London & Quadrant Housing Trust (L&Q) (201915363)

REPORT

COMPLAINT 201915363

London & Quadrant Housing Trust

15 June 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:
1. Apportionment of service charges for bulky refuse removal.
2. Handling of the resident’s complaint.

Background and summary of events

Background

The resident is the leaseholder of the property, a one bedroom flat, which is in a block situated on an estate with other flats, houses and a shop. The landlord is a housing association and it owns the block.
The lease agreement confirms that the provisions of sections 18 to 30 of the Landlord and Tenant Act 1985 regarding service charges apply. Under the terms of the lease the landlord is responsible for keeping common parts of the building, including bin stores, adequately cleaned and maintained. The landlord is entitled to charge for the services it provides and can add, remove or change services.
A variable service charge applies which means that charges reflect the actual cost of providing the services. The lease says that the resident is obliged to pay a “specified proportion” of service charge costs relating to the “building” which is defined as the block which his flat is in. The lease does not make specific reference to the proportion of service charge costs relating the wider estate for which the resident is liable.
The landlord’s service charge policy, effective from October 2019, sets out the types of service it may charge for and how charges are calculated and apportioned. It says that charges are set each year based on the estimated cost of providing them, and that it will credit any overcharges against actual costs or recover any undercharges.
The service charge policy says that apportionment was commonly based on an equal share basis prior to October 2019. However, for new schemes from October 2019, the landlord would consider three methods of apportioning charges based on equal share, number of bedrooms and floor area, and would then apply the “fairest” method. The policy says that the landlord may consider revising the apportionment of existing developments if the majority of residents in a block ask it to do so.
The landlord has a two stage complaints process which says it will respond to stage one complaints within 10 working days and stage two complaints within 20 working days. The landlord’s complaints policy says it will not consider issues over six months old unless there are exceptional circumstances.
The landlord has a separate compensation policy which gives guidelines for compensation which can be paid where the landlord has not replied to a query or complaint within its published timescale. The policy also allows for discretionary payments to be made as a gesture of good will.
The evidence seen shows that the bin store for the resident’s block is located across the road from the block and next to the communal recycling bins for the estate. The area where bulky refuse is left is between the two bin areas and is accessible to anyone using the road.

Scope of investigation

The evidence shows that the resident had raised various queries and complaints about his service charges from at least 2013. Some of his queries and complaints about various aspects of his service charge ran concurrently over the same periods, and some were resolved by the landlord. However, the Ombudsman previously investigated a complaint about the landlords decision not to refund a service charge overpayment in October 2020 (Case 2019156365).
This investigation is focussed on the landlord’s apportionment of service charges for bulky refuse removal. However, some of the evidence provided by the landlord, is not clear what specific chargeable service is being referred to and this is referenced accordingly in this report.

