were incorrect.
On 20 November 2020 the leaseholder emailed the Manager, referring to the September 2020 stage one response and said that she had replied to this setting out why she was dissatisfied with the conclusion, but heard nothing back. She said that she had also sent further emails with concerns about the service charges following this, but received no response. She reiterated concerns about the service charges being applied as though the property was sheltered housing. The Manager replied on 24 November 2020 stating ‘As you are aware, I have responded to your complaint and found no evidence to substantiate your allegation of [the property] being managed incorrectly. I understand that you would like your complaint re-evaluated and I have therefore asked a colleague in the complaints team to review your request in line with Hyde’s complaints policy and we will duly be back in touch with you.’
The leaseholder states that she submitted a new complaint in December 2020 about the issue, although the Ombudsman has not seen a copy of this. The leaseholder also contacted this Service in December 2020, and we wrote to the landlord asking it to deal with her complaint. On 25 January 2021 the landlord wrote to the leaseholder saying that her complaint had now been escalated to stage two and would be investigated and responded to by 22 February 2021. It said that if this date could not be met, it would update her.
The leaseholder continued to email the landlord with her concerns about service charges, referring to ‘Horrendous mistakes to our Electricity Bills’, and a lack of response from the landlord. On 4 February 2021 the leaseholder emailed the landlord to say that she had been trying to resolve the matter for three years, and as an outcome she wanted:
1. A single point of contact for all leaseholders to deal with all service and property matters.
2. ‘Actual Invoices for the Actual work/Services’ that were carried out.
3. The property to be correctly classified as ‘Older Persons (over 55) Leasehold/Homeowners.’
She noted that a contractor attended monthly, quarterly and yearly to check and maintain fire safety. She said that the landlord had now imposed a weekly warden service, whose duties she felt were already covered by the contractor. She said that in the letters that the landlord had sent informing leaseholders of this it had stated that it was an additional service for all residents in sheltered, supported, care homes and retirement homes, pointing out that her property did not fall under any of these categories. She said that she was therefore seeking a refund of the costs she had been charged for services that were either not required, or that were duplicated by other contractors.
On 9 and 19 February 2021 the leaseholder emailed the landlord about a recent issue with the main entrance door repair, which the leaseholder felt demonstrated that the landlord had no way of determining whether the service contracts were being followed. She said that leaseholders were ‘…paying Monthly Estimated Monthly Charges for the Contracts Hyde have issued 5-6 Contracts to, which we have not seen the Specs for, nor has Hyde implemented the adjustments they promised from our Feedback to their S20 letters, and our 2 year scrutiny and investigations of 2016-2017. We are not aware of who comes here, what they are doing, how long they are here, or if they are doing a good or bad job; neither are Hyde’s Contractors or Hyde. We just have to pay.’
The leaseholder noted that she had also emailed the complaint handler dealing with her stage two complaint about this. She also noted that she had just received the monthly estimated service charge costs for 2021/22 which she said again included many more services than those the landlord had to charge her for according to her lease.
On 2 March 2021 the Ombudsman wrote to the landlord noting that it had not provided a response to the complaint, and asked it to do so within five working days. That same day the landlord wrote to the leaseholder apologising for the delay and saying that it would respond no later than 11 March 2021.
In an email dated 11 March 2021 the leaseholder noted that no complaint response had been provided, and again explained that her home was not sheltered housing and said that the landlord should stop all the sheltered services it was providing and charging leaseholders for erroneously. She said these were either totally unnecessary in the view of leaseholders and under the terms of the lease, or duplicated via another of the landlord’s service contracts. She asked it to make back dated adjustments and refunds, provide realistic estimated monthly service charges and, ‘REAL ACTUAL costs’ in the Actual September Statement.’ The leaseholder said that she also now wanted to see the ‘Specs and Contracts’, to know how the landlord checked that these had been adhered to, how this was then checked to determine if further work was required, and how it was then charged to her.
