Home Group Limited (202208081)

REPORT

COMPLAINT 202208081

Home Group Limited

24 January 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

The complaint is about:
1. The resident’s report that the landlord provided him with inaccurate information prior to purchasing the property in relation to:
  1. Access to the roof terrace.
  2. The kitchen worktop.
2. The landlord’s:
  1. Response to the resident’s concerns about differences in the standard of entrance halls across tenures.
  2. Administration of service charges.
  3. Complaint handling.

Background

The resident is a shared ownership leaseholder of the landlord, a housing association. The lease agreement commenced on 7 June 2019.
The property is a second floor flat in a development comprised of a number of smaller blocks that make one U shaped block. The development is mixed tenure, comprised of general needs social housing, shared ownership and private ownership. The block with the roof terrace is in the curve of the U and is privately owned.
The specification set out in the sales brochure for the development included:
1. Quartz stone worktops fitted in the kitchen.
2. Communal roof terraces.
3. Private balcony and/or terrace to each plot.

Summary of events

The resident has told this Service that he contacted the landlord on 19 November, 9 and 13 December 2019 and 7 April 2020 to raise concerns about his service charges and access to the roof terrace. He said that the landlord did not provide a response. This investigation has not seen evidence of this but notes that it is not disputed by the landlord.
The resident emailed the landlord on 9 June 2020 to make a formal complaint, as follows:
1. He had queried his service charge on 7 April 2020 but the 2 responses he received did not provide the information he asked for.
2. The landlord had provided documentation showing that he had access to the roof terrace which could be accessed through a neighbouring property. This was also confirmed during the viewing prior to purchase.
3. Since moving into the property he had learnt he did not have access, despite paying for this through his service charge. He therefore requested a breakdown of his service charge in relation to charges from the management company.
4. He had raised this query with the landlord on 19 November, 9 and 13 December 2019 but had not received a response.
5. He asked the landlord to confirm:
  1. Whether he had a right of access to the roof terrace. If not, why it had said so prior to purchase and why was it included in his service charge.
  2. The breakdown of his 2020/21 service charge.
  3. An explanation as to why his queries had been ignored.
The resident did not receive a response so emailed again on 23 June 2020. The landlord replied on the same day, 23 June, to advise that it had no record of the complaint. It asked him to resend it, which he did on the same day. He followed up with a further email on 25 June to chase acknowledgement of his complaint.
The landlord emailed the resident on 26 June 2020 to acknowledge receipt of his complaint which it said had been forwarded to its customer solutions team.
On 30 June 2020 the landlord provided a response to the resident’s queries by apologising and explaining its position on service charges.
The resident emailed the landlord on 8 July 2020 chasing a response to his complaint which he said was raised over a year ago. The landlord replied on the same day to say it was still waiting for a response from the management company. The resident chased by email on 21 and 27 July.
The landlord emailed the resident on 28 July to confirm that it had chased a response from the management company but not heard back. On 28 July 2020 the resident emailed the landlord to confirm that his fob had been changed and he was unable to access the block where the meters were located. The landlord replied on the same day to say it had raised the issues with its legal team and would provide an update in due course.
The resident sent a further email, also on 28 July 2020, to set out his queries regarding the terms of his lease. On 31 July the resident chased the landlord for a response from the legal team. He chased again on 11 and 13 August.
The landlord emailed the resident on 13 August 2020 to advise that its legal team had not yet provided a response. It said if there was no information soon it would raise a formal complaint on the resident’s behalf. The resident replied that day and asked that the landlord raise the complaint. An internal email shows a formal stage 1 complaint was raised on 14 August.
An internal email dated 19 August 2020 concluded that blocking use of the access point was against the terms of the lease and that the lease was silent on roof terrace access rights. Furthermore the resident should address the issue with his own solicitor while the landlord reviews the sales brochure to ensure it was accurate.
The resident emailed the landlord on 19 August 2020 to confirm that the management company advised him that it would only communicate with the landlord. The landlord replied on the same day to say its legal team’s initial view was that the resident did not have access to the roof terrace although there may be a right to access through the block. It said it was studying the lease in more detail and would provide a further update by close of business that day.
On 24 August 2020 the landlord received an email from the resident and some of his neighbours raising concerns that it had segregated tenants by social status by using ‘prison like metal bars’ as “poor doors” to prevent access to shared space and the electrical room. The residents also referred to differences in decoration in the entrances. Social housing had a carpeted entrance whereas others were decorated to a high specification with tiled marbled floors.
In an internal email date 24 August 2020 the landlord reviewed its position. It said the lease suggested there was no right of access to the roof terrace and the management company had advised the resident did not contribute to the service charges for maintenance of the roof. The landlord considered it position on the mis-representation of its pre-sales literature and suggested compensation would be needed if access to the roof terrace was denied.
The resident emailed the landlord on 2 September 2020 to chase the response from the legal team. He emailed again the following day to flag that he first made a complaint on 9 June 2020 and had not received a response. He chased again by email the following day, on 3 September.
The landlord emailed the resident on 3 September 2020 and apologised. It said it intended to write to the management company to request access to the roof terrace and the removal of the gates. It also confirmed that it would review the flooring in the entrance area to replace it with something more hardwearing and easier to clean.
The resident emailed the landlord on 15 September 2020 to say that its response did not answer his question about access rights and he sought an update on this.
On 29 September 2020 the landlord issued a stage 1 complaint response, as follows:
1. The work top used in the show home was the same as the worktop in the home he purchased.
