Metropolitan Thames Valley Housing (MTV) (202207592)

REPORT

COMPLAINT 202207592

Metropolitan Thames Valley Housing

13 October 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 resident’s request that the landlord provide documentation showing the breakdown of her service charges since 2008, and its administration of her account.
   2. The landlord’s complaint handling.

Background

2. The resident is a shared ownership leaseholder of a 2-bedroom house. The landlord is a housing association.
3. On 15 March 2022, the resident contacted the landlord’s service charge team, as she believed the landlord had wrongly charged her for services as part of the block next door rather than as a separate house. The landlord responded on 27 and 28 April 2022, after being chased by the resident, advising that the charges appear only in the estimates and that, during the actualisation process, incorrect charges were removed in the end of year statements. In response, the resident requested copies of all her service charges going back to the start of her lease in 2008, which the landlord declined as it said it had not charged her the disputed costs. It then responded to her request for these under the Freedom of Information Act 2000 (FOIA) by explaining that it was not a public body subject to this as a housing association.
4. The resident raised a stage 1 complaint on 4 May 2022 for the landlord’s refusal to provide the service charge statements since 2008. As a resolution, the resident requested copies of the estimated and actual service charges from the past 14 years, and for any errors to be investigated and amended, with clarification on why these were applied to her.
5. On 13 July 2022, the resident raised a further stage 1 complaint regarding the same issue, advising that, as the landlord had ignored her previous requests by not providing her service charge statements, she had contacted the Ombudsman. She requested her service charges for the last 14 years, as well as a refund, as she reported that she had proven incorrect charges by explaining that she lived in a house and not in a block that received all the services she had been charged for.
6. The landlord responded at stage 1 of its complaint procedure on 28 July 2022. The landlord advised it was currently obtaining the resident’s requested service charge actual statements to investigate the charges. The landlord further advised that this was not a quick process, but that the service charge team manager would be emailing her updates directly. Once the actual statements had been obtained, it would then check to see if any refund was due. The landlord awarded £30 compensation for time and trouble due to the lack of response from the service charge team.
7. The resident then chased the landlord for her service charge statements again in August 2022, when it provided her with some statements, but it found that its records did not go back before 2014, with her asking it to escalate her complaint to stage 2 on 12 August 2022. It told her on 31 October 2022 that it had obtained her statements for 2014-15, 2016-17 and 2017-18, but it did not have her earlier statements, and it had found no incorrect charges to her, so it requested her evidence of these. The resident continued to chase the landlord for the statements from 2008 onwards in November 2022, as well as for a refund of incorrect charges, and compensation for the period that this issue had been outstanding.
8. The resident then received an email from the service charge team on 30 November 2022. It apologised for the length of time that it had taken to respond to her due to having to liaise with its other departments, and it advised there was an error in the 2022-23 service charge estimates, which were being revised and her account would be refunded for, but it had found no evidence of previous overcharging on the account. The landlord said that this was because the resident had only been charged for scheme-wide and not block-specific services.
9. The resident then again requested that her complaint be escalated to stage 2 via email on 1 December 2022. She stated that the landlord had failed to investigate the errors and only looked at her most recent service charge statements. The resident stated that her own investigation had concluded the landlord had been charging her as part of a block rather than a house since 2008. The resident again requested copies of her service charge statements since then as a FOIA request, which she continued to chase it for in December 2022 and January 2023.
10. The landlord issued a stage 2 response to the resident’s complaint on 5 January 2023. The landlord advised that it was unable to look into all the charges since 2008, as the information was no longer held on its system due to a system migration following a merger. The landlord also advised that, although it considered that it had not received a request for copies of all service charges from 2008 to date, all the physical information it could offer had been provided to the resident.
11. The landlord nevertheless apologised for causing the resident frustration for the time taken to investigate her service charges due to the delay in obtaining and reconciling the information. It stated that the service charge team had been in continuous contact and had kept the resident updated. The landlord also stated it could not identify any poor complaint handling at stage 1, however there were delays that it had explained in the stage 1 response and therefore it offered a further £25 compensation for these.
12. The resident then complained to the Ombudsman that the landlord had been charging her home as part of a block rather than as an individual house, refused to review its service charge breakdown for the last 15 years, and to provide the resident with the requested service charge documentation for that period.
13. Following our request for evidence, on 8 July 2023 the landlord advised us that, after conducting its own review of the complaint, it had decided to award the resident a further £200 compensation in addition to the £55 offered at stages 1 and 2. The landlord broke down the offer for: £100 time and trouble, for the inconvenience caused due to the number of times the resident contacted it over a 9-month period requesting an explanation and response to her concerns surrounding service charges. £75 failure of service, for the length of time it took for the service charge team to conclude their findings. £25 poor complaint handling, for the further delays identified at stage 1 and stage 2 of its complaints process. It was unclear from the landlord’s correspondence whether this offer had been communicated to the resident, but it subsequently refunded some of her service charges for 2018-19, 2019-20, and 2022-23.

