Southwark Council (202200348)

REPORT

COMPLAINT 202200348

Southwark Council

30 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

This complaint is about the landlord’s:
1. Response to the resident’s various concerns around service charges;
2. Complaint handling.

Background and summary of events

Background

The resident is a leaseholder. She acquired the lease in 1997 through Right to Buy. The lease agreement shows the property is a flat split over 2 floors of a block. It also shows the block is located in an estate. The freeholder is the resident’s local authority. A Tenant Management Organisation (TMO) runs the block on its behalf. The resident is elderly and has Leukaemia. In its case evidence, the landlord told us it was not aware she had any vulnerabilities.
The landlord is obliged to provide several services, which are set out in the lease documents. They include: estate lighting, maintaining gardens and cleaning communal areas. The resident is obliged to pay a portion of the landlord’s related costs through service charges. In 2004 a deed of rectification amended the lease agreement. It removed “maintenance of estate roads and paths” from the landlord’s services.
The landlord’s “Your Service Charge Explained” document (April 2021 to March 2022) provides further information. It shows the TMO assumed responsibility for calculating, billing and collecting service charges from April 2019. It also shows some blocks are not part of an estate. These “standalone” blocks do not have to contribute to wider estate services. Individual lease agreements will confirm whether a block is standalone or part of an estate.
The landlord operates a two stage complaints policy. Because it did not provide a policy document, the Ombudsman found a relevant document from our own records. The document, effective 1 March 2021, confirms the landlord responded to complaints within 15 working days at stage one. At stage two, it responded within 25 working days. Complaints were acknowledged within 3 working days at both stages. Online searching confirmed the landlord has since updated its timescales.

