Castles & Coasts Housing Association Limited (202233852)

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REPORT

COMPLAINT 202233852

Castles & Coasts Housing Association Limited

30 August 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:
    1. handling of enquires about quotations needed for major roof works.
    2. response to a request that a Section 20 consultation take place for the works.
    3. communication regarding a referral to the First Tier Tribunal (FTT) to rule on the resident’s dispute.

Background

  1. The resident is a leaseholder. The property is a 1-bedroom ground floor flat in a block containing 4 flats. Each flat in the building is owned by a leaseholder. The landlord is the freeholder of the building.
  2. On 16 November 2020, the landlord commissioned a structural survey of the building. The survey recommended a number of repairs to be completed and indicated that the roof would soon need to be replaced. On 9 February 2021, the landlord provided the leaseholders with a programme of works to be carried out over the following 12 months and 5 years. It said it would increase the service charge on 1 January 2022 to ensure the sinking fund balance was at a sufficient level to cover the required works.
  3. On 15 November 2021, the landlord held a meeting with the leaseholders to discuss a proposal to increase service charge costs. The leaseholders said that the historic lack of maintenance of the building, including the roof, meant the works required were more expensive than they should be. The landlord accepted that it had not historically met its obligations in respect of painting and maintenance. However, it said the roof may need to be replaced due to its lifespan, not maintenance. As a resolution, it proposed that it would pay for an external fire escape, credit £700 to the sinking fund, pay for 50% of the cost of window and door repairs (or replacement), and provide a reduction of leasehold management charges for the previous 5 years.
  4. After a final meeting on 3 March 2022, the leaseholders did not agree to the landlord’s proposal. The landlord explained that because agreement could not be reached, the best route forward was for it to apply to the First Tier Tribunal (FTT) to make a ruling on the reasonableness of its proposal. It said that the leaseholders will receive correspondence from its solicitor about the FTT process. The landlord advised that there were delays because of the backlog as a result of the Covid-19 pandemic, so the process could take a long time.
  5. On 14 October 2022, another leaseholder of the block complained to the landlord about the delay in the process. The leaseholder said that she was told that the landlord had not submitted its paperwork to its legal team as it awaited quotes. The leaseholder wanted the landlord to provide and explanation as to why it had taken 7 months to gather this information.
  6. On 31 October 2022, the landlord provided the other leaseholder with a stage 1 complaint response. It said that had it had experienced difficulty in receiving a quote for the renewal of the external fire escape, saying that there was a reluctance from contractors to hold a quote for a reasonable period of time due to fluctuating price of materials. It confirmed that it had now received an estimated quote which would be submitted to its solicitor by 4 November 2022 to begin the FTT process. It apologised for the delay.
  7. On 31 January 2023, the resident escalated the complaint on behalf of all 4 leaseholders in the block. She was unhappy with a proposed increase of service charges from £48 per month to £113 per month. While they awaited a decision from the FTT to consider if the increased charges were fair and reasonable, the service charge debt increased month on month. The resident said a stage 1 complaint had been made about the lack of progress with the FTT referral and said that no maintenance had been carried out.
  8. On 10 March 2023, the landlord provided its stage 2 complaint response. It acknowledged that there was a delay in submitting information to its solicitor because it awaited a quote. It apologised for the inconvenience caused by the delay. It said it was awaiting legal advice about the potential FTT process and would advise residents of its next steps next week. It said that attempts to progress maintenance works had been delayed by disputes with leaseholders. It confirmed that it would complete a Section 20 consultation with leaseholders prior to carrying works out. It noted that leaseholders had a specific dispute about the requirement for a roof replacement. As a resolution, it would pay for and share the findings of another independent survey.
  9. On 17 March 2023, the landlord’s solicitor wrote to the resident advising that the costs of the works were recoverable and provided a copy of a works schedule that the landlord intended to complete within the next 12 months, including the roof subject to a further survey. The solicitor requested a copy of the resident’s lease and said it would put forward proposals to the leaseholders for repayment when it was in receipt of the lease.
  10. On 11 May 2023, the resident brought her complaint to this Service. She was unhappy with the administration of the service charges. She said the landlord intended to raise her Service charges from £48 per month to £108 per month. She said that the landlord agreed to refer the case to the FTT, but it still had not after 12 months, and the dispute remained unresolved.

Events after ICP 

  1. On 29 June 2023, the landlord wrote to the resident and advised that it would reduce the service charge contributions it demanded for 2022 and 2023. It reduced the monthly service charge from £107.79 to £49.04 and credited the residents account £1093.50.
  2. On 10 July 2023, the landlord’s solicitor wrote to the resident advising that the landlord would complete all necessary outstanding works and make a demand for payment from the leaseholders. If the sums remain outstanding it would take legal action through the FTT to obtain a decision that the sums were reasonable.
  3. On 25 August 2023, the landlord obtained a further survey of the roof. This survey concluded that the roof required replacement as it had reached the end of its serviceable life.                                                                                                                                                                                                                                                      

