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Clarion Housing Association Limited (202200962)

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REPORT

COMPLAINT 202200962

Clarion Housing Association Limited

14 December 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 the landlord’s handling of the resident’s concerns:
    1. about service charges and that he is being charged for services he does not receive;
    2. he was advised incorrectly he was in rent arrears;
    3. over the landlord’s staff conduct.
  2. The Ombudsman has also considered the landlord’s complaint handling.

Jurisdiction

  1. 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.
  2. Paragraph 42 (a) of the Scheme states that the Ombudsman may not investigate complaints which are made prior to having exhausted a landlord’s complaints procedure, unless there is evidence of a complaint-handling failure and the Ombudsman is satisfied that the member has not taken action within a reasonable timescale.
  3. After carefully considering all the evidence, in accordance with paragraph 42 (a) of the Scheme, the complaint about the resident being advised he is in rent arrears and complaint about the landlord’s staff conduct is outside of the Ombudsman’s jurisdiction. This is because these matters were raised after the stage 2 response was provided and have therefore not exhausted the landlord’s complaint process. It is open to the resident to take these matters through the landlord’s formal complaint  process should he wish to.

Background

  1. The resident is a shared owner of a three bedroom property, of which the landlord is the freeholder. The resident moved into the property in November 2021.
  2. On 24 February 2022, the landlord wrote to the resident and set out the 2022-2023 monthly fees for rent and service charges. The service charge was broken down into administration fee, building insurance, estate caretaking, grounds maintenance contract and managing agent services. The total was £67.52.
  3. The resident queried the service charge with the landlord and stated he had been charged for services he had not received. In response, the landlord wrote to the resident on 1 April 2022. It said the resident had incorrectly been charged for cleaning as this only applied to flats in blocks. It confirmed the resident should pay grounds maintenance charges as these applied to all properties and were for green areas, shrubs, trees and parking areas. The landlord stated the service charge department would look into this further for the resident.
  4. The landlord wrote to the resident on 8 April 2022 and explained how it generally calculated service charge. It explained the recent statement the resident had received was an estimate of services it believed ‘would be offered to properties in the estate’. Regarding the resident’s query about ground maintenance services, the landlord said it had verified the charges and explained they did not refer to the green surrounding the resident’s property and instead related to the communal areas near the property. It said that all properties benefitted from the communal green areas and the service charges were related to their maintenance. The landlord also explained it applied a 15% administration charge.
  5. The resident brought his complaint to this Service on 14 April 2022. He said he had received confirmation from the landlord that he did not have to pay the service charge for grounds maintenance but he is still being charged. The resident said he should not have to pay as he maintains his own grounds in his property. He wanted the landlord to remove the estate caretaker fees and grounds maintenance fee. The resident said he had raised a formal complaint with the landlord but had not received a response, so a stage 1 complaint was raised with the landlord through the Ombudsman.
  6. The landlord provided its stage 1 response on 27 April 2022. It understood the resident was disputing the grounds maintenance contact fee and the estate caretaker fee. The landlord said the resident’s property was part of new build development and the estimated costs were based on similar developments, with the actual costs produced later. It advised the resident if he did not receive the services he was disputing, this would be rectified in September 2022 with the service charge actual costs.
  7. The resident remained dissatisfied with this response and escalated his complaint on 3 May 2022. He said he believed the landlord was “obtaining money through deception”. The landlord provided its stage 2 response on 3 August 2022. It said that though it believed the information provided at stage 1 was correct, it had amended the resident’s service charge and refunded £288.60 in service charges. This was made up of the estate caretaking, ground maintenance and administration fee from December 2021 to June 2022.  The landlord had previously advised the resident the cleaning charge was not applicable, but maintained the grounds maintenance fee did apply to the resident. The landlord explained grounds maintenance charges apply to all properties and is for green areas, shrubs, trees and parking areas. It then went on to provide details of its grounds maintenance contractor. £200 compensation was offered in recognition of failings identified in relation to the resident’s complaint, plus £50 compensation for a delay in providing the stage 2 response.
  8. On 27 September 2022 the landlord wrote to the resident with a notice of costs incurred for the actual cost of the service charges for the 2021-2022 period. It was unable to provide a breakdown of costs due to a cyber security incident, but said it had calculated the resident’s share of costs as £137 for the 2021-2022 service charge year, and that it was likely he had already paid this through his monthly fee.
  9. On 7 February 2023, the landlord wrote to the resident with a breakdown of estimated service charges for 2023-2024. This was broken down into an administration fee, building insurance fee and managing agent service fee. The charge for the estate caretaking and grounds maintenance contract appeared to have been removed.
  10. On 27 September 2023, the landlord provided the resident with a copy of the actual service charges for 2022-2023. This was calculated at £418.26.
  11. To resolve his complaint, the resident has advised that he would like additional compensation for the distress and inconvenience, as well as confirmation that he will not be charged for estate caretaking and ground maintenance fees going forward. The resident would like any money paid in relation to this refunded.

