One Housing Group Limited (202228081)

REPORT

COMPLAINT 202228081

One Housing Group Limited

30 September 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 the landlord’s:
1. Handling of the resident’s concerns about delays in its provision of her finalised service charge accounts.
2. Response to the resident’s concerns about the standard of services provided under the service charge agreement.
3. Handling of the associated complaint.

Background

The resident is a shared owner of the property, a 2-bed fourth-floor flat. She moved into the property in October 2017.
The flat is located within a block of similar flats. The landlord is the head lessee of several properties within the block which it leases from the freeholder. At the time of the events in this investigation the freeholder employed a managing agent (MA) to administer services including the cleaning of communal areas.
The resident first raised concerns about the way the landlord was managing her service charges in September 2022. She queried large differences between the estimated and actual service charge spends and delays in providing the final accounts.
On 27 February 2023 the resident asked the landlord to raise a formal complaint (Complaint 1) about its handling of her service charge queries. It replied on 2 March and said the resident’s email was a service request and not “a service failure under the formal complaints process”.
On 8 March 2023 the resident again asked the landlord to raise a formal complaint in relation to its handling of her service charge queries. The landlord acknowledged Complaint 1 on 9 March 2023. It said it understood:
1. Her complaint was about:
  1. The time taken for the service charge accounts to be finalised.
  2. Inaccuracies within the service charge accounts.
  3. Time taken to respond to her queries.
2. As a resolution she wanted:
  1. Service charge statements dating back to 2018 with a breakdown of what the charges included.
  2. Evidence that the MA had carried out the services.
  3. Accountability in the service charge team for the delays and for the landlord to “overturn” team.
The landlord provided its stage 1 response to Complaint 1 on 22 March 2023. It said:
1. Year-end accounts:
  1. It aimed to complete year end accounts within 6 months of the year end.
  2. This had not been possible as the MA managed the site. It needed to obtain information from the MA before checking the accounts.
  3. The accounts for 2021 to 2022 were now fully checked and it would send them external certification that week.
  4. It may not achieve the timeframe it previously gave (31 March 2023) but would send the accounts once they were available.
2. Previous years:
  1. It had recently checked the 2018 to 2019 accounts and they had been externally certified. She should receive them by the end of the month.
  2. It had sent her the 2019 to 2020 accounts in August 2022 and applied the adjustment to her account.
  3. It had not yet completed the 2020 to 2021 accounts. It expected to provide them to her in May 2023.
3. Increase in the current estimate:
  1. It did not yet have the MAs latest budget. It therefore based the estimate on the previous year’s figure with an increase for inflation.
  2. In the previous year it had significantly underestimated the cost of the MA budget and insurance contributions. It believed the new estimate was more accurate.
4. Cleaning:
  1. The cleaning was the responsibility of the MA under the terms of the lease.
  2. The cleaning element was covered within the estate management charge.
5. It accepted there had been an underestimation in earlier estimates which had resulted in significant variance from year to year.
6. It partially upheld the complaint as it could have provided more detail on how the it had calculated the service charges.
7. It offered £25 compensation as a goodwill gesture.
The resident replied the following day and asked that her complaint be escalated. She said the response did not “adequately address [her] concerns”. She also pointed out that the individual who was “the subject of the complaint” had sent the complaint response. She said the response was therefore “biased”.
The landlord responded to the stage 2 escalation request on the same day. It asked her to specify which parts of her complaint were not addressed adequately. On 2 April 2023 the resident provided a document outlining why she was dissatisfied with its handling of her service charge queries.
The landlord provided its stage 2 response to Complaint 1 on 3 May 2023. It said:
1. 2018 to 2019 accounts:
  1. It had said it would send the accounts by 31 March 2023.
  2. The delay was caused by “the volume of work being passed to [its] auditors”.
  3. It apologised that it had not kept her updated and would provide the accounts by the end of June 2023.
2. 2019 to 2020 accounts:
  1. It had sent these in August 2022.
  2. The resident believed it had served the section 20b notice outside the 18-month timeframe.
  3. The 18-month rule only related to charges above the estimate. It had excluded any higher costs incurred between September 2020 and January 2021.
3. 2020 to 2021 accounts:
  1. It had previously said it would provide the accounts in May 2023.
  2. It had now sent them to the auditors and would provide them to residents at the end of June 2023. It apologised for the further delay.
4. 2021 to 2022 accounts:
  1. It had “promised” her the accounts by the end of March 2023.
  2. It would now provide them by the end of June 2023.
5. The resident requested clarification on why the landlord used the previous year’s costs for the current year’s budget. This was standard practice as it had explained previously.
