London & Quadrant Housing Trust (202013904)

REPORT

COMPLAINT 202013904

London & Quadrant Housing Trust

25 April 2023

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

The complaint is about the landlord’s response to:
1. The resident’s enquiries about the reasonableness of service charges.
2. The resident’s request to be refunded for service charges.
3. The resident’s enquiries about service charges.
4. 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.
After carefully considering all the evidence, in accordance with paragraph 42 (e) and 42 (g) of the Housing Ombudsman Scheme, the following aspects of the complaint are outside of the Ombudsman’s jurisdiction:
1. The reasonableness of service charges.
2. The resident’s request to be refunded for service charges.
In accordance with paragraph 42 (e) this Service cannot investigate complaints which concern the level of rent or service charge or the amount of the rent or service charge increase. During this investigation the resident told this Service that he did not feel he was getting value for money and wanted to be refunded for charges from 2001 to 2016. Unlike a court this service cannot determine the reasonableness of service charges or legally order a landlord to refund historic service charges. These matters are usually best decided by the First Tier Tribunal.
In accordance with paragraph 42 (g) this Service cannot investigate complaints which concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure.
This service can, however, investigate complaints which are in relation to the management of service charge accounts and handling of enquiries relating to service charges. The resident’s complaint about the landlord’s response to his service charge enquiries is therefore considered below, together with the landlord’s complaint handling.

Background and summary of events

Background

The resident is a tenant of the landlord. The resident completed a mutual exchange by assignment to the property on 26 November 2001. The resident assigned to an assured tenancy agreement which commenced on 5 June 1995. The property is a one-bedroom flat on the first floor of a two-storey converted house, consisting of two properties. The landlord has recorded mental health vulnerabilities for the resident.
The resident contacted the landlord in January 2020 to raise concerns about his service charge. The resident asked for clear explanations of his service charge as he did not believe he was receiving the services he was being charged for.
The assured tenancy agreement says:
1. Section 2.1 outlines the weekly rent payment charge and service charge costs. There is no service charge cost listed.
2. Section 2.3 “The trust shall provide the following services in connection with the premises for which the tenant shall pay a service charge”. The agreement says that there are no services provided.
The service charge policy says:
1. Section 5.1
  1. “Tenancy agreements, leases and transfer documents set out what services can be charged for within the relevant estate. Generally, service charges cover the maintenance and servicing of communal areas. For example, cleaning, grounds maintenance and servicing of mechanical and electrical building components”.
  2. “Service charge payers are consulted where there is going to be a change in services provided that will affect their charges”
  3. “informal consultation will take place with residents when neighbourhoods wish to introduce or remove a service”
2. Section 5.3 “Whether fixed or variable, charges are determined by the tenancy or lease agreement”.
The compensation policy says that compensation may be offered “when the landlord fails to respond or process a complaint within its agreed timescales, or where it does not comply with this Service’s complaint handling code”. The landlord will award discretionary compensation “when the failure causes a resident distress and inconvenience or where the resident has spent unnecessary time and effort getting the landlord to put things right”.
The landlord operates a two stage complaints policy. A stage one complaint is acknowledged by the end of the next working day and a response provided in writing within ten working days. A stage two complaint is acknowledged within two working days and a response provided within 20 working days. If the landlord is unable to provide responses within those timescales it will explain the reason for the delay to the resident and provide its complaint response within a further ten working days.

