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East Midlands Housing Group Limited (202109071)

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REPORT

COMPLAINT 202109071

East Midlands Housing Group Limited

19 November 2021

 

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:
    1. The landlord’s handling of the resident’s complaint about the administration of his service charge/rent account.
    2. The level and reasonableness of the resident’s service charges.

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.

Level and reasonableness

  1. Under paragraph 39(i) of the Housing Ombudsman Scheme, the Ombudsman will not consider complaints which “concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure”.
  2. Throughout his complaint the resident has explained his dissatisfaction with the level of his service charges. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are more appropriately dealt with by the First-Tier Tribunal (Property Chamber), rather than the Housing Ombudsman. In in accordance with paragraph 39(i), this investigation will not address concerns relating to the level of the service charges.

Background and summary of events

  1. The resident is a tenant of the landlord. His weekly rent includes a service charge.
  2. On 3 March 2021 the resident raised a formal complaint to the landlord. He said he had previously complained to it about paying a service charge for services he did not receive, and unfair charges for communal lighting and the landlord had refunded him. He said the landlord had recently reinstated (it is unclear when) “such unfair and illegal costs” without his knowledge. He said he was familiar with both his, and his neighbour’s property, and asked why his service charge was not lower or equal to that of his neighbour’s (it is unclear from the information provided to the Ombudsman where exactly the neighbour lives in relation to the resident). He asked the landlord when it reapplied the service charge after his initial complaint. He asked what his correct service charge was, and how it was broken down. He asked how much it had “unfairly charged [him]”, and how long a reimbursement would take. He also asked whether the charges would impact his council tax.
  3. The landlord issued its stage one complaint response on 29 April 2021. It set out which charges would be removed, and which would remain on the resident’s account. It said its records showed the resident had been incorrectly charged for service charges since 2016. It said as the resident was in recipient of housing benefit until October 2018, it would inform the local authority of the mistake, and refund any charges onto his account. It said it owed the resident a refund of £345.97 for the years 2020-21, and £346.50 for the years 2019-2020. It apologised for its errors and the distress caused. It concluded by explaining how the resident could escalate his complaint if he remained dissatisfied.
  4. The resident escalated his complaint on 7 May 2021. He reiterated that his neighbour’s service charge was lower than his. He said his neighbour’s property was exactly comparable to his. He asked about the communal electricity and lighting charges, and why they were at their level. He said there was a lack of transparency and correlation between the charges for tenants.
  5. The landlord issued its stage two complaint response on 22 June 2021. It said his service charge was separate to his council tax charge. It said the resident’s and the neighbour’s service charges were different as they were in different building scheme codes. It said it had reviewed his electricity costs and the charges were similar to other schemes costs. It acknowledged that there had been an error with his service charge, and a delay rectifying it. It said it had sent the resident three extension letters before issuing its stage one complaint response. It apologised for its delayed complaint responses, said it would review how it could prevent this from happening again, and offered a goodwill gesture of £50 in view of this.

Assessment and findings

  1. The landlord’s complaints policy sets out that it will acknowledge and apologise for any failures identified. It will give an explanation, and where possible, inform the resident of any changes made to prevent the issue from reoccurring. The policy also explains that the landlord will “always provide feedback on failures and take actions to improve as a result of this”.
  2. The landlord has a two-stage process for responding to complaints, but the complaint policy does not specify any target timeframes for responding to stage one or two complaints. The Ombudsman’s Complaint Handling Code (published on our website) sets out our service’s expectations for landlords’ complaints handling. The Code says that a landlord should respond to stage one complaints within ten working days, and stage two complaints within 20 working days.
  3. In the landlord’s stage one complaint response it set out what charges it would remove, and which ones would remain on the resident’s account. It said it would issue a refund for the incorrect charges and apologised for the distress and inconvenience caused. In view of the considerable amount of money owed to the resident (over £600), and the period over which the errors had occurred (the landlord acknowledged that the resident had been incorrectly charged since 2016), the landlord’s apology and refund in and of themselves were not enough to fully resolve the complaint. The landlord should pay compensation, as set out below for the distress and inconvenience its errors caused to the resident.
  4. The landlord’s complaints policy and the Ombudsman’s own remedies guidance (published on our website) both set out that landlords should “be fair, put things right, and learn from outcomes”. No evidence has been provided for this investigation to show the landlord explaining to the resident in either complaint response what steps it would or had taken to ensure it did not repeat similar mistakes in the future. This was particularly important in this case because the resident has said the landlord has made errors previously when calculating his service charge. This was unreasonable and represents service failure by the landlord. The landlord should now take steps to identify how the errors occurred in relation to the resident’s service charge and how to reduce the risk of similar errors happening in future. The landlord should share its findings with the resident and the Ombudsman, as set out in further detail below.
  5. The landlord took 41 working days to issue its stage one complaint response, and 32 working days for its stage two response. There was an unreasonable delay for both responses. Nonetheless, the landlord acknowledged its shortcoming in its stage two complaint response, apologised, and offered the resident £50 compensation. It was a reasonable, and proportionate offer in consideration that although the delay was noticeable, it was not significant, and the landlord said it had sent the resident three letters advising him of the delay.
  6. Ultimately, the landlord’s offer of compensation for its delayed complaint responses was reasonable. It was in line with the Ombudsman’s remedies guidance which suggests awards of £50 to £250 where we recognise that there has been service failure which had an impact on the complainant but was of short duration and may not have significantly affected the overall outcome for the complainant. Examples include failure to meet service standards for actions and responses but where the failure had no significant impact, such as delays in responding to a complaint where the delay did not affect the overall outcome of the complaint.
  7.  The landlord also responded to the resident’s queries regarding council tax, and his neighbour’s different service charge. However, it did not set out its learning from the resident’s complaint or reassure him how it would prevent the issue from reoccurring.

Determination (decision)

17. In accordance with paragraph 54 of Housing Ombudsman Scheme, there was service failure in respect of the landlord’s handling of the resident’s complaint about the administration of his service charge/rent account.

Reasons

18. The landlord refunded the resident for the charges it had applied incorrectly and apologised for the distress caused. However, it failed to reassure him how it had learnt from the complaint.

19. There were delays in the landlord’s responses to the complaint at both stages of its internal process. The landlord has apologised and offered appropriate compensation in view of the delays.

Orders and recommendations

20. The landlord is ordered to:

  1. pay the resident £100 for the frustration and inconvenience caused as a result of the failings identified in this report.
  2. Carry out a case review to identify the reasons for the errors made in calculating the resident’s service charge and delays in correcting this. The landlord should share the findings of the case review with the resident and the Ombudsman.

These orders should be completed within four weeks of the date of this report. The landlord should update this Service when the compensation payment has been made.