6. Clarification of insurance costs:
  1. The MA arranged the block insurance.
  2. It had requested information from the MA in relation to these costs.
7. Clarification of the £400 increase in service charge costs from the previous year:
  1. This was due to increased insurance costs.
  2. It was investigating the reasonableness of the charges.
  3. If it found the charges were not reasonable it would apply to the First Tier Tribunal (Property Chamber) (FTT) for a review.
8. Clarification on why it now split the costs evenly rather than base them on the size of the properties:
  1. The MA had previously passed on charges based on all properties on the estate. This meant residents in the block “may have been paying for services being delivered across the whole estate”.
  2. The charges were now apportioned for services in their block.
  3. The resident’s previous apportionment was 0.5039% of the charges for the whole estate. Her apportionment was now “20% [of] a much lower charge”. It believed this was “fairer”.
9. It partially upheld the complaint as it had not kept her updated on when she would receive the final accounts.
10. It offered her compensation of £75 in addition to the £25 offered at stage 1. It also said it was increasing resources to the service charge team.
The landlord provided a “further” stage 2 response to Complaint 1 on 18 May 2023 following a response from the resident. It said:
1. It could not charge any costs over the estimated costs which were incurred more than 18 months before it served the section 20b notice.
2. It had used the 20% apportionment since the 2018 to 2019 financial year. The under-lease said that the resident would pay “a fair and reasonable proportion” of charges. It believed 20% was fair and reasonable and that it had not overcharged her in the past.
3. The lease between the landlord and freeholder made mention of apportionment according to square footage. This term was not in the under lease.
4. She would now receive the 2018 to 2019 accounts by June 2023.
Following the further stage 2 complaint response the resident escalated her complaint to this Service. She said she remained dissatisfied with the landlord’s handling of the service charges and her complaint. Her complaint became duly made on 19 January 2024.
On 30 December 2023 the resident asked the landlord to raise a further formal complaint (Complaint 2) about its handling of her service charges. She said:
1. The accounts for 2020 to 2021 and 2022 to 2023 remained outstanding.
2. It had “continually miss[ed] self-imposed deadlines”.
The landlord provided its stage 1 response to Complaint 2 on 12 February 2024. It said:
1. It apologised for the delay in providing the accounts for 2018 to 2019. It had provided them on 24 July 2023.
2. The resident felt it had not followed her section 22 request for documents. It had provided her with the documents it had. It had been requesting the supporting invoices from the MA since her request and would send the information as soon as it received it.
3. “Slow information” from the MA had caused delays in providing actual accounts.
4. It had finalised the accounts for 2020 to 2021 and 2022 to 2023. The costs were higher than estimated due to MA costs and insurance premium increases.
5. It had decided not to issue these accounts while it applied to the FTT for a determination of reasonableness of the charges.
6. It apologised for missing its self-imposed deadlines and partially upheld the complaint.
7. It offered £750 compensation in recognition of the impact of the issue.
The resident responded on 20 February 2024 and explained that her complaint was not about the level of costs or why they had been incurred, she understood this. Her complaint was about how the landlord had administered the costs. She said she did not feel that it added any “value” to the process and had failed to “interrogate” the MAs costs. She said that the compensation it had offered did not cover the distress she had experienced and asked it to waive the 2020 to 2021 and 2022 to 2023 accounts.
On 4 March 2024 the landlord provided a “follow on stage 1 response” to Complaint 2. It said:
1. It did not accept that it added no value to the process. It checked all invoices to ensure that they were legally due and that they could be recharged. It then worked with its accountant to have the accounts certified and issued to residents.
2. It provided a summary of the estimated and actual charges for 2020 to 2021 and 2022 to 2023. It reiterated that it would not pass these costs to residents until the FTT had considered the charges.
3. It had worked through the backlog of accounts. It would complete future end of years accounts within 6 months of the end of the financial year.
4. It could not waive the 2020 to 2021 and 2023 to 2023 cots. It did however increase its compensation offer to £1,000.
The resident replied on 11 March 2024 and:
1. Said with the exception of the insurance certificate it had not yet provided “a single back up receipt or subcontractor invoice”.
2. Asked whether it had taken the freeholder or MA to the FTT, on what grounds, and when it expected an outcome.
The landlord provided a further stage 1 response on 22 March 2024. It said it expected the process of applying to the FTT to take “at least 6 months”. It acknowledged the situation was “extremely distressing due to the very high costs…incurred…which [she was] not expecting”. It said that while it could recharge the costs in line with the lease it accepted that the charges were “very high and [had] become unaffordable”.

