Sanctuary Housing Association (202015195)

REPORT

COMPLAINT 202015195

Sanctuary Housing Association

28 January 2022

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 concerns the landlord’s:

1. Response to the resident’s reports about the level of the service charges.
2. Response to the resident’s queries about the service charge account.
3. Complaint handling.

Jurisdiction

2. 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.
3. After carefully considering all the evidence, in accordance with paragraph 39g of the Housing Ombudsman Scheme, the following complaint is outside of the Ombudsman’s jurisdiction:
   1. The landlord’s response to the resident’s reports about the level of the service charges.
4. Paragraph 39 g of the Scheme states that the Ombudsman will not consider complaints which, in his opinion ‘concern the level of rent or service charge or the amount of the rent or service charge increase’. In this case, it is clear from the resident’s nephew’s (representative) correspondence with both the landlord and this Service that he has concerns about the increase to the service charges over several years. He also disputes the reasonableness of the maintenance and repairs costs.
5. It is not within the Ombudsman’s remit to make findings about whether service charges have been charged at a reasonable level by a member landlord as such authority lies with the First Tier Tribunal – Property Chamber (FTT). The FTT has the authority to consider the terms of the lease in conjunction with costs charged to the leaseholder and make a decision as to whether the landlord’s position is appropriate. This includes whether the landlord acted in accordance with the lease in deciding to recover costs of repairs and maintenance to the building.

