Silva Homes Limited (202224990)

REPORT

COMPLAINT 202224990

Silva Homes Limited

10 November 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 the landlord’s handling of the resident’s queries about service charges.

Background

2. The resident is the leaseholder of a one bedroom flat, for which the landlord is the freeholder.
3. On 6 October 2022, the landlord emailed the resident with an invoice and breakdown of communal service charges for the property.
4. On 27 October 2022, the resident raised a stage 1 formal complaint to the landlord. He believed that charges for communal guttering work were unfair, and he did not understand why the charge for communal electricity had increased. He also felt that the landlord had not divided the electricity charge fairly between the different blocks at the property.
5. On 24 November 2022, the landlord sent its stage 1 formal complaint response to the resident. It explained how the service charges had been calculated, and attached costs incurred for maintenance and repair of communal guttering.
6. On 6 December 2022, the resident raised a stage 2 formal complaint to the landlord. He claimed that the contractor responsible for the guttering work had told him that the communal guttering work had taken them an hour, and that the landlord’s repairs team “must have made a mistake on costs”. He also complained that the landlord had not provided a breakdown of the costs he had requested and that it had blamed the increase in electricity charges on the cost of living, rather than changing supplier. The resident also mentioned being overcharged £18.90 for a fire risk assessment due to a flat not in his block being included, and requested a refund.
7. On 13 January 2023, the landlord issued its stage 2 complaint response to the resident. It stated that the works on the communal guttering were done by its own workforce and no invoice was available, but that the works had been costed to industry standard. However,  it noted that there had been an error in the way the charges for communal gutter clearing had been calculated, and adjusted them accordingly to reflect the recorded work. It confirmed that the resident’s service charge account would be adjusted to reflect the change and that he would not be charged for subsequent work to clear the drain. It also mentioned having a new external contractor to make future costs cheaper. Additionally, the landlord provided the resident with an explanation of how the service charges were calculated.
8. The resident remains dissatisfied with the landlord’s response to his complaint. He believes that the charge for communal guttering is too high and disagrees with the landlord’s explanation for the increase in electricity charges. He also feels that the fire risk assessment charge was applied incorrectly, resulting in an overcharge.

Assessment and findings

Scope of Investigation

9. In his complaint raised with the landlord and his correspondence with the Ombudsman, the resident mentioned that the service charges were too high, and not apportioned correctly. The Ombudsman understands the resident’s concerns about this. However, this part of his complaint is not something the Ombudsman can consider.
10. This is in line with paragraph 42 (f) of the Housing Ombudsman Scheme, which states that the Ombudsman may not consider complaints where the Ombudsman considers it quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, other tribunal or procedure. However, this Service can consider the actions the landlord took when the resident asked for information on how the service charges were calculated, and that is the focus of this report.

The landlord’s handling of the resident’s queries about service charges.

11. The landlord’s tenancy agreement states that the resident must pay the service charge on demand to the landlord. This is for service provisions that include electricity for common parts and the cleaning of common parts.
12. In its stage 1 complaint response to the resident, the landlord explained that communal bills for residents were apportioned via a calculation taking into account the floor area of each property in a given block or development. It also told the resident that it uses an industry standard calculation because it is not possible to divide and apportion communal utility bills according to individual usage. Additionally, it told the resident that electricity costs were increasing under all providers due to rising energy costs and the ‘cost-of-living’ crisis. It said that these factors were the reason for the increase in his service charge, and not the change in electricity provider.
13. In its stage 2 complaint response to the resident, the landlord enclosed 2 utility bills from its new supplier, along with a spreadsheet showing a breakdown of charges from its previous supplier. The bills showed what blocks the electricity was supplied to. Additionally, the landlord explained that the difference between the bill estimates and actual charges were because the estimates were based on usage during the previous year.
14. Also, it stated that because it changed supplier during the estimate period and the unit price increased by nearly two pence, the actual bill was higher than the estimated bill as a result. Finally, the landlord explained that the increase reflected the change in the utility market and how prices in fixed deals changed during the period it secured deals with its current and previous supplier. It pointed out that the majority of electricity with its new supplier had been used in the winter months, also explaining the increased cost.
15. With these explanations, and the information provided to the resident in both its stage 1 and stage 2 responses, the landlord demonstrated that the increased cost to the resident was not as a result of its change in electricity supplier.
16. For the fire risk assessment, in its stage 1 complaint response the landlord explained to the resident that the reason charges had been estimated and included in the service charge was because there had been numerous changes to fire risk assessment regulations in the past few years, which meant it was possible more frequent inspections would be required, impacting the cost as a result. It said that if its estimate was incorrect, the service charge statement would be amended accordingly.
17. In its stage 2 complaint response, the landlord reiterated this, and explained it was obliged to carry out a fire risk assessment every 2 years due to changes in the law. It told the resident that it was spreading the costs of those assessments over those 2 years to avoid one large cost being passed on to residents every 2 years.
18. Regarding how the costs were split between blocks, the landlord explained that one apartment had been included in his block to spread the cost evenly between 5 properties. It also told the resident that it was not always possible to apportion service charge calculations in an exact way, and that it was industry standard to apportion them in a way that was as fair as possible to all residents. By splitting the 10 properties at the block into 2 blocks of 5, the landlord explained it was splitting the costs fairly. This was a reasonable action for the landlord to take, and it explained this to the resident in detail in its complaint responses.
19. For the gutter clearance, in its stage 1 complaint response the landlord explained to the resident that guttering repairs carried out at the property on 16 February 2022 were to clear drainage issues that had been persisting. In addition, gutters at the front and back of the property were also cleared on the same day. Additionally, the landlord confirmed that on 12 August 2021, a job had been raised to inspect the brickwork. It provided the resident with the costs incurred for maintenance and repair of the communal area guttering with both these jobs included.
20. In its stage 2 complaint response, the landlord explained that because works on the guttering had been carried out by its own workforce, there was no invoice available, and works were costed according to an industry standard schedule of rates. However, it explained that it had reviewed the charges and found that some repairs had been costed incorrectly due to the original job being to resolve a drain issue as well as the guttering, which had been predicted to take a whole day.
21. Upon review, the landlord had found that only gutter clearance had been carried out, so it adjusted the charges for the job and reduced them to reflect the costs of the work that had been carried out. It explained that the resident’s service charge account would be adjusted to reflect the change, and he would not be charged for the subsequent drainage work that was scheduled previously. It apologised for the error, and told the resident it had put measures in place to review repair work going forward. It also explained that it had changed contractor since, to ensure a reduced cost. This was an appropriate explanation and response by the landlord.
22. The resident had told the landlord that he could arrange his own gutter clearance at a cheaper cost, and asked to apply for a Right to Manage to arrange this. The landlord explained that it would need agreement from all residents before changing contractor. When the resident asked for the other residents email addresses, the landlord said it could not provide them due to GDPR, and that he would need to contact  the residents himself. It also directed him to online guidance for the Right to Manage process. Again, this was an appropriate response by the landlord.
23. In summary, the landlord provided suitable information, explanations, and guidance to address the resident’s concerns.

Determination

24. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of the resident’s queries about service charges.