Summary of events

In late August 2021 a local councillor emailed the TMO on the resident’s behalf. They said they had received letters and emails from the resident about service charges. Further, she was disputing any estate related charges on the basis she did not live in an estate. They also said she reported contacting the TMO several times about the matter, but she had not received a response. The councillor asked the TMO to investigate.
The TMO replied on 6 September 2021. It said the parties previously communicated about the issue. However, it was willing to call either the councillor or the resident to discuss matters further. The TMO set out its legal position. It also quoted the 2004 deed of rectification. This suggests it previously considered the matter in detail. The main points were:
1. The lease agreement contained a definition of the estate. The agreement was consistent with the block’s other leases, and all leases across the estate. The TMO was obliged to honour this legal agreement.
2. Redefining the block as standalone would require an estate wide consultation. It would involve non-leaseholders assuming a larger share of the estate’s costs. This was both unprecedented and unlikely to succeed.
3. Redefinition would also present problems for the TMO. It would need to complete separate calculations and potentially write-off expenses. The TMO was self-financing. It felt wrong to reduce costs for homeowners at the expense of social-housing tenants.
4. The resident had provided her deed of rectification, which contained a limited amendment only. It did not mention the other estate service charges and there was no redefinition of the block as standalone.
5. The resident was not charged for estate repairs or associated management costs.
The resident emailed the TMO the next day. The email wording confirmed a recent call between the parties. She referenced a letter, from 8 August 2021, detailing her preferred outcome. The Ombudsman has not seen a copy of this letter. Nevertheless, she confirmed she wanted the lease agreement to be amended again. Her main points were:
1. When the resident bought the property, it looked on to a low rise block surrounded by grass. This part of the estate was subsequently sold off for development. Now the property had no privacy because it was overlooked by another block. The estate was no longer visible from the property.
2. Under the local authority’s billing arrangements, the resident was not charged estate related service charges. She should not be charged for services such as electricity and gardening when she did not benefit from them. The lease agreement should be altered to reflect the changes to the estate.
On 20 September 2021 the resident raised a formal complaint with the TMO. Her letter suggests the TMO previously referred her to Citizen’s Advice. She said the TMO also suggested she should apply for a deed of variation (from the wording of the resident’s complaint letter it was unclear when this suggestion was made). The letter developed the resident’s previous concerns. The key points were:
1. The property was on a street and the estate could no longer be seen due to the private development. The development also blocked light to the property. The resident had to shut her curtains because its occupants could see into her living room and bedroom.
2. For years, the resident received no benefit from the estate. In the meantime, there were unresolved issues in her own block. For example, entry doors had been out of order for weeks resulting in bikes being stolen from a shed.
3. This impacted the resident’s safety and her contents insurance premiums. The resident lived alone. Some years ago, she was severely injured after being attacked outside the block. The resident stated the landlord should fix the doors urgently.
4. Bird droppings were impacting the block’s appearance, which was now “horrible to look at”. The TMO should have asked the local authority to cut down trees outside the block. This would bring it in line with the private development. A previously installed deterrent device was “useless”.
5. The resident reiterated that she wanted a “proper” deed of variation, which removed references to estate electricity, cleaning and gardening from the lease agreement.
The resident asked the TMO escalate her complaint on 17 October 2021. This was around 20 working days after her complaint letter. She said it failed to acknowledge (or respond to) the complaint. Overall, she felt her service charges were disproportionate, especially since repairs were not carried out to the block. She said the TMO failed to respond to some repair issues, and related chasers, for more than a year. She referenced the doors and bird droppings.
The TMO responded formally on 22 November 2021. This was around 45 working days after the resident’s initial complaint. The response mirrored its reply to the councillor. It contained the same legal position and deed of rectification wording. It said an external contractor had repaired the block’s rear door and the matter was now resolved. Further, measures had been taken to clear the bird mess and “other alternatives” would be considered in the long term. Its wording shows the response included information supporting the TMO’s charges.
On 27 November 2021 the resident confirmed she was still unhappy. She said she should have been issued a more extensive deed of variation in 2004, but the local authority issued a deed of rectification in error. Further, though she noted the TMO’s comments, she was being charged for management and some repairs. She asked for details of the TMO’s cleaning schedule. Her other new points were:
1. The landlord’s supporting information was confusing. Its documents lacked dates but included flat numbers. The resident understood this was contrary to data protection requirements. Overall, it was “impossible” to tell whether she had been overcharged. In contrast, the local authority’s service charge information had been easy to interpret.
2. The resident was pleased the rear door had been fixed. However, there were quality issues with the repair since the door displayed a red light permanently. Leaseholders should not be charged for the “many” previous call-outs which failed to resolve the issue.
3. The TMO’s response to the bird mess was a disaster. The works looked “awful” and birds could still access the block. The block’s overgrown gardens were “a disgrace” in some parts.
