Platform Housing Group Limited (202127655)

REPORT

COMPLAINT 202127655

Platform Housing Group Limited

12 October 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 handling of:
1. The resident’s request for a full breakdown of the completion statement, and a refund of fees and charges following the surrender of his lease.
2. The associated complaint.

Background and summary of events

Background

At the time of the complaint the resident was a joint leaseholder of a 2 bedroom flat. He had lived in the property with his wife since 4 June 2014, until they surrendered the lease on 19 March 2021. The property is situated in a retirement village. The landlord is the freeholder of the property.
The resident is an older person, he has a heart condition and a hearing impairment.
Throughout the complaints process both the service charge team and the complaints team were corresponding with the resident. The complaints team dealt with the complaint and payment of the compensation. The service charge team dealt with the service charges and refunds of overpaid fees and charges.

Policies, procedures and legal obligations

The resident is subject to the following terms and conditions of the lease:
1. The leaseholder shall pay the deductible charges to the landlord on the date of surrender.
2. The lease describes the “deductible charges” as meaning:

A. Such sums as may be due and owing or but for the determination of the lease would have become due and owing to the landlord in respect of arrears of rent, amenity charge, and service charge including for the avoidance of doubt any underpayments of amenity charge and or service charge not already paid.

B. The sum of £750 towards the landlord’s administration costs incurred on the assignment of the lease to be increased annually on 1 April of each new financial year by RPI.

C. Such sums as may be required to be expended by the landlord in fulfilling any outstanding obligations of the leaseholder including to put the apartment in good repair in accordance with the leaseholder’s obligations to the landlord contained in this lease, works identified in the landlord’s inventory, and any loss of rent during the period properly incurred whilst doing so.

D. A sum representing 1% of the price for each year of occupation since the date of the lease (up to a maximum of 10 years) to provide a sinking fund for depreciation and the costs or anticipated costs of renewal and replacement on the village upgrading and improvements to the village, whether certain or contingent and whether obligatory or discretionary, and other items of future contingent capital expenditure as are not included in the service charge and any interest paid on any money borrowed by the landlord to defray any expenses incurred.

The landlord’s service charge policy says:
1. Service charges will be apportioned between individual properties in accordance with the terms of the tenancy agreement, lease or licence. It recognises the need for reasonable and fair apportionment of charges to customers and where none is prescribed, it will adopt a fair and reasonable approach to apportionment. For general needs and shared ownership/leasehold developments, service charges will be apportioned by equal split. For retirement villages the apportionment will be according to the number of bedrooms in the property.
2. It will provide standardised budgeting and accounts information which makes it clear how charges are apportioned between customers within the same block or on the same estate.
3. For retirement village leasehold and shared ownership properties, where required in the lease agreement, a percentage of the value of the property is collected on sale and paid into the reserve/sinking fund, in addition to the regular amounts paid into the fund as part of the service charge.
The landlord’s equality, diversity and inclusion policy states, in relation to access to information and services, that it will ensure:
1. Its customers have equal opportunity to access the information about its business, its services and employment opportunities.
2. Its employees are trained to have the skills, information and understanding to respond to all our communities appropriately.
3. Customers are aware that information is available in all formats, including different languages, audio, braille, easy read and that any other communication needs are met.
The landlord operates a 3 stage complaints process. The ‘quick resolution’ informal stage is applied where a member of staff feels that the issue could be resolved by the relevant service team within 2 working days. The informal stage is bypassed where it is felt that the issue cannot be resolved within the timescale. Stage 1 formal complaints are responded to within 10 working days. Stage 2 formal complaints (final review stage) are responded to within 20 working days.

