A2Dominion Housing Group Limited (202004192)

REPORT

COMPLAINT 202004192

A2Dominion Housing Group Limited

11 February 2022

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:
1. The landlord’s handling of the resident’s queries about service charges.
2. The landlord’s handling of the resident’s concerns about the level of cleaning in the bin store area.
3. The landlord’s contact with the resident’s mortgage lender.

Background and summary of events

Background

The resident is a leaseholder and purchased the property in 2009.
The lease requires the resident to pay 2.13% of the service charge or such other proportion as the landlord, acting reasonably in the circumstances, shall calculate from time to time.
The landlord’s leasehold management policy says that if an account goes into arrears, it will take action to recover those arrears, including personal contact by phone, letter or email, or by contacting the customer’s lender. These steps will be taken prior to legal action to recover the debt.
The landlord’s compensation policy says it will pay between £50 to £150 for stress and inconvenience caused by its service failure, and it will pay between £25 and £240 for time and trouble (the higher amount payable where service failure has happened over a longer period of time).

Summary of events

In August 2020, this Service contacted the landlord to make it aware that the resident had complained about the level of cleaning in a communal area.
The landlord attempted to call the resident about the matter on 18 August and 25 August 2020, but could not get through. It then emailed her on 2 September 2020 and asked her to provide a suitable time so that it could discuss her complaint. When the landlord did not hear back from the resident, it advised her on 7 September that it had closed her complaint, though it made her aware that if she still wanted it to look into the matter, her complaint could be reopened.
On 18 January 2021, the landlord wrote to the resident about her outstanding service charge arrears. It asked her to contact it as soon as possible, or make a payment to clear the debt.
On 17 February 2021, the resident raised a formal complaint with this Service about how the landlord had handled her queries about service charges. She wanted the landlord to provide a full breakdown of the service charges, including any annual increases. This Service asked the landlord to investigate the matter.
The following day, the landlord wrote to the resident’s mortgage lender advising it of her service charge arrears.
The landlord issued its stage one complaint response on 25 February 2021. It made the following points:
1. It had attempted to speak with the resident to gain further details about her complaint, but had not been able to reach her.
2. It believed that she was referring to the service charge estimate for the period 2020-2021, as it could see that she had raised a query requesting a reduction to the service charge due to affordability. It said that it could find no other query regarding service charges prior to this.
3. When the resident had raised her query with the service charge in June 2020, it had advised her at the time that the service charge had been levied in line with her lease. However, after she asked it to look at the matter again, it found there was an error with the managing agent’s costs. An adjustment was made to her service charge as a result.
4. It apologised for the sub-standard service the resident had received, and offered her £240 compensation for the time and trouble in pursuing the matter, as well as for any distress or inconvenience caused.
The resident contacted this Service about the matter. She explained that the landlord had accepted that she had been charged for maintenance work that did not happen. The resident thought she had been charged for maintenance work for a number of years, and was therefore due a refund for previous years too.
On 5 March 2021, the resident received a letter from her mortgage provider. This said that the landlord had informed them that the resident owed £1,336.24 for outstanding rent/service charges. The mortgage provider explained that if they did not hear from the resident within 21 days, they would pay the outstanding balance to the landlord in order to protect the security the resident’s property represented for the mortgage. They confirmed this amount would be added to the mortgage account and the resident would need to pay interest unless she repaid it.
On 15 March 2021, the resident wrote to this Service and said:
1. She wanted the service charges investigated since 2011. She had emailed the landlord several times, but no action had been taken.
2. She initially bought the property using shared ownership but had 100% ownership from 2011. She had asked the landlord to look into the service charge and deficits after 2011, though she thought the problems had started around 2014, as the service charge had increased significantly at this time.
3. She thought the landlord was charging others much less for similar flats in the same block.
4. Despite paying the high service charge, the cleaning standards and hygiene were poorly maintained in the block.
5. Although she was paying the service charge every month, she had not yet paid this year’s deficit as she was disputing it. Although there was an ongoing investigation, the landlord told her mortgage provider about this, which she thought was unacceptable.
On 7 June 2021, the landlord called the resident about her complaint. The resident said she was unhappy with the service charges, as well as the level of cleanliness with the building, and that there was often rubbish left outside her property which is located by the bin store.
On 8 June 2021, the landlord received a copy of the resident’s email that was sent to this Service on 15 March 2021.
Then on 1 July 2021, the landlord provided the resident with a breakdown of the 2014/2015 service charge accounts.
The landlord issued its stage two response on 17 August 2021. This said:
1. The resident remained unhappy following its stage one response, and had raised these issues:
  1. She had raised historic property managements issues, such as the management of the bin room.
  2. She was unhappy with the level of service charges levied, both in terms of annual cost and the deficits arising from year-end accounts.
  3. She was unhappy that the landlord had contacted her mortgage provider to obtain sums owed in respect of service charges whilst there was an outstanding dispute.
2. It asked the resident to provide it with further information about the property management issues.
3. The landlord was in contact with the resident in respect of the service charge costs and she was being provided with historic cost information, as she had requested. It advised her that service charge costs would not be dealt with via its complaints process, nor would they be reviewed by this Service. The landlord advised her that her next course of action would be the First-Tier Tribunal (Property Chamber), and gave the resident information on how to contact them.
4. In respect of contacting the resident’s mortgage provider, it said that its Income Team had written to the resident on a number of occasions. However, there were no records to indicate she had had any discussions with her Income Officer, but it was also aware that she had raised queries with regards to the service charge costs. Taking this into account, it considered it ought to have reconsidered the action taken until such time that her queries had been resolved. It apologised for this and confirmed it would speak to her property manager and the Income Team to reaffirm this message. Nonetheless, it reminded the resident that the terms of her lease do not permit her to withhold service charge payments and therefore she should continue to make payments whilst it investigates any disputes she may have.
5. As part of its stage one complaint response, it made the resident a compensation offer of £240. It confirmed this remained open.
6. In respect of the internal communication failure leading to the landlord contacting the resident’s mortgage provider, it offered £50 compensation.
The resident asked this Service to look into her complaint. She said she was unhappy with the breakdown as to why her service charge had increased, and was also unhappy that the landlord had contacted her mortgage provider directly who had added the arrears to her mortgage account.