Summary of events

The evidence suggests that the service charge for bulky refuse collection was historically shared equally between all residents on the estate. However, from the 2017-18 service charge estimate provided by the landlord around March 2017, the charge was presented as a service provided to the resident’s block rather than a charge shared across the estate (or scheme). Similarly, the service charge estimate provided by the landlord around March 2018 also presented bulky refuse collection as a service provided to the resident’s block.
The resident emailed the landlord on 21 August 2018 asking how the charge for bulky refuse removal had been apportioned. The landlord replied that the charge had been apportioned to the flats in the resident’s block as they related to those properties. The resident challenged this saying that it was not possible to know who was responsible for dumping rubbish near the bin store, and that previously the cost of bulky refuse removal had been shared equally to all residents on the estate. No evidence has been seen of a response by the landlord.
On 26 September 2018 the landlord provided the resident with a final service charge reconciliation statement for 2017-18. It subsequently provided the resident with an estimated service charge for 2019-20 around March 2019 and a final reconciliation statement for 2019-20 on 13 July 2020. The cost of bulky refuse removal showed as a service provided to the resident’s block on all those documents.
On 11 September 2019 the resident emailed the landlord saying that the charge for bulky refuse collection had been incorrectly apportioned to his block and should have been shared across the whole estate. No evidence has been seen of a response by the landlord though it was corresponding with the resident about his other service charge queries at the time.
The landlord wrote to the resident on 5 December 2019 in response to other queries he had raised about his service charges. In the letter, the landlord stated that charges for services provided to the residents block “should be apportioned based on the number of bedrooms”.
The resident challenged the landlord’s apportionment of the bulky refuse collection charge again on 11 December 2019. He said that up to 2016-17 the landlord had shared the charge across all properties on the estate but had changed this to charge the cost to the flats in his block from 2017-18. The resident said he had raised this in previous years and believed the charge should be shared across the estate. He chased the landlord for a response on 20 December 2019 and 11 January 2020.
On 14 January 2020 the resident and landlord exchanged emails about the apportionment of service charges and charges for bulky refuse collection. The landlord said the resident had six months from receiving his final reconciliation statement to dispute charges. It said that it had responded to his various queries and that the account for 2017-18 was now closed. The landlord suggested that the resident look to vary his lease as the landlord had charged him in accordance with the specified proportion stated in it. The resident responded saying that he had disputed the apportionment of charges from receiving his 2017-18 final reconciliation statement but the matter had not yet been resolved.
The resident also telephoned the landlord and asked to speak to someone in the service charge team. He said that trying to resolve the various errors in his service charges was causing him to be depressed and frustrated.
The landlord emailed the resident later the following day saying that it was due to give him a refund for overcharged service charges in 2017-18. It also said that it would not revise its bulky refuse collection charges as they were “valid and reasonable”. The resident replied saying that all the bulky refuse from the estate was left near the bin store for his block as there was no where else to put it. He said that he had been raising the charging issue since 2017-18 but kept being passed between the property manager and service charge team.
The resident emailed the landlord again on 27 January 2020 saying he disagreed with the landlord’s view that the charges were correct and was unhappy with being “passed from pillar to post”. He sent a further email saying the charges were incorrect on 3 February 2020.
On 17 February 2020 the resident made a formal complaint about the landlord not responding to his queries about bulky refuse collection charges and chased the landlord for a response on 3 March 2020. The resident escalated his complaint on 9 March 2020 saying he had still not had a reply, though the evidence suggests that the landlord logged that contact on another complaint case the resident had ongoing at the time. The resident chased again on 20 March 2020 and 25 March 2020. On 20 and 26 March 2020 the resident emailed the landlord escalating his complaint to stage two as he had received no response. The landlord emailed the resident on 26 March 2020 apologising that he had not had a response and said it would escalate his complaint.