Scope of investigation

The resident contacted the landlord on 3 September 2020 and informed it that he wished to surrender his lease. The resident’s decision followed an unresolved dispute with the landlord which had been ongoing for some time. The dispute does not form part of this investigation.
The surrender and regrant of a lease is a complex legal process. There are specific rules and regulations that must be followed by all involved parties to ensure that all legal requirements are met. Solicitors play an important role in advising and guiding their clients throughout the process.
It is not within the Ombudsman’s remit to determine whether the completion statement was accurate, or not, at the point of completion. It would have been the responsibility of the resident’s solicitor to ensure that the client agreed with the respective fees and charges prior to completion. Therefore, this investigation will focus on the events that took place after the completion of the lease surrender, from 28 March 2021, and will assess whether the landlord’s overall communication with, and responses to, the resident were appropriate, fair and reasonable.

Summary of events

The resident contacted the landlord on 28 March 2021 by email. He requested an explanation of the completion statement provided by the landlord’s solicitors, as he believed that there were errors and omissions. He asked the landlord for the following information:
1. The landlord’s calculation of his contribution to the sinking fund.
2. Where the lease stated the landlord could charge a ‘retention’ fee of £650 and, if justified, what was the purpose of the fee, and when would it be refunded.
3. Where the lease stated the landlord had the right to charge the conveyancing fees, as these costs should be covered within the administration fee.
4. Whether he would receive the refund, due to be paid to all leaseholders resident on 31 March 2021, for the supply of gas and other annual service charges following the challenges made with the resident’s association.
The resident emailed the landlord on 31 March 2021 in response to the landlord asking for clarification on an additional point the resident had previously raised. In his correspondence the resident said that he was dissatisfied, having terminated his occupancy on 19 March 2021, that he had paid the service charge up to 31 March 2021. He requested a refund of his overpaid service charge and a refund of the charges due to be paid to all leaseholders (confirmed in a letter from the landlord dated 18 March 2021). He also requested a refund of the retention fee, conveyancing fees, and 2020/21 overpaid service charges.
The resident contacted the landlord again on 6 April 2021. He said he had cancelled his direct debit after making the final service charge payment. However, he had discovered that a payment of £533.10 was made to the landlord on 1 April 2021 in error. He asked the landlord to refund the overpayment, erase all records referring to the resident as a current customer, and in future, if necessary, only communicate with the resident via his e-mail address.
The resident sent an email to the landlord on 11 April 2021 to amend his refund request following confirmation of the due amounts in a letter from the landlord dated 8 April 2021, a copy of which has not been provided to this service. He requested a refund of the 2016-17 annual service errors of £56.61 and a refund of grounds maintenance charges of £102.04. He also requested copies of his personal data held by the landlord, in a paper/printed format by post, and the annual service charge accounts, listing all transactions for the year ending 31 March 2021.
The landlord responded on 16 April 2021. It thanked the resident for his emails and noted that he was requesting monies back after completion of the surrender of his lease. The landlord gave the following responses:
1. The gas accrual refund, 2016/17 annual service charge error refund, and grounds maintenance refund were only applicable to leaseholders who had a current lease on 31 March 2021. As the resident had surrendered his lease and completed the matter on 19 March 2021, the credit was not due.
