Clarion Housing Association Limited (202008909)

REPORT

COMPLAINT 202008909

Clarion Housing Association Limited

26 May 2022

Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman Scheme. The Ombudsman must determine whether a complaint comes within their jurisdiction. The Ombudsman seeks to resolve disputes wherever possible but cannot investigate complaints that fall outside of this.

In deciding whether a complaint falls within their jurisdiction, the Ombudsman will carefully consider all the evidence provided by the parties and the circumstances of the case.

The complaint

The complaint relates to the landlord’s response to concerns raised about the service charges for 2019/2020.

Determination (jurisdictional decision)

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.
After carefully considering all the evidence, I have determined that the complaint, as set out above, is not within the Ombudsman’s jurisdiction.

Summary of events

The residents are a group of leaseholders who own flats in the property building to which the landlord holds the head lease with the freeholder.
On 26 September 2020, the residents received a letter dated 25 September 2020, from the landlord titled ‘Actual Service Charge’. This stated there was a deficit of £497.72 between the estimated charges and finalised actual charges for 2019/2020. Residents were advised the deficit must be paid by 30 September 2020.
On 28 September 2020, the residents emailed the landlord asking for a breakdown of the actual charges.
On 5 October 2020, the residents sent a letter to the landlord raising concerns about the service charge adjustment advised in its ‘Actual Service Charge’ letter and costs listed in the Certificate of Service Charge related to:
1. the level of the caretaking charge.
2. the appropriateness of the administration charge.
3. the “unreasonable time period” for which residents were expected to pay the deficit payment.
4. The “unfair” proportioning of the service charge amongst residents.
The letter said the difference between the estimated and actual service charges was unreasonable and that residents disputed the charge applied for the overspend. The residents asked for further explanation on how the costs were calculated.
On 31 October 2020, the residents raised a formal complaint about the service charges and the landlord’s failure to respond to their letter of 4 October 2020 despite calling the landlord on several occasions since 29 September 2020.
The landlord’s internal notes indicate that it discussed the complaint with the residents during a phone call on 3 December 2020. The notes reference that residents were unhappy that they had not received a response to the complaint raised within 10 working days.
On 23 December 2020, the landlord’s Service Charge Manager sent a response to the residents apologising for the delay in responding to their concerns. They said they were unsure why their calls were not passed directly to the Service Charge team and advised that they had raised this issue with its contact centre so the issues could be addressed.
Within the response the landlord provided a detailed breakdown of estimate and actual spending of the 2019/2020 service charge. It gave details of each of the charges that made up the overall service charge. It explained the basis of the caretaking and administration charges and referenced the provisions in the lease which provided for these.
It said in respect of residents making the payment, its Home Ownership Income Team could provide assistance with this; this was referenced in the “ways to pay” section in the actuals letter.
It explained the service charges could vary amongst residents depending on if the dwelling had an individual entrance or a communal entrance and also said that insurance may vary depending on the type and size of the flat.
On 3 January 2021, the residents advised that they were dissatisfied with the response provided. They reiterated their request for an explanation as to why the estimates and actual costs vary for different residents and disputed the calculation for the cost of the caretaking charge. They asked why the charges had significantly increased since lockdown measures had been introduced. Further to the details of the costs provided in its 23 December 2020 response, they raised further concerns relating to:
1. Car park gate;
2. Lifts;
3. Doors;
4. Fire Alarm system and Fire Protection;
5. Lighting;
6. Refuse collection;
7. Management fee;
8. Sinking fund; and
9. Estate caretaking.
The residents reiterated that they disputed the level of the service charge, in particular the caretaking cost and asked that the landlord address the accountancy error with this charge.
On 15 January 2021, the residents requested that the complaint was escalated to peer review at stage two of the landlord’s complaints process.
On 21 January 2021, the landlord provided a stage one complaint response in which it apologised for the delay in responding to the complaint. It referenced their formal complaint of 31 October 2020, a call on 3 December 2020 and the response of 23 December 2020 provided by its Service Charge Manager. It said it was sorry if they had experienced difficulties in contacting its team and it offered £50 in compensation in recognition of the delay in responding to the stage one complaint.
In its stage two final response of 10 March 2021, the landlord reiterated its apologies for the delay in responding to their original concerns. It said that due to the nature of the request and the level of detail required, the response took some to time to compile, for which it apologised.
It provided an explanation as to why there was no appreciable reduction in the cost of services after lockdown measures were introduced in March 2020 and said its previous response explained the reason for the estimates and actual costs varying for residents.
Regarding the caretaking charge, it said had not identified any errors in its accounting for this charge.
Within its response the landlord also responded to new concerns raised about the individual charges referencing its 23 December response and providing further explanation.
It said it was sorry for the delays in providing complaint responses which it said was due to a higher than usual amount of customer contact. It said the level of communication provided, particularly during stage one, fell short of its usual standard and it apologised for not keep her updated during this period. It offered £150 in compensation in recognition of issues and service failures identified including £50 for the delay in providing a stage two response.
The landlord concluded that it considered the charge levied were both fair and reasonable and in accordance with the leases. It said however that if they wished to dispute the reasonableness of the charges they had a right to take the matter to First-Tier Tribunal -Property Chamber (FTT) for determination.

Reasons

Under paragraph 39 (g) of the Scheme, the Ombudsman will not investigate complaints concerning the level of rent or service charge or the amount of a rent or service charge increase.
It is clear from the residents’ correspondence with both the landlord and this Service that the main focus of the complaint concerns the level, increase, calculation and accuracy of service charges. It is not within the Ombudsman’s remit to make findings about the reasonableness or accuracy of the service charges.
The appropriate body to determine these issues is the FTT which also has the expertise and processes to determine the reasonableness of increases to the level of service charges as well as decide by whom they are payable, and when.
The Ombudsman is therefore of the opinion that this complaint would be more effectively dealt with by the FTT.