The landlord provided the resident with a final service charge reconciliation statement for 2019-20 on 13 July 2020. The statement showed separate bulky refuse collection charges under costs for the estate and under costs for the resident’s block. Examination shows the estate cost had been shared across all residential properties on the estate and the block cost had been shared across the resident’s block.
The resident emailed the landlord on 7 August 2020 saying that the bulky refuse collection charge was incorrect and that he had raised this previously. He said that this also affected his charge for management fees which were calculated as a percentage of the service charge costs.
The landlord replied on 20 August 2020 saying that the bulky refuse collection charge had been apportioned across “all properties”, his portion was 5.375% and that no overcharge had been made. The resident disputed this saying that all the costs for bulky refuse should have been shared across all properties on the estate. The landlord maintained its position that the charge had been correctly apportioned.
On 28 August 2020 the Ombudsman wrote to the landlord asking it to respond to the resident’s complaint. No evidence has been seen that the landlord had logged a complaint about apportionment of bulky refuse removal under its formal process or provided a response. The Ombudsman wrote to the landlord again on 4 February 2021 resulting in it contacting the resident and acknowledging his complaint at stage one of its process on 8 February 2021.
The landlord provided its stage one response on 25 February 2021 saying that it had apportioned the service charge for bulky refuse collection in line with the terms of the lease. The resident replied the same day saying the response did not address the issues he had raised and his complaint remained unresolved. The landlord asked the resident to provide further explanation of the issues he considered unresolved, which he did on 19 March 2021 resulting in the landlord escalating his complaint.
On 4 May 2021 the landlord sent the resident an estimate for service charges in 2021-22. It showed bulky refuse collection as a charge against the resident’s block. The landlord subsequently sent the final reconciliation statement for 2020-21 on 5 July 2021 which also showed bulky refuse collection under the block heading.
Between 10 May 2021 and 29 November 2021, the resident chased at least four times for a response to his complaint and the evidence shows the landlord apologising for the delay twice. The landlord emailed the resident on 20 December 2021 saying it would respond to his complaint by 6 January 2022 but later extended the response timescale to 21 January 2022.
The landlord provided its stage two response to the resident’s complaint on 21 January 2022 saying:
1. It was sorry for the delay in responding to his complaint which was due to a high volume of complaints. It offered £100 compensation for the delay.
2. It agreed that all the residents of the estate had access to the bin store for his block and should contribute to all costs associated with bulky refuse collection.
3. It had wrongly apportioned the cost to his block in 2020-21 and should have apportioned it across the estate. This had resulted in him being overcharged and it had credited his account accordingly.
4. It could not correct any overcharges for previous years as it was only allowed to investigate issues arising within twelve months. He should contact the service charge team for further assistance.
Following further contact with the resident, the landlord increased its compensation offer to £200 on 25 January 2022. The resident continued to challenge the landlord’s decision not to consider the apportionment of bulky refuse collection charges for previous years and its compensation offer. He sent the landlord a detailed letter on 9 March 2022 resulting in the landlord increasing its compensation offer to £400. The resident remained dissatisfied and asked the Ombudsman to investigate his case on 24 March 2022.
In the meantime, the landlord had issued the resident with an estimated service charge for 2022-23 on 14 February 2022. It showed the charge for bulky refuse removal under charges for the resident’s block. The landlord also provided the resident with a final reconciliation statement for 2021-22 on 18 July 2022 which showed bulky refuse collection charges under the estate heading.