2. The retention payment of £650.00 would have been communicated to the resident’s solicitors. It was not aware of any communication from the solicitors about the retention payment. The payment was to cover any adjustments on the service charge account for 2020/21. In September 2021, when it adjusted the service charge account, it would use the retention payment if required. If it did not use all the monies, or there was no payment due from the retention, the resident would be refunded all or a proportion of the retention payment. The retention monies were held in a separate account to protect them and the process was common practice.
3. The conveyancing fees were all part of the payments made by the solicitor in relation to the sale and were common practice in sales such as the residents. If the resident had any concerns in relation to the disbursements, he should have raised concerns prior to surrendering his lease. The landlord was not aware of any further communication from the resident’s solicitors about the disbursements.
4. The resident would receive a refund of £216.61for the overpayment of 2020/21 service charges between 20 March 2021 and 31 March 2021.
5. Leaseholders were expected to cancel their direct debits at the point the lease was surrendered. However, the direct debit guarantee allowed for the payment to be reversed. It had checked the resident’s account and found that the direct debit posted on 1 April 2021 for £533.10 had been reversed on 8 April 2021.
6. It had passed the resident’s subject access request to its compliance team and it understood that they had already been in touch and were processing the request.
7. The solicitor acting for the resident was responsible for discussing and arranging any requests for credits or special arrangements prior to completion, which they should have been aware of. However, it had not received any such requests. It asked the resident to contact his solicitor if he had any further queries.
The resident responded to the landlord on 2 May 2021. He said he was dissatisfied with its refusal to refund the other charges/fees he had previously paid. He said that some facts had been overlooked and information withheld, both of which had resulted in misunderstanding and unreasonable and unacceptable determinations. The resident said:
1. He was very dissatisfied with the landlord’s failure to respond to numerous requests, since September 2020, for an accurate explanation of the surrender process to assist other leaseholders, or their representatives, in future. He said the process appeared to be secretive, vague and thoroughly confusing, often completely at odds with the lease and the landlord’s values and principles.
2. He was unhappy that the questions he asked on 28 March 2021 had not been fully answered.
3. If the landlord was empowered to make a provision for claiming a shortfall in recovering costs for 2020/21 services, in fairness, it must also refund costs made in error or omission, not only for 2020/21 services, but also for earlier periods.
4. He wanted to register his issues as a formal complaint and asked the landlord to carefully review its decisions.
5. The completion statement was sent 7 days before the surrender of the lease, which was in his view inadequate for careful consideration and communication.
6. He considered the retention fund was unfair and unacceptable. The lease stipulated that leaseholders must pay reasonable, variable costs for services, and he had paid all requested charges in good faith. He believed costs had been unjustly withheld and there was no time limit, or warning of limitations, for correcting the matter.
7. The retention fee was listed without any explanation in the statement. The statement failed to issue any warning or limitation for challenging the charges. The process was confusing and his solicitor told him that the retention fee was an amount which was retained by the landlord until it had inspected the property and was happy with its condition.
