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Aster Group Limited (202233003)

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REPORT

COMPLAINT 202233003

Aster Group Limited

27 June 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

  1. The complaint is about the landlord’s response to the resident’s concerns about a service charge for door entry system maintenance.

Background

  1. The resident is a tenant of the landlord, a housing association. The property is a flat in a block on an estate. The tenancy commenced in July 2021.
  2. The resident’s tenancy obligates him to pay towards variable service charges in addition to the rent, which allows the landlord to add its incurred costs to following years’ service charges. The service charges the tenancy obligates the resident to pay are listed in an annex to the tenancy as communal internal cleaning, window cleaning, ‘fire system & mansafe mtenance,’ grounds maintenance, estate cleaning services, and a management fee.
  3. In 2020, before the resident moved in, a repair was raised for the trades button at the block, after which the door entry system was subsequently upgraded.
  4. In August 2021, after the resident moved in, he was sent a rent letter saying that at the next rent review, the service charge would include costs for “door entry system maintenance,” as in the 2020 to 2021 financial year the actual costs had exceeded the estimated costs for this of £0. In February 2022, the landlord sent the 2022 to 2023 financial year rent statement, which confirmed that the rent from April 2022 included a charge for the door upgrade.
  5. The resident made a complaint to the landlord. He was unhappy about being charged for a repair that occurred before he became a tenant. He was unhappy at being charged for repairs to the door as he felt this was general wear and tear, and an issue the landlord was responsible for. He queried the necessity for the upgrade of the door system, and felt a repair could have been carried out. He raised dissatisfaction with the total cost of the works that residents were being asked to pay toward, and felt the contractor and the landlord were fraudulent accounting as the costs did not represent the works carried out.
  6. The landlord responded at stage 1 in April 2022 and at stage 2 in May 2023, after the resident re-raised the issue.
    1. It acknowledged that the resident was not in occupation when the repair was undertaken. It explained that it operates a variable service charge, and said that the resident was responsible to pay the charges as he was in occupation at the time the year end rent statement was issued.
    2. It said the aim was originally to carry out a trades button repair, but another issue was identified and parts for the system were obsolete, which left it with no alternative but to replace the door entry system.
    3. It identified that there was an apportionment error which it took steps to correct, reducing the total amount the resident was being asked to pay from £386 to £145, and the weekly amount from £7.43 to £2.79.
    4. It said that as a service charge payer, the resident had the right to challenge the reasonableness of the charge via the First Tier Tribunal, which had the jurisdiction to decide on whether a charge could be reasonably passed on to the resident.
  7. The resident referred the complaint to the Ombudsman, raising dissatisfaction with the amount the landlord was charging him for the level of the works carried out. In 2023, the landlord told the resident that a further charge would be added to the service charge from April 2024, for door entry system maintenance carried out in the 2022 to 2023 financial year.

Assessment and findings

Scope of the investigation

  1. The resident has raised separate complaints to his landlord about cleaning and tree service charges, management fees and consideration of his vulnerabilities. While these have been mentioned in correspondence to the Ombudsman, there is no evidence that the resident referred the final responses for these complaints to the Ombudsman for investigation.
  2. The final complaint response that the resident has referred to the Ombudsman was the complaint about a door entry system charge, and therefore this is the main focus of this investigation. If the resident would like the Ombudsman to investigate other complaints, he has the option to refer the final complaint responses for us to carry out separate investigations of these.

