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Tower Hamlets Homes (202127944)

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REPORT

COMPLAINT 202127944

Tower Hamlets Homes

28 September 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 response to the resident’s concerns about her service charge calculations.

Background

  1. The resident is a leaseholder of the property, which is a maisonette within a block of similar properties. The lease began in May 2016. The landlord is the freeholder of the property.  

Summary of events

  1. On 30 September 2021, the landlord sent the resident a letter detailing the 2020-21 actual service charge. The actual charge was £317.35 lower than the estimate for the period. Attached to the letter was a breakdown summary of the charges, including costs of repairs for the block, estate, boiler, lift, door entry system and TV aerial. The landlord also provided a leaflet on how the charge could be paid and a summary of tenant’s rights and obligations in relation to the service charges.
  2. The resident emailed the landlord on 22 October 2021. She said that she wished to dispute several of the charges for the 2020-21 period and listed specific work orders which she had been charged for.
    1. She listed 3 work orders under block repair charges; 2 related to lighting repairs in stairwells and the other related to testing and reporting on lighting and power circuits. She asked whether these related to her block and what the third work order was for.
    2. She listed 21 work orders under boiler house repair charges and asked whether these were communal as they seemed to relate to individual properties.
    3. She listed 1 work order related to a door entry repair charge and asked which block and door it related to.
    4. She listed 2 work orders related to the TV aerial charge and asked if these were communal repairs or individual property issues.
  3. The landlord responded on 3 November 2021. It said it had reviewed the work orders the resident had highlighted and provided its findings within a table. It detailed the following:
    1. In relation to the 3 block repair work orders, it explained that the 2 lighting repairs had been correctly issued. It confirmed that the third work order was for a routine test to ensure that the lighting systems were working correctly.
    2. In relation to 19 work orders related to boiler repairs, it explained that each property in the block was connected to a communal boiler system. Any issue with the internal heating was usually caused by a fault in the communal boiler system. It confirmed that each of the listed work orders related to the communal system. It did not comment on 2 of the work orders the resident had raised.
    3. In relation to the door entry repair, it said that this was reported by the caretaker for the resident’s block. It contacted the caretaker as part of its investigation who was unable to confirm the location as it happened 18 months prior. It said it had reviewed the contractor’s report and was satisfied that the repair was issued correctly. It said that the repair was valid but that it would provide feedback to its repairs team to ensure that the location was specified in subsequent jobs.
    4. It confirmed that the 2 work orders related to the TV aerial were callout charges and on one occasion the operative could not access the property. It confirmed that these were issued correctly.
  4. The resident raised a complaint on 10 November 2021 as she did not feel that her service charge dispute was investigated property. She explained the following:
    1. In relation to the boiler repairs, she had been informed that repairs related to the communal system. She noted that most of the repairs had taken place following the communal boiler fault during the winter of 2020. She was also affected by the fault and was charged for work to a valve due to an airlock at the time. She questioned being charged for the work and was told that the landlord was responsible for maintaining the communal boiler as well as all infrastructure and pipework throughout the building to serve each property. Refilling the system following an outage of the communal system often resulted in an airlock which would fall under its responsibility. If a fault was identified within a leasehold property, this would be the leaseholder’s responsibility.
    2. She noted that the landlord said that it had found no evidence that the work orders raised related to individual properties. She had spoken to the contractors responsible for carrying out the work. She gave examples of 3 work orders she had initially raised which the contractors had verified related to works in individual properties. She did not feel that work carried out to individual properties should be charged to the leasehold service charge. From the information she received from the contractors, she did not believe that the landlord had fully investigated the issues.
    3. She added that the landlord was not being transparent and asked that the disputed charges were investigated further. She reiterated that she had needed to pay individually for a repair carried out in her property in relation to the boiler and did not believe she should need to contribute to repairs carried out in individual properties.
    4. In relation to the block repairs, she was dissatisfied that the landlord had not clarified as to whether these related to her block or another. She noted that in relation to the door repair, the landlord said it had reviewed the repair related to the door system and was satisfied the charge was issued correctly. She was dissatisfied with this response as she had not been provided with proof that this related to her block and did not feel that the landlord was being transparent.
    5. In relation to the TV aerial repairs, she said that if the tenant was not available for the appointment, then the missed appointment fee should be charged directly to them.
    6. She said that she should not have needed to call contractors to gain additional information about the work orders as this should have been investigated by the landlord. She felt that she was paying a leasehold and resident management fee for an unreliable and unacceptable service.
    7. She said that in previous years, some works listed were from years prior. She said she should be disputing all of the charges as she could not be sure that these related to 2020-21 but did not as she did not feel the landlord would take her seriously. She said that the leasehold management team should be managing this and providing the correct charges but every year she had found errors in its calculations.
  5. The landlord issued its stage 1 complaint response on 17 November 2021 and explained the following:
    1. It had spoken to the resident on 12 November 2021 to fully understand her concerns. She said that she felt it had not been transparent, accurate or accountable in the way it calculated and apportioned the service charges.