In an email dated 26 March 2021 to the complaint officer the leaseholder said that the estimated charges for 2021/2022 were ‘a nonsense’. She referred to a complaint she had made in 2018 about the service charges and that she had thought that this had resolved the matter (referring here to an email from the landlord sent in May 2018 confirming revisions to the estimated service charges for 2018/2019), but errors continued.
On 22 April 2021 the leaseholder emailed the landlord expressing her dissatisfaction at the continued delays in providing the stage two response, and the landlord’s failure to keep her updated with this. She also noted that she had not been receiving replies to any of the emails that she had been sending. She summarised the outcomes that she was looking for, which included a single point of contact, ‘…with the ability and authority to deal with ALL Hyde Offices and Depts’, invoices for the work and services the landlord had carried out, details of the contracts, and how the landlord ensured that these were carried out correctly.
She noted that via her previous complaints the landlord had agreed that the property was not sheltered accommodation, but she said that it then failed to provide refunds and to remove services that were not required, or duplicated by other contractors. She said that she now wanted to add the following queries/issues to the complaint:
1. What was the classification and status of the building.
2. Why had the landlord failed to implement the conclusions of the 2018 complaint.
3. The name of the individual who could implement these conclusions, back date it, and refund monies owed.
4. Why leaseholders had to wait for repairs and maintenance ‘…for, weeks, months or until their ‘’Budget’’ allows?’
5. Why the landlord had chosen to reduce the sinking fund contribution to £500.
She said that she had proved twice that the landlord was unable to get the best contract and tariffs with an electricity company, to take and submit readings, and pay the bills. She said in light of this how could she trust any of the other estimated charges she was forced to pay.
A telephone meeting was held on 30 April 2021 between the leaseholder and the landlord to discuss the complaint. The landlord has not provided any record of this. On 13 May 2021 the Ombudsman wrote to the landlord stating that if it did not respond to the complaint in five working days it may be issued with a Complaint Handling Failure Order.
On 24 May 2021 the landlord provided its stage two complaint response. Regarding service charges, it said that it was constantly working to improve the process of accurate estimates and end of year statements. It explained that it had created a new team to act as the point of contact for leaseholders when they had a query relating to either the estimates or statements. They did not get involved in the calculation or invoicing process but were able to highlight errors and work with the relevant colleagues to make the necessary corrections.
The issue of the communal electricity cost had been raised by another resident and the landlord had been carrying out an investigation, which identified several issues with the contract and being on an incorrect tariff. A resolution had been identified and adjustments would be made to the accounts in the next couple of weeks, with a letter to all residents confirming this.
The letter went on to say that the Manager had previously responded to the leaseholder’s query about the classification of the property, and as stated at the time it was recorded as ‘Older Persons Leasehold’. The landlord said it had responded to this matter several times and had nothing further to add.
In relation to the concerns that the leaseholder had raised in March about 2021/22 estimates, the landlord said that these would be dealt with as a separate enquiry.
The landlord noted that during the 30 April 2021 call, the leaseholder had raised concerns about the service being delivered by the scheme coordinator which included three key tasks (weekly fire alarm testing, Person Centred Fire Risk Assessments, and telecare systems testing). The landlord then went on to explain the reasons why these services were delivered and would remain in place. It said that should the scheme coordinator service be removed, these three tasks would have to be outsourced to a contractor and the costs for leaseholders would increase.
It recognised failures in the complaint handling in terms of the delay and keeping the leaseholder informed, and offered £300 in compensation.
On 8 June 2021 the leaseholder provided her response to the stage two letter. She referred to the 2018 complaint/May 2018 email stating the outcome of this was not applied going forward. She said that the Manager insisted that the property was sheltered and that additional services must be applied, even though it had previously been confirmed that it was Older Persons Leasehold, not sheltered or supported housing. She said that she had been trying to get the Manager to look at the 2018 resolution and ‘not to keep dismissing them out of hand.’ She concluded that subjecting residents to weekly tests of the telephone line and charging additional service charge was unnecessary.

