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Cognatum Estates Ltd (202302873)

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REPORT

COMPLAINT 202302873

Cognatum Estates Ltd

3 December 2024

 

Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman Scheme (the Scheme). The Ombudsman must determine whether a complaint comes within their jurisdiction. The Ombudsman seeks to resolve disputes wherever possible but cannot investigate complaints that fall outside of this. 

In deciding whether a complaint falls within their jurisdiction, the Ombudsman will carefully consider all the evidence provided by the parties and the circumstances of the case.

The complaint

  1. The complaint is about the landlord’s handling of the resident’s concerns about:
    1. The level of service charges.
    2. The administration of service charges.

Determination (jurisdictional decision)

  1. 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. After carefully considering all the evidence, I have determined that the complaint, as set out above, is not within the Ombudsman’s jurisdiction.

Summary of events

  1. The resident is the leaseholder of the property, which is owned and managed by the landlord. The landlord imposes an annual service charge, payable quarterly.
  2. In late 2022, the landlord sent the annual report for 2022 to residents, which explained that the service charge would increase by 14.8%. It arranged for an annual meeting to take place on 18 October 2022, when residents could raise any concerns about the charges.
  3. Another resident noted that some of the figures in the report were wrongly calculated, so the meeting was postponed until 15 November 2022. The meeting went ahead on that date and a number of residents disputed the new charges. A further meeting was held on 16 December 2022 and a new statement of service charges was issued on 21 December 2022, in line with the landlord’s original decision.
  4. The resident wrote to the landlord on 11 January 2023 raising concerns about the information provided in support of the new charges and stating that it had not complied with its industry body’s code of conduct. In particular he raised concerns about it failing to follow proper administrative processes or justify the charges. For these reasons, he said he would not accept the increased charges.
  5. The landlord treated this letter as a complaint and responded at stage 1 on 8 February 2023. It explained that it had followed due process in relation to the administration of the service charge increase and went on to confirm its position on the insurance contract, management fees and maintenance projects.
  6. The resident escalated the complaint in mid-February 2022, stating that the landlord had not followed proper administrative processes and had still failed to provide adequate information to justify the increased charges. In the landlord’s stage 2 response of 28 March 2023 it maintained its previous position and largely did not uphold the resident’s points of complaint. However, it accepted that it had not issued notes from the annual meeting and confirmed that it had now done so.
  7. In the resident’s submissions to the Ombudsman he has said that he would like an explanation of the service charge increases and why the landlord had breached its code of conduct, as well as better communication.

Reasons

The level of service charges

  1. Paragraph 42.d of the Scheme states that the Ombudsman may not investigate complaints which, in this Service’s opinion, “concern the level of rent or service charge or the amount of the rent or service charge increase”. These matters fall within the jurisdiction of the First Tier Tribunal (FTT), which is able to interrogate the reasonableness of the charges and their justification.
  2. Therefore, the resident’s complaint about the level of the service charge increase falls outside the Ombudsman’s jurisdiction, in accordance with paragraph 42.d of the Scheme.

The administration of service charges

  1. While the Ombudsman will not comment on the amount of a service charge, there are elements of a landlord’s service delivery around the administration of service charges which we may consider. For example, we may consider a landlord’s communication with the resident regarding the charges, and the provision of information in support of the charges being levied. However, we must then be satisfied that all other requirements of the Scheme are met.
  2. In this case, it is clear that the resident has also raised concerns about the landlord’s administration of the service charge. In particular, he submits that communications around the annual meeting were poor and breached the industry body’s code of conduct. The Ombudsman has, therefore, considered whether there is any part of the complaint it could consider.
  3. However, having reviewed the evidence on file, it is clear that the resident’s additional concerns around administrative processes are fundamentally linked to his position that the new charges are too high. He sought, by challenging the landlord’s processes, to have the charges reduced. In his letter to the landlord of 11 January 2023, he said that he would not accept the increase because of administrative errors he said it had made.
  4. Paragraph 42.o of the Scheme says the Ombudsman may not investigate complaints which “concern matters where the complainant is seeking an outcome which is not within the Ombudsman’s authority to provide”. Further, paragraph 42.f of the Scheme says that we may not investigate complaints “where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure”.
  5. While the Ombudsman does have the discretion to accept complaints about service charge administration in some circumstances, it is not considered appropriate or proportionate to do so in this case. Ultimately, the resident requires a reduction in the service charges being levied, and it is not within this Service’s authority to provide that outcome. Instead, it would be more effective for him to pursue this outcome through the FTT.
  6. As a result, the resident’s complaint about the administration of the service charge falls outside the Ombudsman’s jurisdiction, in accordance with paragraphs 42.f and 42.o of the Scheme.
  7. We accept that it has taken the Ombudsman some time to reach this conclusion and we apologise for any inconvenience this has caused. It was necessary to conduct a comprehensive review of the evidence before we could confirm our position on the complaint. Decisions of this nature can be complex and it is important that we take the time to make the correct decision.

 

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