Background and summary of events

6. The resident is a (shared ownership) leaseholder. The resident purchased the lease on 24 May 2016. The property is one-bedroom flat in a sheltered housing block. The building includes rented and leasehold properties.
7. Within the representative’s communications to the landlord, he refers to the windows fitted at the property being an incorrect size and also mentioned there were issues with the roof and drainage. However, it is clear repairs do not form part of the complaint made to the Ombudsman and that the representative has referred to the repair issues in his communications with the landlord in order to illustrate his concern raised about whether repair and maintenance costs should be included in the service charges, rather than under any warranties put in place when the property was built.
8. On 1 December 2020 the representative raised a formal complaint with the landlord regarding the “vast” increase in the service charge relating to the maintenance charge. As the building was new when they purchased the lease in 2016, they did not expect excess repair costs to be included in the service charges. They were told the monthly service charge would increase with inflation however it has increased from £109.45 at the time of purchase to £229.07 in 2020/21.
9. The representative said that he had been advised that any faults that occur will be passed onto the customer however he feels that repairs, which he said are “plentiful” should be covered by the landlord or builders. The representative referred to issues with the windows fitted at the property as well as the roof and drainage.
10. On 2 December 2020 the landlord acknowledged the complaint and advised a response would be provided within 10 working days.
11. In its stage one complaint response dated 15 December 2020 the landlord acknowledged the property was a leasehold flat but said it was “on a mixed scheme” including rented and leasehold properties. Some of the properties including the resident’s were ‘Extra Care’.  It explained this meant that there were care provisions available to residents, some of which were included as part of the lease provisions and others which residents can ‘purchase’ based on their individual needs.
12. It explained that the service charges were reviewed on an annual basis and were an estimate of the costs for the forthcoming year, based on known contract costs, anticipated additional costs and as well as inflationary increase.
13. The landlord said that as the estimate is not an exact figure, any underspend (surplus) or overspend (deficit) against the budget will show when the accounts were prepared towards the end of September each year. Its current practise was to carry forward any surplus or deficit. It explained that the large increase in the budget for 2020/21 was mainly due to there being a large deficit carried forward from 2019/19. The accounts for 2018/19 had a deficit which had resulted in a debit carry forward, so the budget showed a significant increase from the previous years.
14. The landlord also said that the apportionment was changed following a review of the scheme, on tenure type. This had meant that the number of properties that should have been contributing to the costs varied as the scheme included rented, leasehold, flats and bungalows – all of which may have a different obligation to contribute to relevant costs.
15. The landlord explained the basis of the ground maintenance charge, gas and electricity costs, light bulbs, window cleaning, PAT testing, security and day to day repair costs. In relation to day to day repair costs, the landlord said that for 2020/21, the day to day provision was based on the 2018/19 accounts actuals, plus an inflationary uplift. The amount had increased owing to the changes to the apportionment in 2019/20 per block to across the whole scheme in 2020/1.
16. On 4 January 2021, the representative contacted the landlord to dispute aspects of the complaint response including that the property was included in ‘Extra Care’. He said that any charges related to Extra Care should be removed. The resident also disputed the charges for gas, electricity and water and asked why the landlord had not responded to his points about the windows and general issues of the building.
17. The landlord acknowledged the representative’s communication on the same date and advised a response would be provided within 10 working days.
18. On 14 January 2021, the landlord sent a further acknowledgment to the representative confirming his complaint would be dealt with under the final investigation stage of its complaints process and advised that it would provide a full response by 10 February 2021. It said the delay was due to the challenges presented by Covid-19.
19. On 10 February 2021, the landlord provided a final response. Regarding the windows, drainage and roof at the property building, it acknowledged that window works took place at the building following a fire and that the representative had previously raised concerns  about the windows not fitting correctly. It said that its Development Team had advised that works to remedy the leaking windows were planned but had been postponed because of the pandemic. The responsible contractor was not currently carrying out internal works due to Covid-19 related restrictions but it would ensure that affected residents were updated when more information was available.  It apologised for not responding to this aspect in its stage one response. 
20. The landlord said it could not locate any record of the resident reporting any issues with the roof or drainage system. However, it confirmed that it had made the Housing Officer aware of his concerns relating to these items so that she could liaise with the Development Team so that any reports received from other residents could be assessed to make sure that they do not fall under the remit of any warranties in place for the scheme.
21. Regarding the service charges, it acknowledged the representative’s concern expressed about the stage one complaint stating the property was included within the category of Extra Care whilst he understood that it was an independent living facility with minimum charges. It said the scheme comprised different property types, including those categorised as Extra Care, it confirmed that the property which was a leasehold flat, was not one of those. The landlord said that nonetheless, as explained in the lease, there was still an obligation to pay towards the services for the scheme which included a contribution towards the Scheme Manager and Warden Call system maintenance costs.
22. Within its response it provided clarification regarding the water charges. It also said it was sorry he was dissatisfied with elements of the service charge but the obligation to pay for the services at the property building as per the lease was not something that can be altered via its complaints process. The landlord advised that in the event that he did not consider the service charge to be reasonable, he could apply for a determination on the liability to pay and the reasonableness of service charges to the FTT.
23. The landlord said in summary, it was sorry that the windows, roof and drainage were not mentioned in its stage one response and if this gave the impression that his concerns had not been thoroughly reviewed. Further it said that the stage one response provided as much information as possible for this current financial year but said if he wanted to formally challenge the charges, he would need to seek independent advice.
24. In his 11 February 2021 reply, the representative advised they had not mentioned any leaks rather the complaint was about the window bowing at the top and the sill bowing up on right hand side. He said they were dissatisfied with the repair and wanted the window and sill replaced. He said he had not complained about the roof but was aware there had been issues with it that had required repairs.
25. The representative reiterated his concern that the landlord was passing repair and maintenance costs onto the leaseholders via the service charges. He also said the service charge budget for 2020/21 had not been charged correctly.
26. On 24 February 2021, the landlord provided a further response clarifying that the planned works to the lounge and bedroom windows were due to shrinkage found to the window board and frame rather than due to any leak as previously suggested. The landlord said this work would be completed by its contractors once they were carrying out internal works.
27. Regarding general maintenance costs for the building, it advised that its Housing Officer had checked with the Development Team about the works carried out at building to ensure that they did not fall under the remit of any warranties put in place when the property was built. The landlord said the repairs history for the building had now been reviewed and it could confirm that there were no works that should have been carried out under any form of warranty.
28. The landlord said the service charge budget was not incorrect but advised it did expect that the amounts used for some elements of the charge were overestimated which could result in a surplus when the accounting process took place later that year.
29. The landlord said it understood the resident did not wish to use the services of the Scheme Manager but as per the lease there was still an obligation to pay towards the services provided. It reiterated that any dispute about the reasonableness of the service charge would fall under the remit of the FTT and if he remained dissatisfied with the information that it had provided, it would encourage him to seek independent advice.
30. The representative contacted the Ombudsman on 3 March 2021. He explained he was unhappy with the increase to the service charge which had increased from £115.00 to £275 per month over the past few years. He said the landlord had inflated the charges and had not sufficiently explained them.
31. The Ombudsman confirmed during phone calls with the representative on 25 May and 25 June 2021 that the complaint was one that could be investigated however also confirmed that the complaint relating to the level of service charges would not be investigated. The Ombudsman signposted the representative to the FTT and confirmed this position in a letter to the resident and representative dated 5 October 2021.

