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London & Quadrant Housing Trust (202000557)

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REPORT

COMPLAINT 202000557

London & Quadrant H T

7 December 2020


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 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 refers to:
    1. The Resident’s concerns in relation to the level of her service charge.
    2. The Landlord’s explanation of the Resident’s service charge.
    3. The Landlord’s complaint handling of this matter.

 

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.
  2. After carefully considering all the evidence, in accordance with the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.

Service charges

  1. Paragraph 39(g) of the Scheme states that the Ombudsman will not investigate complaints which “concern the level of rent or service charge or the amount of the rent or service charge increase;”
  2. The First-Tier Tribunal (Property Chambers) makes determinations on disputes about the liability to pay a service charge, including by whom, to who, how much and when a service charge is payable. In order to decide liability, the Tribunal also decides whether service charges and costs have been reasonably incurred.
  3. Given the above and in line with paragraph 39(g), any dispute about the relevance or liability to pay a service charge is more appropriately dealt with by the Tribunal. Accordingly, the Ombudsman will not investigate the Resident’s complaint regarding the level of service charge or whether this should be refunded. We will consider whether the Landlord explained its position regarding the service charge clearly and answered her queries, and whether it acted in line with its policies and procedures.

Background

  1. The Resident has been an assured tenant of the Landlord since 19 February 2018.
  2. The property is a four-bedroom house.

Summary of events

  1. On 30 January 2020 the Resident emailed the Landlord to query which services the Landlord provided to her property, as her service charge had increased to £3.86 a week. She stated that she had not been in receipt of any services and the only fee she felt applicable was the management fee since she had no communal areas or services and was not a homeowner. She expressed dissatisfaction that the Landlord was charging her to write to her once a year to confirm she did not receive services. She requested the Landlord provide her with further information as to which clause in her Tenancy Agreement it was using as a basis to raise this charge and confirm her rent account balance.

 

  1. On 5 February 2020 the Landlord responded and stated that it had checked which services were applicable to her property with its management company. It understood that the Resident lived in a house, not a flat, however, some of the external services would still apply to houses if they benefited from them. It stated it would seek a further response on this matter and confirmed that any queries related to refunds must be directed to its revenue team.

 

  1. On 9 February 2020 the Resident emailed the Landlord and requested a response in regard to her queries in relation to her service charge. She also requested information in regard to any arrears on her previous rent account, so she knew what needed to be paid.

 

  1. On 12 February 2020 the Landlord emailed the Resident and apologised that she had not received a response; it noted that her case was being looked into and she should receive a response within the next couple of days.

 

  1. On 26 February 2020 the Landlord emailed the Resident and stated that it had passed her concerns to its revenue team as it had been incorrectly passed to its service charge team. A further email was sent on the same day to apologise that she had not been able to previously raise her formal complaint. It stated that it had assigned her complaint to its revenue team. The following day the Landlord sent a further email confirming her formal complaint had been raised.

 

  1. On 28 February 2020 the Resident sent a further email to the Landlord in regard to her query; she attached her previous email of 30 January 2020 and requested a response by 2 March 2020, after which she would formalise her complaint.

 

  1. The Landlord responded on 13 March 2020 and explained that the charges were detailed in its FAQs, which was provided with her service charge statement. It stated that she had been charged for Management Company costs and a management fee. It had included the managing agents cost as it had received invoices from its management company in the last three years. It stated it would contact the Resident’s property manager and the management company for further information.

 

  1. On 15 March 2020 the Resident emailed the Landlord and stated that, by law, the Landlord could not charge her for services she had not received. She explained that other tenants of the Landlord have access to off-road parking and have bins provided so any security services or patrols were not relevant to her as she did not receive those services. She had to park on the road, and she did not feel that she should pay for other residents to receive that amenity. She felt the charges in the attached FAQs document were only relevant to a nearby block of flats. She stated that she had still not received a satisfactory explanation from the Landlord and requested her concerns be raised as a formal complaint. She stated that its response would allow her to progress the matter further with The Housing Ombudsman (“The Service”) or the First-Tier Tribunal (Property Chamber). She confirmed that she would like a written response by 20 March 2020 and for the Landlord to refund all of the service charges paid since the start of her tenancy.

 

  1. On 9 April 2020 the Landlord emailed the Resident and apologised for the delay in its response. It stated that the Resident had only been charged for managing agent costs and a management fee which she should be able to see on her statement. It had included a description of all services in its FAQs and this was included in all service charge statements that it sent to all residents. It stated that it would be removing her 2020/2021 service charges. It stated that this was because the managing agent costs on her service charge related to a parallel road, not her property. It stated that it would forward her query regarding her old rent account and a previous offer of compensation to the relevant departments.

 

  1. The Resident emailed the Landlord the same day and asked it to confirm that all service charges from the start of her tenancy would be refunded as she received no services and, therefore, should not receive any service charges. She stated that the cleaning of the communal areas, communal repairs and any security patrols were not applicable to her. She requested the Landlord credit her rent account and make her aware of the balance on her account following this.