Assessment and findings

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

Apportionment of service charges for bulky refuse removal

It is not disputed that the landlord changed its approach to apportionment of the charge for bulky refuse removal from 2017-18 but it is not clear from the evidence why it did so or whether residents were consulted or notified of the reason for the change.
The matter in dispute was the landlord’s decision that the cost of bulky refuse removal should be shared between the resident’s in the block rather than across the whole estate.
Ultimately, the landlord agreed with the resident that its apportionment had been incorrect after the property manager had confirmed that all residents on the estate had access to the area where bulky refuse was being left. However, it took the landlord two-and-a-half years (from 21 August 2018 to 25 February 2021) to realise its mistake, during which time, the resident paid a higher charge than he should have.
The resident made multiple representations to the landlord from 21 August 2018 about the way it has apportioned some service charges including the charge for bulky refuse removal. He consistently told the landlord that the bulky refuse charge should be apportioned to all residents on the estate and that the landlord’s approach in apportioning the costs to his block resulted in him paying a higher charge. The resident said the overcharging also affected his management fee which was calculated as a percentage of overall charges.
The evidence suggests that the landlord failed to respond to some of the resident’s contacts about the bulky refuse charges. For example, no evidence has been seen that the landlord responded to the resident’s email of 11 September 2019. It also suggests there is some correspondence which has not been seen during this investigation. For example, an email from the resident dated 11 January 2020 refers to an earlier email of 20 November 2019 which has not been seen. This could indicate inaccurate record keeping by the landlord.
Where the landlord did respond, there were delays and its responses did not address the points raised by the resident. For example, the landlord did not respond to the resident’s contact of 11 December 2019 until a month later on 14 January 2020 despite the resident chasing a response several times. Further the landlord’s response, that it had charged him according to his lease, did not explain why it considered the bulky refuse collection to be a service provided just to the resident’s block rather than the wider estate which was the challenge raised by the resident. The delays and inadequate responses caused frustration to the resident.
At other times, the landlord’s responses were imprecise. For example, in its email of 20 August 2020, the landlord told the resident that the bulky refuse collection charge had been apportioned across “all properties” which could imply the whole estate. However, its subsequent reference to the resident’s portion being 5.375% of the total cost suggests it meant it had apportioned the charge to the resident’s block. Again, the response did not explain why the landlord considered bulky refuse collection to be a service benefitting only the resident’s block. The lack of precision caused confusion and the resident felt the landlord was contradicting itself.
From the evidence seen, the landlord has separate teams that deal with home ownership, service charge accounting, property management and complaints. This is a common approach but landlords must ensure that their specialist teams do not work in silos and that there is collaboration and co-ordination in managing cases that span across specialisms.
In this case, the resident told the landlord that he was being passed from “pillar to post” between different teams. No evidence has been seen that there was any collaboration between the different teams before February 2021 when the complaint officer checked with the property manager and clarified that the bulky refuse charge should be apportioned across the whole estate. The service charge team could have done this at any point from when the resident first challenged the apportionment in August 2018. The lack of collaboration resulted in the landlord providing the resident with inadequate responses and an unreasonable delay in resolving the issue.
It would have been appropriate for the landlord to have corrected its mistake for the previous years where it had overcharged the resident but it did not do so. Further, the evidence shows that it continued to apportion bulky refuse collection charges to the resident’s block in 2021-22 and 2022-23. For example, although the bulky refuse collection charge showed under the “estate” heading on the reconciliation statement for 2021-22, the charge to the resident is 5.375% of the total cost which means it has been apportioned to the resident’s block.
The evidence suggests that lack of collaboration may have contributed to the landlord continuing to wrongly charge the resident for bulky refuse collection after it had identified its mistake. An email dated 30 June 2022 from the service charge team says that the refund given to the resident during the complaints process was not correctly calculated and suggests that the service charge team still believed the charge should be apportioned to the resident’s block. This suggests they may not have been aware of the clarification given by the property manager during the complaint process.
Review of the estimates and final accounts show they have evolved over the period since 2017-18 and now provide more information. For example, final accounts now show a comparison of actual costs against estimated ones and estimates now include the date they are issued. However, the estimates still do not include the total estimated cost of the service and explanations of apportionment are not included in either the estimates or final account statements. This means that residents cannot check that charges have been apportioned correctly. The landlord should consider including total estimated costs in its estimates and apportionment details in its estimates and final account statements.
For the reasons set out above, there was maladministration in the landlord’s apportionment of the resident’s service charge for bulky refuse collection.
In relation to the failures identified, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this the Ombudsman considers whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: Be Fair, Put Things Right and Learn from Outcomes as well as our own guidance on remedies.
In this case, the landlord refunded the resident for the overcharged bulky refuse collection charge in 2020-21. However, it did not refund the overcharges it had made from 2017-18 and continued to charge the resident incorrectly in 2021-22 and 2022-23. Orders have been made for the landlord to recalculate the resident’s share of service charges from 2017-18 and refund the excess he has paid. Orders have also been made for the landlord to apologise to the resident and pay £300 compensation for the distress and inconvenience caused to him over the years he was overcharged and chasing for responses to his queries. Recommendations have been made that the landlord ensure it charges correctly for bulky refuse collection in future and includes total costs and apportionment details in its estimates and final statements.

