London & Quadrant Housing Trust (L&Q) (202111543)

REPORT

COMPLAINT 202111543

London & Quadrant Housing Trust

27 April 2023

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 concerns about an increase in service charges which he did not believe should apply.
   2. the landlord’s handling of the resident’s complaint.

Background

2. The resident lives in a two-bedroom house. The resident benefited from a fair rent limiting the amount the landlord can charge to £143.70 per week. The resident’s tenancy agreement states that his landlord can recover service charges for the communal ground/garden maintenance and private estate lighting. The resident’s total weekly rent at the time of their complaint was £118.63 including a weekly service charge of £3.36. The resident’s landlord sought to increase this to £125.78 per week, inclusive of a weekly service charge of £7.40 for the financial year 2021-22.
3. In April 2021, the resident contacted his landlord to request a breakdown of the service charges for the period 2021-22. He wanted to know the reason for the increase as he believed he was not benefiting from the services he was charged for, and he believed he was paying more than neighbours.
4. The resident made a formal complaint on 17 June 2021. On 21 June 2021, his landlord responded to him to say that the service charges relate to external communal services that he is liable to contribute to.
5. On 1 September 2021, the landlord responded to the resident saying:
   1. that whilst the resident’s property does not share any communal internal areas, as a standalone house, it still forms part of the communal external block and he is liable for contributing to some communal services at an external level including bulk refuse costs and caretaker services.
   2. that the resident will only ever contribute to his property’s share of the external caretaker duties, rather than any internal services carried out.
   3. that he can contact his property manager if he thinks there is a service included in his charges that he does not benefit from.
6. On 1 September 2021, the resident escalated his complaint to stage two of the landlord’s complaint process. He explained on 2 September 2021 that he does not have an external caretaker, require bulk refuse collections, or have communal T.V equipment so should not have to pay for these. He also indicated that the extent of his estate garden maintenance is a fortnightly grass cut.
7. On 3 November 2021, the landlord issued a stage two response saying:
   1. that the service charges include ad hoc specialist ground maintenance costs which are likely in the future and that are not currently included in the general ground maintenance contract, estimated on the average costs over the last five years.
   2. the cost of bulk refuse removal covers the costs of removing items fly-tipped or items inappropriately stored in communal bin areas on the resident’s estate, estimated on previous years.
   3. the landlord’s management fee is a fixed fee applied to all residents’ service charges and contributes towards the costs of the resident’s neighbourhood office and centralised services.
   4. that charges for houses on the estate are on an equal share and those in the blocks of flats will pay different service charges as these are based on services provided to each individual block.
   5. that it reviews all charges in line with a resident’s tenancy agreement and there may be differences in charges based on the frequency of the review stated in individual agreements. However, having reviewed the 2021-22 charges, both fair rent and general needs properties are all paying the same charge of £7.40 per week.
   6. there was a clear service failure as it should have handled communication more effectively and swiftly.
8. The landlord offered the resident £60 compensation which he accepted. However, the resident referred his complaint to the Ombudsman as he maintained his landlord charged him incorrectly and he was paying more than other residents.

Assessment and findings

Scope of investigation    

9. The Ombudsman acknowledges the resident’s dissatisfaction with the landlord’s list of service charges and his allegations that many of the charges should not apply to him. This investigation will consider whether the landlord offered a reasonable and timely response, including whether the landlord gave him the correct information to help him understand the reason for the charges. The Ombudsman is unable to make findings about the level of reasonableness of service charges or whether they are payable and to whom. This is a matter more appropriate for the First Tier Tribunal (Property Chamber) (FTT) to consider.

The landlord’s handling of the resident’s concerns about the service charge increase and services