2. Its sales brochure states that the contents were not deemed to be part of the contract and that all images and details should not be relied upon as such.
3. It apologised if the situation was not transparent enough and that this had been highlighted with its head of sales and marketing delivery as feedback.
4. It had written to the management company to request that access to the roof terraces be provided to all residents and the gates removed. It said that the gates sat outside of its direct control and ownership but that it supported the resident’s request. It would feedback once the management company had provided a response.
An internal email dated 7 October 2020 confirmed that the position of the management company was that it would not allow the landlord to carry out works to remove the gates. The landlord queried whether it was able to enforce its request.
On 21 October 2020 the resident emailed the landlord because he had learnt that it was looking to recoup a deficit in service charges in the next financial year.
The landlord replied on the same day, 21 October, to set out the charges for 2019-20. It said that it tried to ensure its budgets were an accurate representation of the charges it expected. It originally mis-interpreted the draft budget provided by the management company, but could evidence it had set a budget based on the information it had and the invoices it was presented with. The main issue was the management company increased their budget significantly from 1st October 2019 onwards without any warning and it could not increase its budgets in line with this.
The resident replied to the landlord on 21 October to express his frustration at the amount charged by the management company which he felt was a “scam.” He said he was being charged for services he had not received. He sought support from the landlord to resolve the issues.
On 23 October 2020 the landlord issued the resident with a statement setting out the estimated service charge costs with the actual costs incurred for the financial year 2019-20. On 29 October 2020 the resident emailed the landlord to request a line by line breakdown of the service charges the management company had passed on.
On 29 October 2020 the resident emailed the landlord because he was “yet to receive a satisfactory response” to his complaint which was initially raised on 9 June 2020.
On 2 November 2020 the landlord emailed the resident and advised that he had the right to request copies of individual invoices from the management company. If it refused, it could request them on his behalf.
The resident emailed the landlord again on 23 November 2020 to request a full and final response to his complaint. He asked it to confirm if the complaint was still open and if so when he could expect a response. The resident chased the landlord for a response on 3 December.
On 20 and 28 January 2021 the resident emailed the landlord to ask if there was an update from the management company. The landlord replied on 28 January to confirm that it had not received a response.
The resident emailed the landlord again on 9 February 2021 to express his ongoing frustration over the unresolved service charge issues. The landlord replied the same day to say it had made multiple attempts to contact the management company to no avail. It said it hoped to attend the annual general meeting (AGM) of the resident’s management company in January but it was not sent an invite and was not sure if it went ahead. It acknowledged that this was not acceptable but said it was doing “what it could.”
On 9 February 2021 the resident emailed the landlord again to chase the final complaint response.
An internal email dated 10 February 2021 was sent in relation to the resident’s complaint response. It asked that contact be made with the resident to establish whether he had received the response letter, or whether the recent contact related to another matter.
On 12 February 2021 the landlord emailed the resident to confirm it had received the new budgets from the management company for 2020-21 which it had used to calculate its service charge. It said it would send out the most recent invoice plus the full 2020-21 budget from the management company so he could scrutinise how it apportioned the budget and who paid for what. It said it would also sort out the additional compensation it agreed in relation to the original service charge that was set lower than it should have been.
On 17 February 2021 the resident emailed the landlord to say he had received its letter. He was disappointed that it was a direct duplication of the letter sent the previous year. It did not address any of the additional points raised in his original complaint of June 2020.
The landlord phoned the resident on 19 February 2021 to apologise for its complaint handling. It said it would investigate and call him again on 26 February.
The resident phoned the landlord on 1 March 2021, and sent a follow up email on 2 March, because it did not phone on 26 February, as agreed. The landlord replied on 3 March to apologise, adding that the responding officer had been away from work unexpectedly.
The resident emailed the landlord on 16 March 2021 to express his dissatisfaction. The landlord replied on the same day to say it was trying to arrange to meet with the resident’s management company. Having been contacted by this Service the landlord had opened a stage 2 complaint.
The resident sent the landlord a further email on 16 March 2021 to say he was still waiting to hear whether the lease provided a right of access to the roof terrace.
On 16 April 2021 the landlord sent an internal email to confirm that it had received an inadequate response from the management company. It also confirmed that works to the entrance hall were to commence within a fortnight.
On 30 April 2021 the landlord emailed the resident to confirm that works to the entrance hall had been put on hold while it considered the best type of flooring to use.
The landlord’s records dated 29 September 2021 noted that the management company was “underperforming and uncommunicative.” It thought the most effective resolution was for a new management company to be appointed.
On 7 October 2021 the landlord wrote to the resident to confirm the actual costs for service charges for the period 2020–21. It confirmed there was a large deficit of £1186.24. This would not be applied to the account nor payment requested until some of the issues were resolved.
On 17 October 2021 the resident emailed the landlord about a letter he had received advising that he owed money in service charges. He said having a debt hanging over his head that he had “zero awareness of and no control over” was affecting his mental health.
On 2 November 2021 the London Legacy Development Corporation (LLDC) served a planning contravention notice on the landlord. This was because the installation of gates was not part of the original planning permission.
An internal email dated 3 November 2021 confirmed that to be consistent with other payments of compensation in relation an error in the sales process, compensation of £250 would be appropriate. This was communicated to the resident on the same day. He replied on 4 November to say that it did not reflect the stress of trying to resolve the issues.