    2. It had looked at its repair log for the boiler and found that the repairs raised were due to faults with the boiler system. Although the repairs might be linked to individual properties on the estate, this did not mean that the cause of the fault was internal to the properties.
    3. It explained that each property served by the communal boiler was assigned a gross rateable value based on their size. The total cost of the repairs was apportioned to both leasehold and tenanted properties on the estate. It was satisfied that the resident’s contribution towards this element of the service charge was consistent with the service provided.
    4. It noted that the resident had said that the information it had provided was contrary to information provided by its contractors. It was keen to learn more about this so that it could investigate this further. It asked the resident to provide information about who she spoke to and the date and time of the interactions. It said that should the information on its system be inaccurate, it would take necessary steps to rectify this.
    5. In relation to the block repairs, its contractor had confirmed that the work to the main entrance door took place at the resident’s block. This was completed on 23 April 2020.
    6. It said that callout charges were consistent with the contract agreement it had with its contractors. It appreciated the resident’s concerns and explained that it required its contractors to pay residents £10 compensation for a missed appointment. It did this to ensure its repair service was fair to both contractors and residents.
    7. It was committed to ensuring that leaseholders did not pay for items that are not consistent with the lease terms. It did this by sharing calculation documents used in preparing the service charges. Sharing this with leaseholders enabled them to hold the landlord to account for its service standards and the lease terms. It said that the resident’s complaint provided it with an opportunity to review its processes and acknowledge where it had made mistakes.
    8. It explained that leaseholders had the right to make an application to the First Tier Tribunal (Property Chamber) for a determination about specific charges that they believe are excessive or unreasonable. It provided details for the First Tier Tribunal.
    9. It confirmed that the resident could escalate her complaint to stage 2 of its complaints process should she remain dissatisfied.
  6. The resident asked for her complaint to be escalated on 25 November 2021 and explained the following:
    1. She reiterated that she had needed to pay in full for work to replace a valve in her property due to an airlock following fault with the communal boiler system. She had been informed that where a fault with the communal system resulted in an airlock, the landlord’s contractors would address this as part of the landlord’s responsibility but if a fault is identified within a leaseholder’s property, this would be the responsibility of the leaseholder.
    2. She had come across several repairs of a similar nature which had been charged through the leasehold service charge in 2020-21. The landlord had informed her that the charges were correct, but she had again spoken to the contractors following the landlord’s stage 1 complaint response to gain additional information.
    3. She listed 14 work orders, which she had initially raised, that related to work undertaken in individual properties on the estate, some of which were identical to the work completed in her own property to replace a valve. She maintained that these should not have been charged through the service charges as they were either the landlord’s responsibility (for tenanted properties) or an individual leaseholder’s responsibility. She asked why she was charged individually for her repair, but she had also been charged for a proportion of 9 other repairs through the service charge for the same work.
    4. She believed that her dispute had been dealt with inadequately and negligently. She also considered the leasehold management service to be unacceptable and unreasonable. She felt that issues raised had been undermined and she was not getting the service she paid for. She said it was not her job to gather this information but felt she had no choice to ensure that the landlord addressed inconsistencies.
  7. The landlord issued its stage 2 complaint response to the resident on 22 December 2021 and explained the following:
    1. It apologised that the resident needed to raise a complaint to get the issues regarding her service charges addressed. It said that this was not the standard of service it aimed to offer its residents. It confirmed that its leasehold services team would be refunding amounts detailed on an attached schedule in relation to the repair charges.
    2. It explained that repairs to the communal boiler were rechargeable to all those connected to the communal boiler, but that repairs carried out to individual radiators within properties were not rechargeable. These should have been raised against the individual property so that the costs were not recharged to leaseholders in the block.
    3. It listed 13 work orders which should have been logged against individual property addresses. They were incorrectly logged against the communal boiler which resulted in them being recharged to leaseholders. It apologised for the error. It confirmed that it had reminded officers to log repairs on its system correctly and calculate service charges accurately. It did not comment on 1 work order which the resident had disputed as being identical to the repair carried out in her own property.
    4. It confirmed that the total refund due was £52.94 and that this would be refunded in January 2022. It again apologised for the shortcomings in its service.
  8. The resident referred her complaint to this Service in March 2022 as she maintained that she had been made to pay charges that did not apply to her. She said that the landlord was not willing to investigate when she first made contact and she had needed to spend significant time and trouble gathering the information required to pursue her concerns. She added that the landlord had not applied the credit it said it would to her account despite her calls in January, February and March 2022. She wanted the landlord to credit her service charge account with all of the charges she had disputed and also with the amount she needed to pay for leasehold management and customer engagement as she did not believe she received the services she had paid for.
  9. The landlord has provided this Service with a statement of the resident’s service charge account dated 9 May 2022. The statement shows a credit of £52.94 was made on 29 April 2022. The landlord has explained to this Service that the delay was due to an oversight on its part.