Assessment and findings

The landlord’s response to the resident’s queries about the service charge account.

32. In his formal complaint, the representative raised a concern about the increases to the service charges in particular the repairs and maintenance costs. In its complaint response the landlord explained the process for calculating the service charges which was based on an estimate of charges for the forthcoming year which was subsequently adjusted according to actual expenditure.  It also set out the services included in the service charge and explained that there had been a change to the apportionment of charges based on tenure and the types of services which included maintenance and repairs of the property building. As the landlord’s response gave an appropriate level of detail regarding the costs included in the service charge and explained the process for calculating this, its response was reasonable in this regard.
33. However, within its stage one response the landlord did not respond to the representative’s concerns raised about repair costs such as those to the windows which he considered may be more appropriate for the landlord to have carried out under the warranties in place. It also incorrectly stated that the property was an “Extra Care” home under the scheme suggesting the resident was utilising the care provisions available at the sheltered housing. The landlord provided clarification on this point in its final complaint response after the representative disputed this, confirming the resident’s property type was not categorised as Extra Care but that he still was responsible to pay a contribution towards costs related to living in sheltered accommodation.
34. In its final response the landlord also responded to the resident’s concerns about repairs costs being included in the service charges as opposed to falling under the remit of any warranties put in place when the property was built. It advised that it would review if any repair costs fell under the remit of the warranties.
35. Whilst the landlord’s first stage one response did not address all of the representative’s concerns, it has apologised for this and addressed the omissions in its stage two final response. The landlord has demonstrated that overall, its complaint responses were reasonable and proportionate. In its further response to the resident, the landlord also confirmed that it had reviewed the repairs history for the building and said there were no works that should have been carried out under any form of warranty. The landlord also clarified that the confirmed works to the windows was to address shrinkage to the window board and frame and that its contractors would be undertaking rectification works once they were carrying out internal works.
36. Therefore, the landlord has demonstrated it responded to all queries raised by the representative surrounding the service charges that, on the face of it look reasonable. It also followed up on the issues it said it would.

Complaint handling.

37. The landlord operates a two stage complaints process and its complaints policy states it will provide a stage one response within 10 working days and within 20 working days at stage two.
38. The representative requested to escalate his complaint to stage two of the landlord’s complaint process on 4 January 2021 and the landlord provided a response on 10 February 2021. Therefore, the landlord did not provide its stage two response within the timescale stated in its complaints policy however it acknowledged this in its final response, provided an explanation and offered the resident £50 in compensation in recognition of this. This reasonably resolves this failure in the service provided.

Determination (decision)

39. In accordance with paragraph 39 (g) of the Scheme, the complaint about the level of the service charge is outside the Ombudsman’s jurisdiction.
40. In accordance with paragraph 54 of the Scheme, there was no maladministration with respect to the landlord’s response to the resident’s queries about the service charge account.
41. In accordance with paragraph 55b of the Scheme, there was reasonable redress with respect to the landlord’s complaints handling.

Reasons

42. In its complaint responses, the landlord provided sufficiently detailed explanations for the basis of the charges and increases and also confirmed that the maintenance/ repair costs included in the service charge did not fall under any warranties in place.  Therefore, the landlord addressed the representative’s queries raised about the service charges during the complaint process, providing responses which on the face of it, were reasonable.
43. There was a minor delay by the landlord with its issue of its final response however as it informed the resident of this and explained the reason and then offered reasonable compensation for this, the landlord reasonably resolved the issue of delay when complaint handling.