Melton Borough Council (202000883)

REPORT

COMPLAINT 202000883

Melton Borough Council

20 May 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

This complaint is about the landlord’s handling of:
1. an increase in the resident’s service charges;
2. the related complaint.

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(i) of the Scheme states that the Ombudsman will not investigate complaints which ‘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’.
The resident’s concerns relate to a rent demand notice dated 28 February 2020. His subsequent complaint referred to service charges that he said he had not been subject to in previous years and he has more recently explained to this Service that his dispute is that he does not believe the landlord has a contract with him whereby he is obliged to pay service charges.
This Service cannot issue a binding decision setting out what a landlord can and cannot do under the terms of a tenancy, or about a resident’s liability to pay rent or service charges. I am therefore satisfied that the Ombudsman cannot consider this complaint further as it is a matter for the Courts or Tribunal.
As per paragraph 39(i) of the Housing Ombudsman Scheme, the resident’s complaint about the landlord’s handling of an increase in his service charges is therefore out of jurisdiction.
However, the Ombudsman has considered the landlord’s handling of the related complaint.

Background and summary of events

Background

The resident commenced an introductory tenancy on 29 June 2015. The landlord is a local authority and has described the property as a two-bedroom second floor flat.
The tenancy agreement shows that it is a weekly tenancy with payments due ‘in advance on Monday of each week’; it set out a net rent figure of £75.64 plus charges described as ‘water charge’, ‘TV aerial’, ‘support charge’ and ‘communal clean’.
The landlord has a corporate complaints policy that shows that it:
1. will acknowledge complaints within one working day
2. has an ‘early resolution’ stage where it has an opportunity to resolve the matter immediately before it progresses to a ‘formal complaint’ but that ‘if immediate action is not possible or appropriate, or the customer would like to complain formally then it should be progressed to a formal stage’
3. there is a two-stage formal complaints process where responses should be issued within 15 working days at each stage.

Previous Ombudsman investigation

The resident brought a similar complaint to this Service in July 2020 and the Ombudsman issued a determination report dated 23 April 2021 (under case reference 202016738) that found the following matters were out of jurisdiction:
1. that health and safety service charges introduced by the landlord were not compliant with the tenancy, guidance and legislation, and therefore not rechargeable
2. that the landlord’s overall management of its entire stock is not compliant with safety regulations and is of a generally poor level
3. that property charges relating to supported and sheltered housing are not enforceable
4. whether the landlord can introduce new policies, the method by which it does this, and its consultation process.

It also found no maladministration in the landlord’s handling of a related complaint that exhausted its complaints process in July 2020.

The Ombudsman considered a Review Request from the resident in October 2021 and decided there were no grounds for a review. It also advised the resident that this was ‘a matter that we consider would be best dealt with by the First Tier Tribunal (Property) because service charges are one of its specialist areas’ but that ‘the broader issue of complaint handling will be investigated’ through a new case that he had brought to this Service.

Summary of Events

The landlord issued a rent notice to the resident on 28 February 2020 that set out the new charges that would take effect from 6 April 2020.
The resident submitted a complaint to the landlord on 10 March 2020, which he said was in response to the 28 February 2020 notice, raising concerns that:
1. a property and sheltered housing charge was now being made for which there had been no consultation or communication so he asked for it to be removed and for details of this charge over previous years
2. he had never used the communal TV aerial so asked for the charge for this to be removed and for a refund of the payments he had made towards this since June 2015
3. he did not receive a ‘designated intensive housing management service’ and had not seen the relevant staff members for over a year so asked for the service to be cancelled, the charge to be removed and for a refund of the previous year’s charge
4. a health and safety charge was now being incurred for which there had been no consultation or communication so he asked for it to be removed and for details of this charge over previous years.
The resident chased responses from the landlord on 12-13 March 2020 because it had not acknowledged his complaint within one working day.
The landlord wrote to the resident on 13 March 2020. It advised that he had not attempted to resolve the complaint through early resolution so the issue would not be ‘put into the formal process at this stage’.
The landlord wrote to the resident on 30 March 2020 – it advised that it intended to respond to his correspondence of 10 March 2020 but that Covid-19 meant that ‘the majority of council staff have been redeployed to cover essential frontline community work helping those most vulnerable at this time’ so its response would be delayed. It added that it hoped to be able to respond within two weeks.
The resident wrote to the landlord on 3 April 2020. He advised that his Direct Debit had been cancelled because the landlord had not responded to his concerns of 10 March 2020 and confirmed he was still seeking a refund of incorrect amounts charged.
The landlord wrote to the resident on 3 April 2020, advising that it had not yet completed its enquiries as part of its informal early resolution stage so would not escalate the resident’s complaint but would ensure that a response was issued within 10 days.
The resident responded to the landlord on 3 April 2020 – he disputed that there was any requirement for the early resolution stage to be undergone prior to a formal complaint and that he had not agreed to this approach as its complaints policy required. He asked for the complaint to be escalated accordingly.
The landlord acknowledged the resident’s correspondence on 6 April 2020, advising that it hoped to respond in full by 15 April 2020.
The resident wrote to the landlord on 9 April 2020, invoicing it for his time spent on dealing with the complaint and advising that he had received an unpaid Direct Debit notice.
The landlord acknowledged the resident’s correspondence on 9 April 2020. It reiterated that it was being hindered by having to respond to the Covid-19 outbreak but expected to be able to respond during the week of 27 April 2020.
The resident replied to the landlord on 9 April 2020. He disputed a comment the landlord had made in its letter that day and rejected its request for understanding due to Covid-19.
The landlord sent a holding response on 23 April 2020 which said it hoped to respond in full by 15 May 2020.
The resident wrote to the landlord on 24 April 2020 – he said it was unacceptable that it was not following its own complaints policy.
The resident wrote to the landlord on 5 May 2020 in response to a text message rent reminder and alleged that the landlord had failed to act in accordance with the Direct Debit Guarantee. He reiterated similar concerns on 7 May 2020.
The landlord replied to the resident on 7 May 2020. It advised that:
1. the text message was standard practice, he should be paying weekly rent unless the payment method was Direct Debit and it updated him on his rent account balance
2. it pointed to a letter it said had been issued on 9 March 2020 that showed the Direct Debit payments it intended to deduct from 6 April 2020 and said it had received notification on 7 April 2020 that the resident had cancelled his Direct Debit
3. a detailed response in reply to his concerns about service charges would be sent in due course.
The resident replied to the landlord on 7 May 2020. He said he had not received the letter dated 9 March 2020 and advised that he had changed his payment method to standing order.
The landlord issued its final complaint response on 14 May 2020. It said it had decided to treat the resident’s concerns as a stage two complaint and concluded that:
1. the resident was liable to pay £90.90 weekly rent, including service charges of £16.70 but he was in receipt of 86% Housing Benefit so only needed to pay £12.73 per week
2. it reiterated the service charge breakdown that it had provided in February 2020
3. the resident had cancelled his Direct Debit but he was obliged to pay rent so needed to reinstate payments otherwise it may take legal action
4. it was undertaking a review of rent and service charges given the resident’s feedback and would pass on the outcome of this review once it was concluded.
The resident replied to the landlord on 15 May 2020 – he advised that:
1. he had already referred the complaint to this Service and it was convenient for the landlord to adopt a position that Covid-19 may have caused delays in the complaints process
2. the early resolution stage was not appropriate for more complex complaint matters
3. he had asked for a more detailed breakdown of the rent and service charges and removal of disputed charges but this had not happened.
The landlord advised the resident – through separate complaint responses in June-July 2020 that were already subject to investigation by this Service through case reference 202016738 – that:
1. the health and safety charge would be refunded
2. it had committed to consulting on a service charges policy (planned for consideration by elected members in September 2020)
3. each tenant in his block had access to an ‘intensive housing management officer’ for which the support charge was made and the property and sheltered housing charge was towards ‘cleaning, grounds maintenance and other ancillary costs through the communal areas’
4. through the new service charge policy, it intended to provide ‘a full itemisation of service charges on the annual rent account letter to all tenants, to provide greater clarity to all tenants’.
The resident advised this Service in June 2021 that the rent and service charges review should have been done before new charges were added and claimed as recently as May 2022 that there was no legal obligation on him to pay service charges to the landlord.