8. In his opinion the decision not to pay the refunds for gas accrual, 2016/17 service charge errors, and grounds maintenance was one-sided and discriminatory, and the refund had been unjustly withheld.
The landlord acknowledged the resident’s formal complaint on 5 May 2021. It sent the resident a further email on 7 May 2021 and asked the resident to confirm precisely what he would like as the outcome of the complaint investigation.
The resident responded on 14 May 2021. He said he wished for his complaint to be treated promptly and fairly, the investigation to correct the errors and omissions in the completion statement dated 9 March 2021, and he wanted a refund of the money he had paid in good faith. This included the gas accrual refund, the refund for the 2016/17 annual service charge errors, and the grounds maintenance refund. He also wanted the conveyancing fees to be set against the landlord’s admin costs. He requested to be reimbursed the retention fee in the event of an underspend in the 2020-21 service charge estimates, and he asked that the landlord answer the questions he asked on 28 March 2021. In addition to this he requested:
1. An accurate explanation of the surrender process be provided, with amended versions of the two examples, to assist other leaseholders or their representatives in future. (The two examples are a reference to information contained within the lease in relation to examples of charges to leaseholders on surrender of a lease. This point was clarified between the parties in separate correspondence on 28 May 2023 and 7 June 2023).
2. Some gesture of goodwill, such as a donation to a particular project, and an apology for the time and stress experienced in dealing with the matter.
The landlord contacted the resident on 17 May 2021 to extend its complaint response time. It said that it had made some initial enquiries, however it wanted to extend its investigation by 10 working days to 2 June 2021, to ensure that it had covered all the points raised.
The landlord contacted the resident again on 28 May 2021 to extend its investigation further due to the complexity of the issues raised and to ensure it had all the relevant information to provide a comprehensive response.
The resident responded to the landlord on 7 June 2021. He said that he disagreed that the issues raised were complex, and he trusted the landlord would avoid the need for escalation of the dispute and respond by 18 June 2021.
The landlord sent the resident a stage 1 response letter on 25 June 2021 by email. It thanked the resident for his patience whilst it investigated the formal complaint. It said:
1. It had agreed that the refunds for gas accrual, 2016/17 annual service charge, and grounds maintenance costs were to be refunded to leaseholders who had a current lease on 31 March 2021. As the resident surrendered his lease on 19 March 2021, the credits were not payable.
2. However, having investigated the matter fully, it recognised the information and timescales around the reimbursement should have been clearly communicated prior to, and during, the sales process, to give the resident the opportunity to instruct his solicitor to negotiate compensation through the sales process. In recognition of the lack of communication it would refund the full amounts that were due on 31 March 2021.
3. The land registry fee and search fee, both part of the conveyancing fees, should not have been charged to the resident and it apologised for the error. It had arranged for its solicitors to return the charges to the resident’s solicitors as soon as possible.
4. The remaining conveyancing fees were correctly charged to the resident. However, it acknowledged the resident’s suggestion that the two examples in the lease should be amended to assist other leaseholders in future. This had been fed back to the relevant team. It also recognised there should be a clear policy outlining the surrender and regrant process and this would be reviewed.
5. It could provide the following responses to the questions raised in the resident’s email dated 28 March 2021:

