Notting Hill Genesis (202205545)

REPORT

COMPLAINT 202205545

Notting Hill Genesis

9 November 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 response to the resident’s concerns about:
   1. his rent increase;
   2. building insurance being included in his service charge;
   3. the landlord’s communication in relation to the rent and service charge.

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. Paragraph 42(e) of the Housing Ombudsman Scheme notes as follows:

42. The Ombudsman will not investigate complaints which, in the Ombudsman’s opinion:

e) concern the level of rent or service charge or the amount of the rent or service charge increase.

4. As part of his complaint, the resident raised concerns about the increases to his rent. In its formal responses the landlord signposted the resident to the relevant terms in his shared ownership lease agreement relating to rent increases and advised it had increased the rent in accordance with these terms.
5. After carefully considering all the evidence, in accordance with paragraph 42(e) of the Housing Ombudsman Scheme, the complaint regarding the resident’s concerns about his rent increase is outside of the Ombudsman’s jurisdiction.
6. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber) (the FTT). The resident may be able to obtain free and independent legal advice from the Leasehold Advisory Service (LEASE) (https://www.lease-advice.org/) in relation to how he could bring his complaint to the FTT.

Background

7. The resident is a shared-owner leaseholder. The landlord is a registered provider of social housing. The property is a flat, within a block of flats.
8. The resident’s rent and service charges increased for the period 1 April 2022 – 31 March 2023. On 6 April 2022, the landlord wrote to all residents within the resident’s block, and acknowledged that most of them had not received notification of the new charges. It said that the new charges were now in effect and could be viewed online, and that they would receive confirmation letters by the end of that week.
9. On 9 April 2022, the resident made a complaint about the increase in his rent charge. It is understood that the resident asked the landlord to explain the increase. He was also dissatisfied with the scope of coverage provided by the building insurance (which formed part of his service charges), and asked why he had to pay for this.
10. The landlord issued its stage one response on 29 April 2022. It provided an explanation of the purpose of the building insurance and included a copy of its policy, which included information about what was covered. It also explained that the policy did not cover things for which the resident was responsible for under the lease agreement.
11. On 6 May 2022, the resident escalated his complaint as he disagreed with the landlord’s response. As well as his concerns about the rent increase, he also highlighted that the landlord had not given him sufficient notice that his rent would increase. He also remained dissatisfied with the coverage provided by the building insurance policy.
12. The landlord issued its final response on 13 June 2022. The landlord provided commentary about the rent increases, but did not address its delayed communication of the increases. It also reiterated that it had already provided the resident with a copy of his building insurance policy, which detailed what was covered under this.
13. The resident referred his complaint to this service as he remained dissatisfied with the increase in his rent. He also believed that he did not benefit from having building insurance, and therefore believed this aspect of his service charges was unreasonable and that he should not have to pay for this. He also stated that the landlord increased his direct debit without any notice.

Assessment and findings

14. As noted above, the Ombudsman is unable to decide on matters concerning the level of increase in rent or service charges, and whether such charges are reasonable or payable. The Ombudsman can, however, consider the landlord’s communication in relation to the charges, and whether it responded reasonably to the resident’s concerns.

Building insurance

15. The shared ownership lease agreement includes a term that the landlord will at all times keep the estate insured against loss or damage. The shared ownership lease agreement also includes a term allowing the landlord to recover the costs of the insurance through the service charge. It is a further term of the shared ownership lease agreement that the resident keeps the interior of his property in good repair, including the glass, internal walls, windows and doors.
16. Based on the obligations noted in the shared ownership lease agreement, the landlord arranged building insurance. Given that the shared ownership lease agreement included specific repair obligations for the resident, the landlord’s building insurance did not cover items for which the landlord was not responsible. In the Ombudsman’s experience, this is common practice in the industry.
17. Following the resident’s complaint, the landlord appropriately signposted the resident to the relevant terms in its lease, and provided its position on its obligations surrounding building insurance. It also appropriately provided the resident with a copy of the insurance certificate for his records.
18. While the resident continued to be dissatisfied with this response, given that its position was unchanged, it was reasonable that the landlord referred the resident to its earlier response in its stage two response.
19. In summary, the landlord provided a reasonable response to the resident’s complaint which clearly set out its position. It also made appropriate reference to the shared ownership lease agreement and provided the resident with pertinent documents and information. Should the resident wish to dispute the landlord’s position that it is obliged to pay for building insurance, or argue that the insurance coverage is incorrect, the resident should pursue this complaint at the FTT, who is the correct body to interpret the terms of the shared ownership lease agreement and make decisions in relation to service charge obligations.

Communication

20. In an independent review that the landlord undertook of the complaint (as part of its stage two investigations), the following service failure was identified; “[there] was a delay in issuance of formal review of monthly charges letter… an appropriate form of compensation should be offered for the slight delay in the letter being issued.” However, although the landlord acted appropriately at the time the delay occurred by acknowledging the error and communicating a timeframe in which residents would receive the relevant information, it did not address, or apologise for this delay in its final complaint response despite the issue forming part of the resident’s stage two complaint.
21. While it is not evident that this concern was specifically raised as part of the resident’s original complaint, given that it was raised as part of his escalation request, the Ombudsman would expect the landlord to either address the concern as part of its stage two response, or otherwise signpost the resident to raise a new stage one complaint.
22. It is evident from the landlord’s internal investigation that its initial delay amounted to service failure for which compensation was appropriate to reflect any distress caused to the resident. Given that the landlord failed to address the issue in its formal response, there was further distress caused to the resident, as he was left unsure how this element of his complaint would be resolved.
23. Considering the above, there was service failure by the landlord in relation to its communication surrounding increased to rent and service charges, and its subsequent complaints handling. In the circumstances, an amount of £100 compensation is appropriate to reflect the distress caused to the resident, being £50 for its initial delay, and £50 for its failure to address the complaint in its formal response.

Determination

24. As noted above, in accordance with paragraph 42(e) of the Housing Ombudsman Scheme, the complaint regarding the resident’s concerns about his rent increase is outside of the Ombudsman’s jurisdiction.
25. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in respect of response to the resident’s concerns about building insurance being included in his service charge.
26. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its communication in relation to the rent and service charge.

Orders

27. The Ombudsman orders the landlord to pay compensation of £100 for any distress and inconvenience caused to the resident by its poor communication in relation to the rent and service charge increases.
28. This amount must be paid within four weeks of the date of this determination.