Policies, procedures & legal obligations

The resident’s lease obliges her to pay a service charge. The lease states:
1. The service charge includes “all expenditure reasonably incurred” by the landlord for the “repair, management, maintenance and provision of services” of the building.
2. The service charge consists of a sum based on the estimated expenditure that the landlord was likely to incur in the account year (1 April to 31 March).
3. “As soon as practicable” after the account year the landlord will “determine and certify” any amount by which its actual expenditure exceeded or fell short of the estimate.
The landlord has explained its service charge process as follows:
1. In February it provides service charge estimates prior to the start of the financial year. This sets out the resident’s monthly service charge payment.
2. At the end of the financial year it collates all evidence to calculate the actual spend, it states it “aims” to provide this information to residents by the end of September in the next financial year.
Section 20b of the Landlord and Tenant Act (LTA) 1985 says the landlord must notify leaseholders of service charge costs, or demand payment of them, within 18 months of the landlord incurring them. Where the landlord is unable to calculate final costs within this period it must serve a section 20b notice. This notifies the leaseholder of costs incurred to date and that they will have to contribute towards these. If a landlord does not follow the requirements of section 20b then it is unable to reclaim costs from the leaseholder.
The landlord has a 2-stage complaints process. It aims to respond to stage 1 complaints within 10 working days and to stage 2 complaints within 20 working days.
The complaints policy states that “the manager responsible for that service area” will investigate stage 1 complaints. It says that a senior manager will consider stage 2 complaints.

Assessment and findings

Scope of the investigation

In relation to the resident’s service charge concerns, the Ombudsman is unable to determine whether service charges are reasonable or payable. This is because the FTT is better placed to consider complaints of this type. The Ombudsman can consider a landlord’s administration of service charges, including its response to requests for information about them.
The resident has expressed to the landlord and this Service that she does not consider that the landlord has followed section 20b of the LTA 1985. She has also expressed that she feels that the level and increase of the charges are unreasonable.
This investigation has not considered the landlord’s adherence to section 20b of the LTA 1985 or whether the level or increase of the service charge is reasonable. This is because these matters are more reasonably and effectively considered by the FTT. The resident should contact the FTT if she wants a binding determination as to whether the charge is reasonable and payable.
This investigation has however considered whether the landlord responded appropriately to the resident’s concerns and complaint about her service charge, and whether it treated her fairly in the circumstances.
The resident has also said that the landlord has not responded to her section 22 requests to review receipts in line with statutory requirements. As the resident made the section 22 requests outside the landlord’s complaint process and after the stage 2 complaint response, this has not been considered in this report.
We note that within her complaint the resident said that she wanted the service charge team to be “overturned”. This report will not order the landlord to take disciplinary action against a member of staff, or make changes to its staff. Terms and conditions of employment will be set out in a contractual agreement between a landlord and its staff, and it is for a landlord to decide whether any personnel action is warranted.

Handling of the resident’s concerns about delays in its provision of her finalised service charge accounts.

In January 2021 the landlord issued a 20b notice stating it did not yet have a final actual spend for the 2019 to 2020 financial year. It said it would provide the actual figures when it had them and would keep residents updated.
On 6 October 2022 the landlord responded to the resident’s query regarding the disparity between its estimated service charge costs for 2019 to 2020 and the actual costs. It said:
1. While it endeavoured to provide accurate estimates at the start of a financial year this was not always possible due to “daily reactive costs such as repairs and maintenance”.
2. It had not received the MA’s budget before it provided its own estimate and this had caused the shortfall in this case.
3. Due to “internal issues” it had been unable to provide its accounts on time.
4. It now had a new service charge team working on the accounts with new auditors to clear the “backlog” and avoid future delays.
5. The section 20b notice explained the actual accounts for the 2019 to 2020 year were not yet complete. It would provide the accounts later when they had been finalised.
6. It apologised for the inconvenience.
The resident replied and said that the delay was “not excusable” and that the time the landlord had taken to respond to her queries was “terrible”. She said that the landlord had either been “negligent…or grossly incompetent”. The resident told the landlord that it could not demand payment for costs incurred more than 18 months prior to a section 20b notice being issued.
This Service acknowledges the resident’s frustration with the landlord’s delays in issuing the actual service charge costs and the large increase in the charges. The increase was substantial and would have had an impact on the resident’s expenditure and financial situation. At this time however the landlord provided a reasonably and thorough explanation for the delays and apologised for the inconvenience.
The resident contacted the landlord again on 8 October 2022 and said:
1. It had written to her in September 2021 saying it was still working on the 2019 accounts. It took it a further year to provide the final accounts in August 2022.
2. The final accounts included a bulk charge for “estate management costs”. This provided no detail about what the landlord was charging residents for.
3. It had told her it would update her on the 2020 to 2021 charges before the end of 2021. She had not received any updates.