Assessment and findings

When considering complaints the Ombudsman applies its Dispute Resolution Principles, which are high level good practice guidance developed from the Ombudsman’s experience of resolving disputes, for use by everyone involved in the complaints process. There are only three principles driving effective dispute resolution:
1. Be fair – treat people fairly and follow fair processes
2. Put things right
3. Learn from outcomes
The Ombudsman must first consider whether a failing on the part of the landlord occurred, and if so, whether this led to any adverse effect or detriment to the leaseholder. If it is found that a failing did lead to an adverse effect, the investigation will then consider whether the landlord has taken enough action to ‘put things right’ and ‘learn from outcomes’.
Regarding the issue of the property being incorrectly categorised, the leaseholder’s concerns about this stem from her belief that she is being made to pay for services that are not necessary. As explained above, this investigation makes no determination on the liability to pay for the services or reasonableness of the service charge. However, there is no evidence available that shows that the property has been incorrectly categorised. The information that is available shows that the landlord has responded to the leaseholder’s concerns about this on several occasions, confirming and offering reassurances that the property is not categorised as sheltered or supported housing.
It has also consistently explained why certain services were in place and that these were not because the building was categorised as sheltered housing. For example, the 24 December 2019 stage one letter confirmed that the property was classified as ‘Older Persons Leasehold’ and explained that the service charges that the leaseholder was disputing were applied as the accommodation included a fire alarm to support an evacuation strategy, and all of the homes had a telecare system. These required regular testing which was carried out by a scheme coordinator as the most cost-effective solution.
In an email dated 29 June 2020 the Manager again explained that the landlord was responsible for testing the telecare and communal fire alarm systems. They said, ‘Sheltered Housing and Care Homes are managed very differently to [the property] with more intensive resources. [The property] is periodically visited by a scheme coordinator for specific tasks to ensure the safety and compliance of the building and its facilities.’
The landlord reiterated this again in its 24 May 2021 stage two letter, explaining the reasons why weekly fire alarm testing, Person Centred Fire Risk Assessments, and telecare systems testing took place.