10. The evidence shows that the landlord provided a summary breakdown of the estimated service charges on 18 May 2021 (“the summary”). The landlord provided this within a reasonable time however it did not explain why there had been an increase or the reason for the charges. It also did not comment on the resident’s concern that he was paying more than his neighbours. The landlord missed an opportunity to address the resident’s concerns when it would have been reasonable for it to do so. The landlord remains accountable to the resident in respect of the money it spends on service charges and must be able to explain them. As the resident felt most of the charges should not apply to them it was important for the landlord to explain to them how and why the charges were applicable.
11. The landlord’s email to the resident on 21 June 2021 simply confirmed that the resident was liable to pay the charges. It did not adequately address the resident’s query because it provided no explanations or detail to help him understand why they had increased or why they applied. The landlord offered a further explanation why the charges should apply in September 2021 which was nearly four months after his request. The Ombudsman is of the opinion that the landlord’s September 2021 response could have been more comprehensive and the delay in responding was unreasonable. The landlord’s response was brief, and it did not explain the reason for the service charge increase or comment on his charges in relation to his neighbours.
12. The Ombudsman notes that in September 2021 the landlord directed the resident to his property manager to discuss any services that he felt were not being delivered or which he felt he was not benefiting from. There is no evidence that the resident contacted the property manager. Had the resident contacted them it is possible that they may have been able to answer his concerns at an earlier point. However, in the Ombudsman’s opinion it was reasonable for the resident to expect the landlord’s service charge team to either obtain the information the resident requested or to arrange for the property manager to contact him. This is because it is not good practice to signpost and place the onus on residents to contact the landlord again when they have already requested information and experienced a delay.
13. The landlord failed to call the resident to discuss his concerns until 22 October 2021 despite the resident first requesting the landlord contact him by telephone in May 2021. The landlord was aware in May 2021 that the resident was finding communicating by email both stressful and time-consuming. It was therefore unreasonable of the landlord to take several months to respond to the resident and to have failed to make contact by telephone for around five months. This would have reasonably added to the resident’s stress and frustration.
14. In November 2021, the landlord addressed in more detail and in a more meaningful way the reasons for the service charges and why they applied. It also addressed for the first time the issue of the resident’s charges in comparison to his neighbours, this was around seven months after the resident requested clarification. However, there was no proper explanation for why the charges had increased or comment of why the charges for the communal T.V and caretaking services applied.
15. There was maladministration by the landlord in respect of its handling of the information requests because of the extensive delay in providing information. It has still failed to explain the reason for the increase or why the charges for the communal T.V and caretaking services apply, issues that remain unresolved at the point of complaint closure.
16. In its stage two response the landlord acknowledged that service standards had not been met and that communication should have been timelier and more effective. However, the offer of £60 compensation for the inconvenience, time, and trouble it had put the resident to, and the service failings was not proportionate to the extent of delays and level of service failings.
17. Although the Ombudsman is unable to make findings about the level of service charges payable it is the Ombudsman’s opinion, given the level of service failure regarding information provision and having regard to the Services’ Remedies Guidance (available on our website), that an order of compensation of £250 is appropriate to reflect the resident’s frustration and inconvenience.

Complaint handling  

18. The landlord has a two-stage complaints procedure whereby it aims to investigate and respond to a complaint within ten working days at stage one. Where a complainant is dissatisfied with the complaint response at stage one, they may request escalation of the complaint to stage two. The landlord aims to make contact within two working days to give a complainant the opportunity to explain their side. It aims to write with the outcome and next steps within 20 working days of the request to escalate. If it is unable to do this, it will explain why and write again within a further ten working days.
19. Responding to a complaint is an opportunity for the landlord to demonstrate that it has heard and understood the complainant’s concerns and is a chance to put things right. Additionally, the complaints process at stage one is to investigate matters and at stage two, to review the initial response to the complaint.
20. Dealing with service charge complaints can be complex and time-consuming however this Service expects landlords to contact residents to keep them updated on their complaints. Where it is not possible to respond within the required timescale it is important to agree on a revised timeframe for responding to residents. There is no evidence the landlord attempted to do this, this meant the resident lost trust in the landlord and involved the resident in time and trouble chasing his landlord when he should not have had to.
21. On 17 June 2021, the landlord acknowledged the resident’s complaint at stage one however when it responded on 21 June 2021 and 1 September 2021 it made no reference to the complaint at stage one. The Ombudsman expects landlords to make clear at what stage it is responding to the complaint and inform the resident of their right to escalate the complaint if they remain dissatisfied. The landlord’s responses in June and September 2021 did not do this. The landlord acknowledged the complaint at stage two of its complaint process on 2 September 2021 and suggested it could take 30 working days or longer to receive a response. This Service contacted the landlord on 21 October 2021 requesting a response by 4 November 2021. The landlord responded at stage two on 3 November 2021, this significant delay amounted to a failure by the landlord.
22. The landlord failed in its stage two response to make an appropriate offer of compensation in recognition of these failings, as it had the discretion to do. This would have demonstrated that it had taken the resident’s concerns seriously. The offer of £60 compensation, having regard to the Ombudsman’s Remedies Guidance (available on the Ombudsman’s website), did not adequately reflect the level of failings and distress, inconvenience, length of delay or time and trouble caused to the resident in pursuing the complaint. The Ombudsman is of the opinion, given the level of inconvenience, trouble, and distress caused to the resident by the landlord’s complaint handling failures, that additional compensation of £100 would be fair in all the circumstances.

Determination

23. In accordance with paragraph 52 of the Scheme, there was maladministration in respect of the landlord’s handling of the resident’s concerns regarding the increase in service charges.
24. In accordance with paragraph 52 of the Scheme, there was maladministration in respect of the landlord’s handling of the resident’s complaint.

Orders

25. Within four weeks of the date of this report the landlord should pay the resident £350 compensation, comprised of:
    1. £250 for the service failures identified with its handling of the resident’s concerns about the service charge increase, including the level of communication and information provided.
    2. £100 for the service failures identified with its complaint handling.
26. Within four weeks of the date of this report the landlord should contact the resident to explain the reason for the service charge increases for 2021-22 and 2022-23.
27. Within four weeks of the date of this report the landlord should contact the resident to explain the reason why he is charged for communal T.V and caretaking services.
28. The landlord is to evidence compliance with the above orders within four weeks of the date of this report.

Recommendations 

29. The landlord should review its handling of this case and formulate an action plan to ensure it can provide residents with service charge breakdowns and answers to questions about individual charges and increases in a reasonable timescale in the future.
30. The landlord should confirm its intentions to the Service in respect of this recommendation within eight weeks of the date of this report.