Assessment and findings

Scope of investigation

  1. The Housing Ombudsman Scheme sets out that the Ombudsman may not investigate complaints which in its opinion concern the level of service charge. The appropriate body that has jurisdiction to consider complaints about the level of the service charge is the First-Tier Tribunal (Property Chamber – Residential Property), which can determine the appropriate level and amount of service charges recoverable by a landlord; decide if the charges were reasonably incurred; by whom they are payable, and when.
  2. This means that it not within the Ombudsman’s authority or expertise to decide on matters such as service charges or breach of lease in the same way as the courts, including if service charges are value for money or if a landlord has breached the lease contract. As such, any issues regarding the resident’s liability for grounds maintenance related service charges would be better suited for the First-Tier Tribunal. We can assess whether the landlord followed proper procedure, followed good practice, and responded reasonably to the concerns the resident raised, taking account of all the circumstances of the case, which this assessment goes on to do.

Policies and Procedures

  1. The landlord’s service charge policy states the landlord uses an estimate of the charges to establish the approximate cost to residents, then measures the actual cost against the estimate. The policy states the landlord will send a certificate of actual expenditure within 6 months of the end of the financial year, and work out any difference between the estimate and the actual costs. The difference will then be applied to a resident’s account on 1 October.
  2. The occupancy agreement states that the resident must “pay the estate charge at the same time and in the same manner in which the rent is payable under this lease”.

The landlord’s handling of the resident’s concerns over service charges

  1. When investigating a complaint, the Ombudsman applies its Dispute Resolution Principles. These are high level good practice guidance developed from the Ombudsman’s experience of resolving disputes, for use by everyone involved in the complaints process. There are only 3 principles driving effective dispute resolution:
    1. Be fair- treat people fairly and follow fair processes;
    2. Put things right, and;
    3. Learn from outcomes.
  2. The Ombudsman must first consider whether a failing on the part of the landlord occurred, and if so, whether this led to any adverse effect or detriment to the resident. If it is found that a failing did lead to an adverse effect, the investigation will then consider whether the landlord has taken enough action to ‘put things right’ and ‘learn from outcomes’.
  3. The substantive issue of the resident’s complaint is that he is being charged for services he does not receive, predominantly the estate caretaking fee and grounds maintenance fee.
  4. On 1 April 2022, the landlord advised the resident that ‘ [It] understood the resident was being charged for cleaning. This is not correct as cleaning charges only apply to flats in blocks’. It is assumed the charge listed as ‘estate caretaking fee’ relates to this. Therefore, it is reasonable to conclude the resident had incorrectly been charged this fee. In the same email, the landlord stated the resident ‘should have grounds maintenance charges which apply to all properties and is for green areas, shrubs, trees, etc’. The resident followed this up to check that this meant he should not be paying for the ‘estate caretaking’. The landlord wrote to him on 8 April 2022 setting out how service charges were apportioned, but did not refer to the fact that the resident had been told he was being charged for cleaning when he should not be. This was understandably frustrating for the resident.
  5. In the subsequent stage 1 response, the landlord explained that due to the resident’s property being on a new development, the charges were based on estimates for similar developments and any services not received would be credited back in the ‘notice of actual costs incurred’ which was communicated in September of the financial year. The landlord provided a reasonable explanation of its usual practice in relation to service charges, however again did not refer to the fact that the resident had been informed he was being charged for something he should not be.
  6. The resident has provided this Service with a copy of an email he received from the landlord’s grounds maintenance contractor, dated June 2022, which states the contractor ‘does not look after [the resident’s property] yet, so it is still under the care of the developer’. The resident has also stated he contacted the property developer who has also confirmed it has not provided these services. The resident said his property does not receive any grounds maintenance services so therefore he was unhappy to pay the service charge.
  7. In the stage 2 response, the landlord reiterated what the grounds maintenance charges were for and that they applied to all properties. However, it then said that it had “been able amend your service charges” and refunded the resident the cost of the administration, caretaking and grounds maintenance fees from December 2021 to June 2022. It did not provide an explanation as to why the charges were refunded. It went on to acknowledge failures and offer £250 compensation for the impact of these. Due to this, it is assumed the resident was correct in his assumption that the services had not been provided. This is further supported by the fact that the charge for estate caretaking and grounds maintenance contact did not appear in the estimated service charges for 2023-2024.
  8. Further, the landlord stated in this letter that its contractor “had been providing grounds maintenance services to the estate” since 2020, which seems to contradict the email the resident received from the same contractor stating that it did no not look after [the resident’s road] yet. In addition, an internal landlord email from February 2023 notes that “currently the grounds maintenance falls under the remit of the developer…until the snagging is up together [the contractor] won’t be responsible for the grounds maintenance.”
  9. Overall, the Ombudsman has not seen evidence of grounds maintenance services being provided and the landlord’s response to the matter was confusing. While it was appropriate that the landlord refunded the resident and also offered £250 compensation, it remains unclear whether services were received from June 2022 onwards, or if the resident started paying the charges again from this point. It would have been reasonable for the landlord to provide the resident with a evidence that showed what services were carried out and when, and what the service charges were in relation to as he continued to dispute that his property received these service.  It is understandable the resident felt confusion over the validity of the service charges when the landlord has not demonstrated what services were being delivered. Orders are made below in relation to this.
  10. The landlord has made it clear what the administration fee relates to. Though it is noted the resident has questioned this as he has stated he has struggled to get a response from the landlord, this would not be within the Ombudsman’s remit to investigate and would constitute a complaint about the reasonableness of the charge, which would be better suited for the First Tier Tribunal

