Stonewater Limited (202223270)

REPORT

COMPLAINT 202223270

Stonewater Limited

31 January 2024

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 the resident’s queries about service charges.
The Ombudsman has also investigated the landlord’s complaint handling.

Background

The resident has been a shared owner of the landlord, a housing association, since 2018. The property is a 4 bedroom house, which is on a road that is part of a larger scheme of properties. Some of the communal services to the scheme are provided by the landlord and some by a third party management company.

Policy and legal framework

Under the terms of the lease agreement, the resident agrees to pay the landlord a proportion of:
1. The expense of cleaning, lighting, repairing, renewing, decorating, maintaining and rebuilding any communal facilities.
2. Costs, charges and expenses incurred by the landlord in connection with the provision, maintenance and management of communal facilities.
3. The cost of maintenance, repair and renewal of the shared footpath.
Under the terms of the lease agreement, the landlord agrees to take reasonable steps to enforce the obligations and covenants on the part of the managing agent, relating to the managed facilities.
The landlord’s complaints, compliments and comments policy at the time of the resident’s complaint said that it would not accept a complaint when it was referring to a service not provided by the landlord. It would respond to stage 1 and 2 complaints within 10 working days. Where it was unable to respond within these timeframes, it would agree an extension with the resident.

Summary of events

In April 2022 the resident reported that a landscaped area next to her parking space was overgrown and untidy and asked who was responsible for maintaining this. Between April 2022 and March 2023 the landlord’s grounds maintenance contractor recorded that it attended the scheme on 25 occasions to carry out grounds maintenance.
The resident made a complaint to the landlord on 14 November 2022 and asked why there was such a big increase in her service charge that year, compared to the previous years. She did not see anyone on site and had recently raised an issue with some shrubs and the contractor’s response was to cut back the plants, leaving stumps which were a trip hazard and an eyesore. She asked why the statements and invoices did not refer to her road and queried whether this was a mistake. She asked to see a breakdown of what the charge for the management company included as there was a lack of maintenance in the area and she did not feel the price increase was warranted.
Two days later the landlord asked the management company for a detailed breakdown of the services it provided as part of the management company charge. The following week it also asked for a map of the areas it was responsible for in relation to grounds maintenance.
The landlord provided its stage 1 complaint response on 29 November 2022. It confirmed the resident was on a variable service charge and provided an explanation of how it calculated the charge each year. The summary correctly referred to the scheme name, rather than the road name. It provided the breakdown of her monthly charge for the current year, which included a management company charge and included a breakdown of 16 services provided by the management company, which included electricity and health and safety risk assessments. It said it would look into the shrub issue she had reported as an urgent matter.
The resident told the landlord she was unhappy with its response to her complaint on 5 December 2022, when she said:
1. She wanted to know how the increase could be so much more that year when nothing had changed and she wanted specific details of what the increase related to. She believed that the landlord should ensure that its residents were not being overcharged by the management company and it needed to do more to investigate how the charges were justified.
2. There was no evidence of grounds maintenance being carried out and she was having to maintain a pathway near her property in her own time and at her own expense. She had reported issues with the grounds maintenance but she should not have to do this if there was a service in the area.
3. She asked what the charge for electricity covered.
4. There was no evidence of health and safety risk assessments being completed as her and other residents had reported issues which had not been resolved.
The landlord’s grounds maintenance contractor told the landlord on 14 December 2022 that the scheme was “not too bad” but an area at the back had been neglected. It would put in some extra time to clear this and add this area to the specification. It believed this had been missed due to staff sickness and said it could compensate for this if required. Two days later it confirmed it had attended and carried out the works but that further work was needed once frost had cleared.
In an internal email exchange by the landlord the in December 2022 it queried whether it should address that money had been paid for a grounds maintenance service that was not provided. The internal response said it would need to get a credit note from the contractor so it could apportion this out.
On 23 December 2022 the landlord provided its stage 2 complaint response, as follows:
1. It suggested the resident register for the online portal and provided the website details for this. She could then access all the information relating to the scheme budget and her property, as well as raise concerns.
2. The management company was a separate organisation and the landlord had little control over the administration of charges. If there was a dispute with the charges this should be raised with the management company. It would monitor the charges and increases and was aware it would increase each year with the general increase in contract costs. If she did not feel the service was being provided, she would need to raise this with the management company.
3. The electricity charge covered communal lighting in car parks, courtyards, footpaths and bin stores and was payable by all those who benefited from the lighting, including houses.
4. The landlord was responsible for the grounds maintenance and the amount being charged for this had reduced in April 2022.
5. In July 2022 it identified that a piece of land that was part of the scheme had not been maintained and it had raised this with its contractor and maintenance had resumed. It provided a picture of the area in question and apologised that this had been missed. This was due to staff changes and miscommunication. It believed the period of time it was not maintained was from April to July 2022. As it was now winter months, its contractor would attend monthly from October 2022 to the end of March 2023.
6. It had completed a recent site visit and confirmed the area in question had not been maintained to the requirements and it had raised this with its contractor. The contractor attended and confirmed it had undertaken some works to the area but could not complete all the works due to the cold weather.
7. It would meet with the resident onsite to look at the health and safety concerns raised in relation to a slippery pathway and area of poor grounds maintenance.
Five days later the landlord met the resident on site and she showed it the area she was maintaining. The landlord noted in an email in March 2023 that this area was within the landlord’s boundary so should be covered by its grounds maintenance service. It highlighted this to its contractor the following month and asked it to confirm it would be included going forward, which the contractor did.
In March 2023 the landlord apologised to the resident for failures in its complaint handling and offered her £250 compensation.
The same month the landlord asked its grounds maintenance contractor to provide the service and inspection history for the scheme in order to provide to this Service. The contractor provided this the following day and said that the inspections had not been as frequent as required and going forward it would inspect the area at least once a month. A refund of £98 was due for the area missed from April to July 2022.

