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Clarion Housing Association Limited (202229270)

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REPORT

COMPLAINT 202229270

Clarion Housing Association Limited

31 October 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 regarding the landlord’s;
    1. Communication and handling of the resident’s queries regarding service charges.
    2. Complaints handling.

Background

  1. The resident has occupied the property since October 2021 under a shared ownership. This complaint relates to two concurrent complaints the resident held with the landlord. These complaints will be differentiated as complaint 2423 and complaint 7988.
  2. The resident raised a formal complaint with the landlord, complaint 2423, on 13 May 2022 relating to a section 21 request. The landlord was unable to provide a copy of this complaint.
  3. The resident contacted the landlord on 25 April 2022 asking a number of questions relating to security, which are not relevant to this investigation. The resident asked the landlord to confirm the amount of letters sent to all residents from 15 October 2021 to 25 April 2022. Lastly the resident made a request for access to the year accounts for all financial matters relating to the setting, payment and issuing of the service charge for his property. The resident raised a formal complaint with the landlord, complaint 7988, on 11 November 2022 advising he had received no response to his contact on 25 April 2022.
  4. The landlord provided a stage one response to complaint 2324 on 15 November 2022. It advised a recent cyber attack had significantly impacted its ability to provide the resident with the requested information and apologised for this delay. The landlord provided a spreadsheet with a breakdown of the figures requested by the resident and went on to explain the service charges and how they were calculated based on the managing agents previous budget plus an uplift for inflation. The landlord apologised for the delay in the complaint response as well as any distress and inconvenience caused. It acknowledged there had been a service failure and offered £250 compensation consisting of £150 for the time taken to resolve the complaint and its failure to follow policy and £100 for delays in the complaint response.
  5. The landlord also provided a stage one response to complaint 7988 on 25 November 2022. It stated that it could not divulge how many letters had been sent to other residents as this would be a breach of GDPR. The landlord also signposted the resident to responses provided under previous complaint references, which are not relevant to this investigation. The landlord offered £200 compensation for inconvenience and the delay in responding to the request.
  6. The resident and landlord communicated multiple times between 19 January 2023 and 17 February 2023. The resident repeatedly requested access to invoices, bills and itemised breakdowns of the service charges. The landlord responded detailing the managing agents accounting process and when invoices could be requested for each year.
  7. The landlord provided a joint stage two response for complaint 2423 and complaint 7988 on 20 February 2023. It advised a manager would contact the resident directly to respond to his queries regarding the spreadsheet that had previously been provided and any invoice related to this. The landlord offered a further £50 compensation for the complaint response time at stage two.
  8. The landlord provided an addendum stage two response on 22 May 2023. It advised the addendum was required as there had been a misunderstanding regarding a query the resident had made relating to a service charge letter. The landlord acknowledged the cycle of service charges between itself, and the managing agent was very confusing and reiterated an explanation of how the budget is set and the actual charges invoiced. The landlord advised confusion had occurred as the resident had contacted it multiple times sending emails to numerous different addresses and contacts. The landlord offered a further £150, £50 for the delay in providing the stage two addendum and £100 for the misinterpretation of the initial complaint.
  9. The resident remains dissatisfied and by way of resolution is looking for the landlord to confirm that no other letters had been sent to all residents but not him, copies of all invoices as previously requested, further compensation and acknowledgement of the issues in the complaints handling process.

Assessment and findings

Scope of Investigation

  1. In accordance with paragraph 42(d) of the Housing Ombudsman Scheme, this service may not consider complaints which, in the Ombudsman’s opinion ‘concern the level of rent or service charge, or the amount of the rent or service charge increase’. This means the Ombudsman will not investigate the level of the charge or the increase at the beginning of each year. However, this service will investigate how the landlord handled the resident’s enquiries relating to service charges.

The landlord’s communication and handling of the resident’s queries regarding service charges