4. If honouring the lease was paramount, the landlord should enforce its other requirements. For example, there were clauses around keeping plants on balconies and hanging washing out.
5. The resident’s block lighting charges had doubled. This had to be wrong since prices had not gone up and the resident already paid for estate lighting.
The resident wrote further letters the same day. Their wording suggests they were sent to the TMO’s directors. She confirmed her actions were a response to the private development, which had changed the estate’s character. She said she would not have bought the property if the development was in place in 1997. Her new points were:
1. The TMO’s previous comments around increasing costs for social-housing tenants were “rubbish”. Lots of tenants were better off anyway. Their rent and service charges were less and they paid less for major works.
2. Its information was also incorrect because the resident was paying 2 lots of management charges. She was currently contesting these charges with the TMO, which frequently issued confusing estimates and actuals information
3. The resident felt her lease agreement was invalid following the development and other alterations to the estate. Given her vulnerabilities, the resident was unable to discuss her concerns in person with the TMO.
The resident emailed the landlord on 20 January 2022. She reiterated her concerns and said she was unable to resolve matters through the TMO. On 4 February 2022, the TMO updated the landlord. It said it issued a holding response to the resident’s letters in December 2021. However, due to staff and resource shortages, it had been unable to complete its investigation. A partial response was attached to the TMO’s update. The TMO said it would respond to the outstanding issues in due course.
The TMO’s partial response was also dated 4 February 2022. It accepted there were delays in responding to the resident’s concerns. It apologised and echoed its explanation to the landlord. It said the resident’s complaint was at stage 3. It addressed the lease terms, estate services and the actual service charges for the year 2021-22. It said the TMO would respond to the resident’s outstanding concerns in due course. The main points were:
1. Having checked the resident’s invoice for 2019-20, there were no charges for any estate repairs. The block benefited from the landlord’s services which were charged in accordance with the lease.
2. Estate cleaning comprised: daily litter picking in grounds and shrub areas, minimum weekly sweeping of car parks, regular clearing of leaves, minimum monthly emptying of dog bins, annual jet washing and graffiti removal as required. There were 2 cleaners dedicated to the estate and, on average, they spent around 20 hours cleaning per week.
3. Gardening activities included grass cutting, pruning and weeding. The TMO recorded these works in weekly timesheets. Trees the resident referenced were the local authority’s responsibility. Estate lighting comprised a daily electricity charge and repairs on a responsive basis.
4. In the year 2020-21, the resident’s total estate charges were £186.87. The TMO deemed this amount reasonable. Whilst the view from the property may have changed, the lease agreement’s definition of the estate had not. Nor had the services provided.
5. The TMO did not have the authority to vary the resident’s lease. Nevertheless, it would strongly object to any further variation through the landlord. The resident benefitted from the services charged and administrating these charges was already complex.
The TMO issued a further response on 8 February 2022. This was around 48 working days after the resident confirmed she was still unhappy. It again apologised for the delay. The response addressed: layout of work order breakdowns, block lighting increase, estate management charge, service charge documentation and bird mess hazard. It included a detailed overview of the TMO’s service charge documentation and its timing. In the event she disagreed, the resident was advised to seek legal advice and notify the landlord. The main points were:
1. The TMO agreed the work order breakdowns were “poor and not customer friendly”. It would provide internal training around formatting to ensure the information was better presented in future.
2. A breakdown of the resident’s chargeable repair services for 2020-21 was enclosed. The works were in date order and sensitive information had been removed. A summary had been provided to help the resident match previous documents.
3. Having investigated door entry works over the previous year, the TMO was unable to find any duplications or false call outs to warrant a service charge reduction.
4. For comparative purposes, it had provided the resident block lighting costs for 2019-20. With the exception of 2 duplicated jobs, all 2020-21 charges were found to be valid and rechargeable to leaseholders.
5. As a result of the resident’s enquiries, the TMO had found another invalid charge under responsive repairs to the block. Having recalculated the service charges accordingly, a credit of £12.52 had been placed on the resident’s account. A credit note and account statement were enclosed.
6. The resident was charged for estate management because she received some estate services. She was not charged the full proportion because she was not charged for estate repairs. This could be confirmed from an October 2021 actuals invoice. The situation was due to the deed of rectification, which removed charges for estate roads and paths.
7. The TMO appreciated its calculation and invoicing documents could be confusing. It had arranged for a covering letter explaining any exceptions to be sent with its documentation.
8. The TMO tried to ensure its service charge documentation was written in understandable language. However, much of its content was dictated by legal requirements. Its “mail out” was modelled on the landlord’s previous version. However, the TMO did not benefit from the landlord’s scale. As a result, it needed to provide a cost-effective service.
9. Bird nesting and fouling had been an issue for residents and the TMO alike. Residents previously voted against the TMO’s recommendation to install netting to the entire block. Currently, patch cleaning was undertaken to bird droppings multiple times per week. In addition, deep cleaning had been completed several times.