A. The sinking fund payment had been calculated correctly, and it provided a full breakdown of the calculation.

B. The retention fee of £650 would have been communicated to the resident’s solicitor. The retention was for any adjustments on the service charge account for 2020/21. In September 2021, when the service charge accounts were adjusted, it would use the retention fee if required. If, however, it did not use the whole amount, or there was no payment required, the resident would be refunded accordingly.

C. The retention monies were held in a separate account to protect them. The process was common practice in sales and should have been challenged at the time by the resident’s solicitor, if there were any concerns.

D. It acknowledged the resident’s concern that the charges of the required fees should be made clearer to future leaseholders and this had been fed back to the relevant team.

It upheld the resident’s complaint and, in addition to the reimbursements offered, it offered the resident £100 in recognition of the additional distress and inconvenience it had caused.

The landlord contacted the resident on 5 July 2021 to confirm the monies agreed through the complaints process had been credited to his account. This included £390.17 for the gas accrual, £102.04 for grounds maintenance, £56.61 for the 2016/17 service charge errors and the credit of £216.61, which meant a total refund of £765.43 had been paid.
The resident contacted the landlord on 7 July 2021 as he had noted a discrepancy between the refund amount stated in the letter dated 28 June 2021, and the amount stated in the email dated 5 July 2021. The resident said the agreed refund was £864.98, and not 765.43. He asked the landlord to amend the account and reimburse him as soon as possible.
The landlord responded on the same day and apologised for the confusion. It explained that the refunds were being dealt with by two separate departments. It said the resident’s account was in credit by £765.43 in credit, and if it added the £100 compensation, the resident was entitled to a total payment of £865.43. The landlord attached a statement showing the credit and said that it would send another statement showing the zero balance once the refund had been made.
The resident sent the landlord two emails on 4 October 2021. He reminded it that the two examples set out in the lease, had not yet been improved. He also requested a progress report on any improvements made in relation to the surrender and regrant process. The resident also told the landlord that he was aware of a £647.28 underspend in the service charge accounts for the year ending 31 March 2021. He asked for a refund of overpaid charges, a copy of the financial reports for the period, and other documents normally provided within six months of year end. In addition to this he asked for a refund of the retention fee, land registry fee, and search fee.
The landlord responded on 7 October 2021. It apologised for the delay in the refund of the land registry and search fees and said it had chased the relevant team. It also informed the resident that the learning highlighted in the stage 1 complaint response was an ongoing process and had been passed onto the relevant team to review.
The landlord contacted the resident again on 13 October 2021. It confirmed that it would be returning the proportion of credit for the service charges and all the retention fee. It said it had been working with the relevant teams to amend the residents former account, so a refund could be issued.
The resident responded on the same day. He said that the response did not cover all his requests. He asked the landlord to confirm that the apportioned credit due was £624.22 and if not, how it was calculated. He also reminded the landlord that he had requested a copy of all financial reports normally provided within six months of year end, a refund of the remaining overcharged fees, a report of the progress on the feedback to the relevant team in relation to clarification of the surrender and regrant process, and an apology for the time wasted and distress caused.
The resident sent the landlord a further email on 20 October 2021 as he had not yet received a response, or a refund of overpaid fees and charges.
The landlord confirmed on 20 October 2021 that it would refund the retention fee and credits related to the resident’s former lease account. It told the resident to direct any other issues to the customer feedback team or the person who investigated his complaint. On 21 October 2021 the landlord told the resident it had chased a response from its solicitor in relation to the outstanding fees, and it also apologised for the delay.
The resident contacted the landlord by email on 30 October 2021. He thanked the landlord for the statement and for arranging the refunds and nominal compensation. He asked the landlord to explain the ‘general debit adjustment’ made on 12 April 2021. He said he had yet to receive the statement showing the zero balance following the refunds from his account. He said that as there were still numerous outstanding enquiries, requests for evidence of costs/revenue and complaints regarding financial matters, he wanted to raise a formal complaint.
The resident contacted the landlord again on 3 November 2021 to chase a response. The landlord confirmed on the same day that he would receive the retention fee and service charge credit for 2020/21, however, it would come back to him in relation to his request for the financial information.