  1. On 25 April 2022 the resident contacted the landlord and made a formal request to access the year accounts for all financial matters relating to the setting, payment and issuing of the service charge for his property. The resident advised that he was requesting this under section 21 of the 1985 Housing Act. The resident raised a formal complaint (2423) regarding delays in this request on 11 November 2022.
  2. Section 21 of the Landlord and Tenant Act 1985 requires landlords to provide leaseholders with a summary of the service charge costs incurred. Once the request is received the landlord must provide the information within one month or within six months of the year end, whichever is later.
  3. In its stage one response the landlord provided the resident with a spreadsheet, which provided a breakdown for each schedule and the charge for each service. This response was provided on 15 November 2022, this was six months and 21 days after the request was made, seven months and 15 days after the year end. The landlord stated this delay was in part due to a cyber attack it had experienced, however, it went on to state that the resident had requested this information one month prior to the cyber attack. While the experience of a cyber attack does go some way to explain that delay, this Service has seen no evidence that the resident was advised of a delay or kept up to date. The landlord apologised for the delay and offered £150 compensation for the time taken to resolve the complaint and failure to follow process. It was appropriate for the landlord to acknowledge and apologise for the delay. While the delay will have caused frustration to the resident, it did not cause a severe adverse impact and as such the level of compensation was proportionate.
  4. The resident contacted the landlord on 17 November 2022 and requested “all invoices [landlord] received which are then used to calculate the costs of the service charge for the period to which we are currently paying toward”. The resident sent further emails on 19 January 2023 and 27 January 2023 requesting bills/invoices related to each service charge cost for 2021/22 and 2022/23. The resident also requested confirmation of the formula used to apportion charges to each household and an itemised breakdown of charges for 2022/23.
  5. The landlord responded on 8 February 2023, apologised for the delayed response and stated it had been working on finalising the 2021/22 actual costs and setting the 2023/24 charges. The landlord advised that it would speak with the managing agent to get answers for the asked questions. It went on to state the breakdown already provided to the resident was based on the managing agent’s budgeted costs and therefore there were no invoices related to these, however it would request invoices for 2021. The landlord advised the managing agent would likely not share information on the formula used due to data protection, but it would request this. The landlord also provided the resident with a spreadsheet of the 2022/23 charges.
  6. Multiple email exchanges occurred between the resident and the landlord until 17 February 2023. The resident repeatedly requested access to invoices, bills and itemised breakdowns of the service charges and queried why they were not being provided. The landlord responded confirming the managing agent’s financial year runs from 1 January to 31 December and at the end of that year they have six months to finalise their accounts and have them audited. The landlord explained that as such their 2022 accounts were unlikely to be finalised until June 2023. It advised that it would request invoices once the accounts were received. The landlord went on to explain how it set charges for 2021/22 and 2022/23 and why an uplift percentage was added. On 3 March 2023 the landlord provided the resident with a number of invoices dating from 21 December 2020 to 2 February 2023.
  7. Ultimately the landlord took appropriate action to provide the resident with the requested information. It appears to the Ombudsman that the landlord responded to all queries and attempted to clearly explain complicated processes. The landlord explained that it could only provide invoices for financial years that had been finalised and as such invoices could not be provided for estimated costs. The promise to request invoices once the accounts had been finalised was a practical solution.
  8. In its stage two addendum the landlord clarified that it had provided the resident with an itemised breakdown of the estimates, based on the managing agent’s budgets. The resident had requested invoices that corresponded with each amount shown on the budget. The landlord confirmed that as they were budgets not actual costs no invoices yet existed. The landlord confirmed that it had provided the resident with all the invoices it had received to date. This was the appropriate action to take and fulfilled the landlord’s obligations to provide a summary of service charge costs, under section 21 of the Landlord and Tenant Act 1985.
  9. This Service notes that the landlord provided detailed descriptions of the service charge cycle of both itself and the managing agent, it also offered a one-to-one meeting with the resident to discuss the charges further. This was a practical solution and shows that the landlord acknowledged the difficulty and confusion that could have occurred due to a complicated financial cycle.
  10. On 17 November 2022 the resident queried why a letter had been sent to another resident within his block but not to him when the letter itself stated it had been sent to all residents. The resident asked the landlord to confirm how many letters had been sent to residents that he may not have received between 15 October 2021 and 24 April 2022. In its stage one response to complaint 7988 the landlord stated it would not divulge how many letters regarding service charges had been sent to residents between these dates as this was a breach of GDPR. The landlord apologised for any incorrect information that had been given. The resident responded to this requesting redacted copies of any letters so as to not breach GDPR.
  11. In the landlord’s stage two addendum response, it acknowledged the residents request for redacted copies and advised its decision remained unchanged and no copies of letters would be provided. This is an acceptable response, and this Service would not expect landlords to provide residents with copies of letters sent to other residents. The landlord could, however, have confirmed with the resident which letters he had received and cross-checked them with any letters previously sent to all residents to ensure none were missing. This would have provided the resident with peace of mind and showed that the complaint was fully understood and being taken seriously.
  12. The landlord has displayed a failure in service by not providing the requested documents within the appropriate time frame. However, the landlord did go on to provide detailed descriptions of the accounting process and provide further opportunity for the resident to ask questions and clarify answers. As such a finding of reasonable redress will be made.

