Sanctuary Housing Association (202211416)

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REPORT

COMPLAINT 202211416

Sanctuary Housing Association

6 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

  1. The complaint is about the landlord’s administration and communication in relation to the resident’s service charge query.

Background

  1. The resident is an assured tenant of the landlord and lives in a two-bedroom flat. There are six properties at the scheme where he lives.
  2. On 23 May 2022 the landlord wrote to the resident with a change of rent and service charge letter. The letter stated that there would be an increase in the resident’s service charge to £22.84 per week. Included with the letter was a ‘frequently asked questions’ sheet and service charge statement. The Service charge statement showed a total budgeted cost of £4,750.72.
  3. On 26 May 2022 the resident emailed the landlord. He said that he was confused about the service charge increase. He said that the figures were wrong and had been apportioned incorrectly, because the total cost had not been split between the six flats. The same day the resident raised a formal complaint. He said that residents are being over charged and he was concerned that this may have been the case over previous years. He asked the landlord for copies of the previous year’s increase letters and service charge statements.
  4. On 10 June 2022 the landlord responded to the resident at stage one of its complaints process. It did not uphold the complaint. The response said:
    1. “I have checked the service charge schedule for 2022/23 and I can confirm that the calculations are correct”.
    2. “To explain the detail on your service charge schedule for 2022/23, it shows that there are 6 units at [the scheme] and on your schedule there are 4 properties on this type. We split properties into types purely for administrative purposes. I can confirm that all units at [the scheme] have the same costs apportioned’.
  5. The landlord provided the resident with copies of the service charge statements for the previous four years.
  6. The same day, the resident asked the landlord to escalate his complaint. He said that the service charge should be divided by six flats and then divided by 52. He said that ‘four properties of this type’ meant nothing to him and that the explanation from the landlord was not clear. He said that the landlord had overcharged him because the service charge costs had been split between four and not six.
  7. On 17 June 2022 the landlord issued its final response to the resident. It did not uphold the complaint. The response said:
    1. “I can confirm there are six properties on the budget for your scheme and all cost lines are equally split across the six properties on the budget”.
    2. “All the calculations are correct”.
    3. “Internally we have to take into consideration a number of factors when administering service charge accounts including the type of tenancies in place and the review date listed on individual tenancies”.
    4. “At your scheme there is more than one type, and we are therefore unable to include all the properties on the same type for administration purposes”.
    5. “…each type will only have the costs for the number of properties that are attached to that type so the costs of £4750.72 are for four properties only at your scheme”.
  8. The resident emailed the landlord and said that its final response was not clear. He questioned if the charge was being split equally, and asked for clarification on whether the service charge was greater than the total budgeted cost, and if any additional costs had been split between the other two flats. The landlord responded to the resident and said that there wasanother type at his scheme, and that the service charge costs for his schemewere greater than the budgeted cost, and that his type wassplit between four properties.
  9. In his complaint to the Ombudsman, the resident said that the communication from the landlord had been poor and that the service charge statement was not clear. He also said that the service charge figure should be divided by six and that the figures were incorrect.

Assessment and findings

Scope of investigation

  1. It is important to be aware that it is outside the role of the Ombudsman to review complaints about the increase of service charges and determine whether service charges are reasonable or payable. This is in line with paragraph 42 (e) of the Housing Ombudsman Scheme, which states that the Ombudsman may not consider complaints that concern the level of service charge or rent or the increase of service charge or rent. Complaints that relate to the level, reasonableness, or liability to pay rent or variable service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber). However, this Service can assess complaints that relate to how information about service charges have been administered and communicated. 

The landlord’s administration and communication in relation to the resident’s service charge query

  1. When investigating a complaint, the Ombudsman applies its Dispute Resolution Principles. These are high level good practice guidance developed from the Ombudsman’s experience of resolving disputes, for use by everyone involved in the complaints process. There are only three principles driving effective dispute resolution:
    1. Be fair – treat people fairly and follow fair processes;
    2. put things right, and;
    3. learn from outcomes.
  2. The Ombudsman must first consider whether a failing on the part of the landlord occurred, and if so, whether this led to any adverse affect or detriment to the resident. If it is found that a failing did lead to an adverse affect, the investigation will then consider whether the landlord has taken enough action to ‘put things right’ and ‘learn from outcomes’.
  3. The resident’s tenancy agreement states ‘the service charge and the method of apportionment shall be made available to the Tenant upon request’.
  4. At the top of the service charge statement that was sent to the resident it stated, ‘Number of Units: Scheme – 6; Property Type – 4’. The statement provided a breakdown of the charges, a total budgeted cost, and a weekly calculation. The statement showed that the costs had been divided by four, in conjunction with the property ‘type’. However, there was nothing in the service charge statement or accompanying letter that explained what this meant, and so it was unclear why the service charge had been calculated in this way.
  5. In response to the resident’s questions about this, the landlord attempted to explain how the service charge was apportioned. It said that the six properties were split into ‘types’ for administrative purposes and stated that the costs were split equally between the six properties, but the costs were apportioned to the different property ‘types’. It also confirmed that the overall costs for the scheme was more than the £4,750.72 ‘total budgeted cost’ shown in the service charge statement for the four property ‘types’, further reinforcing that the other two units were also apportioned costs.
  6. The explanations from the landlord could have been clearer, and the wording in its responses was confusing at times. It would have been more customer focused had the landlord offered to speak with the resident to provide a further explanation and answer any questions. However, whilst the Ombudsman acknowledges these shortcomings, overall, the landlord’s communication was reasonable throughout the period of the complaint. The landlord responded to the resident’s concerns within reasonable timeframes, it gave a reasonable level of detail in its responses, and it acted fairly and in line with the resident’s tenancy agreement when it tried to explain the service charge and its apportionment.
  7. Further, the landlord has provided the Ombudsman with evidence of the service charge costs apportioned to the other two property ‘types’ in the form of the full service charge schedule. The Ombudsman is satisfied the landlord has calculated the resident’s service charge correctly and that the service charge costs have been split equally between all six properties.  Therefore, the information provided to the resident was accurate.
  8. Overall, there was no maladministration from the landlord in respect of the complaint, however, in line with the Ombudsman’s dispute resolution principles, this investigation has highlighted actions that the landlord can take to improve its service and learn from the outcomes of the complaint. These actions are set out as a recommendation below.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in respect of the landlord’s administration and communication in relation to the resident’s service charge query.

 Recommendations

  1. It is recommended that the landlord reviews its rent and service charge letters and statements to ensure they provide a clear explanation on the different property types, and how these impact the service charge calculations.