The landlord responded to the resident again on 5 November 2021. It said the resident had stated that he wished to register a formal complaint in relation to “numerous outstanding enquiries, requests for evidence of costs/revenue and complaints regarding financial matters”. The landlord said it was unclear as to what the resident wanted to make a complaint about specifically, and how it related to his former leasehold account.
On 16 November 2021 the resident told the landlord that he was upset by what he described as the poor standards of financial administration, communication, and the “dysfunctional” complaint process. He confirmed that his complaint was in relation to his former leasehold account, which had yet to be closed satisfactorily, and the surrender of his lease. He said he had still not received a refund of fees and overpaid service charges. He asked the landlord to refund the overcharged costs and fees and escalate his complaint.
The landlord sent several emails to the resident on 16 November 2021 from both the service charge team and the complaints team. It said the ‘general debit adjustment’ made on 12 April 2021was an adjustment on the account. Although the resident’s lease ended on 18 March 2021, it did not close the account 12 April 2021.Therefore, the system had made the necessary adjustments to calculate the correct charges. It also said that it would send over the transaction details for the financial year 2020/21 in the next few days. It confirmed that it would refund the resident £1274.24. Which was made up of the retention fee of £650.00 and a credit of £624.24 from the surplus of 2020/21.
The resident contacted the landlord by email on 18 November 2021. He asked whether his complaint had been escalated in line with his request. He also informed the landlord that he did not agree that the total of the outstanding refund was £1,274.24 as it did not include the land registry fee or search fee, which were £138.60 in total. The resident suggested that a gesture of goodwill or compensation should be added to the outstanding amount in recognition of the delays, distress and inconvenience experienced by the resident and his wife.
The landlord confirmed, on 19 November 2021, that it had sent the transaction details for the financial year 2020/2021 and it was waiting for the resident’s bank details to arrange the refund. It said that it would provide an update on the refund from the solicitors. It also asked the resident to clarify what remained outstanding, and it asked the resident to be specific, rather than providing general statements.
The resident responded to the landlord on 22 November 2021 by email. He said he was not prepared to wait for a further update from the solicitors. He said that the outstanding refund due was at least £1,412.84, and he wished the landlord to confirm the amount before he submitted his bank details. He said that the statements he made in his email of 18 November 2021 were specific complaints and clearly detailed his grievances.
The landlord informed the resident on 22 November 2021 it had received confirmation that its solicitor would be sending the refund of the land registry and search fees to the resident’s solicitor. It apologised for the delays.
The landlord acknowledged the residents request for his complaint to be escalated to the final review stage by a letter dated 30 November 2021. The landlord contacted the resident by telephone on 3 December 2021 and arranged a further telephone call to discuss the issues raised by the resident on 7 December 2021.
The landlord sent the resident an email and a copy of a statement showing a zero balance on 10 December 2021. On 11 December 2021 the resident requested a clear explanation of all transactions in the statement described as ‘leaseholder service charges,’ ‘general debit adjustments’ and the refund dated 7 July 2021. He said he felt that the statement failed to meet acceptable standards that enabled vulnerable leasehold customers to easily scrutinise their final financial statement. He also said that he had not yet been provided with all the financial statements normally provided within 6 months of March 31, 2021.
The landlord sent the resident a final stage 2 review response letter, dated 10 December 2021, by email on 15 December 2021. It said:
1. It was pleased that the resident confirmed he had received the refund of solicitor’s fees and overpaid service charges. It could confirm that payment for the outstanding amount of £1,274.24 would be paid by the end of Tuesday 14th December 2021.
2. It would not have been able to process a refund until the accounts were completed at the end of September 2021. It did not legally have to award the additional refund of £624 but it had agreed to do so. It apologised that this had taken longer than it would usually anticipate, but it hoped that by refunding the £624 in addition to the retention, it was being fair.
3. It confirmed that it had requested a statement of account showing a zero balance to be sent out to the resident. It apologised that he had not received it sooner.
4. It could confirm that a piece of work in relation to providing a clear policy outlining the surrender and regrant process was being developed. It hoped to have this in place by April 2022.
5. It was pleased to confirm that the report on annual service costs (2020/21) and other documents the resident would have expected to receive after the end of September had now been sent.