Summary of events

On 7 January 2020 the resident contacted the landlord as he was dissatisfied with his service charges. He did not feel that he was getting value for money and queried the management fee and water testing elements of the service charge. The resident made further calls to the landlord on 29 January 2020 and 31 January 2020. The resident contacted the landlord again in February 2020 to dispute his service charges.
On 28 February 2020 the landlord wrote to the resident about the 2020 to 2021 service charges. It provided the following explanation for the services that were being charged:
1. Electrical testing was an annual flat rate charge to cover the cost of statutory testing of all electrical intake points.
2. Fire protection was for scheduled servicing and maintenance of the equipment. It also covered any works found on visits, such as battery replacement.
3. Water testing was a fixed rate to cover the cost of statutory testing of shared water supplies and storage tanks. The charge was mandatory as it was important that the testing was carried out to identify and remove issues such as legionella.
4. Emergency lighting was similar to fire protection and covered servicing and maintenance. It also covered any works found during visits.
The landlord’s records showed that the resident made contact again on 16 March 2020. It said that the resident was dissatisfied with the landlord’s response as he believed he was paying too much service charge. The landlord referred the resident to its letter dated 28 February 2020.
On 1 July 2020 and 08 July 2020, the resident contacted the landlord. He said that there was no water tank in the property and queried why he was paying for water testing. He said that no one had been to the property for electrical testing and that his neighbour did not pay a service charge. He asked the landlord to call him to discuss the issues.
The landlord’s records showed that on 5 August 2020 and 19 August 2020 the landlord again referred the resident to its letter dated 28 February 2020. It said it had provided an explanation and that all charges were valid and reasonable. It said it would not be removing any of the charges for 2020 to 2021.
On 3 September 2020, 14 September 2020 and 8 January 2021 the resident contacted the landlord to dispute his charges and asked the landlord to visit the property.
On 25 January 2021 the landlord said that as the property was within a building of flats, all communal services were shared amongst the properties. The landlord said it was unable to discuss charges of other residents and said that the resident was liable to pay service charges.
On 11 February 2021 the resident contacted this Service as he was dissatisfied with the landlord’s responses. This Service contacted the landlord on 26 February 2021 to ask for the resident’s complaint to be progressed through its complaints process. The resident had asked for the following as a resolution to his complaint:
1. Clear explanations for the service charges.
2. Reimbursement for any services not received in return for the charges.
3. An explanation for why his neighbour was not paying a service charge.
On 1 March 2021 the landlord acknowledged the resident’s complaint and said it would respond by 14 March 2021. The landlord responded at stage one of its complaints process on 5 March 2021 and said:
1. It was sorry that the resident had to make a complaint to resolve his concerns.
2. It repeated its responses from 28 February 2020 about fire equipment, electrical testing and emergency lighting. It added:
  1. It was responsible for providing a safe supply of electricity and it was a mandatory check required to all buildings. Regular testing of a building’s wiring structure and maintenance was mandatory by law and quoted the regulations. It did not need to be a shared electricity supply as it was to test the mains which transported electricity from the single point of connection of the building to the individual outlets to provide power. Therefore, any electrical intake into the building was subject to testing.
  2. Fire protection servicing and maintenance was a variable cost as it reflected non-planned work. It said that the costs were calculated using a basic service contract value provided by its building services team. VAT and inflationary uplift was added which was 1.7% in 2021 to 2022.
  3. Emergency lighting servicing and maintenance was calculated in the same way as fire protection.
3. The management fee for 2021 to 2022 was a fixed fee of £78. The fee would remain constant throughout the year and was set for the property based on the value of the services received.
4. It had looked back to the 2017 to 2018 estimated service charges and could see that the fire protection and emergency lighting charges had been charged each year.
5. Electrical testing had always been carried out; however, the landlord had not charged for the cost previously and had only started to do this recently.
6. There was no reimbursement for services charged but not received.
The landlord provided a further response on 8 March 2021 with an apology as it had failed to address the query in relation to why the resident’s neighbour was not paying service charges. It said that it was unable to discuss other residents’ charges, however this could be due to a number of factors, one being that another resident might be on a different tenancy agreement.
The landlord’s records for 8 March 2021 showed that it had escalated the resident’s complaint and showed that the resident was querying:
1. Two wired smoke alarms in his home. He wanted one removed and a refund for the extra electricity.
2. He believed he should only be paying for fire protection.
3. There was no emergency lighting and he wanted a refund of the charges.
4. He believed that the landlord did not service or maintain any equipment.
Between 8 March 2021 and 15 April 2021, the resident made numerous calls to the landlord further disputing the charges.
This Service contacted the landlord on 15 April 2021 and asked for the resident’s complaint to be escalated to stage two of its complaints process. The resident remained dissatisfied with the explanations and believed he was being charged twice for maintenance and service of equipment. The resident’s ideal solution was for the landlord to visit the property to verify what was being charged for.
The resident contacted the landlord on 8 July 2021. He repeated his queries and requested a response.
The landlord’s records dated 3 September 2021 referred to a site plan which showed the lighting and fire equipment. It said that this had been in place for the past seven and a half years.
The landlord wrote to the resident on 24 June 2022 to say it would provide a stage two response by 4 July 2022. It wrote again on 4 July 2022 and explained that it needed longer to investigate and said it would respond by 11 July 2022.
On 8 July 2022 the resident contacted the landlord to request that a fire safety officer remove one of his fire alarms or advise why he needed two next to each other.
The landlord provided a stage two response on 13 July 2022:
1. The landlord said It was sorry for the delay in allocating the complaint to an officer at stage two and thanked the resident for discussing his complaint on 25 May 2022. The landlord said that the stage one complaint was responded to on 5 March 2022.
2. The landlord set out the resident’s complaint as follows:
  1. There were two smoke alarms in the property that the resident didn’t believe were necessary. He had expressed concern that the extra smoke alarm was using electricity and he wanted it removed. The landlord acknowledged that the query regarding two smoke alarms had not been addressed at stage one of its complaints process.
  2. Concerns regarding the service charges and that when he moved in, he was paying for services he didn’t receive. He wanted a refund for the period he did not receive the services.
  3. The resident’s continuous efforts to resolve the matter had been unsuccessful.
3. The landlord said that it had spoken with the fire safety department and established that all smoke alarms within the property were in line with the fire safety regulations. The property fire safety installation report said that there was one smoke detector and one heat detector in the building. The annual fire safety electrical test was completed on 20 June 2022.
4. The fire safety department advised that there was part of the property which had a smoke and a heat detector and looking at the photo provided by the resident the landlord believed that was the case. The fire safety department would contact the resident to arrange an appointment for an inspection. If it found that the resident had two smoke alarms, it would remove the extra alarm and reimburse the resident for the extra electrical costs. To do this it would need a copy of the resident’s electrical bills before and after obtaining the extra smoke alarm. It apologised for the errors and acknowledged that it was unacceptable.
5. The landlord explained that as part of the complaints policy it was not able to investigate complaints older than 12 months. As a good will gesture it had looked back to the 2017 to 2018 estimated service charges and could see that the fire protection and emergency lighting charges were charged each year.
6. The electrical testing was always carried out, however it had not previously recharged this cost. This was recently introduced.
7. There was no reimbursement of services charged but not received.
8. The landlord apologised for the delays and length of time the resident had to wait to receive an answer to his queries. It understood the frustration and inconvenience caused and offered compensation of £250.
A further stage 2 response was sent on 18 August 2022. The landlord said:
1. There were administration errors in its stage two response of 13 July 2022.
2. The resident had raised further issues which were not part of the original complaint but as a gesture of good will it had addressed these as follows:
  1. It had made enquiries about a CO detector and it was not currently mandatory but would be by the end of the year.
  2. The resident had requested a copy of his signed tenancy agreement and had not received this. The landlord had requested a member of its staff to provide this.
The landlord’s records for 22 August 2022 showed that the second smoke alarm was removed and replaced with a heat detector. The landlord apologised for its failing and reimbursed £116.18 for electricity costs. The resident contacted the landlord on the same date to discuss the service charge dispute. He said that he was told to look at his tenancy agreement in relation to the charges. He had requested this many times but not received a copy of his original tenancy agreement from the mutual exchange.
The landlord’s letters dated 13July 2022 and 18 August 2022 were its final responses to the resident’s complaint, confirming that his complaint had exhausted the landlord’s internal complaints process.