On 5 November 2021 the resident emailed the landlord to report that a neighbouring leaseholder had been paid compensation because it had installed a “cheap” kitchen worktop instead of the quartz stone as promised. He said he was currently getting quotes to change his worktops.
On 25 November 2021, in an internal email, the landlord agreed to increase the compensation to £500 for the nuisance the resident had suffered. On 9 December 2021 the landlord emailed the resident and confirmed that it would pay for the replacement worktops.
On 13 January 2022 the landlord emailed the resident to confirm that the replacement of the entrance floor was delayed due to issues with the old company and would now be progressed with the new one.
The LLDC emailed residents on 31 January 2022 to confirm that a new management company who had been appointed did not object to the gates being unlocked and left open to allow all resident access to all areas.
The landlord’s internal email dated 11 February 2022 confirmed that it did not put the gates in and was not able to open them. It said that further compensation should be limited to £500 as residents had not “suffered an actual loss.
The landlord emailed the resident on 9 March 2022 and confirmed that it agreed with the resident’s observations about the entrance halls and confirmed an action plan was in place to address the issues. It said that the offer of £500 compensation remained, in addition to the waivered deficit of £1186.24.
On 9 March 2022 the resident enquired about next steps in the complaints process. The landlord emailed the resident on 10 March 2022 to confirm that his stage 2 complaint could be closed either by him accepting the offer or closed noting that the resident declined to accept. The resident could request to escalate his complaint to review by an independent complaints panel. In a further email exchange with the resident on the same date the landlord confirmed that the panel had the power to “make an instruction” regarding compensation.
The landlord issued its stage 2 complaint response on 18 March 2022 in which it:
1. Apologised for the length of time taken resolve the issues which was “unacceptable” and had caused “distress and inconvenience.”
2. Accepted that it unintentionally gave incorrect information about the roof terrace.
3. Confirmed it offered £500 compensation for the challenges the resident encountered in getting the right information.
4. Confirmed that the local authority’s request to reinstate access to the roof terrace was being actioned.
5. Confirmed that the gates were not in place when it purchased the building and it was not informed that they were to be installed. It then faced “considerable challenges” communication with the original managing company and was unable to get them removed.
6. It noted that the entrance halls were significantly different. It had held discussions with the new managing company about bringing the entrance hall to a more “equitable standard.”
7. Accepted that the residents’ recourse for complaints about the managing company was through its own services and its communication could have been better. As a result, it set up fortnightly communication, alongside an action plan, which would continue until all issues were resolved. Communication had already improved since the new managing company took over. It apologised for problems that poor communication caused.
8. Acknowledged that it did not offer clarification on the charges. It had therefore agreed to write off the deficit of £1186.24.
9. Said that the new management company had committed to carrying out a full and transparent review of the charges so that all residents could have confidence in the reconciliations and future spends.
The landlord’s independent complaints panel met with the landlord on 29 April 2022 to discuss the complaint. The panel made a number of recommendations, including that the landlord should double the compensation and carry out works to the entrance in the resident’s block.
On 10 May 2022 the resident emailed the landlord to query a letter he had received to say he had not paid enough and was in debt. There was no explanation as to what it was for and/or why it was so much. The landlord replied on 12 May 2022 to provide the balance on the account and explained how this had been calculated.
The independent resident’s panel held a virtual meeting with the resident on 13 May 2022. During the discussion the resident confirmed that the gates were in situ at the time he viewed the property but they were open however, they had been locked by the time he moved in. The panel’s thoughts and recommendations following its discussion with the resident included that the ongoing situation was inexcusable and there had been mismanagement by the landlord.
On 25 May 2022 the landlord sent a number of internal emails to consider the panel’s recommendation regarding the award of compensation. It confirmed that the previous decision by the relevant budget holder to award £500 compensation would not change.
On 8 June 2022 the landlord’s internal email confirmed that it issued the panel outcome letter to the resident on 31 May 2022. It had a further 20 working days to provide a final response which was therefore due on 28 June.
On the 28 June 2022 the landlord issued the outcome of the independent complaint panel, the main points were as follows:
1. It did not always have control of the design stages of a development project. Even in schemes that it had fully designed and developed there would be differences in the internal specification of homes of different tenures to match maintenance and procurement strategies. Equally, the communal space specifications were developed to allow efficient maintenance and management which allowed it to keep service charges as low as possible.
2. It was reviewing its internal processes to ensure that all residents were provided with important communications from the management company, including the annual service charge budgets.
3. It agreed to waiver the £1,186 end of year service charge deficit.
4. It had reviewed the £500 compensation offered at stage 2 and had concluded it was in line with the Housing Ombudsman remedies guidance. This was considered to be fair redress in addition to the service charge waiver.
The resident contacted this Service on 19 July 2022 to express his dissatisfaction with the landlord’s complaint response because:
1. The landlord did not follow the independent complaint’s panel’s recommendation about compensation.
2. It was hard to understand why it could not resolve the issue.
3. He was mis-sold the property which was not partly down to confusion as asserted by the landlord.
4. Works to the entrance hall had not started.
5. Since moving in 5 years ago there had been a lack of transparency over the service charges which had left him in debt. The stress over the rising debt during a cost-of-living crisis is ever increasing.
6. The management company was unresponsive to residents, and they were left powerless without the landlord’s intervention.
7. He had not been fairly compensated for his time in resolving the matter. The landlord had admitted several times that residents had to work too hard.

