Notting Hill Genesis (NHG) (202123314)

REPORT

COMPLAINT 202123314

Notting Hill Genesis

29 March 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:
1. The increase in service charges for the property.
2. The landlord’s response to the resident’s concerns about the service charges and reported reduction in services.
3. The landlord’s 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.
The resident wrote to the landlord on various occasions, including on 17 September 2021, to express her dissatisfaction about the increase in the service charges and to question the overall reasonableness of the charges. This Service has considered whether this falls within the Ombudsman’s jurisdiction and, after carefully considering all the evidence, in accordance with paragraph 42(e) of the Housing Ombudsman Scheme, the increase in service charges for the property is outside of the Ombudsman’s jurisdiction. Paragraph 42(e) of the Scheme states that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion…“concern the level of rent or service charge or the amount of the rent or service charge increase”.
The resident may be able to apply to the First Tier Tribunal, which has the expertise and authority to consider the reasonableness of the service charges and the level of any increase.

Background

The property is a one-bedroom flat in a block consisting of 30 residential units. The landlord is a housing association, which owns 15 of the units. The resident has been a shared ownership leaseholder of the property since 1 October 2008.
The head lessor for the block is a private company, referred to in the head lease as the ‘superior landlord’. The landlord is a leaseholder of the superior landlord and the resident holds a shared ownership lease directly with the landlord.
The superior landlord’s obligations include the calculation and administration of service charges, maintaining the structure and exterior of the building and the upkeep of communal areas. A managing agent carries out the superior landlord’s property management and maintenance responsibilities, including the calculation and administration of the service charges.
The freeholder of the overall estate is a private company (separate to the superior landlord) and is responsible for issues such as parking on the estate.
The landlord pays service charges to the superior landlord and recovers its costs from its residents within the block. The resident’s lease requires the landlord to “use its best endeavours to ensure the superior landlord complies with its covenants contained in the head lease”.