10. The TMO was happy to explore alternative solutions. However, it was presently unsure of the best solution. The resident was encouraged to engage with the TMO’s local representative to ensure her views were reflected in any proposals.
On 17 February 2022 the landlord updated the TMO. It said the resident had escalated her complaint to the landlord. The Ombudsman has not seen the resident’s corresponding escalation request. However, the update said she reported that leaves were not swept regularly, and garage lighting had been faulty for 2 years. Further, a deed of variation application was outstanding. The landlord asked the TMO to respond to each of these points.
The TMO responded in detail on 21 February 2022. It said the resident had not previously raised her concerns around leaves or garage lighting. As a result, these matters should not technically form part of the landlord’s investigation. However, it was appropriate for the TMO to answer the resident’s questions. The TMO said a cleaning schedule relating to leaf clearing was attached. Further, this was used to calculate its service charges. The main points were:
1. Leaves were cleared daily by the TMO’s cleaning and grounds staff. The resident should refer to the First Tier Tribunal (Property Chamber) if she felt the landlord’s charges were unreasonable. Alternatively, she should supply supporting evidence if she felt chargeable services were not being provided.
2. The TMO would investigate the resident’s concerns around garage lighting and respond to her directly.
3. The resident’s argument, that she no longer benefitted from estate services due to changes in the area, was unlikely to succeed in court. The TMO felt this was why she wanted the lease to be changed. She had been advised such changes were not the TMO’s remit and it would oppose them. A variation would leave the remaining tenants at a financial loss.
The landlord issued a stage 2 response on 22 March 2022. The timeline suggests this was around 23 working days after the resident’s complaint to the landlord. It addressed unswept leaves and defective lights in communal areas, along with the resident’s request for a deed of variation. The complaint was partially upheld. The response wording suggests the landlord’s decision reflected a confirmed lighting fault. The main points were:
1. The TMO disputed the resident’s assertion that leaves were not being cleared. Instead, it advised the leaves were cleared daily and it provided a cleaning schedule to support its position. In contrast, the resident had not provided any supporting images.
2. Having been asked to investigate, the TMO identified a fault in an electrical cupboard serving the garages. An external contractor had been instructed to rectify the issue. The resident should notify the TMO if the repairs were not complete by 31 March 2022.
3. Any variation/rectification of the lease agreement was beyond the TMO’s remit. However, given it calculated the service charges and was self-financing, the TMO would oppose such an application.
4. The resident would need to show that the estate definitions in the original lease were flawed when she bought the property. Any claim that she no longer benefited from estate services was open to legal challenge.
5. The resident’s preferred outcome would result in tenants subsidising leaseholders. She should obtain legal advice if she wanted to pursue this option.
The resident updated the Ombudsman on 6 April 2022. In addition to restating her previous concerns, she said she wanted to confirm whether the lease agreement was still legally valid. With reference to daily litter picking and weekly sweeping of car parks, she disputed the TMO’s cleaning schedule information. She also said she was given incorrect information around raising a complaint. Her subsequent interactions with the Ombudsman, from July 2022, suggest the landlord was not responsible for the incorrect information.
In an email update on 11 April 2022, the TMO told the landlord its electrical contractor resolved an issue with the block’s garage lights on 8 April 2022. Within days, the landlord notified the TMO that the resident had reported the lights were constantly on. The TMO replied this new issue was not part of the resident’s stage 2 complaint. Further, it would respond directly to the resident in due course.
On 20 June 2022 the TMO told the resident an incorrect sensor had been installed during the light works in April 2022. It said its finance team would ensure the time taken to repair the faulty lights was considered when calculating the service charges. Further, the resident would not be charged for the lights during this time.
In an email to the Ombudsman on 16 July 2022, the resident said Citizen’s Advice had given her incorrect information about the complaints process. She later reiterated this information during a phone call with this Service.
The resident emailed the Ombudsman again on 22 August 2022. She said there had been an improvement in the TMO’s services until recently. She reported providing the TMO with images of cleaning quality issues. She said it attended her report the following day. She referenced bird droppings, overgrown plants, litter, and a tree that should have been cut down. She reiterated she objected to paying for the estate given these issues.
The resident updated the Ombudsman during a phone call on 24 October 2023. She reiterated that the deed of rectification had been issued incorrectly, she received little benefit from the TMO’s services and her service charges were disproportionate given the quality of the services provided. Her key points were:
1. The resident “lost” her complaint with the landlord because she was unable to provide supporting images. She now took photographs to evidence new issues.
2. She recently visited the estate for the first time in years. In contrast to the block, it was in a “beautiful” condition. This disparity was unfair.
3. Wiring installed in 2022 had made a significant improvement to the block’s bird mess issues. Further deterrent measures may be included in upcoming major works.
4. There were current issues with the block’s lighting, which had been on constantly for the last few weeks. Cleaning standards has also deteriorated having recently improved.