Events post internal complaints process

The landlord wrote to the resident on 22 May 2023 to set out the outcome of its review of service charges for the block. It said it had made decisions which balanced the need to be fair and reasonable to residents but did not impact too negatively on it given that it was “not directly responsible for services provided and had no control over the decisions it took.” It hoped the resident was satisfied that it had now “finally” provided the information he had requested in relation to his service charges.
During a telephone conversation with this Service on 12 December 2023 the resident advised that the works to improve the entrance hall and replace the carpet had not been carried out. The resident explained that he is dyslexic and we established that in his stage 1 complaint of June 2020 complaint he accidentally referred to November, December 2020 which should read 2019.

Assessment and findings

Landlord’s obligations, policies and procedures

Its service charge policy says it:
1. Monitors services provided to residents to ensure the delivery and quality reflect the service charge.
2. Will ensure residents know what services they can expect to receive and how much they will need to pay, providing them with a clear statement of their service charges.
Its customer promise includes “making it clear how your rent and service charges are spent.”
Schedule 4 of the head lease sets out the obligations of the company, which includes to provide maintain or install in or about the estate or any part of it any other service or facility as the company in its absolute discretion considers desirable for the comfort or convenience or other benefit for the residents of the estate or any part of it.
Schedule 6 of the resident’s lease says the landlord covenants include:
1. 3.1 subject to the leaseholder paying the service charge, to enforce the obligations on the management company contained in schedule 4 of the head lease.
2. 3.2 before the start of each service year, the landlord shall prepare and send the leaseholder an estimate of the service charge for that service charge year and a statement of the estimated service charge for that service charge year.
Its complaints handling process says that it aims to respond with stage1 complaints within 10 working days and to stage 2 complaints within 20 working days. If it is not able to adhere to these timescales the complaint owner must explain the reason for the delay and tell the resident when they can expect to receive the response. Any delay should not exceed 10 working days without good reason. In exceptional cases, where further extension is needed approval must be given by the relevant director or equivalent senior leader.
Its complaints, compliments and comments policy (complaints policy) says that by agreeing an action plan to resolve a complaint and accepting compensation, residents are agreeing that the matter is resolved and no further action will be taken.
Its guidance notes ‘doing it the right way: discretionary compensation’ says that the independent complaints panel cannot order it to pay compensation but can make recommendations in relation to this for consideration.