 

  1. The Resident emailed the Landlord on 24 April 2020 and stated that she had been unable to raise a formal complaint through its website. She requested that the Landlord raise a formal complaint regarding her initial enquiry and the time taken to receive a response that answered her questions. She wanted these issues addressed under its Complaints Procedure.

 

  1. On 24 April 2020 the Landlord responded to the Resident and stated the following:

 

  1. Its service charge team had a 10-working day timeframe to address complaints.  

 

  1. It explained that the Resident was liable to pay toward service charges and in each of her statements she should see that she had been contributing to management fees and admin fees only. She had not been charged for any other services.

 

  1. Third-party management costs were discussed when the Resident signed her Tenancy Agreement in 2018. The Landlord stated that its Management Company had an obligation to provide external maintenance services to the external common area in which her property was situated. It went on to say that external services may include grounds maintenance and bulk refuse collection. The Landlord receives invoices from the Management Company and recharges these costs to residents accordingly. The Management Company sends a budget of what they anticipate to spend and the Landlord bases its residents’ service charge on this budget.

 

  1. The Landlord stated that it had credited back the Resident’s service charge for 2020/2021 because the most recent budget had related to another parallel street. This did not mean that the Resident would not have to pay any service charges in future. If the Management Company carries out external work, it would recover the costs from her as she was a fixed, service-charge payer. It stated that service charges would vary year on year depending on the previous year’s expenditure, and the services provided.

 

  1. It confirmed it would not be refunding the Resident for the service charges she had paid in previous years, as the financial years had ended. It stated that she could appeal the increase and the tribunal would decide whether her rent, which included service charges, was unreasonable.

 

  1. On 27 April 2020 the Resident emailed the Landlord and raised her dissatisfaction that the Landlord would not backdate her service charge and provide a refund. She maintained her position that she did not receive any services in previous years and should not have been expected to pay a charge. She stated that she had originally raised her concern in January 2020 and the Landlord had provided a response after its 10-day timeframe. She expressed concern that the Landlord may also be charging other residents for services they did not receive.

 

  1. On 4 May 2020 the Landlord responded to the Resident and confirmed that, as previously stated, it would not be backdating the charges and if it continued to receive invoices in future from the Management Company who provided its services, she would be charged. The fact that she would not be charged for 2020/2021 did not mean that charges would be removed in future as service charges vary from year to year. The Resident emailed the Landlord the following day and requested that it provide a written response in relation to its investigation of her complaint.

 

  1. On 12 May 2020 the Landlord emailed the Resident and stated that it had provided its full and final response on the matter and her service charge would be reviewed yearly based on the invoices it received.

 

Assessment and findings

 

  1. As stated above, this Service cannot look at the level of service charge or determine whether this should be refunded to the Resident as this is best suited to the First-Tier Tribunal (Property Chamber). If the Resident has further concerns about the level of her service charge, she could pursue this matter with the Tribunal. As such, this Service will investigate how the Landlord responded to the Resident’s concerns and whether this was reasonable and proportionate.

 

The Landlord’s explanation of the Resident’s service charge.

 

  1. The Resident’s Tenancy Agreement states the Resident is liable to pay for the Landlord’s administration fee and third-party management costs. The Landlord’s Service Charge Policy states that a tenant would be expected to pay a fixed service charge. The Resident had requested the Landlord to explain her service charge on multiple occasions. When a resident requests information on service charges, the Landlord would be expected to provide a clear response in a timely manner

 

  1. The Landlord did not respond in a timely manner and there had been gaps in the Landlord’s communication with the Resident, meaning that she had to chase her request for an explanation multiple times. Whilst the Landlord had stated that it would need to seek further information regarding her concern from its Management Company, the Resident had to chase any further communication as the Landlord did not provide a timely response or fully explain why she had been charged at the earliest opportunity.  The Landlord has confirmed that the Resident only receives service charges related to its administration fee and management costs which had been previously detailed in her Tenancy Agreement. It explained that the other service charges listed in its FAQs were included as general information on which service charges could apply to its residents.

 

  1. It is noted that the Resident had requested a suitable explanation of her charges on multiple occasions which has caused her inconvenience, the Landlord should offer an award of compensation in recognition of the inconvenience caused as a result of its lack of clear communication. It is also recommended that the Landlord gives a clear explanation of why her previous years’ service charges were applicable and provide its position in regard to refunding this amount in a detailed way, to prevent any further inconvenience to the Resident.