Assessment and findings

Scope of investigation

  1. In her communication with this Service, the resident said that she wanted to be reimbursed for charges she had disputed alongside those she had been charged in relation to the landlord’s leasehold management and customer engagement services. In line with paragraph 42(e) of the Housing Ombudsman Scheme, the Ombudsman may not consider complaints that concern the level of service charge or rent or the increase of service charge or rent. As such, it is beyond the remit of this Service to determine whether the resident is liable for these charges.
  2. This report will not determine whether service charges are reasonable or payable, or whether any reimbursement of the service charge is due to the resident but focus on the landlord’s communication with the resident and whether its response was reasonable in the circumstances. Complaints concerning the level of a rent or service charge are best suited to be considered by the First Tier Tribunal (Property Chamber), who can establish whether service charges are reasonable or payable. The resident may wish to contact The Leasehold Advisory Service (https://www.lease-advice.org/) for advice if she wishes to pursue this aspect of her complaint further.

Policies and procedures

  1. The resident’s lease agreement states that she must pay a service charge. The charge broadly covers the landlord’s costs associated with managing and maintaining the estate and block and delivering its services in any given financial year.
  2. The landlord has a 2 stage formal complaints procedure. At stage 1, it aims to respond within 10 working days. If the resident remains dissatisfied, they can escalate their complaint to stage 2. The landlord aims to respond to stage 2 complaints within 20 working days. If, at any stage, there is likely to be a delay, the landlord is expected to contact the resident, explain the reason for the delay and provide an expected response date. The landlord would be expected to respond to each aspect of a resident’s complaint in its responses.

The landlord’s response to the resident’s concerns about her service charge calculations