We have not seen evidence that the landlord responded to this email. That we have not seen evidence that the landlord provided a response to legitimate queries raised by the resident is unreasonable.

Our December 2023 Insight report on service charges said that the Ombudsman expects landlords to be able to provide clear information about a charge that is payable. In this case the use of the general term “estate management costs” did not provide the resident with sufficient details to allow her to be satisfied that she was not paying for services that she did not receive.
In February 2023 the landlord provided its service charge estimate for 2023 to 2024. It also invited residents to attend an online meeting to discuss the estimated charges. In arranging a meeting to discuss the charges the landlord showed that it was aware of the resident’s concerns and wanted to address them. This was resolution focussed.
The resident replied to the landlord and expressed concern that the service charge had increased by “500%”. She said the estimate had included “no breakdown of the charges”. The resident asked it to provide:
1. A full breakdown of what the charges for and how it had calculated them.
2. Paperwork from the MA to “back up” the estimate.
3. The outstanding accounts from 2018 to 2019, 2019 to 2020, and 2021 to 2022.
We have not seen evidence that the landlord responded to this email or provided the documentation requested by the resident. This was unreasonable and an example of poor communication by the landlord.
In March 2023 the landlord provided its stage 1 complaint response. Within this it assured the resident that it would provide the 2018 to 2019 accounts by the end of the month. It also said it would provide the 2020 to 2021 accounts in May 2023 and the 2021 to 2022 accounts “once available”.
On 4 April 2023 the landlord met with the resident and other residents of the block. During the meeting:
1. Residents raised concerns regarding:
  1. A “significant increase” in service charge costs of £500 per month.
  2. Delayed accounts from previous years.
  3. “Minimal explanations” for the increase and the service provided by the landlord.
  4. Information provided by the landlord in formats which were “difficult to interpret”.
2. The landlord agreed several actions including that it would:
  1. Provide a full list of charges including a breakdown of management costs.
  2. Provide a copy of the head lease.
  3. Consider taking the MA to the FTT.
  4. Provide an update on the accounts from 2018 to 2019.
The landlord and residents of the block (including the resident) held a further meeting on 26 April 2023. The resident raised concerns that the landlord had not completed any of the actions agreed at the earlier meeting.
That the landlord agreed to carry out actions and then did not do so was a failure to manage the resident’s expectations. This would have further eroded the resident’s trust in the landlord to do as it promised.
The resident contacted the landlord at the end of April 2023 and asked why it had changed the way it apportioned service charges. She said that apportionment had previously been based on the size (square feet) of a property but it was now splitting charges evenly. She said this had a “detrimental effect” on those with smaller properties. The landlord addressed this query within its stage 2 complaint response in early May 2023. It explained that it believed that the new apportionment was “fairer” as it was a larger proportion of a smaller overall charge.
While the landlord’s explanation was reasonable it could reasonably have provided a breakdown of how this affected the resident’s charge using real examples. This would have helped the resident in understanding the change and addressed her concerns about individuals being detrimentally effected.
In April 2023, the landlord provided the estimated adjustments to the 2020 to 2021 accounts. The resident asked to review the receipts in line with section 22 of the LTA 1985. She said she also wished to dispute the costs applied for 2019 to 2020.
The landlord replied on 5 May 2023. It said:
1. Its 2020 to 2021 and 2021 to 2022 accounts were with its accountants for certification. It said it would provide these accounts and the 2018 to 2019 accounts “no later than” the end of June 2023.
2. It also advised that as it had not yet served the final 2020 to 2021 accounts, section 22 did not yet apply. It said it had however requested more documentation from the MA.
This Service notes that the landlord had failed to adhere to the timeframes outlined in its stage 1 complaint response. This would reasonably have eroded the resident’s confidence in its commitment to adhering to the new timeframes.
On 8 May 2023 the resident emailed the landlord. She said:
1. Its stage 2 complaint response suggested it had not charged her for costs incurred between September 2020 and January 2021. This was because it had served the section 20b notice late.
2. It had not explained this anywhere within the accounts nor had it acknowledged this previously.
3. She therefore asked it to prove that it had not charged any added costs for this period.
4. She wanted further clarification about why the apportionment had changed and whether she had been paying too much previously.
The landlord telephoned the resident on 11 May 2023 to discuss her email. Following the call it provided its further stage 2 response on 18 May 2023.
The further stage 2 response confirmed that it could not charge any costs over the estimated costs which it had incurred more than 18 months before it served the section 20b notice. It did not however provide any evidence to confirm it had not done so as requested by the resident. This was unreasonable. If it was unable to provide such evidence it should reasonably have told the resident and explained why.
The landlord provided the final accounts for 2021 to 2022 in June 2023. This was in line with the assurance given in its stage 2 complaint response. It did not however provide the accounts for 2018 to 2019 or 2020 to 2021.
In July 2023 the resident contacted the landlord to request an update on the missing accounts. She pointed out that it had again failed to adhere to its own timeframes. That the resident had to invest unnecessary time and trouble to chase an update from the landlord was unreasonable.
The landlord replied and said that it would provide the 2018 to 2019 accounts the following week. It said that the 2020 to 2021 accounts were still with its auditor. It apologised that it had not contacted her about the delay. While it is correct that the landlord should apologise this was not sufficient to show to the resident that the issue would not happen again.