Assessment and findings

Handling of the resident’s queries about service charges

The landlord is entitled to charge for services provided to communal areas under the terms of the lease agreement, as detailed above. The landlord does not have a policy, procedure or process around estate services, which means the Ombudsman cannot measure the landlord’s actions against any formal commitments. Instead, this Service has considered whether the landlord’s actions were fair and reasonable in the circumstances.
When the resident raised concerns about the quality of the grounds maintenance service, the landlord raised this with its contractor, which attended. This was an appropriate reaction in response to the resident’s concerns; however, it is important that landlords are also proactive in the management of service contracts. From the evidence provided, there is no record that the landlord was carrying out proactive checks in the area to monitor the quality of the work or the conduct of the maintenance contract. While appropriate that it involve residents in the monitoring of these types of services, it is not fair to expect residents to have to continually report issues where there is a regular service in place.
When the Ombudsman requested evidence to progress this investigation, the landlord requested service and inspection history from its contractor. It is a concern that the landlord did not have access to this information prior to this request as it is important that the landlord can monitor its contractors attendance in line with their contractual obligations.
When the contractor provided this information, it accepted that it had not been inspecting the area as frequently as it should. If the landlord had been able to access this information in real time, it would have been able to identify this sooner and had the opportunity to put things right at an earlier stage. The landlord’s failure to properly monitor its contractor’s actions meant it did not have a sufficient level of oversight to effectively manage the service being provided.
When the landlord identified an area of the estate that had been missed by its grounds maintenance contractor, it noted internally that a credit note was needed to process a refund for the amount charged. While the contractor provided the refund amount, there is no record that this was provided as a credit note or processed. It is unfair to expect residents to pay for a service that they have not received and the landlord’s failure to obtain and process the refund amounts to maladministration. An order has been made below for the landlord to obtain a credit note from the contractor and process the refund accordingly.
When the resident told the landlord that she was maintaining a pathway next to her property, it met with her and confirmed this area fell within its boundary. While appropriate that it did this, it was not until around 4 months later, and after the resident escalated her complaint to this Service, that it highlighted this area to its contractor to ensure it was included in the service. This delay amounts to maladministration and would have been frustrating for the resident and left her feeling as though the landlord was not taking the matter seriously.
The resident said that she incurred costs by maintaining this pathway and so it would be reasonable for the landlord to assess the costs incurred and provide reimbursement for these. There is no evidence that the landlord considered or offered this in its correspondence with the resident. An order has, therefore, been made below for the landlord to contact the resident to obtain evidence of costs incurred for her maintenance of the pathway near her property and reimburse her these costs.
As part of its investigation into the resident’s complaint, the landlord made enquiries with the management company about the services it provided and the areas it covered. While appropriate that it did this, it is concerning that the landlord did not already have this information. From the records provided, the landlord received a breakdown of what the management charge covered within invoices, but this did not list the specific services and only referred to general charges. As the landlord was charging residents for these services, it should have taken steps to fully understand what they covered in order to be able to monitor whether they were being provided.
From the more detailed list of 16 items provided in the landlord’s stage 1 complaint response, it is still not immediately clear what all of these items covered. As a result, an order has been made for the landlord to obtain a more detailed breakdown from the management company and provide a copy of this to the resident and all other residents of the scheme.
The Ombudsman’s spotlight report on managing agents published in March 2022 says that it is reasonable to expect landlords to demonstrate proactive engagement with managing agents. In this case, the landlord did not do this and suggested that the resident raise complaints directly with the managing agent about the services provided. While reasonable that it could not investigate a formal complaint about the actions of the management company, it should have taken steps to engage with the company to highlight the resident’s concerns and seek a response to be able to offer reassurance that the charges were reasonable. Its failure to do this meant that the resident has been left with uncertainty about what she is being charged for and this amounts to maladministration. An order has been made below for the landlord to engage with the management company to highlight the resident’s concerns and provide feedback.
The landlord’s handling of this issue has been very reactive. When dealing with service charges, it is important that landlords are as proactive as possible in their approach to monitoring and checking the services are being provided to the required standard. It is unfair to expect residents to pay for services they are not receiving, or to be the primary means of monitoring the efficacy of a landlord’s contractors or service providers, as in this case. The landlord’s handling of this issue amounts to maladministration and would have caused the resident to lose faith in it. Orders have been made below for the landlord to apologise to the resident and pay her £300 compensation, which is considered reasonable and in line with the Ombudsman’s remedies guidance.