The landlord’s response to the resident’s concerns about a service charge for door entry system maintenance

  1. The resident raised dissatisfaction at being charged for costs that were incurred before he moved in. The resident’s tenancy obligates him to pay toward a variable service charge, which allows the landlord to reconcile estimated service charges with the costs the landlord has actually paid. The landlord therefore provided reasonable general explanation in this regard, as the resident’s tenancy allows the landlord to apply valid costs to service charges in following years.
  2. The resident raised dissatisfaction that a repair was not carried out, and the landlord explained that this was due to parts to carry out a repair being obsolete. The landlord responded reasonably, as it considered the issue and provided explanation about why an upgrade had to be carried out, rather than a repair.
  3. The resident raised dissatisfaction with the amount, and the landlord appropriately identified and corrected an apportionment error, which was a suitable response to this aspect. However, some aspects of the landlord’s response were not satisfactory.
  4. The landlord explained to the resident that he has the right to challenge the reasonableness of the charge via the First-tier Tribunal (Property Chamber). However, just because the tribunal can be used does not mean residents should be required to go that route, and where the Ombudsman can decide on a case, we will. The Ombudsman can consider whether information about service charges has been clear and transparent at the start of the tenancy and afterwards, and whether the landlord followed the tenancy terms in deciding a change in the amount payable.
  5. The tenancy agreement and an annex to the tenancy agreement detail the services the landlord is obligated to provide, and which the resident is obligated to pay for. The tenancy and annex to the tenancy mention nothing relating to the door entry system. The landlord does not show that, while it may provide ad–hoc door entry system maintenance, the tenancy allows it to claim for a door entry system maintenance charge from the start of the tenancy.
  6. The tenancy says that, after consultation, it may vary the services and charges. This means that to permit it to claim an additional charge, the landlord should show that after the start of the tenancy, it engaged in appropriate consultation with the resident. The landlord does not show that it engaged in an appropriate consultation with the resident to include a door entry system maintenance service and charge.
  7. The landlord’s service charge policy says “enquiries concerning accuracy of charges” will consider whether “they adhere to terms of tenancy/lease/transfer/conveyance agreements.” The landlord does not demonstrate that it appropriately considered and addressed how the door entry system maintenance charge adhered to the terms of the tenancy, and how the resident was consequently obligated to pay toward it, in line with the requirements of its internal policy, which is a service failure.
  8. The Ombudsman’s insight report on charges confirms that the landlord should be transparent about charges. Its residents should be able to read and understand their tenancy, and rent and service charge increases, and understand why the landlord is entitled to recharge them. The report says that “the terms and conditions should set out what the landlord is permitted to charge for. If the cost does not appear in the lease or tenancy, it will not generally be fair to claim the charge unless it has been introduced later following the correct procedure.” It also says that the tribunal process should be considered a last resort, and residents should not always be required to go that route and be expected to incur the related costs for every issue.
  9. In the Ombudsman’s opinion this is applicable here, as the landlord does not show that it was allowed to claim for a door entry system maintenance charge from the start of the tenancy, show that it engaged in appropriate consultation to add the charge, or show that it followed its internal procedure to investigate if the charge adhered to the resident’s own tenancy. This leads the Ombudsman to find maladministration and to make some orders to ‘put things right.’

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in the landlord’s response to the resident’s concerns about a service charge for door entry system maintenance.

Orders and recommendations

Orders

  1. The landlord is ordered to, within 4 weeks, pay the resident £300. This comprises £150 for the resident’s distress, inconvenience, time and trouble pursuing the complaint over a lengthy period of time, and £150 to reflect what he paid for the door entry system maintenance.
  2. The landlord is ordered to, within 4 weeks, take steps to remove the door entry system maintenance charge from the resident’s 2024 service charge.
  3. The landlord is ordered to, within 6 weeks, obtain legal advice about its approach to recharge for charges not included in, or consulted in line with, the resident’s tenancy, and to consider relevant corrective measures, including for the resident and any other similarly affected residents at the block. The landlord should provide the outcome of this to the Ombudsman.

Recommendations

  1. The landlord is recommended to review the Ombudsman’s December 2023 insight report on charges, including page 3, and take steps to:
    1. improve its transparency and communication about charges tenants may be asked to pay toward as part of their tenancy, if services and charges schedules in tenancy agreements do not capture all these.
    2. ensure that internal procedure is followed when service charge enquiries are received.