Assessment and findings

The resident’s request for a full breakdown of the completion statement, and a refund of fees and charges following the surrender of his lease.

It should be noted that the request made by the resident for information and clarification of charges on 28 March 2021, were all issues that should have been resolved between both parties as part of the legal process, prior to completion. The landlord, however, took on the responsibility for resolution of the matter by agreeing to look into the issues and provide feedback to the resident. It therefore went above and beyond its responsibilities in this case in resolving this matter for the resident.
It is unclear as to the content of the letter sent to the resident on 8 April 2021 as this service has not been provided with a copy. From the evidence provided, it appears that the letter was sent to all leaseholders in relation to service charge refunds. It is also unclear as to why the resident received a copy of the letter given that he was no longer a leaseholder.
The landlord provided a reasonable and clear response to the resident’s queries on 16 April 2021. It was appropriate for the landlord to refer the resident back to his solicitor if he had any further queries, given that the queries related to the completion of the surrender and regrant process.
The landlord’s stage 1 response recognised that the information it had provided in relation to the reimbursement of charges was unclear, and that this had resulted in a missed opportunity for the resident to instruct his solicitor to negotiate compensation through the sales process. It, therefore, agreed to honour the refunds, which was reasonable in the circumstances.
The landlord also apologised in the stage 1 response and recognised that the land registry fee and search fee should not have been charged to the resident. It agreed to instruct its solicitors to refund the charges, which was reasonable in the circumstances.
The landlord showed that it had learnt from the complaint when it agreed that the two examples of fees due on surrender, set out in the lease, should be amended to provide greater clarity to other leaseholders going forward. It also recognised that a clear policy outlining the process was required. In addition to the refunds, the landlord’s offer of £100 compensation for distress and inconvenience was reasonable in the circumstances, considering the general impact on the resident.
However, the landlord’s overall communication with the resident was poor at times throughout the complaint. The resident had to chase the landlord for responses to his emails, and repeatedly ask for the same information or explanation. The evidence provided suggests that the resident was dealing with both the service charge team and the complaints team, who were both sending emails and agreeing refunds and compensation. This was likely to have caused unnecessary frustration and confusion for the resident.
It would have been reasonable for the landlord to have nominated one department or officer to correspond with the resident to reduce the amount of contact necessary by both parties. This is evident when the landlord confirmed on 5 July 2021 that the total refund due was £765.43, when in fact the resident was due a payment of £865.43 once the compensation was included.
The resident had to contact the landlord again on 4 October 2021 to chase the fees due to be returned to his solicitor and the finalisation of the service charge accounts for 2020/21. Although the landlord did respond on 13 October 2021 to confirm that the resident would be receiving a service charge credit in addition to his full retention fee, it was unreasonable that the resident had to prompt the landlord to do this.
In the Ombudsman’s opinion it would be reasonable for the landlord to have a process in place to ensure that former leaseholders, who are waiting for the finalisation of their year-end accounts, are automatically contacted without the need to remind the landlord.
The landlord’s response on 20 October 2021, and the several responses sent on 16 November 2021,are further evidence of the confusion caused by two different departments dealing with the issues separately. The response on the 20 October 2021 was also unsympathetic to the resident’s situation and required the resident to make further contact with the landlord. This was unreasonable, as the resident had already had to make more contact than he should have in the circumstances.
The reasons for the persistent delays in refunding the resident the fees and charges he was entitled to is unclear from the evidence provided. The landlord was aware from its correspondence with the resident that he was distressed and frustrated by the landlord’s unreasonable delays and apparent lack of action. It was also aware that the resident is an older person who was struggling to make sense of the multiple transactions and adjustments on his leasehold account.
Therefore, it would have been reasonable for the landlord to offer to meet with the resident and go through the accounts in person, or at the very least offer to have a telephone conversation, rather than sending multiple, and often confusing and conflicting emails, from different departments.
The landlord’s equality, diversity and inclusion policy clearly says that it will ensure customers are aware that information is available in all formats, and that any other communication needs are met. Yet, from the evidence provided, it did not apply this policy to the resident’s circumstances. There is no evidence to suggest that the landlord made any enquiries with the resident about his communication needs or offered to make any adjustments to its processes, given that the resident has a protected characteristic under the Equality Act 2010.
The landlord’s stage 2 response did not adequately address the further unreasonable delays in resolving the issues since the outcome of the stage 1 complaint. Although it clarified that it could not have provided an update on the retention fee, or the credit related to the 2020/21 service charges, until the accounts were finalised in September 2021 and apologised for the delay, it failed to adequately recognise that it had taken 3 months to finalise the resident’s service charge account. Given that it does not appear to be a complex decision making process as there was an overall surplus, and the retention amount was not required, this amounted to an unreasonable delay.
The stage 2 response also failed to offer any compensation in recognition of the further time and trouble, frustration and distress the resident had experienced throughout the process.
In summary, the landlord’s communication with the resident was poor at times and the landlord did not consider whether the resident had any specific communication needs. The landlord’s general approach to the resident and his concerns was unsympathetic. There were unnecessary and unreasonable delays in providing the resident with refunds of overpaid fees and charges, and the landlord failed to offer reasonable redress (a proposal to make things right with the resident) as it did not consider additional compensation at stage 2.