Assessment and findings

Jurisdiction 

  1. Having carefully considered the evidence, this service cannot investigate the resident’s complaint about the landlord’s:
    1. handling of enquires about quotations needed for major roof works.
    2. its response a request that a Section 20 consultation take place for the works.
  2. What we can and cannot consider is called the Ombudsman’s jurisdiction. In accordance with paragraph 42.f. of the Scheme, the Ombudsman may not investigate complaints concerning matters where it is considered quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, or other tribunal or procedure.
  3. The resident’s complaint about the roof quotations is fundamentally about the landlord’s proposal to increase the resident’s contribution to the sinking fund in anticipation of future roof works. This Service does not have the authority to provide a determination on whether the landlord complied with the statutory consultation requirements, or its obligations to maintain the sinking fund in accordance with the lease.
  4. With regards to the resident’s request for a Section 20 consultation, the landlord is legally obliged to carry out a Section 20 consultation and confirmed that it would in its stage 2 complaint response.
  5. These aspects of the complaint are outside the jurisdiction of this Service. The resident may wish to seek independent legal advice and consider referring these matters to the First Tier Tribunal (Property Chamber) (FTT) for a binding determination. Further information about the role of the FTT can be found on its website here: https://www.gov.uk/courts-tribunals/first-tier-tribunal-property-chamber.

Scope of investigation 

  1. While it is evident that the issues raised by the resident affected all leaseholders in the block, this Service had not investigated the complaint as a group complaint. This because there was no evidence that the resident had authority from all leaseholders in the block. Furthermore, the impact of any landlord failings will be different depending on individual circumstances of each leaseholder.   
  2. This Service cannot consider complaints related to the level, reasonableness, or liability to pay rent or service charges as these complaints are within the jurisdiction of the First-Tier Tribunal (Property Chamber). However, we can look at the landlord’s communication around the service charge proposals and consider if it was fair and reasonable to the resident in the circumstances.

The landlord’s communication regarding a referral to the First Tier Tribunal (FTT) to rule on the resident’s dispute.

  1. It was a reasonable position for the landlord to take when it said it would refer the matter to the FTT. The evidence from the virtual meetings indicate that the leaseholders were in favour of this position too when a resolution could not be agreed. It held 3 meetings with the leaseholders on 16 November 2021, 3 February 2022, and 2 March 2022. Each of these meetings noted that a referral to the FTT would determine if the landlord’s proposals were reasonable.
  2. It was appropriate for the landlord to take legal advice on the matter. It confirmed it would take this action on 1 March 2022 in its last meeting with the leaseholders. There is evidence that the landlord sent correspondence about its proposal to the residents to its solicitor on 14 June 2022.
  3. The landlord’s stage 1 complaint response said it had been proactively chasing a quote for a fire escape which caused delays in the FTT referral. This Service has not received any correspondence between the landlord and contractors and limited correspondence between the landlord and its solicitor. It is not possible for this Service to assess how proactive the landlord had been in obtaining this information. There was no evidence of communication to the resident about the need to obtain a quote or the delay in obtaining a quote until another leaseholder raised a complaint.
  4. While the landlord’s solicitor was reviewing the case for referral to the FTT, the landlord should have had oversight of communication with the resident. The resident could not have known that the landlord was awaiting a further quote, and it is reasonable to conclude that the resident believed that the landlord was putting forward its original proposals to the FTT. This was a communication failure by the landlord.
  5. After the complaint was duly made with this Service, the landlord confirmed that it would complete the repairs and then apply to the FTT to consider the reasonableness of the charges should the leaseholders refuse to pay the charges. While this was always an option for the landlord, its initial resolution to the breakdown in negotiations was to refer its proposals to the FTT. It should have been clear in its communications that it was taking legal advice on the matter and that it was a possibility that the FTT referral could take place after it completed the works.
  6. It is considered that the resident could have brought her own case to the FTT. However, all communication from the landlord up until the stage 2 complaint response, indicated that it was in the process of referring the case to the FTT. Therefore, it was reasonable for the resident to await the landlord’s referral.
  7. This Service finds that there was service failure with the landlord’s position that it would make a referral to the FTT to rule on the dispute. This is because it failed to communicate appropriately with the resident after negotiations broke down. It should have been more transparent with the resident when it needed further information for its solicitor to consider the FTT referral. 
  8. While it is evident that the dispute has been stressful and inconvenient for the resident, this Service cannot determine whether the landlord was responsible for any distress and inconvenience caused by the dispute itself. However, the landlord’s communication failure caused further distress and inconvenience. An order of compensation has been made below in line with the Housing Ombudsman Service’s Remedies Guidance
  9. When assessing compensation, it is considered that it was reasonable for the landlord to rely on legal advice. It is also acknowledged that there were delays beyond the landlord’s control and the landlord must consider its own responsibilities for maintaining the building. Furthermore, the resident still has an opportunity to put her case to the FTT should she dispute increased costs.

Determination

  1. In accordance with paragraph 42.f. of the Housing Ombudsman Scheme, the landlord’s handling of enquires about quotations needed for major roof works is outside the jurisdiction of this Service.
  2. In accordance with paragraph 42.f. of the Housing Ombudsman Scheme, the landlord’s response to a request that a Section 20 consultation take place for the works is outside the jurisdiction of this Service.
  3. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure with the landlord’s communication regarding a referral to the First Tier Tribunal (FTT) to rule on the resident’s dispute.

Orders

  1. It is ordered for the landlord to apologise to the resident for the communication failures identified in this report.
  2. It is ordered for the landlord to pay the resident £100, within 4 weeks of the date of this determination, representing distress and inconvenience caused by the communication failures identified in this report.