Notting Hill Genesis (NHG) (202122911)

REPORT

COMPLAINT 202122911

Notting Hill Genesis

10 August 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:
   1. The theft of the resident’s bicycle from a shared bicycle store in 2017.
   2. The landlord’s response to the resident about his service charge arrears.
   3. The landlord’s complaint handling.

Jurisdiction

2. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
3. After carefully considering all the evidence, in accordance with paragraph 42 (c) of the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction:
   1. The theft of the resident’s bicycle from a shared bicycle store in 2017.
4. Paragraph 42 (c) of the Scheme sets out that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, were not brought to the attention of the member as a formal complaint within a reasonable period which would normally be within 6 months of the matter arising. The resident complained, in his 2020 complaint, about the theft of a bicycle in 2017. While the landlord addressed this in its response, this is not considered in this investigation as it is an historic issue which it is not evident was raised in a reasonable timeframe prior to the complaint.

Background and summary of events

5. The resident is a shared owner and leaseholder of a two-bedroom flat, which is managed by a management agent on behalf of the landlord. He moved into the property in May 2015 and since that date has accrued significant service charge arrears. He has refused to pay the service charges, as he feels that the landlord and the management agent have not provided the finalised accounts for the relevant years in a reasonable time period. He has also withheld payment of service charges due to holding the management agent responsible for the theft of a bicycle from communal storage in 2017.
6. The information provided advises that after new landlord staff took post in March 2020, the management agent contacted them about the resident’s arrears with the intention to commence legal proceedings. The landlord staff was of the view that this should be a last resort and sought to discuss matters with the resident between May and August 2020. The resident subsequently made a payment, but declined to settle other outstanding service charge invoices he was sent, as he said that the landlord had breached an obligation to provide final accounts no later than 6 months after the year end. The resident was then informed that his account would be referred to a legal procedure due to the level of the arrears, after which he raised a complaint about the landlord’s handling of matters.
7. The stage 1 response was issued on 13 November 2020. The landlord stated that it had been unable to access historical communications between the resident and the management agent, so could not assist with resolving concerns from the resident about poor communication. It did not uphold a complaint about collusion between the landlord and the management agent, and stated that the communication between the two was necessary due to the level of arrears on the account. It refused to remove charges on the account that the resident felt were inappropriate, as these were costs incurred in trying to recover the arrears.
8. A stage 2 response on 8 January 2021 upheld the stage 1 response. The landlord provided an explanation of why the resident’s reasoning for withholding service charge payments was incorrect and out of line with the lease, and also said that the dispute over the bicycle was not a valid reason for withholding payments.
9. The resident subsequently referred the complaint to this Service on 16 January 2022. He said he had not been able to properly scrutinise the service charges claimed despite requesting accounts and invoices on several occasions. He said this had left him out of pocket as the service charge had risen significantly since he moved in. To resolve the matter, he wanted outstanding issues over service charge payments and provision of service charge accounts resolved; reimbursement for the cost of the stolen bicycle; and the landlord to make improvements to its complaint handling process.