Assessment and findings

In reaching a decision about the resident’s complaint we consider whether the landlord has kept to the law, followed proper procedure and good practice and acted in a reasonable way. Our duty is to determine the complaint by reference to what is, in this Service’s opinion, fair in all the circumstances of the case.

The landlord’s response to the resident’s enquiries about service charges

The landlord said that it introduced services charges for fire equipment and emergency lighting in April 2015 and service charges were apportioned between two flats. Whilst it was reasonable for the landlord to advise the resident that it could not discuss another resident’s charges, it did not provide a clear explanation to the resident. It would have been good practice to have provided a clear breakdown which detailed the costs and demonstrated that the resident was only paying his contribution. The landlord’s explanation was not clear that the costs were apportioned between two properties.
The landlord did provide explanations for the individual elements of the service charge and why they were needed. However, in the landlord’s initial response dated 28 February 2020 it said that water testing was mandatory and part of the service charge. In its stage one and stage two responses water testing was not mentioned. During the investigation this Service requested a breakdown of service charges. Water testing was not itemised in the breakdown provided. This Service could not see that the landlord had responded to the resident’s comments about not having a water tank or shown that it forms part of the service charge. The landlord has therefore not reasonably addressed the resident’s concerns or provided a response to the resident’s query about water testing.
On 8 March 2021 the resident asked the landlord to visit him at the property. He wanted the landlord to confirm the services he was paying for. He had also told the landlord that he had two smoke detectors next to each other. He made several requests for the landlord to visit. This Service advised the landlord on 15 April 2021 that the resident’s ideal solution was for the landlord to visit the property.
1. The landlord delayed in visiting the property. It would have been more resolution focussed to have visited the resident to explain his charges and show him where the emergency lighting and other equipment was located.
2. On 3 August 2022 the landlord’s records showed that there was a second smoke detector. The landlord removed one of the smoke detectors and replaced it with a heat detector.
3. The landlord acknowledged the error and refunded the resident £116.18 for electricity. The landlord’s records said that the resident had been unable to provide electricity bills as requested in its stage two letter dated 13 July 2022. It had therefore calculated the refund as £10 per month which was 0.32p per day and provided a refund for one year. This was a fair calculation and reasonable redress for the refund of electricity.
4. The landlord could have resolved this matter earlier had it visited the property sooner. It is reasonable to assume that the two smoke detectors had been in place since 2015 when they were installed. The landlord should have considered compensation for failing to address this in addition to the refund of electricity costs. The redress did not therefore resolve this aspect of the complaint satisfactorily.
While not part of the original complaint, in the second stage two response the landlord acknowledged that the resident had been requesting a copy of his tenancy agreement.
1. Copies were provided to this Service as part of the evidence to investigate this case. The landlord should have provided copies of the original assured tenancy agreement dated 1995 along with the assignment paperwork completed in 2001which formed part of the mutual exchange. The resident assigned to the original tenancy and effectively took this over from the previous resident.
2. The resident said that he was told to refer to his tenancy agreement to see his charges, however the original 1995 tenancy agreement does not show any service charges or that services are provided. The landlord advised this Service that service charges were introduced in 2015 through its annual rent review process. This was therefore not helpful to suggest this to the resident.
The original tenancy agreement dated 1995 showed that there were no services provided.
1. During the investigation this Service asked the landlord to provide copies of any consultation or tenancy variation paperwork for the introduction of service charges in April 2015. The landlord’s response was that service charges had been introduced through its annual rent review process. No copies of the rent review letters were provided.
2. Whilst this service cannot make legally binding decisions in relation to tenancies, it is not clear whether the introduction of service charges are contrary to the resident’s tenancy agreement or whether the terms of the tenancy allow for the introduction of charges via the rent review process. The resident may wish to seek further legal advice in relation to this.
The landlord provided responses to the resident’s initial enquires, outlining the service charge elements. However, there are failings in its responses. There was maladministration in the landlord’s responses to the resident’s enquiries. Therefore, an order for compensation has been made.