Assessment and findings

It is recognised the situation is frustrating for the resident. The timeline shows she has multiple concerns about the landlord’s service charges. Where the Ombudsman’s finds failure on a landlord’s part, we can consider the resulting distress and inconvenience.
The scope of this assessment is limited to the issues raised during the resident’s formal complaint, which is broadly reflected in the timeline above. This is because the landlord/TMO need to be given a fair opportunity to investigate and respond to any issues accordingly, prior to the Ombudsman’s involvement. Recent lighting and cleaning issues are therefore out of scope.
In this case, the TMO is the landlord’s agent, and the landlord is ultimately responsible for the TMO’s actions. On that basis, for readability, the below assessment will mostly refer to “the landlord”. The TMO will be used where the distinction is key to the assessment/findings.

The landlord’s response to the resident’s various concerns around service charges

The Ombudsman is unable to determine whether service charges are reasonable or payable. Complaints of this type are better suited to the First Tier Tribunal (Property Chamber), which can decide these matters. We can consider the landlord’s administration of service charges. This includes its response to the resident’s complaint, and its provision of the services charged. If she wants to contest the validity of her lease agreement, the resident should seek legal advice.
Overall, the timeline confirms the landlord responded appropriately to the resident’s service charge concerns. For example, with reference to the deed of rectification, it detailed its legal position clearly at an early stage of the timeline. The evidence suggests the resident was subsequently referred to Citizen’s Advice having disagreed on legal grounds. Given the circumstances, these were appropriate and reasonable actions respectively. When the complaint developed, the landlord engaged with the resident’s new concerns appropriately.
For example, the timeline suggests it responded promptly to her initial door entry and bird mess concerns. Further, it subsequently: supplied the resident with additional service charge information, including a summary and schedule; agreed to provide training to improve the quality of its service charge documentation and include cover letters going forwards; recalculated the resident’s charges and issued a credit. Again, these were appropriate actions given the circumstances.
In contrast, no information was seen to undermine the position detailed in the landlord’s complaint responses. The Ombudsman reviewed evidence including repair records, cleaning schedules and service charge documents as part of our investigation. That said, the landlord’s final response could have been clearer about the upheld aspect of the resident’s complaint. This will be considered further in the complaint handling section below. Ultimately, no information was seen to show the resident was adversely impacted by a long-term garage lighting fault.
Given the above, there was no maladministration by the landlord in respect of this complaint point. Whilst a record keeping issue relating to the resident’s vulnerabilities was noted, there was no indication of any related failures on the landlord’s part. The Ombudsman will make a recommendation to address the matter accordingly. Though the resident’s preferred outcome was noted, we cannot compel the landlord to vary the lease agreement. This is a legal matter.