The associated complaint

There were failings in the landlord’s handling of the resident’s complaint. The resident submitted his stage 1 complaint to the landlord on 2 May 2021. The landlord sent the resident a letter on 17 May 2021 to extend the response time by 10 days until 2 June 2021. The landlord then sent a further extension letter on 28 May 2021 due to the “complexity of the issues raised”.
The Housing Ombudsman’s Complaint Handling Code in place at the time of the complaint stated that a “stage 1 decision should be 10 working days from receipt of complaint – if this is not possible, an explanation and a date by when the stage one response should be received. This should not exceed a further 10 days without good reason”.
It is acknowledged that the resident’s complaint was relatively complex and would have taken some additional investigation to understand the full extent of the resident’s concerns and provide a detailed response. However, once the constituent parts of the complaint had been understood it was unreasonable to expect a delay beyond the first extension period of 2 June 2021. As the landlord did not provide a stage one response until 25 June 2021, the resident was subject to an unnecessary and inappropriate additional delay of 17 working days.
This meant the overall response time was 37 working days from submission, which was significantly outside of the landlord’s published timeframe of 10 working days, and 20 working days including the first extension request, which was unreasonable.
The resident informed the landlord on 30 October 2021 that he wanted to raise a formal complaint due to “numerous outstanding enquiries”. As the enquiries appeared to generally relate to the stage 1 complaint, it would have been reasonable for the landlord to escalate the complaint to stage 2 at that point, or at the very least seek clarification from the resident that he wanted to escalate his complaint to stage 2. However, the landlord did not acknowledge the resident’s request to escalate his complaint until 30 November 2021, which was unreasonable.
The landlord’s stage 2 response did not recognise its complaint handling failures and delays or consider whether to provide the resident with compensation in recognition of the likely distress and inconvenience caused.
In summary, there were failings in the landlord’s complaint handling, which would have caused the resident additional time and trouble, frustration and distress. The landlord did not respond to the resident’s complaint in line with its complaints policy which resulted in delays. The landlord did not offer compensation or provide reasonable redress in the circumstances.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the resident’s request for a full breakdown of the completion statement, and a refund of fees and charges following the surrender of his lease.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the associated complaint.

Reasons

The landlord delayed unreasonably in refunding the resident the overpaid fees and charges. The landlord’s communication with the resident was poor and confusing at times, and the landlord failed to consider whether the resident had any specific communication needs in line with its equality, diversity and inclusion policy. Although the landlord provided the resident with compensation for general distress and inconvenience at stage 1, it failed to consider additional compensation at stage 2.
The landlord’s complaint handling was poor and it departed from the timescales set out in its complaints policy and the Housing Ombudsman’s Complaint Handling Code. There were unnecessary delays in the landlord issuing its stage 1 response and in the escalation of the complaint to stage 2. The landlord also failed to adequately recognise its complaint handling failures and did not offer any redress.

Orders and recommendations

Orders

Within four weeks of the date of this report, the landlord must:
1. Write to the resident to apologise for the failures highlighted in this report.
2. Pay the resident compensation of £300 for the distress and inconvenience, time and trouble caused by the failures in its handling of resident’s request for a full breakdown of the completion statement, and a refund of fees and charges following the surrender of his lease.
3. Pay the resident compensation of £175 for the distress and inconvenience caused by its complaint handling failures.
Within eight weeks of the date of this report, the landlord must review its service charge policy and process specifically in relation to finalising service charge accounts following the termination or assignment of a lease. The landlord must provide this service with evidence of the review in the form of an action plan, and include actions it has taken, or will take to ensure:
1. Residents are made aware of the process for reconciling service charge accounts, and that accounts will not be finalised until the September after year end.
2. Former leaseholders automatically receive any refund of the retention fee due within a reasonable time frame, and without the need to prompt the landlord.
The landlord should reply to this Service with evidence of compliance within the timescales set out above.

Recommendations

It is recommended that the landlord should:
1. Ensure that its staff are aware of the need to consider residents individual communication needs and make reasonable adjustments where necessary, in line with its equality, diversity and inclusion policy.
2. Consider that where a resident has made a formal complaint, a single point of contact is allocated to liaise with the resident to avoid multiple contacts from different departments and unnecessary confusion.
The landlord should reply to this Service within 4 weeks of the date of this report to advise of its intentions in regard to the above recommendations.