Complaint handling

The resident first made enquiries about his service charges in January 2020. He made numerous attempts to resolve his queries before contacting this Service in February 2021. This Service contacted the landlord to ask for the resident’s complaint to be raised at stage one of its process. The landlord should have recognised the resident’s dissatisfaction earlier and progressed it through its complaints policy.
This Service further contacted the landlord on 15 April 2021 to escalate the resident’s complaint to stage two. The landlord’s records show internal emails on 23 May 2021 and 13 July 2021 relating to escalating the stage two complaint however this Service was unable to see any further records until a stage two response was sent on 13 July 2022.
In its stage two response the landlord said it had responded at stage one on 5 March 2022. This Service believes this was an error as the only stage one response received as evidence was dated 5 March 2021.
A stage two response was not provided until 13 July 2022, 315 working days later, 295 days later than the 20-working day timescale set out in the landlord’s complaints policy. Extensions to timescales should not exceed a further ten working days. The stage two response is significantly outside of the timescale set out in the landlord’s complaints policy and this Services complaints handling code.
The landlord apologised and recognised the delays in providing responses. It offered £250 in compensation. The £250 compensation offer was reasonable and proportionate to the time and trouble the resident experienced in repeatedly chasing responses.
Therefore, this Service considers that the redress offered by the landlord was proportionate, and that the landlord has made redress to the resident which, in this Service’s opinion, resolves the complaint satisfactorily.

Determination (decision)

In accordance with paragraph 52 of the Scheme, there was maladministration in relation to the landlord’s response to service charge enquiries.
In accordance with paragraph 52 of the Scheme, there was reasonable redress in the landlord’s complaint handling.

Reasons

The landlord failed to address the resident’s concerns in relation to his service charge enquiries. There was conflicting information provided in relation to water testing. The landlord delayed in visiting the property to meet with the resident to address his concerns. The landlord also delayed in visiting the property to check whether the resident had two smoke detectors. The landlord failed to provide the resident with a copy of his tenancy agreement.
The landlord significantly delayed in responding to the resident’s stage two escalation request and providing a response in line with its complaints policy. The landlord has however made reasonable redress in awarding £250 compensation and apologising for the delays.

Orders and recommendations

Orders

Within four weeks of this determination the landlord is ordered to pay the resident compensation totalling £500 made up as follows:
1. £250 in recognition of the distress and inconvenience caused to the resident by its failure to respond to the resident’s concerns.
2. £250 offered in its stage two response if not already paid.
Within four weeks of this determination the landlord should provide the resident with a copy of the original tenancy agreement dated 1995 and assignment paperwork from 2001 if not already done so.
Within four weeks of this determination the landlord should seek legal advice on whether the introduction of service charges was carried out in line with the terms of the tenancy agreement.
Within four weeks of this determination the landlord should provide the resident with a full breakdown of service charge costs for the year 2021 to 2022. The landlord should confirm whether water testing forms part of the resident’s service charge and respond to his query in relation to this.
The landlord should evidence its actions to the Ombudsman within four weeks.