While the Ombudsman makes no determination on the liability to pay for these services, it can be said that the landlord has acted fairly in dealing with the leaseholder’s concerns about this issue, as it has responded and provided explanations on a number of occasions. There has been no maladministration by the landlord here.
However, there were significant failings in its handling of the 2020/2021 formal complaints. While there is no indication that the leaseholder escalated the December 2019 complaint to stage two, it is apparent that she did express her dissatisfaction with the August 2020 stage one response. The Manager said on 24 November 2020 that the landlord would review this in line with the complaints policy and be back in touch with the leaseholder. There is no record of the landlord doing so, and it is unclear what the outcome of the review was.
The leaseholder states that she submitted a new complaint in December 2020 about the issue, although the Ombudsman has not seen a copy of this. This Service also wrote to the landlord around this time, asking it to clarify the leaseholder’s concerns and deal with her complaint. The landlord then wrote to the leaseholder on 25 January 2021 saying that the complaint had been escalated to stage two.
As part of this investigation the Ombudsman obtained clarification from the landlord on why a response was provided at stage two at this point: It said that due to the delay and the previous responses that had already been provided on the matter, and as the leaseholder had requested a stage two escalation via the CEO repeatedly in January 2021, the matter was discussed with senior management and progressed to stage two. This was a reasonable course of action from the landlord. It is the case that the leaseholder had already been provided with two stage one responses regarding her concerns about the classification of the property and associated service charges, and that her December 2020 complaint seems to also have been about this same matter.
The letter stated the leaseholder would receive a full response and decision by 22 February 2021 and said, ‘If you want to add anything else you can email any extra details…’ and gave the email address of the complaints team. This was not a reasonable suggestion to make at a stage two complaint, as it left it open to the leaseholder to raise additional issues: Generally, a stage two complaint should be clarified with the leaseholder at the time of receipt, and focused on matters that had already been addressed at stage one. Allowing new issues to be added can cause delays, and also means that these new issues are not fully considered in line with the complaint policy, only receiving a single response, which does not allow a resident the opportunity to challenge any decision on the new issues by correcting errors or sharing concerns.
As can be seen in this case, the leaseholder did email further concerns to the landlord about other matters. There is little indication that the landlord responded to these or otherwise clarified the complaint until the telephone meeting held on 30 April 2021 (which the landlord appears to have no record of).
The Ombudsman chased up the stage two response with the landlord in March 2021 and May 2021, but it was not until 24 May 2021 that this was provided, a very significant delay outside of its complaint policy timescales, with little indication that the leaseholder was kept updated or otherwise communicated with, in line with the complaint policy.
Further, having taken several months to provide a stage two response to what was originally a complaint about the classification of the building, the landlord then declined to respond to the matter. This was unreasonable given that it had agreed to escalate the complaint in January 2021, and as no stage two response had ever been provided.
Regarding service charges, the landlord detailed the work it was doing to improve the accuracy of these, but did not provide a specific response to the leaseholder’s concerns about her own service charges. It appears to acknowledge that there were errors with the communal electricity cost but did not detail how these had come about (although the leaseholder has confirmed to this Service that this was resolved), and said that concerns about the 2021/22 estimates were being dealt with as a separate enquiry, though did not explain why.
Although the stage two response did provide a clear explanation for the services provided (such as the scheme coordinator and fire alarm testing), overall, and especially given the length of time it had taken, the response was poor.
Finally, in accordance with the policy, the stage two review should have been carried out by a Head of Service or a Director, but there is no evidence that this occurred, with the stage two letter signed by the Corporate Complaints Manager.
In identifying whether there has been maladministration the Ombudsman considers both the events which initially prompted a complaint and the landlord’s response to those events through the operation of its complaint procedure. The extent to which a landlord has recognised and addressed any shortcomings and the appropriateness of any steps taken to offer redress are therefore as relevant as the original mistake or service failure.
The landlord did recognise failings in its handling of the complaint, in terms of the delay and keeping the leaseholder informed, and offered £300 in compensation. It was appropriate for the landlord to acknowledge the failings, and award compensation as a redress to the time, trouble and frustration caused to the leaseholder by the poor handling. This is in keeping with the Ombudsman’s own compensation guidance, which sets out that amounts of £250 and above where there has been significant failure in complaint handling, but no permanent impact on the leaseholder.
But this did not specifically recognise the overall poor complaint response, which failed to address many of the issues that the leaseholder had raised. Neither did the landlord provide any explanation for its delayed response and failure to update, nor detail any action it was taking to address what had gone wrong in this case. As the £300 compensation offered by the landlord goes some way to making redress for the poor standard of complaint response, a nominal further sum of compensation is ordered for the overall poor response, and only service failure is found (rather than maladministration). An order is also made to assist in ‘learning from outcomes’.

Determination (decision)

In accordance with section 54 of the Scheme:
1. There was no maladminstation on the part of the landlord relating to the classification of the property.
2. There was service failure on the part of the landlord relating to the complaint handling.

Reasons

There is no evidence available to the Ombudsman that demonstrates that the property is incorrectly categorised as sheltered housing, and the landlord has provided clarifications and explanations on a number of occasions.
There were a number of failings in the complaint handling including a long delay, failure to update, and overall poor response. This was time consuming and frustrating for the leaseholder. While the landlord has acknowledged some of these failings and provided compensation, this has not gone far enough to ‘put things right’ for the leaseholder or ‘learn from outcomes’.

Orders

Within one month of the date of this report, the landlord must:
1. Pay the leaseholder £75 for the frustration caused by the poor stage two response.
2. Carry out a review of the complaint handling in this case, to determine what went wrong, and detailing how the landlord has ‘learnt from outcomes’. A copy of the review to be shared with the Ombudsman.

Recommendation

If it has not done so already, the landlord should pay the leaseholder the £300 previously offered in its stage two response in recognition of the delays and failure to update.