Complaint handling

The landlord responded to the resident’s stage 1 complaint in 12 days and the stage 2 in 15 days. Both of these were slightly over its committed response times set out in its complaints, compliments and comments policy, as detailed above. Despite the delays, the landlord did not contact the resident to agree an extension as is committed in its policy. It also failed to acknowledge the delays, apologise or consider any other form of redress in its stage 1 and 2 response letters.
Three months after its final response and after the resident escalated her complaint to the Ombudsman; the landlord provided a further response which acknowledged its complaint handling failures, apologised and offered compensation. While appropriate that it did this and the redress offered was fair and reasonable in the circumstances, it appears this only happened as a result of the resident escalating her concerns to this Service. Therefore, this cannot be considered reasonable redress as the Ombudsman’s guidance on outcomes is clear that a reasonable offer of redress must be made prior to the Ombudsman’s formal investigation and on the landlord’s own initiative.
As that did not happen in this case, the landlord’s complaint handling amounts to service failure. Orders have been made below for the landlord to pay the resident the £250 compensation, if not already done so, and provide staff training on complaint handling in line with its current complaints policy and the Ombudsman’s Complaint Handling Code.
The Ombudsman has decided to issue a wider order under paragraph 54(f) of the Scheme for the landlord to review its practice in relation to the failings identified in this determination, which may give rise to further complaints about the matter. We have set out the scope of the review below.

Determination (decision)

In accordance with paragraph 52 of the Scheme, there was:
1. maladministration in the landlord’s handling of the resident’s queries about service charges.
2. service failure in the landlord’s complaint handling.

Reasons

The landlord addressed the resident’s concerns about grounds maintenance with its contractor; however, there is no record that it was proactively monitoring the service, which placed an unfair burden on the resident to continually report concerns. The landlord was aware that the service was not being delivered to an area for a 4 month period but did not obtain or process a refund for this. The landlord provided basic details of what the management company were charging for but this lacked detail and it failed to raise the resident’s concerns with the managing agent to obtain answers and provide reassurance to her.
The landlord’s complaint handling was slightly delayed and with no record of any communication to inform the resident of these delays. The landlord offered redress, but only after the resident had escalated to this Service and not on its own initiative.

Orders and recommendations

Orders

Within 4 weeks, the landlord is ordered to:
1. Obtain a credit note from its grounds maintenance contractor for the £98 refund due for missed grounds maintenance between April and July 2022, and process this on the service charge account.
2. Contact the resident to obtain evidence of costs incurred for her maintenance of the pathway near her property and reimburse her these costs.
3. Obtain a more detailed breakdown of what the management company charge includes and provide a copy of this to the resident and all other residents of the scheme.
4. Engage with the management company to highlight the resident’s concerns and provide written feedback to the resident.
5. Apologise to the resident for its handling of her queries about service charges.
6. Pay the resident £550 compensation (£300 for its handling of her queries about service charges and £250 for its complaint handling, if not already done so).
The landlord to provide evidence of compliance with the above orders to this Service within 4 weeks.
Within 8 weeks the landlord is ordered to provide staff training on complaint handling in line with its current complaints policy and the Ombudsman’s Complaint Handling Code.
The landlord to provide evidence of compliance with the above orders to this Service within 8 weeks.
In accordance with paragraph 54(f) of the Scheme, within 12 weeks of this report, the landlord is ordered to consider the failings identified in this report and complete a review at senior management level of its practices around estate services, with a view to introducing a formal process, identifying:
1. The steps and actions it will take to monitor the standard of communal cleaning and grounds maintenance, which should include periodic pro-active inspections and a set pro-forma for recording the outcome of these.
2. The steps and actions it will take to monitor its cleaning and grounds maintenance contractors attendance in real time.
3. How it will communicate with residents to let them know what level of service they will receive in respect of cleaning and grounds maintenance. This should include how it will engage residents in the pro-active monitoring of these services.
4. How it will engage, both pro-actively and reactively, with third party managing agents who provide services to its residents.
The landlord to provide a copy of the review to the Ombudsman with any proposals within 12 weeks of the date of this report, including timeframes for implementation and a plan for staff training.