Assessment and findings

Scope of investigation

14. In accordance with the Housing Ombudsman Scheme, the Ombudsman may not consider complaints regarding the level or amount of increase of service charges, or matters where it is quicker, fairer, more reasonable or more effective to seek a remedy through the courts or other tribunal. This is because, while we can look into the landlord’s administration of the service charge account, the Ombudsman does not have the authority, expertise, or resources to conduct a detailed audit of the service charge accounts, or the legally binding power to determine the liability for, level or reasonableness of service charges. This investigation will therefore be limited to how the landlord handled the resident’s requests for a breakdown of her service charges since 2008, its administration of her account, and her formal complaints.

Service charges

15. Under section 21 of the Landlord and Tenant Act 1985 (the LTA), a leaseholder has the right to request a written summary of the costs which make up their service charges. The summary must cover the last 12-month period, ending no later than the date of the request. The summary must be provided within 1 month of the request, or within 6 months of the end of the period to which the summary is related, whichever is the later. The leaseholder has the right, within 6 months of receiving a written summary of costs, to inspect the accounts, receipts and other documents supporting the summary, under section 22 of the LTA.
16. According to HM Revenue and Customs, there is normally an obligation to keep accounting records, including service charge documentation, for 6 years after the end of the accounting period.
17. When a resident makes a request for information on service charges the landlord should take reasonable steps to provide the information they are entitled to. Following the resident reporting that she had discovered that the landlord had calculated her service charges as part of a block rather than as a house, the resident contacted the landlord’s service charge team from March 2022 onwards to advise them of the error. In response, the landlord advised the resident that, while the estimated charges did include items she should not have been charged for, the incorrect charges were not included in the end of year actual charges.
18. In response, the resident requested that the landlord provide her with copies of her service charge statements back to when she first moved to the property in 2008. The landlord responded that, as there was no error in the most recent statements, it would not be looking at providing the resident with service charge statements back to 2008. The resident then asked that the landlord provide the requested information as a FOIA request. This was also declined, as the landlord advised her that housing associations, such as the landlord, were not subject to the FOIA and therefore it was under no obligation to respond.
19. Although it considered that it did not have to provide her historic service charge statements, the landlord’s blunt refusal of the resident’s requests did not assist in resolving the dispute with her. The resident’s requests indicated that she remained dissatisfied with the landlord’s explanation of the disputed charges. Therefore, a more sympathetic approach to understand the reason for the request may have resulted in a less adversarial relationship between the resident and the landlord in resolving the dispute.
20. Following the raising of the resident’s second stage 1 complaint on 13 July 2022, the landlord did take steps to provide the resident with some of the requested information. In the stage 1 response, the landlord advised that it was currently compiling the information from its systems, however this was not a quick process. It further advised that the head of the service charge team would keep the resident updated, and once they had the information it would be reviewed.