The resident continued to contact the landlord throughout September 2023 in relation to her request for invoices relating to the insurance charge.
In September 2023 the landlord issued a further section 20b notice in relation to its 2022 to 2023 accounts. It did so as it was unable to provide the final accounts within 18 months of incurring the costs. The resident responded to the notice expressing frustration that there were further delays in providing final accounts.
It is noted that the resident pointed out that the landlord had not given any sign of delays in the 2022 to 2023 accounts in its earlier communications. While we have not seen evidence that the landlord was aware of any likely delays prior to its issuing the 20b notice. We acknowledge however that yet another delay would have had the effect of further damaging the resident’s trust in the landlord.
The landlord emailed the resident at the beginning of October 2023. It said:
1. The delays in finalising accounts were because the 2019 to 2020 accounts for all of its properties having to be re-checked. This had caused a backlog.
2. It appreciated her “frustration” but it had explained this to her “multiple times”.
3. The delay in providing final accounts for 2022 to 2023 was so it could query costs with the MA.
It was right that the landlord responded to the resident’s concerns and provide an explanation for the delays. Its tone however in saying more than once that it had explained the delays “multiple times” was abrupt.
At the end of October 2023 the resident asked the landlord for an update about the information requested from the MA. It replied and said it was working with the MA to obtain “as much information as possible”. It said the issue was not “entirely within [its] control” as it couldn’t send “what [it didn’t] have”.
This Service notes that the landlord had advised the resident in May 2023 that it had requested the insurance charge information from the MA. That it had still been unable to provide the information 5 months later was unreasonable.
It is important to point out that the resident’s relationship is with the landlord, not the freeholder or the MA. It was the landlord’s responsibility to pass on the residents’ queries to the other parties and to chase them for updates. While the landlord’s internal communications indicate that it had been chasing the MA, we have seen no evidence that it had considered taking any further action. This was unreasonable.
At the start of November 2023 the landlord emailed the resident in response to an email from her. It said that she could apply to the FTT for a decision about the reasonableness of the service charges. It provided her the contact details for the FTT.
By this time the resident had been frequently contacting the landlord about her serious concerns about the service charges for over a year. That this appears to have been the first time it signposted her to the FTT was unreasonable.
Internal landlord emails at the end of November 2023 show that the account for 2020 to 2021 had been “certified some time ago but were held back due to the deficits”. They also show that the landlord had not yet sent the 2022 to 2023 accounts to the auditor for certification. This was because there was a “duplicate charge” from the MA which needed resolving. The landlord said within the emails that the MA had been “ignoring” its information requests for “years”.
The landlord emailed the resident on 29 November 2023 and said it had still not received the requested information from the MA. It said:
1. It had not been able to go ahead with an application to the FTT yet but still planned to take this action.
2. The 2020 to 2021 accounts had been certified “some time ago” but needed “further work”. It expected to send these in the new year.
3. It had reconciled the 2022 to 2023 accounts but was waiting on a response from the MA to a query before sending for certification.
4. It did not yet have the insurance documentation. It had been requesting this from the MA “for some time”.
It was positive that the landlord gave provided this update to the resident promptly on becoming aware of the further delays.
In January 2024 the landlord told the resident that she would receive the outstanding accounts by the end of February 2024. It also provided the insurance documents previously requested by the resident.
Within its responses to Complaint 2 the landlord provided assurances that it was applying to the FTT in relation to charges for 2020 to 2021 and 2022 to 2023. Its final complaint response in February 2024 estimated that this would take 6 months.
The resident states that the landlord advised residents in a meeting in June 2024 that it had not yet instructed solicitors. She said it explained that it would be making its application to the FTT by early-August 2024 and that it would keep residents updated. She says she has received no update.
This Service has asked the landlord to provide an update in relation to its application to the FTT. It has said that it has sought advice from its solicitors but has not yet made an application to the FTT.
The landlord has acknowledged that the resident’s situation is “extremely distressing” and that the costs were “very high” and had become “unaffordable”. This being the case it is unreasonable that 7 months later the landlord has not resolved the issue.
Overall, the landlord has failed to:
1. Respond promptly to the resident’s queries.
2. Provide information in an easy-to-understand format.
3. Communicate effectively with residents.
4. Adhere to its own timeframes for providing final accounts on several occasions.
5. Adhere to its own timeframe for applying to the FTT.
Its failings have caused the resident distress, inconvenience, time and trouble over an extended period. The landlord offered the resident £1000 compensation when investigating Complaint 2, in recognition of this. We are satisfied that this is a proportionate level of compensation in the circumstances. However, we have identified some failings in the landlord’s handling of the matter which were not identified during its complaints investigation and in recognition of the fact that the situation remains unresolved, we have found that there was severe maladministration in its handling of the resident’s service charge queries. While we have not ordered further compensation in respect of this matter, we have made a series of orders aimed at putting things right and ensuring that the landlord learns from the issues highlighted in this case.