Information provided about access to roof

In his email to this Service on 19 July 2022 the resident said that he was mis-sold the property on the basis of the information provided by the landlord about access to the roof. It is outside the scope of this investigation to determine if a property has been mis-sold. Furthermore, it is outside the scope of the investigation to make a definitive interpretation of the resident’s lease and we do not have the power to amend the lease.
Therefore, this investigation will focus on assessing whether the sales information was accurate and whether the landlord’s response to any inaccuracies was reasonable in the circumstances. If the resident wishes to pursue matters in relation to being mis-sold the property and/or the wording of his lease agreement he may wish to seek his own independent legal advice as this would be better suited to examination by the court.
The landlord did not respond to the resident’s complaint of 9 June 2020. As a consequence, he was caused time, trouble and inconvenience when chased the landlord on 8, 21 and 27 July 2020. During that time the landlord tried to seek an update from the management company but it did not respond.
During the conversation between the landlord and resident on 28 July 2020 the landlord agreed to refer the matter to its legal team. However, it did not provide an update and the resident was caused inconvenience and time and trouble in chasing a response on 31 July, 11 and 13 August.
Due to the delays thus far, the landlord offered to raise a complaint on behalf of the resident on 14 August 2020. While it was appropriate that it took steps to address the resident’s concerns about the delay, it is unclear why it was not able to escalate the matter internally to provide an answer on the substantive issue. This would have been more beneficial to the resident, instead of prolonging the matter, causing further distress, through a complaints process.
The landlord’s legal team provided feedback on the lease on 19 August 2020 which appropriately addressed the specific points raised by the resident. In a further email dated 19 August it said it intended to examine the lease in more detail and would update the resident accordingly. The landlord contacted the resident again on 1 September 2020 to confirm it was still reviewing the head lease. The resident chased the response on 15 September. The resident discussed this further with the landlord on 21 September when it again said it would update him in due course. The resident was caused further inconvenience, time and trouble in having to chase a response from the landlord.
As a shared owner, the onus was on the resident to seek his own independent legal advice to clarify the terms of the lease. However, the landlord used its discretion to assist the resident. Having decided to do so, it would have been reasonable for it to respond in a reasonable time frame. It provided its first response on 14 August 2020 which was 3 weeks after its first discussion with the resident. This was after the resident had chased on 3 occasions and made a stage 1 complaint. Furthermore, there is no evidence that the landlord provided a definitive response following its conversation with the resident on 21 September.
An internal email dated 24 August 2020 highlighted that ultimately the resident was responsible for clarifying any concerns regarding the terms of the lease with is solicitor prior to purchase. The principle of ‘caveat emptor’ or ‘let the buyer beware’ implies that it is for the buyer to ensure that the goods about to be purchased are fit for purpose and meet their specific requirements, and they bear the risk.
However, the communication from the landlord confirmed that access to the roof terrace was included as part of the purchase. Furthermore, given that the gates were not locked when the resident viewed the property he had no reason to query access with his solicitor. Therefore, it was reasonable that the landlord accepted that it was responsible for “mis-description from a sales point of view” and the associated compensation.
In its stage 1 complaint response of 29 September 2020 the landlord failed again to address the resident’s request for a response from the legal team regarding access. The resident chased again in an email dated 16 March 2021. The landlord also failed to consider compensation which was inappropriate given its acknowledgement of the substantive issue.
In an internal email of 7 October 2020 the landlord considered the question as to how it might enforce its request to remove the gates. This was appropriate given its covenants at schedule 6 of the lease however, there is no evidence that this was considered further which was a failure.
There was no evidence that the landlord followed up on its email to the resident on 1 September 2020. The email said it was looking at the head lease and therefore the failure to provide an update was inappropriate.
On 3 September 2020 the landlord said that the gates were outside of its direct control and ownership. Due to inaction by the landlord the local authority served a planning contravention notice on the landlord on 2 November 2021. As recognised by the landlord in its email to the resident of 11 February 2022, this was the result of considerable effort on the part of its resident. It was a failing that the landlord had not taken this approach earlier in the process.
The landlord had an obligation in the lease to ensure access to the neighbouring block to access meters amongst other things. The landlord made informal attempt, however, there is no evidence that the landlord considered taking further action, preferring instead to wait for the resident management company to act.
Confirmation that the gates could be unlocked was received 19 months after the resident first raised his concerns which was unreasonably long. It is acknowledged that relationships between management companies and landlords can be difficult, particularly when they are appointed by the freeholder. However, residents should be able to hold the professionals responsible for the quality, safety and management of their homes to account. In turn, landlord should also be able to hold third party freeholders and managing companies to account in relation to discharging their responsibilities.
In its stage 2 complaint response of 18 March 2022 the landlord “accepted that the residents’ recourse for complaints about the managing company was through its own services and its communication could have been better.” In the circumstances it would have been reasonable for the landlord to have taken legal advice on its position and/or considered contacting the freeholder to explore if they could intervene. That it did not do so is evidence that the landlord did not do all it could to resolve the issue for the benefit of the resident which was a failure.
On 3 November 2021 the landlord offered the resident £250 compensation for the misinformation in the sales process. In an internal email dated 25 November it acknowledged the inconvenience, time and trouble caused to the resident. It agreed to increase the compensation to £500 in recognition of nuisance caused.
On 20 May 2022, the independent resident’s panel concluded that the landlord failed to fulfil its customer promise because it ignored and failed to unlock the gates. It felt that the award of compensation for £500 was “very inadequate”. However, the evidence suggests that this was its overall conclusion in relation general compensation, taking into account other aspects of the complaint.
In its email to the resident on 10 March 2022 the landlord told the resident that the independent complaints panel had the power to “make an instruction” regarding compensation. However, its guidance notes says that the panel cannot order it to pay compensation but can make recommendations in relation to this for consideration. The landlord’s mixed messaging was inappropriate, and a source of considerable frustration for the resident.
Although not explicitly stated, the evidence suggests that £250 was awarded because its pre-sales information was incorrect and a further £250 awarded to recognise the inconvenience caused as a result.
The landlord’s email of 12 May 2022 confirmed its decision to write off the £1186 end of year deficit was part of the compensation for the resident’s lack of access to the roof terrace. There was no evidence to say how much was apportioned to the failure. Therefore, this investigation considers it reasonable to divide the amount in half, meaning that £593 was awarded for the access issues. This brings the total amount of compensation to £1093.
This investigation has identified a number of failures including inaccurate pre-sales information, poor communication and inaction in relation to the management company. Given the detrimental effect caused to the resident by these failures a finding of maladministration would have been appropriate were it not for the redress offered by the landlord.
The landlord has acknowledged and identified its failings in the case. Through its complaints process it has offered compensation as a means of ‘putting things right’. Therefore, this investigation considers that while the landlord’s response to the resident’s complaint about the lack of access could reasonably have been improved, it has recognised the impact on the resident and has taken proportionate steps to put things right. As such, an offer of reasonable redress has been made in the circumstances.

Kitchen worktops

In its stage 1 complaint response of 29 September 2020 the landlord apologised but did not consider offering any further form of redress. This was inappropriate because the misinformation caused frustration and inconvenience to the resident.
On 9 December 2021 the landlord emailed the resident to confirm it would pay for the replacement worktops. This was an appropriate decision however, it is noted that it came very late in the process. The resident first raised the issue in a formal complaint on 14 August 2020 and this decision was made 16 months later which was unreasonable.
The detriment caused to the resident by the error was on the lower end of the scale. The landlord restored the resident to the position he would have been in but for its failure. Therefore, this investigation considers that while the landlord’s response to the resident’s complaint about the worktops could have been improved, it took proportionate steps to put things right. As such, an offer of reasonable redress has been made in the circumstances.