The landlord’s complaints handling

  1. While this Service requested sight of the initial complaint (2423), the landlord advised it was unable to locate it. This Service expects landlords to keep clear, accurate and easily accessible records to provide an audit trail. If this Service investigates a complaint, we will ask for the landlord’s records. If there is disputed evidence and no audit trail, we may not be able to conclude that an action took place or that the landlord followed its own policies and procedures. This Service expects landlords to keep a full record of the complaint, any review and the outcomes at each stage. This must include the original complaint and the date received, all correspondence with the resident, correspondence with other parties and any reports or surveys prepared. In this case a lack of the original complaint had no detriment on the resident and as such did not amount to service failure, however, learning should be had to ensure this does not happen in the future.
  2. The landlord’s complaints policy states that at stage one the complaint will be responded to within 10 working days and at stage two within 20 working days.
  3. The Ombudsman’s Complaint Handling Code is a guidance document that sets out the Ombudsman’s expectations for how landlords should handle complaints. It states landlords must respond to a stage one complaint within ten working days, with any delays communicated and not exceeding an additional ten working days.
  4. The resident contacted the landlord with the initial complaint (2423) on 13 May 2022. The landlord provided its stage one response on 15 November 2022, 127 working days after the initial expression of dissatisfaction.
  5. This Service has seen no evidence to suggest the resident was made aware of any delay in the stage one complaint response. This is not in line with the landlord’s complaints policy or the Complaint Handling Code. The landlord apologised for the delay and offered £250 compensation, this is proportionate redress.
  6. The resident raised a further complaint with the landlord on 11 November 2022 regarding an email which had not been responded to. The landlord sent the resident a response to that email on 16 November 2022 and then sent a stage one response reiterating the information on 25 November 2022. The email at no point states that it is not a stage one response or that a formal response would follow. By responding to the email before sending a formal complaint response the landlord caused confusion and opened another line of communication which ultimately resulted in missed communication and delays.
  7. The resident responded to the email on 17 November 2022 and requested the complaint be escalated to stage two. The landlord later stated that because a formal stage one response had not been issued it did not take any further the resident’s request to escalate. It is reasonable to think that the resident could have believed the email was a formal stage one response and as such the landlord should have accepted his request to escalate to stage two at the time. Alternatively, it would have been reasonable for the landlord to contact the resident after the formal stage one response had been sent to confirm if he wished for the complaint to be escalated.
  8. The landlord ultimately provided a stage two response on 20 February 2023, 64 working days following the request for escalation. This is not in line with the landlord’s complaints policy or the Complaint Handling Code. The landlord apologised for the delay and offered £50 compensation, this is proportionate redress.
  9. If a landlord becomes aware of a misunderstanding on its part, which may have materially affected the outcome of a complaint, the Ombudsman would expect it to reinvestigate and provide a further formal response.
  10. During a conversation between the landlord and the resident on 27 February 2023, the landlord became aware that it had misunderstood a query regarding transparency made in the complaint (7988). The landlord confirmed to the resident on 13 March 2023 that it would reinvestigate the complaint and provide a stage two addendum response. This was an appropriate and practical response and solution to the misunderstanding. The landlord offered compensation of £100 for the misunderstanding, this was proportionate redress for the level of impact.
  11. The landlord provided a stage two addendum response on 22 May 2023, 47 working days after the landlord had confirmed it would reinvestigate. This Service expects any reinvestigations to be carried out in line with timeframes set out for the original complaint response. As such, this was not in line with the landlord’s complaints policy or the Complaint Handling Code however the landlord did apologise for the delay and offered £50 compensation, which was proportionate redress for the level of impact.
  12. While the landlord demonstrated numerous service failures throughout its complaints process, it acknowledged these failures and offered proportionate redress. As such a finding of reasonable redress will be made.

Determination

  1. In accordance with paragraph 53(b) of the Housing Ombudsman scheme, the landlord has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, satisfactorily resolves the complaint about the landlord’s communication and handling of the resident’s queries regarding service charges.
  2. In accordance with paragraph 53(b) of the Housing Ombudsman scheme, the landlord has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, satisfactorily resolves the complaint about the landlord’s complaints handling.

Recommendations

  1. The Ombudsman recommends the landlord review its record-keeping processes to ensure a full and accurate audit trail of complaints are easily accessible. The landlord should also consider, if has not done so already, implementing a Knowledge and Information Management Strategy. This is discussed in the Ombudsman’s Spotlight report on Knowledge Management and Information (KIM) management.