 

  1. There is no evidence to suggest that the Landlord is acting against the Tenancy Agreement by charging the Resident for its administration fee and costs incurred by its Management Company. Although, by issuing a refund on the basis that the managing agent fee was not applicable to her property for the 2020/21 financial year, the Landlord set expectations that the previous years’ service fees may have also been charged incorrectly; this may have led the Resident to question the Landlord. The Landlord explained that it would not refund the service charges for previous years as the previous financial years had closed; whilst this explanation may be accurate, it was very brief and did not fully explain the reason why this could not be done – if the Resident disagrees with the Landlord’s explanation regarding her service charges she could pursue this with the Tribunal as previously discussed.

 

The Landlord’s complaint handling in relation to this matter.

 

  1. The Landlord’s Complaint Policy states that it has a two-stage complaint process. When a complaint is received, the Landlord is expected to make contact with the resident to attempt to resolve the complaint at the time; if this is likely to take longer, the resident would be informed of the likely timescales and a response should be issued within 10 working days. If the resident remains dissatisfied, they can request to escalate their complaint and the Landlord’s Customer Relations Team would consider the request. The Resident would be notified of any reasons why a complaint escalation would not be considered by the Landlord. Following an escalation, the complaint would be reviewed by a senior manager under stage two of the Landlord’s policy. There is no specific timeframe detailed in the Landlord’s Complaint Policy for stage two reviews; however, a full written response would be sent to the resident advising them of the Landlord’s position and the next available steps. Following a request that a complaint be raised, the Landlord would have been expected to raise a complaint and act in line with its Complaint Policy. 

 

  1. There has been service failure by the Landlord in respect to its handling of the Resident’s complaint. The Resident had attempted to raise her concerns as a formal complaint on multiple occasions which highlights an amount of uncertainty as to whether her complaint had been raised on previous occasions. The Landlord confirmed that a formal complaint had been raised on 27 February 2020, but the Landlord’s email responses to the Resident were not clearly labelled as complaint responses and, therefore, the Landlord did not adequately manage the Resident’s expectations. She continued to communicate with the Landlord’s service charge team, although there is no evidence to suggest that this was handled formally in line with its two-step complaint’s process. Furthermore, the email responses had been handled by the same advisor and there is no evidence to suggest that her complaint was escalated to the Landlord’s customer relation team to be considered for escalation or review. The Landlord’s ‘final response’ stated that its Service Charge team had a 10-working day timeframe for handling complaints, suggesting that the advisor was not aware that a complaint had been raised. As the email responses were not labelled as a stage one response or final response, the Resident spent additional time pursuing the complaint and was only provided a formal written response at her request.

 

  1. The Landlord has not acted in line with its Complaint Policy which has caused the Resident undue inconvenience. The Landlord should review the Resident’s complaint in order to address its service failure in respect of its complaint handling. It should also offer an award of compensation in recognition of the inconvenience and uncertainty caused by not handling the Resident’s complaint formally, in line with its policy and procedure.

 

Determination (decision)

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the Landlord in respect of its communication regarding the Resident’s service charge.
  2. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the Landlord in respect of its complaint handling of this matter.

Reasons

  1. The Landlord has advised that the Resident is only liable to pay for service charges related to its administration fee and managing agent costs. It has refunded her 2020/21 service charges and acknowledged that these were applied incorrectly as they related to another area. However, it set an expectation that the Resident’s previous service charges may also have been charged incorrectly and has not provided a clear explanation as to why it would not refund service charges for previous years. This Service cannot order the Landlord to refund service charges as this would fall outside of our jurisdiction; however, the Landlord should consider providing the Resident with a detailed explanation as to why her previous service charges were applicable and its position on refunding these. For the inconvenience of needing to pursue the Landlord for a satisfactory explanation, the Landlord should offer an award of compensation.

 

  1. In regard to its complaint handling, the Landlord has not handled the Resident’s complaint in line with its Complaint Policy or Procedure. There is no evidence to suggest that the Landlord responded to the Resident’s complaint in a way that made it clear it was issuing a stage one response or a final response. Furthermore, the Resident’s concerns were handled by a single advisor and there is no evidence to suggest that her complaint had been handed to its Customer Relation Team to consider an escalation. The Landlord’s handling of the Resident’s complaint has caused a significant amount of uncertainty for the Resident who attempted to raise her complaint on multiple occasions due to the Landlord’s lack of clear communication. The Landlord should offer an award of compensation in recognition of this inconvenience and uncertainty.

 

Orders

The Ombudsman orders that the following actions be carried out within four weeks:

 

  1. The Landlord is to write to the Resident to apologise for its service failures.

 

  1. The Landlord is to pay the Resident £150:
    1. £50 in recognition of the time taken to pursue the complaint and the inconvenience this may have caused.
    2. £100 in recognition of the uncertainty and inconvenience caused as a result of its complaint handling. 

Recommendations

  1. The Landlord should consider providing the Resident with a detailed explanation as to why it would not be refunding her service charges for previous years and why these were applicable.
  2. The Landlord should review the Resident’s complaint in order to address its service failure in respect of its complaint handling in order to prevent reoccurrences.