The landlord’s complaint handling

  1. The Ombudsman’s complaint handling code (CHC) sets an expectation that landlord should reply to complaints at stage 1 within 10 working days and within 20 working days at stage 2 from the date of escalation.
  2. The stage 1 response was provided 8 working days after the resident raised a complaint through the Ombudsman. This was in line with the timescales expected in the CHC. However, the response at stage 2 was provided on 64 working days after the resident escalated his complaint, which constitutes an unreasonable delay and exceeds the expected timescales. It is noted the landlord experienced a cyber security incident which it explained contributed towards the delay in responding to the resident. The landlord offered the resident £50 compensation for the delayed response. Orders are made to increase this compensation in line with the Ombudsman’s remedies guidance whereby ‘the landlord had acknowledged failings and made some attempt to put things right but failed to address the detriment to the resident’.
  3. The landlord also awarded the resident £200 compensation for ‘issues and service failures’ related to his complaint. It is unclear what this refers to. Though the landlord has admitted failings, it has not specified what these relate to. It is assumed this is in relation to customer service and communication issues, as though the Ombudsman has not been provided with copies of contact logs from the landlord, the resident has stated he has repeatedly chased a response to his complaint and has spoken to 21 people.
  4. The CHC states that ‘landlords must address all points raised in the complaint and provide clear reasons for any decisions’. The Ombudsman would expect to see evidence the landlord had investigated the issues raised and taken the resident’s concern seriously. Though the landlord has offered compensation, it is a shortcoming on the part of the landlord that it has not specified or explained what failings it was for.
  5. Overall, there was maladministration in the landlord’s complaint handling and orders are made below in line with the Ombudsman’s dispute resolution principles to ‘put things right’ and ‘learn from outcomes’.

Determination

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

Orders

  1. Within four weeks of the date of this determination, the landlord must:
    1. pay the resident an additional £150, comprised of £50 in regards to the failings identified in complaint handling and £100 for the resident’s time and trouble;
    2. clarify to the resident what the estate caretaking fee relates to. If the charge relates solely to cleaning in the block of flats, as referenced, the landlord should review the resident’s charges from June 2022 onwards, and refund any costs for estate caretaking and remove this charge going forward if it is still being applied. The landlord should write to the resident, copying in the Ombudsman, to confirm the outcome;
    3. provide clear, detailed evidence regarding services carried out from June 2022 onwards in relation to grounds maintenance charges to the resident, copying in the Ombudsman. If the services are not found to have been provided, the landlord should refund the resident these charges.

Recommendations

  1. The landlord should clarify the cost breakdown of the managing agent fee and provide this to the resident, copying in the Ombudsman. If services are found not to have been provided, the landlord should refund managing agent service charges to the resident.