Summary of events

The resident submitted a formal complaint to the landlord on 4 June 2021 regarding a new policy that had been introduced in May 2021 by the freeholder of the estate to restrict parking for contractors and visitors to 90 minutes. The complaint was that neither the landlord nor the managing agent had communicated the change of policy to residents. Consequently, the resident was unaware that this would affect a contractor who she had arranged to carry out work to her property. The landlord responded to the stage one complaint on 18 June 2021 and said the following:
1. The change had been introduced by the estate freeholder as it controlled parking on the estate;
2. The resident’s lease had no provision for parking on the estate and, as a consequence, the resident was not charged a service charge for parking or the parking areas.
On 18 June 2021, a residents’ meeting took place involving the landlord and the managing agent. The meeting discussed various subjects, including the introduction of the 90 minute parking restriction. Residents were advised that they would have to provide the estate freeholder with as much notice as possible if parking was needed.
The resident wrote to the landlord on 30 June 2021 to say she had not received a response to her complaint and would therefore escalate it to the Ombudsman if she did not receive a reply. The landlord contacted the resident on 13 July 2021 to confirm that it had replied to the complaint about parking on 18 June 2021. The landlord stated that it would now escalate the complaint to stage two.
On 5 July 2021, the resident wrote to the landlord about the Fire Safety Act and stated that, in her view, as a result of the Act, residents should not have to pay for proposed fire safety works, such as replacement fire compliant doors to individual flats.
On 13 July 21, the landlord wrote to the resident to confirm the name of the officer who would be dealing with the resident’s stage two complaint about the introduction of the parking restrictions.
Also, on 13 July 2021, a residents’ meeting took place with the landlord and the managing agent. The notes of the meeting show that the following points were discussed:
1. The managing agent confirmed that it would be the ‘duty holder’ under the Fire Safety Act 2021, and residents could be charged for works to the building structure/external walls and doors to individual flats that open into the common parts;
2. The landlord said that “in theory” residents could fit fire seals to their front doors, but it would have to look into the certification process for ensuring the seals have been properly fitted;
3. There had been various leaks in the block and most of these had been ‘flat-to-flat’ leaks. The landlord had put together a leaks guide for residents and this was in the process of being checked (the guide was subsequently sent to residents on 2 August 2021);
4. Leaseholders could register to use the landlord’s online portal;
5. The landlord was in the process of obtaining prices to deal with the block signage;
6. In relation to service charges, the landlord confirmed that its process was to check all service charge accounts when served on the landlord by the managing agent. Residents had raised issues regarding cleaning and the landlord agreed to send a request to the managing agent for the stairs to be deep cleaned;
7. An update was given by the landlord regarding the installation of air conditioning in individual flats. The landlord confirmed that it had submitted the initial costings to the landlord’s assets team to review;
8. The landlord gave an update on a potential amendment to the Section 106 agreement, which would allow shared owners to staircase to 100% ownership.
On 4 August 2021, the resident submitted a stage one complaint regarding the following issues:
1. The resident was unhappy about the managing agent’s request for residents to arrange a water safety check in relation to their individual flats to help prevent ‘flat-to-flat’ leaks. She stated that the managing agent should provide residents with a water safety report for the building as a whole;
2. The resident stated that the managing agent had “demanded” residents pay for fire seals on doors, the ‘waking watch’ scheme, extra hours for the concierge and water safety assessments/certificates;
3. The resident stated that the managing agent had reduced services by blocking access from the lift to the parking area, restricting parking to 90 minutes, insisting all communication go via the landlord rather than directly to the managing agent, and only accepting communications via the online portal.
On 4 August 2021, the landlord sent a response to the resident’s stage two complaint about the parking restrictions, in which it stated the following:
1. The landlord acknowledged that the parking changes, including the 90 minute restriction, should have been communicated to residents directly and in advance of their introduction. The landlord had therefore offered residents a £50 goodwill gesture;
2. It confirmed that it had raised concerns with the estate freeholder about anti-social behaviour (ASB) taking place on the wider estate grounds; however, the landlord said it had limited powers to “force” the freeholder to revise its policy for dealing with ASB;
3. It acknowledged the problems the resident had experienced with contractors’ parking arrangements because she was unaware of the change in policy and explained that this was the reason for offering the £50 goodwill gesture.
The resident wrote to the landlord on 17 September 2021 to say that she had not received a reply to the stage one complaint she had submitted on 4 August 2021 regarding the water safety checks, service charge issues and the reported reduction in services.
The landlord replied to the resident on 21 September 2021 and apologised for not replying to her previous email. The landlord confirmed that the resident’s complaint had now been registered.
The landlord sent its response to the stage one complaint on 1 October 2021 and included the following:
1. The landlord explained the service charges and confirmed it had compared the resident’s charges with other properties of similar size and apportionment and found the resident’s charges to be “average”;
2. The landlord confirmed that it had checked the charges, including whether they were within the Section 20 consultation limits and had queried some of the charges with the managing agent;
3. The managing agent had acknowledged that its budget had not been as accurate as it should have been in representing the anticipated spending for the year;
4. The managing agent had also acknowledged and apologised that certain of its services, such as the concierge service, had not been delivered to the expected standard. The managing agent would therefore be reviewing the contracts to ensure the services improve;
5. The landlord had requested sight of the new budget that was in the process of being drafted so that it could review the line items and give leaseholders the opportunity to ask any questions. Observations would then be fed back to the managing agent;
6. The landlord’s reply covered other issues such as the parking restrictions, use of the landlord’s online portal and communication;
7. The landlord provided links to organisations that might be able to offer assistance if the resident was experiencing financial difficulties in paying the service charges;
8. The landlord concluded that it had “not seen evidence that the charges incurred by residents are unreasonable”;
9. The landlord apologised for not recognising the resident’s previous email about service charges as a complaint and offered £50 compensation;
10. The landlord stated that if the resident felt the charges were unreasonable, she could apply to the First Tier Tribunal.
During October 2021, the resident sent various emails to the landlord covering issues such as a faulty fire panel, which had led to the fire service attending the block, lift maintenance, the waking watch service, ASB, water safety checks and water leaks.
The landlord sent its stage two reply on 15 November 2021, in which it stated the following:
1. The landlord emphasised that when challenging service charges it needs to be on the basis of the actual costs incurred. The landlord noted that the resident was challenging some items before receiving the actual charges for them (eg fire safety works, waking watch, extra hours for the concierge service and water safety assessments);
2. If the resident wished to challenge service charges she should complete a service charge dispute form, which would enable the landlord to meet with the managing agent to review the expenditure the resident felt was unreasonable;
3. The resident could request copies of invoices under Section 22 of the Landlord and Tenant Act 1985, to ensure the expenditure was correctly billed;
4. The resident would also have the option of applying to the First Tier Tribunal to challenge the service charges. The landlord said it had received advice that the resident should name the managing agent in any such application as they were responsible for providing the services;
5. The landlord had examined the last set of finalised service charge accounts and included information in its response on the two most significant overspends (concierge and general maintenance);
6. The landlord had challenged the managing agent on some of its costs and, as a result, the managing agent had agreed to make the charges more clearly identifiable when setting the budget;
7. The landlord included information in its response to address the resident’s concerns about a reduction in services in relation to blocking lift access to the car parking area. It explained that residents should not originally have been given lift access to the car park as they did not contribute towards the maintenance of the car park area;
8. Information was also included in the letter on: the introduction of the 90 minute parking restriction, insisting all communications go via the landlord and requesting that residents use the online portal;
9. The landlord confirmed it had “carried out due diligence checks on the actual expenditure incurred and also when the estimates are set”. It went on to say “we have not seen any evidence that the service charges are not in line with the terms of lease or are unreasonable”;
10. The landlord commented that the resident had asked for additional issues to be included in the stage two complaint, but that it was unable to include issues that had not been covered in the stage one complaint.