Response to the resident’s concerns about the standard of services provided under the service charge agreement.

Internal landlord emails in January 2023 show the resident reported that no cleaning service was being provided to her floor of the block. She said the MA said it had previously provided cleaning to this floor but had recently stopped doing so. The email said the head lease showed the MA should be providing cleaning but the bills showed it had not been charging for this.
The landlord has provided evidence that it carried out inspections of the block including the resident’s floor. There were however gaps in inspections with only one carried out throughout 2022. More regular inspections appear to have resumed after the resident raised concerns in February 2023 with reports then completed every other month.
It is reasonable that the landlord carries out checks to ensure that its residents are receiving the services they pay for to a satisfactory standard. It is unclear why the landlord did not show that it carried out checks for long periods. That it did not do so however was a failing.
Further internal emails in February 2023 show that the landlord had not yet resolved the communal cleaning issue. It spoke to the building’s concierge (who was employed by the MA) who advised:
1. The MA had carried out cleaning “as a favour” for 5 years.
2. It was withdrawing its cleaning service as residents were “becoming abusive toward the cleaner”.
On 27 February 2023 the resident contacted the landlord. She asked it to confirm what it was doing about the communal cleaning. We have not seen that the landlord responded. This is a further example of poor communication.
We have not seen evidence that shows that the landlord liaised with the MA or freeholder about the cleaning services. This was unreasonable. Residents were paying for a service and the landlord has not proven that it was acting on their behalf to ensure they were getting value for money. This was therefore a failing.
Within the landlord’s stage 1 complaint response in March 2023 it confirmed that the communal cleaning was the responsibility of the MA and was covered within the estate management charge.
It is not clear from the evidence seen by this Service when the cleaning service resumed. Nor does it show if the landlord explored whether residents were due any refund for the period when they did not receive cleaning services. This was unreasonable.
Our December 2023 Insight report on service charges said that where concerns were raised about the standard of service “it would be for the landlord to demonstrate the service is chargeable under the lease or tenancy, that it has been provided and that the standard was of satisfactory quality.” The evidence does not show that it did so in this case. There was therefore maladministration in the landlord’s response to the resident’s concerns about the standard of cleaning services.

Handling of the associated complaint.