Differences in standards of entrance halls across tenures

The resident was dissatisfied that the design of the building itself, including variations in brickwork, created divisions between tenures which was not in keeping with the landlord’s policy. The landlord provided the resident with a response accordingly. However, it is outside the scope of this investigation to make a determination on whether the landlord’s purchase of the building was in line with its policies. Therefore, this assessment has focussed on whether the landlord’s response to the resident’s concerns about the standard of the entrance hall was reasonable in the circumstances.
In its peer review complaint response dated 28 June 2022 the landlord set out potential reasons for differences in the internal specification of homes of different tenures. It also clarified how this might be reflected in service charges. The landlord’s response was reasonable in the circumstances.
However, the resident and his neighbours also raised concerns about the suitability of the current floor covering in the entrance hall. In its email of 3 September 2020 the landlord confirmed that it would review the flooring in the entrance area to replace it with something more hardwearing and easier to clean.
Having committed to carrying out works to the entrance hall, the landlord provided an update almost 6 months later, on the 16 April 2021. It said that works were to commence in fortnight. However, just 2 weeks later on 30 April, it emailed again to say that the works had been put on hold. There was no further communication until 5 January 2022 when it emailed to say it was still considering the replacement of entrance hall flooring which had been delayed due to issues with old management company.
Despite the difficulties it had experienced with the old management company it was not acceptable for the landlord to delay the works for so long without providing regular updates to the resident. It said it would carry out the works in September 2020 but 15 months later it had failed to do so. In an update to this Service on 12 December 2023 the resident advised that the works have still not been carried out. The resident was not provided with an explanation as to why which was also unreasonable.
Having made a commitment to carry out the works, not doing so caused further distress and frustration for the resident. The failure to carry out the work and the delays in communication amount to maladministration. The landlord has been ordered to pay the resident £200.