Assessment and findings

The landlord’s response to the resident about his service charge arrears

10. It is noted that the dispute over service charges goes back several years, however the focus of this investigation is 6 months prior to when the complaint was made, in line with the Housing Ombudsman Scheme. It should also be noted that the role of this Service is not to make a determination about the reasonableness or level of service charges. If the resident disputes whether he is responsible for paying charges, it is more of a question for the First Tier Tribunal (Property Chamber). The role of this Service is to consider whether the landlord has responded and acted reasonably in respect to matters.
11. The statement of account for the resident’s property shows that the resident incurred significant arrears between 2015 and 2020. The landlord made regular contact with the resident in the timeframe of the complaint to try to resolve the issue, and prevented the management agent from taking forfeiture proceedings. The evidence therefore shows that the landlord tried to avoid acting in a heavy-handed way in its approach to the arrears. The evidence then suggests that there may have been misunderstanding from each party after discussions. The landlord seemed to expect the arrears to be paid after setting out its position and asking the resident to settle the outstanding arrears, while the resident seemed to expect the landlord to postpone action after he detailed why he was making one payment but not others. He then complained after being informed that his account would be referred to a legal procedure due to the continued arrears.
12. The resident argued in May 2020 that the landlord was in breach of the lease by not providing final accounts in a timely manner, as he believes the final accounts should be produced within 6 months of the end of the accounting period, and he also felt costs added due to the arrears were inapplicable.
13. There is no evidence that final accounts should be issued within 6 months of the year end. The resident’s basis for this belief appears to be Section 21 of the Landlord and Tenant Act 1985. While this gives leaseholders right of access to certain information within 1 or 6 months, this Service understands that this does not specifically mean that final accounts need to be supplied to leaseholders within 6 months. The landlord has referred to not being able to recover service charges where the costs are incurred more than 18 months before the final demand, unless an interim notice has been served. Some of the dates of the final accounts seem close to that 18 month deadline, and one set of final accounts seem to have been served 21 months after the end of the accounting period.
14. However, the Ombudsman cannot definitively decide that the service charges are not payable. Initially, the landlord is reasonable to expect the resident to make service charge payments, and is reasonable to consider action to recover payments if these become overdue. The lease requires monthly payments towards an estimated service charge, not just when a final account is produced, so the resident seems to have an obligation to be making regular payments regardless of when a final account is issued. The lease also allows the addition of costs that arise from non-payment. The resident agreed to the terms of the lease by forming the leasehold contract with the landlord.
15. The resident refers to circulars from the landlord in February and September 2019 (which clarified how to make monthly payments) to suggest there was previously confusion and difficulty in respect to making monthly payments. While these periods are not the focus of the complaint, the evidence does not clearly demonstrate that the resident experienced any significant barriers in previously attempting to make monthly payments. By the timeframe of the complaint, it is evident that he was aware of how to make monthly payments. As noted at paragraph 10, the First Tier Tribunal (Property Chamber) makes legally binding decisions on disputes about the reasonableness of service charges, and could consider any historic evidence the resident may have.
16. There were some periods between May and August 2020 where there were some gaps in correspondence, however the landlord was responsive when the resident contacted it. It provided detailed responses which addressed actions it was taking to ensure accounts were produced in a timely manner going forward; arranged for its management agent to contact the resident about the bicycle theft in 2017, which it noted resulted in no reply from the resident; and took action to discuss other concerns the resident had with the management agent. There seems to have been no correspondence from the landlord to give the impression that the arrears were not due at any point, and it seems clear that postponement of legal action at points was to try to give the resident the opportunity to settle the arrears more informally.
17. Overall, the landlord responded reasonably to the issues that were raised in the timeframe of the complaint, and set out reasonable explanation and position in respect to the resident’s service charge obligations in line with the lease. It is not in the Ombudsman’s jurisdiction to definitively determine whether either party have breached their obligations in the lease, and if this continues to be disputed, only a legal procedure such as the First-Tier Tribunal can make a legally binding decision.

The landlord’s complaint handling

18. The resident expressed dissatisfaction that the stage 1 was provided by staff with whom he had communicated in the lead up to the complaint. The complaint made reference to the staff taking sides with the management agent and introducing the issue of forfeiture proceedings with the management agent, and therefore some of the complaint was reasonably about the staff’s handling of matters. The landlord’s complaints policy does say that such complaints should be handled by staff’s managers, and so the staff’s investigation of the initial complaint was not in accordance with policy or entirely reasonable, as this can lead to concerns about impartiality.
19. However, there is no evidence that the handling of the complaint led to any detriment and the responses were generally provided in a timely manner. The stage 1 provided a detailed response which reasonably addressed the resident’s concerns and set out a reasonable position. At stage 2, the landlord carried out investigation involving a leasehold manager and a manager from another department in order to give an independent perspective on matters. At stage 2, the landlord noted that the resident had declined to have a call to discuss matters in detail, and noted that email correspondence had been exchanged about the resident’s desired outcomes, showing that the resident was given appropriate opportunity to discuss his concerns. Overall, while the landlord’s stage 1 response was not provided by different staff in line with its policy, the responses were detailed and reasonable and there is no evidence that any significant detriment was caused by the complaint handling.

Determination (decision)

20. In accordance with paragraph 42 of the Housing Ombudsman Scheme, the complaint about the theft of the resident’s bicycle in 2017 is outside of the Ombudsman’s jurisdiction.
21. In accordance with paragraph 52 of the Scheme, there was no maladministration in:
    1. the landlord’s response to the resident about his service charge arrears.
    2. the landlord’s complaint handling.

Recommendations

22. The landlord to review its complaint handling and ensure that initial complaints about staff are investigated by different staff in accordance with its policy.