Handling of the resident’s complaint

The resident first made a formal complaint about the charge for bulky refuse collection on 17 February 2020. The evidence shows that he had made other complaints about various aspects of the service charge some of which were ongoing when he made this complaint. Under its complaints policy, the landlord should have dealt with his complaint about the service charge for bulky refuse as a new complaint or responded to the issues he had raised in its responses to his other complaints. No evidence has been seen that it did either.
As with its handling of the resident’s queries about apportionment, the evidence suggests that inadequate record keeping contributed to the landlord’s failings in handling this complaint. For example, the landlord logged the resident’s contact of 9 March 2020 on another ongoing complaint case when the resident was actually chasing a response for his complaint about the bulky refuse collection charge apportionment. This caused his escalation request to be overlooked and missed the opportunity to identify that the resident’s complaint about the bulky refuse charges had not been logged or responded to. The landlord should review its record keeping practices to ensure records are precise, accurate and logged on the correct case.
Despite prompts from the Ombudsman, the landlord did not acknowledge the resident’s complaint about the apportionment of bulky refuse removal until 8 February 2021, almost a year after he had raised the complaint. It is not clear from the evidence why the landlord did not respond after the Ombudsman’s first intervention, but the delay caused the landlord’s stage one response of 25 February 2021 to be provided over a year after the resident had complained. The delay was inappropriate and contrary to the Ombudsman’s Complaint Handling Code (the Code) and landlord’s complaints policy.
The landlord’s stage one response did explain how it had apportioned charges for bulky refuse collection in 2019-20 but did not explain why it had charged this way. Nor did it address its apportionment of bulky refuse charges for 2017-18 which was the subject of the resident’s complaint. This missed the opportunity to consider whether the charges had been applied correctly to the resident’s block and meant the response did not answer the issue the resident was complaining about.
When the resident told the landlord its response had not addressed the issues he had raised, he invited the landlord to contact him. The landlord could have arranged to speak to the resident to clarify why he felt his complaint had not been resolved. This may have avoided the subsequent delay in escalating his complaint, which did not happen until 22 March 2021 after the resident had submitted further written information, and it would have avoided him having to compile evidence which the landlord already had possession of.
It took the landlord almost ten months longer to provide its stage two response on 21 January 2022. The response incorrectly said the resident had complained on 8 February 2021 when, in fact, that was the date that the landlord had acknowledged his complaint. It also incorrectly said that the resident had a fixed service charge when the evidence shows it is a variable one. The landlord has since confirmed to us that the service charge is variable.
The landlord’s stage two response upheld the resident’s complaint that it should have apportioned charges for bulky refuse removal across all properties on the estate. However, its decision not to investigate the previous years where the resident said the same mistake had been made was not reasonable. The landlord’s complaints policy says that it may investigate matters over six months old in exceptional circumstances and it would have been reasonable for the landlord to use its discretion to investigate in this case.
Further, the landlord’s second stage two response of 25 January 2022 incorrectly said that it was not “allowed” to investigate matters over six months old “in line with instructions by the Ombudsman”. No such instruction has been given and the Ombudsman expects that landlords will correct injustices identified through their complaints process. That did not happen in this case.
The landlord initially offered the resident £100 compensation for the delay in responding to his complaint at stage two. It increased this offer to £200 on 25 January 2022 in recognition of the distress and inconvenience caused and increased its offer to £400 on 14 March 2023. It is not clear how the landlord calculated its final compensation offer.
For the reasons set out above there was maladministration in the landlord’s handling of the resident’s complaint. The Ombudsman considers that the compensation offered is sufficient redress for the distress and inconvenience caused to the resident over the 23 months (from 17 February 2020 to 21 January 2022) it took to deal with his complaint. Orders have been made for the landlord to apologise to the resident and pay the £400 compensation it previously offered if has not already done so. A recommendation has been made for the landlord to review its record keeping practices.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in respect of the landlord’s:
1. Apportionment of service charges for bulky refuse removal.
2. Handling of the resident’s complaint.

Reasons

It took the landlord two-and-a-half years to conclude that it had incorrectly apportioned the resident’s service charge for bulky refuse removal. It did not refund the resident for all the years it had overcharged him and continued to incorrectly charge him after identifying its mistake. The landlord failed to respond to some of the resident’s contacts and provided inadequate responses to his queries and challenges.
It took the landlord almost two years to deal with the resident’s complaint about the bulky refuse charge. Its final response did not put things right for the resident as the landlord did not investigate the previous years where the resident said he had been overcharged.

Orders and recommendations

The landlord is ordered to take the following action within four weeks of the date of this report. The landlord must provide the Ombudsman with evidence that it has complied with these orders:
1. Recalculate the resident’s share of service charges for bulky refuse collection for the six years from 2017-18 to 2022-23, apportioning the charge across all properties on the estate. The landlord must evidence that it has refunded the resident for all overcharges for bulky refuse collection and any associated overcharges of management fees.
2. Write to the resident to apologise for the failings identified in this report in respect of its handling of his service charge queries and his complaint.
3. Pay the resident a total of £700 compensation. This must be paid directly to the resident and not offset against any arrears. The compensation comprises:
  1. £300 for the distress and inconvenience caused by its failure to respond adequately to his queries about the bulky refuse collection apportionment.
  2. £400 for the distress and inconvenience caused by its handling of his complaint if it has not already paid this.
The landlord should provide the Ombudsman with its response to the recommendations below within four weeks of the date of this report. The Ombudsman recommends that the landlord:
1. Consider refunding the other residents in the block if they have also been overcharged for bulky refuse collection due to the landlord’s mistake. This would be in line with the landlord’s compensation policy.
2. Ensure that it correctly apportions bulky refuse collection charges across all properties on the estate from 2022-23 onwards.
3. Include total costs and apportionment details in its future service charge estimates and final statements.
4. Review its record keeping practices to ensure records are precise, accurate and logged on the correct case.