21. The service charge team contacted the resident on 31 October 2022, advising it had obtained some service charge documentation back to 2014, however no older information was available. It stated it had not uncovered any unjust costs in these charges, but requested the resident provide any information to the contrary. It is unclear from the landlord’s email what documents were provided to the resident and in what manner. However, as HM Revenue and Customs state that it is normally only an obligation to keep accounting records for 6 years, and the LTA requires the landlord to provide copies of and access to inspect the most recent years’ service charge statements to the resident, it was not unreasonable that the landlord only offered her some documentation back to 2014 instead of all documentation back to 2008.
22. The landlord’s stage 2 response explained that, due to system migration following a merger, older service charge documentation was physically unavailable, and that all information it could access had been provided to the resident. This was a reasonable position for the landlord to take, given that it did not have access to the older documentation itself, although it may also have been helpful for it to have explained to the resident its data retention policy for service charge records, which may have also prevented it from providing these to her. It is disappointing the landlord did not explain its obligations regarding the storage and provision of service charge information, as this may have assisted the resident in understanding the landlord’s position.
23. In respect of the disputed items from the resident’s available service charge statements, the landlord subsequently took appropriate steps to address the resident’s concerns. It reviewed the items that were in dispute and identified items that needed to be removed, which led it to refund some of her service charges for 2018-19, 2019-20, and 2022-23. It also provided an explanation for the items where it thought the charge was justified. In reviewing the service charges and giving explanations to the resident, the landlord’s eventual response here was reasonable, although it is concerning that it took from her reports in March 2022 until after it was contacted by the Ombudsman to confirm these in July 2023. It should also be noted that it is outside the scope of this investigation to determine whether or not the charges were justified.
24. The length of time that the landlord took to do so therefore meant that it was appropriate that it compensated the resident in recognition of its delays in her service charge case. Its stage 1 response awarded her £30 for the time and trouble that she experienced from the lack of a response from its service charge team to her request for her statements. The landlord later informed the Ombudsman that its post-stage 2 review had awarded the resident a further £75 for the failure in service of the length of time that it took for the team to conclude their findings, as well as another £100 from the time and trouble of her inconvenience in repeatedly having to contact it about this for over 9 months.
25. The landlord’s compensation policy recommends up to £150 compensation for failures including time and trouble from unnecessary effort communicating with it. The Ombudsman’s remedies guidance also recommends up to £100 compensation for delays in getting matters resolved, and a higher level of compensation for failures that adversely affected the resident. Therefore, the £205 total compensation that the landlord eventually awarded the resident was proportionate to recognise its delays in her service charge case under its policy and guidance and our remedies guidance.
26. However, the length of time that the landlord took to award the resident proportionate compensation was unreasonable, particularly as it only confirmed that it had done so after she had completed its complaints procedure and it had been contacted by the Ombudsman. It has therefore been ordered below to pay her the £205 compensation that it subsequently awarded her, if it has not done so already, and it has been recommended below to try and resolve her outstanding concerns regarding its provision of her service charge documentation, and administration of her account, by meeting with her to discuss this.
27. The landlord otherwise eventually took appropriate steps to investigate the resident’s concerns, it reviewed the information disputed by the resident, and identified the errors. It also provided an explanation to the resident for the charges and took steps to rectify the errors to prevent a future recurrence. In reviewing the charges, providing refunds, and giving explanations to the resident, the landlord’s subsequent response was reasonable.