Assessment and findings

The resident made an initial complaint on 10 March 2020. This was in response to the landlord’s rent notice of 28 February 2020 and raised specific concerns about some of the service charges regarding why they were now separately billed, the quality of the service received for them and what the amounts had been for previous years.
The landlord explained to the resident on 13 March 2020 that it would not pass the complaint through to its formal two-stage process because he had not engaged the informal early resolution option. This approach was inappropriate as the landlord’s complaints policy indicates that the early resolution should be ‘immediate’ and that this recourse is applied where the resident does not wish to complain formally. Given the resident’s correspondence of 10 March 2020 was marked as a ‘formal complaint’ and the enquiries were not straightforward (and so unlikely to be resolved immediately), it should have logged the case at stage one of its complaint process and responded within 15 working days.
In mitigation, this Service accepts that March 2020 and the following weeks was a difficult period for most organisations. We are aware that local authorities often had to transfer staff to frontline services to ensure a continuity of business and assist vulnerable residents given the Covid-19 pandemic. This Service therefore accepts that some delay in the landlord being able to respond to the resident’s complaint was likely and it was reasonable that it offered holding responses to him in on four occasions during April 2020.
The landlord’s final complaint response was offered on 14 May 2020 – this was around two months after the resident’s initial complaint and a few weeks outside of the complaints policy target timescale for two 15-day complaint investigations. However, considering the landlord needed to prioritise its reaction to the Covid-19 pandemic, this delay was not unreasonable, particularly given the landlord’s efforts to provide regular holding responses to the resident and willingness to remain in correspondence with him in early May 2020 regarding Direct Debit payments.
When the landlord issued its final complaint response on 14 May 2020, it offered information about the resident’s rent and service charge liability and how much he was required to pay after Housing Benefit deductions. It also indicated that it was conducting a review of the service charges. Although it was reasonable for the landlord to promise to consider the service charge concerns through a further review, the landlord failed to provide answers to the resident’s specific concerns about:
1. what property and sheltered housing and health and safety charges he had paid in previous years
2. why he should contribute to the communal TV aerial charge
3. the quality of the service he received for the designated intensive housing management charge.

Although the landlord promised to undertake a review of service charges (and updated him accordingly in June-July 2020), it was unreasonable that it failed to address these concerns within its final complaint response in the meantime.

In summary, although it mitigated the impact of the complaint handling delay by communicating regularly with the resident, the landlord’s initial decision to apply its early resolution stage was inappropriate and its final complaint response did not fully address the resident’s concerns.

Determination

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in its handling of the related complaint.

Reasons

The landlord failed to log the resident’s 10 March 2020 correspondence as a formal complaint and its final complaint response did not address all of his concerns.

Orders

The landlord to write to the resident to:
1. apologise for the service failures identified in this report;
2. update him on his current rent account balance and, if he is in arrears, explain why (if it has not already done so);
3. provide him with a copy of the service charges policy (if it has not already done so).
The landlord to pay the resident compensation of £50 in recognition of the time and trouble and inconvenience caused to him by the service failure in its handling of the complaint.

The landlord should confirm compliance with these orders to this Service within four weeks of the date of this report.