Assessment and findings

Scope of the investigation

The resident has reported various issues to this Service that were not considered by the landlord as part of its formal complaints process; for example, problems with the central fire safety panel. The resident has asked for these matters to be included in the Ombudsman’s investigation. The Ombudsman can only investigate issues that were considered by the landlord as part of its formal complaints process. Paragraph 42(a) of the Housing Ombudsman Scheme states that the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion, are made prior to having exhausted a member’s complaints procedure.

The landlord’s response to the resident’s concerns about the service charges and reported reduction in services.

The presence of a superior landlord in this case means that the resident’s landlord is not responsible for the management and maintenance of the block or communal areas, nor the administration of service charges. However, in this situation the Ombudsman would expect the landlord to:
1. Check the service charge accounts and satisfy itself that the charges are reasonable;
2. Challenge the superior landlord or managing agent where it considers charges to be unreasonable;
3. Provide information to its residents to indicate whether it considers the charges are reasonable – the landlord may need to seek assistance from the superior landlord or managing agent to do this;
4. Raise concerns with the superior landlord or managing agent where services are not being delivered to the required standard;
5. Work with the managing agent to put in place good channels of communication so that residents’ concerns can be raised with the managing agent, either directly or via the landlord.
The landlord’s service charge policy states that its role is “to advocate for residents and liaise between the resident and superior landlord, who is responsible for setting and spending service charge costs”. The policy goes on to say that where the landlord’s influence may be limited, it will be clear with residents about what it can influence, and will inform residents on how to get more information or challenge costs in relation to service charges.
In terms of resolving service charge disputes, the landlord’s service charge policy states that it will aim to resolve all service charge issues and disputes via its local officers. However, when all other avenues have been exhausted, such as via the complaint’s procedure, it will encourage residents to explore other means in order to seek a resolution, such as the First Tier Tribunal.
In this case, the resident raised concerns during 2021 about various issues that were focussed on the reasonableness of the service charges and a reduction in the services provided by the managing agent on behalf of the superior landlord. The specific concerns considered by the landlord through its complaints procedure and a summary of the landlord’s response in each case is as follows:
1. Service charge costs – the landlord informed the resident that its process was to check all service charge accounts when served on the landlord by the managing agent. This was explained at a residents’ meeting on 13 July 2021, and the landlord’s stage one and stage two responses included information to indicate that it had examined the service charges that were of concern to the resident. The landlord also provided the resident with clear information about the process for challenging service charges, i.e. to complete a service charge dispute form, and advised the resident that she had the option of applying to the First Tier Tribunal.
2. Removing the lift access to the car park – the landlord indicated in its stage two response that there had been residents’ meetings to explain the reasons for this decision and it reiterated the reasons for the decision in its stage two reply. The landlord acknowledged that it should have communicated this decision directly to its residents in advance of the change, and had therefore offered compensation.
3. Introduction of the 90-minute parking restriction – the landlord explained that the decision had been taken by the freeholder of the estate. The landlord acknowledged that it should have communicated the decision directly to its residents in advance of the change and therefore had offered compensation for not having done so.
4. Asking for all communication to go through the landlord – the landlord explained the rationale for this in its stage two response, which was that the resident’s legal relationship was with her landlord rather than with the managing agent. However, it went on to say that the managing agent was willing to engage with the resident as long as communication was “respectful”.
5. Asking residents to use the landlord’s online portal – the landlord confirmed in its stage two response that the online portal was an additional communication channel and was not a reduction in service. It confirmed that residents could continue to contact the landlord by email and telephone.
Although, for the reasons already stated, this Service is unable to comment on the reasonableness of the service charges, the evidence indicates that the landlord took reasonable steps to respond to the resident’s concerns about the service charges and the reduction in services because:
1. The landlord clearly stated to the resident that it had checked the charges and considered them to be reasonable;
2. It provided explanations to the resident about why some charges had increased;
3. It requested additional information from the managing agent and obtained agreement that the managing agent would provide more detailed information in the future;
4. The landlord raised with the managing agent some issues relating to the standards of service and had obtained agreement from the managing agent that changes would be made;
5. The landlord met with residents and the managing agent in order to provide an open forum to provide information and resolve disputes. The meetings were likely to have been pre-arranged and not arranged as a direct response to the resident’s concerns, nevertheless they demonstrate the landlord’s approach in resolving disputes;
6. The landlord advised the resident of an alternative dispute resolution mechanism, i.e. the First Tier Tribunal;
7. The landlord advised the resident that she could request copies of invoices under Section 22 of the Landlord and Tenant Act 1985, to ensure the expenditure is correctly billed;
8. The landlord acknowledged that it had not adequately communicated the freeholder’s plans to restrict parking to 90 minutes or stop lift access from the block to the car park area, and therefore offered financial redress for this. The landlord therefore took steps to put right its failure to adequately communicate with residents.
In line with its policy, the evidence shows that the landlord attempted to resolve the service charge dispute by liaising with the managing agent, encouraged the resident to fill out a service charge dispute form to facilitate further discussions with the managing agent and provided the resident with information about the First Tier Tribunal. The landlord’s response to the resident’s concerns about the service charges and reported reduction in services was therefore appropriate. The landlord also demonstrated that it was sympathetic to the resident’s anxieties about the affordability of the charges by sign-posting her to organisations that could potentially provide advice and assistance.

