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Lambeth Council (202001297)

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REPORT

 

COMPLAINT 202001297

Lambeth Council

15 January 2021


Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman 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. This complaint is about the landlord’s response to the resident’s concerns about the increase in his service charges, in particular, relating to the charges for the repair costs incurred following a fire within the block.

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 a leaseholder of a flat within a block that is owned and managed by the landlord.
  2. The block sustained fire damage in or around July 2018. The resident wrote to the landlord in October 2018 to enquire if the repair costs for the fire damage would be claimed on the block insurance policy instead of being added to next year’s service charge bill. The landlord responded and said that that the final costs would not be available until September 2019, and if he notices any fire damage repair costs that should not be included on the service charges bill, he should raise it at that point.
  3. The resident received his service charge bill on 19 September 2019 which had increased from the previous year and included fire damage repair costs. He was asked to pay £792.67. The resident wrote to the landlord on 24 September 2019 to query the charges and made the point that any costs related to the fire damage repairs should have been claimed under the block insurance policy and the residents should not have been charged for this.
  4. As no detailed response was received from the landlord, the resident logged a formal complaint on 24 October 2019. The landlord responded on 28 October 2019 and said that it was waiting for confirmation of which repairs were to be written off, and once this was received it would adjust the bill accordingly.
  5. The landlord issued its complaint response on 25 November 2019 stating:
    1. I can confirm that the block charges in question will be removed. You will not receive an amended bill, but this correction will appear as an adjustment on your service charge account (i.e. as a credit) reducing your service charge contribution accordingly. Once the adjustment has been processed…your service charge collections officer, will write to you confirming the jobs that have been removed along with the associated amounts.
    2. It accepted that the fire repairs should not have been charged to the residents and should have been dealt with under the buildings insurance.
  6. The resident was unhappy with the response and asked for the complaint to be escalated. He was of the view that the landlord was not taking his concerns about potential fraudulent over-charging seriously enough.
  7. The landlord issued its final complaint response on 3 January 2020:
    1. It explained the process of issuing bills and why a new bill could not be issued and why a credit note would be issued instead.
    2. It confirmed that all residents would be sent a credit note.
    3. It apologised for errors in the bill and said that it was taking steps to ensure more stringent checks. It had asked an external auditor to review its processes it had in place and this has identified areas for improvement, which it would be improving going forward.
    4. It acknowledged that there had been service issues and it apologised for this.
    5. It said it would shortly be able to confirm the final adjusted figure payable for the year, but it would not be able to issue a new bill.
    6. It confirmed that this was the final step in its complaints process.
  8. The landlord issued a letter on 8 February 2020 confirming that the bill for the year had now been reduced by £177.77. The resident wrote to the landlord on 25 February 2020 and said that the amount written off was incorrect, and according to his calculations it should be more. He said that by his calculations, the landlord had written off about £6000 for the fire damage repairs to the block, but the actual costs were around £13,000. He said that he would not pay the bill until he had received full confirmation of how the adjustment had been worked out, and the landlord had shown exactly what repairs it had charged residents for.
  9. The landlord wrote to the resident on 8 July 2020 and apologised for the fact that the resident had not been properly informed of another adjustment to the bill. It provided a statement showing the amounts that were written off and the new amount payable was now £208.
  10. The resident remained unhappy and was not convinced that the amount payable had been correctly calculated. He contacted this Service and said my complaint relates to general mismanagement of my service charge account with recurrent issues every year, and specifically the fact that Lambeth attempted to charge Leaseholders for work relating to a fire that should have been claimed on insurance. He also said that he had received his service charges bill for 2019-2020 and the fire repair costs were still showing and had not been removed.

Reasons

  1. This complaint is, ultimately, about the resident’s concerns about the liability to pay for any repairs relating to the fire damage which has resulted in an increase in his service charges. In effect, whilst the resident has complained about the landlord’s handling of the matter, the crux of the complaint (and any potential resolution) effectively relates to the level, and reasonableness, of the service charges and the increase and costs charged for the 2018-2019 and 2019-2020 financial years.
  2. Paragraph 39(g) of the Ombudsman’s Scheme states that:
    1. “The Ombudsman will not investigate 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’
  3. In addition, paragraph 39(i) of the Ombudsman’s Scheme also states that:
    1. “The Ombudsman will not investigate complaints which, in the Ombudsman’s opinion (…) 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”.
  4. The Ombudsman does not have the jurisdiction to investigate this complaint because, firstly, it is about the level and/or increase of the service charge, and secondly, the appropriate body that has jurisdiction to consider such complaints is the First-tier Tribunal (Property Chamber).
  5. The First-tier Tribunal can determine the appropriate level and amount of service charges recoverable by a landlord; decide if the charges were reasonably incurred; by whom they are payable, and when. It would therefore be more reasonable and effective for the resident to seek a determination on the reasonableness of the service charge and/or the increase from the Tribunal.