Administration of service charges

In its letters to the resident dated 30 June and 21 October 2020, and 28 June 2022 the landlord provided information on how it calculated service charges. Its explanation was appropriate and in line with its obligations set out at Schedule 6 of the resident’s lease. Therefore, its position in its letter of 21 October 2020 was reasonable in the circumstances.
However, the landlord acknowledged that it made a number of administrative errors when setting the service charges, including its letter to the resident on 30 June 2020. The landlord was open and transparent about its mistakes however, there is no evidence that it provided clarification about how this would be remedied. This was inappropriate and evidence of poor communication. Furthermore, it did not offer any form of redress for the errors which would have been reasonable.
In its letter of 2 November 2020 it said that its asset management team made an error when translating the original draft budget provided by the management company. This was because the monthly charges set on the account were less than they should have been. In order to put things right and restore the resident to the position he would have been in were it not for the failure, it agreed to ‘top up’ the payments to the correct amount which was reasonable. In its email to the resident of 12 May 2022, it confirmed that the mistake was corrected and a credit applied to his account equivalent to what the charged should have been from the start.
On 7 October 2021 the landlord wrote to the resident to confirm the actual costs for service charges for the financial year 2020-21. It said it would not apply the resulting deficit to the account nor request payment. However, 10 days later, on 17 October 2021, the resident received a letter advising that he owed service charges. On 18 October 2021 the landlord again confirmed its decision to ‘hold’ the deficits.
It was not appropriate for the landlord to reassure the resident the charge would not be applied only to then send a letter setting out the charges without making it clear payment would not be sought. Mixed messaging caused further distress and frustration for the resident, and it also further undermined the landlord/tenant relationship. On 12 May 2022 it confirmed that the deficit had been written off.
On 10 May 2022 the resident emailed the landlord to query a letter he had received to say he had not paid enough and was in debt. There was no explanation as to what it was for and/or why it was so much. This was not appropriate because the resident had a right to know the rationale behind the letter, particularly given its customer promise in relation to service charges. The landlord did provide a broad explanation on 12 May but this was reactive rather than proactive and therefore did not prevent the distress caused to the resident.
The resident replied to request that he be provided with a breakdown of how this figure was calculated because he paid exactly what was asked therefore the debt arose from poor management by the managing agent and landlord. This additional amount on top of the increase in service charges and other bills caused distress to the resident.
It is acknowledged that the landlord and management company had a difficult relationship. The evidence shows that the landlord tried to contact the management company on multiple occasions in relation to the service charges, including 30 June, 28 July, 4 December 2020 and 9 February and 16 March 2021.
It did not receive a response from the management company so could not pass an update onto the resident who, knowing his only recourse was through the landlord, continued to chase. He sent further emails on 21 October and 29 October 2020 to request a detailed breakdown of his service charges, causing further time and trouble.
In its email to the resident on 9 February 2021 the landlord said it hoped to attend the annual general meeting (AGM) of the resident’s management company in January but it was not sent an invite and was not sure if it went ahead. It acknowledged that this was “not acceptable but it was doing what it could. However, the landlord’s own evidence does not support its position.
Furthermore, it should have made it a priority to know if there was a meeting and if so, obtain an invite to attend or if not, find out when the next meeting was due to take place so it could do so.
By 16 April 2021 the landlord had received a response from the management company which it described as “inadequate”. It said it intended to formally respond to the management company on a number of points, including block repairs incorrectly itemised in the estate charge but there is no evidence it did so. This was unreasonable and further demonstrated a lack of commitment to resolving matters on behalf of the resident.
On 4 December 2020 the landlord emailed the resident to confirm a new team was in place to provide greater scrutiny of third party management charges. It confirmed that when third part management companies were involved it was “lacking control of costs” which was under discussion at a senior level. This was appropriate because it was evidence that the landlord was taking steps to put things right and learn from outcomes.
In line with dispute resolution principles the landlord made attempts to put things right by restoring the resident’s position when it agreed to top up the service charges in November 2020. It also agreed to write off the deficit in May 2022 as a means of providing redress.
Further learning from outcomes was demonstrated by the landlord’s response to the new management company being appointed. On 25 February 2022 the landlord emailed the resident to set out its responsibilities and those of the new management company in relation to matters including service charges, end of year accounts and monthly joint site inspections.
In its stage 2 complaint response of 18 March 2022 it accepted that the residents’ recourse for complaints about the managing company was through its own services and that its communication could have been better. As a result, it set up fortnightly communication, alongside an action plan, which would continue until all issues were resolved. Communication had already improved since the new managing company took over. It apologised for problems that poor communication caused which was appropriate.
On the 28 June 2022 the landlord issued the outcome of the independent complaint panel. It provided further evidence of its commitment to learn from outcomes by confirming that it had set up a working group to review its internal processes in relation to important communications from the management company. It confirmed its OM was also working with residents to improve standards of communication.
On 20 May 2022 the independent complaints panel discussed the case further, concluding that the landlord had not fulfilled its customer promise in respect of service charges. In its letter to the resident on 22 May 2023 the landlord said it did not necessarily agree with everything the management company had done. However, it had made decisions which balanced the need to be fair and reasonable to residents but did not impact too negatively on it given that it was “not directly responsible for services provided and had no control over the decisions it took.”
The landlord acted appropriately in acknowledging its failures for which it apologised. However, the evidence shows that it did not go far enough to consider how it could use formal remedies to enforce the management company to fulfil its obligations. Furthermore, there is no evidence that it considered the time, trouble and distress caused to the resident by its own accounting failures and the ongoing issues with its communication with the management company.
In its internal email of 20 May 2022 the landlord said that when calculating an offer of compensation, it should take into account the Ombudsman’s remedies guidance and the write off of the £1186 end of year service charge deficit. On 12 May 2022 the landlord said that the write off was part of the compensation for the resident’s lack of access to the roof but there is no evidence to say how much that was and/or how the remaining amount was apportioned. This investigation has apportioned half to the issues with roof access. Therefore it is considered that £593 was offered as financial redress for failures in administration of service charges.
Part 6.4 of the Housing Ombudsman’s Complaint Code states that factors to consider in formulating a remedy can include, but are not limited to, the:
1. Length of time that a situation has been ongoing.
2. Severity of any service failure or omission.
3. Number of different failures.
4. Cumulative impact on the resident.
The resident first raised concerns about his service charges in June 2020 and the landlord issued its final response in relation to the service charge review on 22 May 2023, nearly 3 years later. This investigation has identified communication failures, administrative accounting failures. There was also inaction by the landlord in relation to the management company. The ongoing situation caused the resident significant distress which impacted on his mental health. It also caused him time, trouble and inconvenience given the lengths he went to try to resolve his complaint.
The landlord acknowledged some failings and made some attempt to put things right but failed to address the detriment to the resident. The landlord did demonstrate that it learnt from outcomes but this came too late in the process to offer any improvement in its service to the resident in relation to his complaint.
The failures amount to maladministration and an order has been made for the landlord to pay the resident £800 compensation. The amount of compensation offered is at the higher end of the scale to reflect the length of time the taken for the landlord to resolve the complaint and the detriment caused to the resident. The landlord may deduct the £593 it has already offered if this has already been paid.