Complaint handling

28. The landlord’s complaints policy provides for a 2-stage internal complaints procedure. At stage 1 of this procedure, it should provide its response to the resident within 10 working days, and at the final stage 2, it should respond within 20 working days. This policy states that, when the landlord is unable to meet these timeframes, it should write to the resident to explain why, keep the resident informed, and agree new response times. This is also in accordance with the Ombudsman’s complaint handling code (the Code).
29. In its complaint responses, the landlord recognised poor complaint handling at stage 1, where the 28 July 2022 response was 49 working days outside its complaints policy’s 10-working-day timeframe from the resident’s first stage 1 complaint of 4 May 2022, its stage 2 response therefore awarded the resident £25 compensation for poor complaint handling at stage 1.
30. In its contact with the Ombudsman on 8 July 2023 following its own post-stage 2 complaint review, the landlord recognised it had also failed to deal with the resident at both stages 1 and 2 within the complaints policy’s timeframes. The first escalation request was received on 12 August 2022, while the final response was not issued until 5 January 2023, 79 working days outside the 20-working-day stage 2 response timescale outlined in the landlord’s complaints policy. The landlord therefore awarded a further £25 for poor complaint handling for this and its previous delay.
31. It is therefore of particular concern that the landlord had failed to apply its complaints policy to the resident’s first stage 1 complaint. The failure to progress the resident’s first complaint of 4 May 2022 represented a missed opportunity for an early resolution of the resident’s complaint. Following the landlord’s lack of response, the resident then contacted the Ombudsman and subsequently raised another stage 1 complaint on 13 July 2022. The landlord’s failure to progress the first complaint would have clearly caused the resident frustration and made the complaint more difficult to resolve amicably.
32. On 12 August 2022, following the receipt of the stage 1 response, the resident requested that the complaint be escalated to stage 2. The landlord’s response of the same date advised it was still trying to obtain the missing service charge information, but that it would provide it to her once available, hopefully by 25 August 2022, however it did not escalate the complaint to stage 2 as requested. On 1 December 2022, the resident again requested her complaint be escalated to stage 2, which was actioned by the landlord. Although the landlord did respond to the resident’s first stage 2 complaint email with an update, it failed to note the resident’s escalation request which would have further contributed to the resident’s frustration.
33. The landlord’s stage 1 response also advised that the resident was unhappy with the response to her request for 14 years of service charge statements, however the stage 2 response advises that, regarding the request, “It has been confirmed by the Regional Service Charge Manager that a request was not received in any of your emails to the team”. The resident’s emails provided in the landlord’s evidence to the Ombudsman, however, contain multiple requests for this information, which was originally made to the service charge team on 27 April 2022. The failure to provide the information formed the basis of the resident’s complaint, and therefore it is puzzling for such a statement to be included in a formal response, which must have caused the resident considerable confusion and frustration.
34. In accordance with the Ombudsman’s above remedies guidance, and the landlord’s above compensation policy and guidance on awarding compensation, its offers of compensation for its poor complaint handling totalling £50 was not proportionate redress for the further complaint handling failures identified in this investigation.
35. Moreover, according to the landlord’s separate table of discretionary compensation tariffs, poor complaint handling can be awarded up to £150, depending on the severity of the failure. The landlord’s failure to respond to the resident’s original stage 1 complaint, and its subsequent failure to escalate the resident’s complaint to stage 2 when requested, as well as its incorrect and contradictory stage 2 response regarding her request for service charge statements, were fundamental failures in the handling of complaints. This was also contrary to the Code’s requirements for expressions of dissatisfaction about the standard of service or lack of action to be accepted as complaints and escalations unless there is a valid reason not to do so.
36. The result of these failures was to delay the completion of the complaint process, as well as requiring the resident to expend further time and effort to progress the complaint. It then added to this by not awarding her proportionate compensation in recognition of its delays in her service charge complaint until after she complained to the Ombudsman, and by not doing so at all in respect of its poor complaint handling by only awarding her a total of £50 for this.
37. As this would have caused the resident considerable frustration and was contrary to our dispute resolution principles to be fair, put things right and learn from outcomes, we therefore order the landlord below to pay her the maximum amount of £150 compensation for poor complaint handling under its compensation policy. This is in addition to the £50 that it previously awarded her for this if she has not received this already.
38. Moreover, the landlord has been ordered below to carry out a case review to identify why its complaint handling failures in the resident’s case occurred, and to outline how it will prevent these failings from occurring again in the future, before apologising to the resident for this and providing her and the Ombudsman with the outcome of the review. It has also been recommended below to review its staff’s training needs with regard to their application of its complaints policy and the Code.

Determination

39. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in its handling of the resident’s request that it provide documentation showing the breakdown of her service charges since 2008, and its administration of her account.
40. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in respect of the landlord’s complaint handling.

Orders and recommendations

41. The landlord is ordered to:
    1. Pay the resident compensation totalling £405 within 4 weeks, which is broken down into:
       1. £205 compensation already offered by the landlord for its delays in the resident’s service charge case if she has not received this already.
       2. £50 compensation already offered by the landlord for its poor complaint handling in the resident’s case if she has not received this already.
       3. Further compensation of £150, for the additional complaint handling failures identified in this investigation.
    2. Carry out a case review within 8 weeks to identify why its complaint handling failures in the resident’s case occurred, and to outline how it will prevent these failings from occurring again in the future, before apologising to the resident for this and providing her and the Ombudsman with the outcome of the review.
42. It is recommended that the landlord:
    1. Arrange for a meeting with the resident and the service charge team where her outstanding concerns can be heard, and the landlord’s position fully explained.
    2. Review its staff’s training needs with regard to their application of its complaints policy and the Code.
43. The landlord shall contact the Ombudsman within 4 and 8 weeks to confirm that it has complied with the above orders, and whether it will follow the above recommendations.