At the end of February 2023 the resident asked the landlord to raise a formal complaint. It declined to do so saying that her query was a service request and not a service failure.
The Ombudsman’s Complaint Handling Code (the Code) states that landlords should recognise the difference between a service request and a complaint.  It defines a service request as a request which requires action to be taken to put something right. This includes repair requests or requests for information. A complaint is when a resident raises dissatisfaction with the landlord’s response to their service request.
In this case the resident was clearly dissatisfied with the landlord’s response to her earlier service requests for information relating to her service charges. That the landlord did not treat the resident’s communication as a complaint was therefore a failing.
The resident replied on 2 March 2023 and reiterated that she wanted a complaint to be raised. The landlord replied on 6 March 2023 and said that it would provide the information she had requested. It went on to say that if it was “determined that there has been service failure” then she could request a formal complaint be logged.
This Service does not consider that the landlord’s reasoning was correct. There does not have to have been a proven service failure in order for a complaint to be logged. It is the purpose of the complaint process to decide whether there have been any failings or not. To decline to log a compliant without evidence of a failing is to pre-empt the outcome of the investigation.
The resident replied again on 8 March 2023 and said that she wanted the landlord to raise a formal complaint. She said she did not need to for the outcome of her latest information request before the complaint was logged.
The landlord accepted the stage 1 complaint 8 working days after the resident’s request. This delay was unreasonable.
The landlord provided its stage 1 response 17 working days after the resident raised the complaint. This is outside the timeframe outlined by the Code and the landlord’s own policy. The delay was caused by the landlord’s failure to recognise that the matter was a complaint and not a service request.
Within its stage 1 complaint response the landlord accepted that there had been delays in its handling of the service charge accounts. It apologised and acknowledged that the delays had caused her inconvenience. This was reasonable.
The landlord provided an explanation for the delays and gave timeframes for when it would provide the accounts. This would have been reasonable had the landlord adhered to these timescales. It did not and this further eroded the resident’s confidence.
The resident asked the landlord to escalate the complaint to stage 2 of its process. She said that she felt that its response had been “biased” as it had been investigated by someone who was “the subject of the complaint”.
The landlord’s policy says that a stage 1 complaint will be investigated by the manager responsible for the service area subject to the complaint.
The Code does not prohibit an officer from the service area subject to the complaint from carrying out the investigating. It does however state that they must have “no conflicts of interest” and be “able to act sensitively and fairly”.
The landlord’s stage 1 complaint response was issued by the head of service charges. It is accepted that this officer had had earlier communications with the resident in relation to her queries. They were not however the officer who primarily responded to her queries before her formal complaint. While the resident’s concerns are noted, we have seen no evidence that shows that the officer acted unfairly. We are also satisfied that the officer would have been best placed to provide the stage 1 response as they could provide knowledge and insight into the concerns that had been raised.
It is noted that within her complaint the resident asked the landlord to provide a breakdown of what the charges included and evidence that the services had been carried out. We have not seen any evidence that the landlord provided this information. It therefore did not address all aspects of the complaint. This is a failing.
The landlord provided its stage 2 response to Complaint 1 within the timeframe within the Code and its own policy.
Within its stage 2 response to Complaint 1 it provided updated timescales in which it intended to provide the outstanding actual accounts. This would again have been reasonable had it adhered to the amended timescales. Its failure to do so caused the resident further distress, time and trouble and eroded the already damaged resident-landlord relationship.
The landlord said within the stage 2 response that it had requested further information from the MA in relation to the insurance charges. It was correct that the landlord provided an update on the action it was taking. It is however noted that the requested information was not provided to the resident until 6 months after the stage 2 response. This was an unreasonable delay.
The stage 2 response addressed the resident’s query about the apportionment of charges. However, as previously noted it could reasonably have provided an example of how this affected the resident’s individual charges. This was a missed opportunity to alleviate her concerns that she was being disadvantaged by the change.
The landlord offered the resident £100 compensation. By this time the resident had been expressing her concerns for 8 months and had still not received charges from almost 4 years earlier. We do not therefore consider that the compensation was proportionate to the distress, inconvenience, time and trouble experienced by the resident.
The resident asked the landlord to raise Complaint 2 on 30 December 2023. The landlord replied 10 days later and said her service charge complaint had already exhausted its internal complaints process. It reiterated this stance on 15 January 2024. The resident explained that Complaint 2 was different as:
1. It related to events since the final response to the earlier complaint.
2. The accounts remained outstanding.
3. The service charge team had investigated her last complaint and the response was therefore “deeply flawed”.
We consider that as Complaint 2 related to events that had taken place after the stage 2 response to Complaint 1, the landlord needed to log a new complaint. It did so on 19 January 2024. This was 20 days after the resident asked it to do so which was an unreasonable delay and a further complaint handling failure.
The landlord said the stage 1 complaint would be investigated by its director of customer operations. Given the resident’s concerns about the impartiality of the handling of her earlier complaint, it was positive that the landlord had an independent officer investigate. It said that due to the “nature of the complaint” it would be unable to respond within its usual 10 working day timescale. It said it would respond by 12 February 2024.
It took the landlord 16 working days to provide its stage 1 response to Complaint 2 after acknowledging it. This was not unreasonable.
Within its response the landlord explained the reasons for the increased service charge costs. It also said the delays in providing actual accounts was due to the MA being slow to provide information.
The landlord said that it would be applying to the FTT in relation to the reasonableness of the outstanding charges. It also said it would not issue the accounts to residents until it received the FTTs judgement. This was reasonable. It showed that it had considered the resident’s circumstances and her ability to pay the large charges. The landlord also offered the resident £750 in compensation in recognition of “the impact of the issue”.
The landlord provided a further stage 1 response on 4 March 2024 following further contact from the resident. Within the further response it increased its compensation offer to £1,000. It was appropriate for the landlord to offer the resident increased compensation following further consideration of the complaint. However, it is unclear why the response was a “further stage 1” response and why the matter had not been dealt with at stage 2.
The landlord provided a third stage 1 response on 22 March 2024. Again, it is unclear why the landlord did not treat this as a stage 2, and final, response to the complaint. However, that it did not was a departure from the Code and complaint handling failure.
Overall, the landlord:
1. Delayed in accepting Complaint 1 and Complaint 2.
2. Did not adhere to the timescales it gave in its complaint responses.
3. Failed to escalate Complaint 2 in line with its policy and the Code.
4. Did not learn from the outcome of the complaints and resolve the ongoing substantive issue.