  1. In this case, it is evident that the resident spent time and trouble seeking additional information about her service charge and correction of errors between 22 October 2021 and the landlord’s final response on 22 December 2021. The landlord confirmed within its stage 2 complaint response that several costs for 13 work orders under dispute had been incorrectly charged to the resident because of the work orders not being assigned to the individual property where work was carried out. It initially acted fairly by apologising to the resident and confirming that it would refund the total of £52.94 in January 2022.
  2. The landlord’s initial response to the resident’s dispute on 3 November 2021 failed to comment on 2 repair orders (11332810/1 and 11349124/1) that the resident had disputed as she believed these related to works in individual properties. It would have been appropriate for the landlord to have confirmed its position to address her concerns more fully at this time.
  3. It is noted that the first work order detailed above related to a replacement valve and was later found to have been charged incorrectly to the resident following her escalation request. The other related to a loss of heating due to a build up of sludge and poor circulation. It is noted that the resident did not specifically pursue her dispute in relation to this work order, and the Ombudsman is unable to determine whether this was charged correctly, however, the description for this work order is similar to other work orders that the landlord later found to be incorrectly charged. The landlord did not offer any further comment on this charge which was a missed opportunity to address the resident’s concerns.
  4. The landlord acted appropriately by issuing its complaint responses within its published timescales. In her escalation request to the landlord, the resident made specific reference to 14 work orders which she had been informed had been carried out in individual properties by the landlord’s contractors. The landlord failed to comment on 1 of these within its response (11309239/1) or confirm whether a refund was due for this work order. As this work order also related to the replacement of a valve within an individual property, which was similar to other orders found to be incorrect, it would have been appropriate for the landlord to have confirmed its position and explained how this order differed from the others if it was found to have been charged correctly.
  5. In addition, while the landlord addressed all but one of the specific work orders raised by the resident and found that 13 work orders had been charged incorrectly, there is no evidence to suggest that it had reviewed the other 7 work orders in relation to the boiler works that the resident had initially disputed on 22 October 2021. This would have been appropriate given the resident’s concern that her initial dispute was not handled accurately. In view of this, an order has been made below for the landlord to review these work orders to determine whether these were charged correctly. If they were charged correctly, it should confirm the reasons why the orders did not relate to individual properties and were therefore applicable to the resident’s service charge. If they were not charged correctly, it should arrange to refund these.
  6. In relation to the door system repair, the landlord explained that its caretaker could not remember the location of the work due to the length of time that had passed. It then confirmed that it had checked this with its contractor who said that the work related to the resident’s block. While this was a reasonable recourse to take given that its caretaker could not recall the relevant details, the landlord has not provided evidence of the actions it took to confirm this with its contractor. The Ombudsman is therefore unable to determine that the landlord acted appropriately in its investigation of the matter.
  7. In relation to the block repairs, the resident had initially asked for evidence to confirm that the lighting repairs related to her block. She also raised concern in her complaint that the landlord had not provided evidence to confirm that charges applied to her block, despite the landlord stating that these had been charged correctly. The landlord failed to comment further on the 3 lighting repairs which she had been charged for or provide evidence as to how it satisfied itself that these were charged correctly to the resident. While it is not within the remit of this Service to determine whether these were charged incorrectly, the onus would be on the landlord to provide the evidence it had relied upon when determining that these were accurate. Its failure to do so was likely to cause inconvenience to the resident in that it had failed to fully respond to her complaint.
  8. The landlord acted reasonably by confirming its position in relation to the 2 call out charges for work orders associated with the TV aerial. As above, it is not within the remit of this Service to determine whether the resident is liable for these charges or whether these were accurately charged. If the resident wishes to pursue her dispute regarding these charges further, she may wish to contact the First Tier Tribunal (Property Chamber).
  9. The landlord acknowledged that there were errors in its service charge calculations and that the level of service provided to the resident was below its expected standard. It took some steps to put things right by apologising to the resident for its poor service and confirming that it would credit amounts to the resident’s account. However, it failed to fully acknowledge the level of involvement by the resident in seeking corrections of its mistakes or that it had previously provided incorrect information to her. It also failed to offer suitable redress for the additional time and trouble and involvement she had needed to have in pursuing corrections of the landlord’s errors.
  10. In addition, there was a delay in providing the resident with the refund as agreed following its stage 2 complaint response in December 2021. The landlord has confirmed to this Service that the delay in crediting the resident’s account was due to an oversight on its part and that it had not contacted the resident about the delay. This was likely to have caused additional inconvenience to the resident and she said she had contacted the landlord multiple times between January 2022 and March 2022 about the refund before approaching this Service.

Determination (decision)

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its response to the resident’s concerns about her service charge calculations.

Reasons

  1. The landlord acknowledged failings in its actual service charge calculations and acted fairly by apologising and confirming that it would refund the resident. However, it failed to confirm its position in relation to each disputed charge or provide evidence it had relied upon when determining that the other charges were issued correctly. It also failed to fully acknowledge the time, trouble or inconvenience caused to the resident in seeking a correction of its mistakes. In addition, there was a delay on the landlord’s part in refunding the resident as agreed following its final response which was likely to have caused additional inconvenience to the resident.

Orders

  1. Within four weeks of the date of this report, the landlord is to write to the resident to apologise for the identified failures.
  2. Within four weeks of the date of this report, the landlord is to pay the resident £100 compensation in recognition of the time and trouble she spent seeking a correction of the landlord’s service charge calculation errors. This should be paid directly to the resident rather than to her service charge account unless specifically requested.
  3. Within four weeks of the date of this report, the landlord is to review the costs associated with 8 work orders (detailed in the determination letter attached to this report) and confirm whether these were correctly recharged to the resident through her service charge.
  4. Within two weeks of the review, the landlord is to contact the resident and this Service to confirm its findings and explain whether any further refund is due in relation to the charges disputed. 
  5. The landlord should provide evidence of compliance with the above orders to the Ombudsman within the timescales set out above.

 Recommendations

  1. It is recommended that the landlord carries out training for staff involved in service charge enquiries to enable them to identify and correct errors when disputes are first raised.