The landlord’s complaint handling

The landlord operates a two-stage complaints process. Stage one replies are sent within ten working days and stage two within 20 working days.
The evidence submitted to this Service indicates that the resident submitted two formal complaints during 2021. The first was about the parking restrictions that had been introduced and the second was about the services charges and reported reductions in services.
The resident sent the landlord a stage one complaint about the parking restrictions on 4 June 2021. The landlord responded to the complaint on 18 June 2021, which was within its ten working day timescale.
The resident’s email dated 30 June 2021 prompted the landlord to escalate her complaint to stage two and the landlord sent its stage two response on 4 August 2021. Although the landlord took approximately a week longer to respond than its 20 working day target, the landlord had maintained contact with the resident by writing to her on 13 July 2021 to confirm the complaint would be escalated to stage two and on 19 July 2021 to confirm the name of the officer who would be conducting the review. Therefore, the landlord’s response time was reasonable.
In terms of the complaint about the service charges and reported reduction in services, the resident sent a stage one complaint to the landlord on 4 August 2021. She then wrote to the landlord again on 17 September 2021 to say she had not received a response to her complaint. The landlord replied on 21 September 2021 and apologised for not having acknowledged the complaint. The landlord advised the resident that the complaint had now been registered and advised her of the complaint reference number.
The landlord sent its stage one reply on 1 October 2021, which was approximately six weeks overdue. The landlord apologised for this and offered the resident £50 compensation.
The landlord’s compensation and goodwill gestures policy states that up to £50 compensation can be paid where “service standards haven’t been met [or] the issue has taken slightly longer than expected causing some inconvenience to the resident”. In this case, the resident had to chase the landlord for a response and therefore it was right for the landlord to offer compensation and to apologise for the delay. The landlord’s actions in acknowledging its late response were therefore reasonable.
The resident contacted the landlord on the same day (1 October 2021) to advise the landlord that she was dissatisfied with its response. The landlord sent its stage two complaint response on 15 November 2021, which was within its 20 working day timescale for stage two complaints and was therefore appropriate.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its response to the resident’s concerns about the service charges and reported reduction in services.
In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, and in the Ombudsman’s opinion, there was reasonable redress offered by the landlord for its service failure in relation to its complaint handling.

Reasons

The landlord attempted to resolve the service charge dispute by liaising with the managing agent. It also encouraged the resident to complete a service charge dispute form so that it could have further discussions with the managing agent about the areas of dispute and it provided the resident with information about the First Tier Tribunal.
The landlord acknowledged the delay in sending its stage one reply in relation to the introduction of the parking restrictions, apologised and offered financial redress.

Recommendation

It is recommended that the landlord re-offers the resident the £50 for not communicating the parking changes sooner and the £50 for complaint handling, if these sums have not already been paid.