We therefore find that there was maladministration in the landlord’s complaint handling.

On 8 February 2024, the Ombudsman issued the statutory Complaint Handling Code. This Code sets out the requirements landlords must meet when handling complaints in both policy and practice. The statutory Code applies from 1 April 2024.
The Ombudsman has a duty to monitor compliance with the Code. We will assess landlords using our Compliance Framework and take action where there is evidence that the requirements set out in the Code are not being met.
In this investigation, we found failures in complaint handling. We therefore order the landlord to consider the findings highlighted in this investigation when reviewing its policies and practices against the statutory Code.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was:
1. Severe maladministration in relation to the landlord’s handling of the resident’s concerns about delays in its provision of her finalised service charge accounts.
2. Maladministration in relation to the landlord’s response to the resident’s concerns about the standard of services provided under the service charge agreement.
3. Maladministration in relation to the landlord’s handling of the associated complaint.

Orders and recommendations

Orders

Within 4 weeks of the date of this report:
1. A senior officer of the landlord must apologise to the resident in line with the Ombudsman’s remedies guidance.
2. The landlord must pay the resident £1,800 compensation including:
  1. The £1,000 for distress and inconvenience, time and trouble in relation to its handling of the resident’s service charge queries that was offered on 4 March 2024, if this has not been paid already.
  2. £300 for time and trouble in relation to its response to the resident’s concerns about the standard of the cleaning service.
  3. £500 for time and trouble, distress and inconvenience in relation to its complaint handling.
Within 4 weeks of the date of this report the landlord is ordered to provide an update to the resident and this Service in relation to its application to the FTT. It should provide an updated timeframe for when it expects to conclude this matter and agree a frequency of updates to the resident.
In accordance with paragraph 54.g of the Housing Ombudsman Scheme, the landlord is ordered to provide the Ombudsman with a review conducted by a senior manager to ensure (at a minimum) it:
1. Identifies any other residents who may have been affected by similar issues, but not necessarily engaged with its complaint procedure, for the period from January 2022 to present;
2. Reviews staff training needs to ensure all relevant officers:
  1. respond to requests for service charge information appropriately, in an efficient and prompt manner, and in accordance with its relevant policies and procedures;
  2. understand the importance of effectively managing resident’s expectations and adhering to agreed timeframes;
  3. understand the difference between a service request and a complaint;
  4. raise a further complaint when the complaint relates to the same issue but over a different timescale.
3. Following the review, the landlord should produce a report setting out:
  1. The findings and learning from the review;
  2. recommendations on how it intends to prevent similar failings from occurring in the future;
  3. the number of other residents who have experienced similar issues;
  4. the steps it proposes to take to provide redress at the earliest opportunity to the residents who have been similarly affected by the identified failings. This should include consideration of compensation equal to the level of detriment a particular resident has experienced if caused by a failing on the part of the landlord.
4. The landlord is to confirm compliance with these order to the Ombudsman within 10 weeks of the date of this report.