Assessment and findings

Service charges

This Service has already advised the resident that the level of service charges is a matter for the First Tier Tribunal (Property Chamber) to determine rather than the Ombudsman. Instead, this investigation considers the way in which the landlord communicated with the resident about the charges.
There was an error with the service charge identified in 2020, for which the landlord offered the resident £240 compensation. However, the resident has not complained about this error, and has said she will decide whether to accept this offer after the landlord has provided her with a full breakdown of her service charges since 2011. Her complaint is that the landlord has not done this.
On 1 July 2021, the landlord provided the resident with a breakdown of the 2014/2015 service charge. This Service asked the landlord why it had not provided a breakdown of the other years, and the landlord said it was unsure of the resident’s request as it seemed the resident was complaining about the overall increase in cost year-on-year. However, it has said it will prepare this information and send it to the resident.
It is accepted that the resident did not initially make it clear to the landlord what information she required in respect of the service charges. However, on 8 June 2021, the landlord received a copy of the resident’s email to this Service of 15 March 2021. Thus, it would have known before issuing its stage two response that the resident wanted a breakdown of the service charge for other years (and not just 2014/2015). The landlord said in its stage two response that the resident was being provided with historic cost information, but it then did not do this.
The landlord therefore ought to have provided this information to the resident, but failed to do so.

Bin store area

The landlord was made aware in August 2020 of the resident’s concerns about the level of cleaning in a communal area. It attempted to contact the resident three times about this, but did not receive a response. It therefore did not take the matter further at the time. That was reasonable.
When the resident again raised concerns about the level of cleaning in the bin store area in 2021, the landlord asked her to provide further information about this, so that it could look into the matter. That was also reasonable.

The landlord’s contact with the resident’s mortgage lender

The landlord contacted the resident’s mortgage lender on 18 February 2021 and advised it of her service charge arrears. The landlord’s leaseholder management policy allows it to take action to recover arrears, including contacting the resident’s lender.
The landlord was therefore entitled to contact the resident’s lender when her account remained in arrears. However, the landlord accepts that it was too hasty in doing so, as it was aware that the resident had raised a query about her service charges the month before. It thought it should have waited until her queries about the service charges had been resolved. It confirmed that it would speak to the relevant staff members about this, so that they were aware of this message. It also offered the resident £50 compensation for this.
The payment of £50 compensation is in line with the landlord’s compensation policy, which says it will pay between £50 and £150 for stress and inconvenience caused by its service failure.
In identifying whether there has been maladministration, the Ombudsman considers both the events that initially prompted the complaint and the landlord’s response to those events through the operation of its complaints procedure. The extent to which a landlord has recognised and addressed any shortcomings and the appropriateness of any steps taken to offer redress are therefore as relevant as the original mistake or service failure. The Ombudsman will not make a finding of maladministration where the landlord has fully acknowledged any failings and taken reasonable steps to offer redress. As the landlord has done so here, no further action is required.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the resident’s queries about service charges.
In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was no maladministration in respect of the landlord’s handling of the resident’s concerns about the level of cleaning in the bin store area.
In accordance with paragraph 55 (b) of the Scheme, the landlord has offered redress which, in the ombudsman’s opinion, resolves the complaint satisfactorily in respect of the landlord’s contact with the resident’s mortgage lender.

Reasons

The landlord caused unreasonable delays in answering questions about the service charges for years other than 2014/2015.
Although the resident first raised concerns in 2020 about the level of cleanliness in a communal area, the landlord made several attempts to speak with the resident about the matter but was not able to do so. When she again raised concerns about this in 2021, it asked her to provide further details so it could look into the matter for her. This was appropriate.
The landlord was entitled to make the resident’s mortgage lender aware of her service charge arrears, but accepts it was too hasty in doing so as her service charge queries had not been resolved. It has taken steps to make sure this does not happen again, and has paid reasonable compensation for this.

Orders

The landlord to:
1. Provide the resident with a breakdown of the service charge for the years requested.
2. Pay the resident £100 compensation in recognition of the inconvenience caused to her by its failure to provide a breakdown of her service charges (other than for 2014/2015).
The landlord should confirm compliance with these orders to this Service within four weeks of the date of this report.

Recommendations

The landlord to formulate an action plan to ensure it can provide residents with service charge breakdowns in a reasonable timescale in future.
If it has not already done so, the landlord to pay the resident the £50 compensation previously offered in respect of contacting her mortgage lender, as the finding of reasonable redress has been made on that basis.