The landlord’s complaint handling

The timeline points to issues with the landlord’s complaint handling. For example, it shows the TMO failed to acknowledge or respond to the resident’s initial complaint in September 2021. Further, this prompted her to chase it for a response. It is reasonable to conclude this was unnecessary and inconvenient for the resident. The timeline also shows there were combined complaint handling delays of around 53 working days (approximately 2 months). Based on the landlord’s responses, it failed to recognise the full extent of these failures.
For clarity, the Ombudsman considers an apology sufficient to address a delay of a few days. Given the overall duration of the above identified delays, compensation would have been appropriate to put things right for the resident. The landlord is encouraged to consider its own complaint handling, from the beginning of the complaint journey, during every complaint investigation. This should enable the landlord to identify and redress complaint handling delays and other procedural issues accordingly.
It was also noted there was some confusion around complaint stages. For example, in February 2022 the TMO said the resident’s complaint was at stage 3. In contrast, the timeline suggests it should have been at stage 2 at this point. This is because the TMO’s only previous complaint response was on 22 November 2021. Further, councillor enquiries are a separate process for most landlords. Nevertheless, given the landlord’s own response on 22 March 2022, the timeline shows the complaint was ultimately subjected to 3 different stages.
In contrast, the landlord’s complaints policy comprises 2 stages only. For clarity, the Ombudsman considers a third complaint stage unnecessary. Our March 2022 Spotlight on: Landlords’ engagement with private freeholders and managing agents report confirms managing agents should provide the first formal response and the landlord should complete the review stage if the resident remains dissatisfied. It was noted this report was issued around the same time as the landlord’s final response. Whilst the report did not cover TMO’s, its simplified approach could benefit the landlord’s residents.
As mentioned, the landlord’s own response lacked clarity. It failed to engage with the resident’s comments about the duration of the garage lighting fault. On that basis, it was unclear whether the landlord agreed the fault had been ongoing for around 2 years. If it did, the landlord should have reasonably done more to investigate the resulting impact to the resident. Further, compensation may have been appropriate. However, the brief response wording suggests the complaint was partially upheld on the basis a fault was found.
From the information seen, the Ombudsman was unable to confirm the duration of the fault. Nor was there any evidence of an adverse impact to the resident. However, section 3.15 of the Housing Ombudsman’s Complaint Handling Code, as published in July 2020 said, “Landlords shall address all points raised in the complaint and provide clear reasons for any decisions…”. Section 5.2 said, “Landlord’s should acknowledge and apologise for any failure identified, give an explanation, and, where possible, inform the resident of the changes made or actions taken to prevent the issue from happening again”.
Given the above, it is reasonable to conclude the landlord’s response failed to meet the requirements of the Code. Overall, the above identified delays and failures confirm there was maladministration in respect of the landlord’s complaint handling. As a result, the Ombudsman will order proportionate compensation to put things right for the resident based on the information seen.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was:
1. Maladministration in respect of the landlord’s complaint handling.
2. No maladministration in respect of the landlord’s response to the resident’s various concerns about service charges.

Reasons

The landlord detailed its legal position clearly at an early stage of the timeline. As the complaint developed, it engaged with the resident’s new complaint points and took appropriate action. No information was seen to undermine the position detailed in the landlord’s complaint responses.
The landlord failed to recognise the full extent of its complaint handling delays and failures. Its apology was not sufficient to put things right for the resident. Its final response lacked clarity in relation to the complaint outcome. The evidence suggests the response failed to meet the Code’s requirements.

Orders and recommendations

Orders

The Ombudsman orders the landlord to pay the resident £100 in compensation within 4 weeks. Compensation should be paid directly to the resident and not offset against any arrears. The compensation is to address any distress and inconvenience the resident was caused by the above identified complaint handling delays and failures.
The landlord to share the report’s complaint handling findings with its relevant staff, including the TMO, for learning and improvement purposes. Within 4 weeks, the landlord should share a copy of its relevant internal communication with the Ombudsman.

Recommendations

The landlord to ensure its primary records accurately reflect the resident’s vulnerabilities. This is to ensure they are considered accordingly during the landlord’s interactions with her. The landlord may need to contact the resident beforehand to clarify the correct details.
The landlord should provide evidence of compliance with the above order and confirm its intentions with regards to the recommendation within 4 weeks.