The landlord’s complaint handling

The resident made a stage 1 complaint on 20 June 2020. Due to the landlord failing to receive the complaint initially, it was not acknowledged until 26 June. An internal email dated 26 August 2020 confirms that the investigator officer previously assigned the stage 1 complaint had been away. A request was made for the complaint to be reallocated. It took over 2 months for the landlord to acknowledge any known delays to its complaint response. Given that its response time for stage 1 complaints was 10 days this was inappropriate.
The resident chased a response on 2 occasions during September 2020. However, it was not until 25 September 2020, 3 months after the complaint was first raised, that the landlord sent an internal email to chase the complaint response.
The stage 1 complaint response was issued on 29 September 2020. This was 113 working days after the complaint was made, 103 days out of time. The response was not headed as a formal complaint response. It did not clearly signpost the resident as to what steps he could take if he remained dissatisfied with the complaint response, referencing its complaint leaflet instead. There was no acknowledgement of the delay and no apology offered which was unreasonable.
Section 5.6 of the Housing Ombudsman’s Complaint Code (the Code) says that landlords must address all points raised in the complaint. The complaint response did not address the resident’s concerns about the administration of his service charges. This was inappropriate because it caused the resident time and trouble, inconvenience and increasing frustration having chased the landlord on 5 occasions between October 2020 and February 2021.
The landlord failed to act until 10 February 2021 when it asked that contact be made with the resident. Given the resident’s ongoing dissatisfaction it would have been appropriate to open a stage 2 complaint. Instead, it reissued its letter of 29 September 2020 and arranged to call him. This caused frustration to the resident and delayed him being able to access the complaints process.
On 16 March 2021 the landlord opened a stage 2 complaint. There was no further progress regarding the complaint. An offer of compensation was made via email exchanges outside of the formal complaints process on 3 November 2021.
The landlord confirmed the status of the resident’s stage 2 complaint on 10 March 2022, 1 year after the complaint was logged. The landlord issued the complaint response on 18 March, 237 working days over its target response time. Its response failed to address why it had taken so long to provide a complaint response which was unreasonable. It would have been reasonable for it to have issued an apology and considered compensation for its failures.
The landlord’s complaints handling process says that the stage 2 complaint response must make clear to the resident that they have the right to ask this Service to consider their complaint. There is no mention of an independent complaints panel in its complaints policy. Therefore, signposting the resident to the panel was a departure from its complaints policy which was inappropriate.
In its email to the resident of 10 March 2022 the landlord recommended the independent panel and said it had the power to “make an instruction” regarding compensation. It subsequently overruled the panel’s recommendations about compensation.
While its compensation policy says that the panel’s decision cannot order it to pay compensation, this was not communicated to the resident. In fact, the opposite was said, which raised unrealistic expectations causing further distress and frustration. When the landlord then declined to take the panel’s recommendation on board, its relationship with the resident was further undermined. This was because he felt it had been dishonest and that the outcome did not reflect the communication he had had with the panel.
Section 5.17 of the Code says that 2 stage landlord complaint procedures are ideal because it ensured that the complaints process is not unduly long. The way the landlord responded to the outcome of the panel’s review had a negative impact on the resident’s experience. Furthermore, it also protracted the internal complaints process, delaying the resident being able to contact this Service to reach a final resolution which was inappropriate.
The landlord issued its decision following the independent complaints panel review 28 June 2022, 2 years after the resident first made his stage 1 complaint in June 2020. 1 year later it wrote to the resident again on 22 May 2023 to set out the outcome of its review of services charges for the block. It said it hoped the resident was satisfied that it had now “finally” provided the information he had requested in relation to his service charges.
There have been serious complaint handling failures by the landlord which amount to maladministration. There were a series of failures which significantly delayed the resident’s ability to exhaust the internal complaints process and to seek a resolution via this Service. The landlord’s response to the failures exacerbated the situation and further undermined the landlord/ resident relationship. Taking into account the Ombudsman’s remedies guidance an order has been made for the landlord to pay the resident £800.

Determination (decision)

Under paragraph 53(b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress in relation to the information provided by the landlord prior to purchasing the property in relation to access to the roof terrace which, in the Ombudsman’s opinion, satisfactorily resolves the complaint.
Under paragraph 53(b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress in relation to information provided by the landlord prior to purchasing the property in relation to the kitchen worktop which, in the Ombudsman’s opinion, satisfactorily resolves the complaint.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s response to the resident’s concerns about the differenced in the standard of the entrance halls across tenures.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s administration of service charges.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s complaint handling.

Reasons

The landlord’s offer of compensation appropriately reflects the detriment caused to the resident by its failures in its response to the resident’s concerns about lack of access to the roof terrace.
The landlord’s offer of compensation appropriately reflects the detriment caused to the resident by its failure in relation to the information provided to the resident prior to purchasing the property in relation to the kitchen worktop.
The landlord failed to carry out works to the entrance hall in a timely manner, as agreed with the resident.
The landlord made several administrative errors in relation to collection of service charges. It was unable to communicate effectively with the resident in relation to his service charges because its relationship with the management company did not operate as it should.

The resident encountered significant difficulties in obtaining a full complaint response from the landlord. Responses were unreasonably delayed and the complaint process included a third stage which was not set out in the landlord’s complaint policy.

Orders

Within 4 weeks of the date of this determination the landlord is ordered to pay the resident £1800, comprised of the following:
1. £200 for the distress and inconvenience caused by the landlord’s delays in carrying out works to the entrance hall.
2. £800 for the distress, frustration, inconvenience and time and trouble caused by the landlord’s administration of the service charges. The landlord may deduct the £593 it has already offered if this has already been paid.
3. £800 for the distress, time and trouble, inconvenience caused to the resident by the landlord’s complaint handling failures.
A member of the senior leadership team should apologise to the resident who should be given the choice of whether he received it in writing or in person. The date and details of the apology should be provided to this Service, also within 4 weeks.
The landlord should write to the resident to set out an action plan setting out what works will be carried out to the entrance hall, when and by whom. A copy of the letter should be provided to this Service, also within 4 weeks.
Within 6 weeks of the date of this determination the landlord should carry out a review of the failings in the case and write an action plan setting out what it would do differently next time to prevent a reoccurrence of the issues in relation to:
1. Administration of service charges.
2. Complaint handling, including a review of the inclusion of a third, peer review, stage.
The date and outcome of this review should be provided to this Service, also within 6 weeks of the date of this determination.

Recommendations

The landlord should reoffer its compensation, including its offer to write off the service charge deficit, if this has not already been paid.
The landlord should review its complaints, compliments and comments policy to ensure that residents are aware that they can escalate their complaint to this Service if they accept an offer of compensation.