Stonewater Limited (202126401)

REPORT

COMPLAINT 202126401

Stonewater Limited

19 December 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

The complaint is about the landlord’s response to the resident’s:
1. Concerns of administration and calculation of service charge actuals and monitoring of the quality of works.
2. Concerns of reasonableness of services charges for the services provided, increase of service charges, and lease variations.
3. Request to be refunded for service charges.
4. The landlord’s communication and complaint handling.
5. The landlord’s knowledge and information management.

Jurisdiction

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Scheme. When a complaint is brought to this service, the Ombudsman must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.
In the course of the complaint, the resident raised the following issues related to the consultation process, lease variations or reasonableness of the service charges and the works performed on the estate:
1. The cost of the guttering cleaning and their parts replacement per metre.
2. The increase in the insurance costs and the overall increase in the reserve fund contributions following a stock survey.
3. The reasonableness of the works to the emergency lighting and the lack of consultation.
4. The share of the communal electricity cost.
5. The request for removal of the warden “call out” service.
6. Health and safety costs and fire safety costs.
7. Request for a refund in relation to provisions of services during the pandemic in 2020/2021, refund of the expenses for a stock survey and refund of the management fee.
In accordance with paragraph 42 (d) this Service cannot investigate complaints which concern the level of rent or service charge or the amount of the rent or service charge increase.
This Service has noted that the residents had raised concerns related to numerous issues, including the ones mentioned above. Overall, the above related to the reasonableness of the level of the service charges for the works performed or their increase. In order to action some of the above, the landlord was required to perform consultation for a potential variation of the lease.
Unlike a court, this Service cannot determine the reasonableness of service charges or legally order a landlord to refund historic service charges. Such matters are usually best decided by the First Tier Tribunal (FTT) Property Chamber. The FTT could potentially make a legally binding decision about the service charge liability, level and legality. Additionally, any variations to the lease are a legal matter and the Ombudsman does not have any expertise to take a decision on changes of the lease.
Whilst this Service is unable to decide on the matters above, the Ombudsman has investigated the residents’ concerns related to possible calculation errors and administration of the service charges. The Ombudsman has also considered whether the landlord’s explanation into the queries, its complaints handling, and communication were reasonable and appropriate.

Background and summary of events

This complaint was submitted to the landlord and the Housing Ombudsman as a group complaint including 11 households who are leaseholders of the landlord within the same group of building. The initial complaint was raised by the lead resident on behalf of 14 leaseholders. The buildings involved are four blocks with four storeys, each of which contains 16 households with mixture of leasehold and rented properties of the landlord. The leaseholders’ flats are for people aged 55, and under that scheme there are 16 households in the estate. During the course of the complaint, the landlord re-named the position of the property manager (PM) to retirement living manager (RLM).
This Service has seen the lease of the lead resident in this complaint. The lease sets out the contract between the parties. The landlord is obligated to maintain the common parts of the estate. The resident is obligated to pay a proportion of the service charge, including costs reasonably incurred by the landlord in respect of the maintenance and services it provides for the common parts of the building. The service charge is variable, and the leaseholder is asked to pay towards estimated costs, for which excesses or deficits are consolidated every year.
As per the lease, the service charges shall make provision for the following expenditure in respect of the property:
1. The cost and expense of maintenance of the structure and common parts of the property and reasonable provision for a reserve against expenditure on maintenance and repairs and replacements.
2. The expense of lighting the area used in common by the leaseholder and other leaseholders and the landlord.
3. The cost of maintenance, repair, replacement and renewal of the alarm system and charges made by the central control facility.
4. The cost of maintenance, repair, replacement and renewal of the communal television aerial.
5. Expense of insurance, auditors fee.
6. Equitable proportion of the cost of maintenance and repair of the private road and car park spaces.
7. The cost of management.
It is not disputed that the lead complainant’s lease reflects the covenants and service charge delivery obligations of the other group complainants.
The landlord’s service charge policy states:
1. The landlord will regularly monitor contractor and service provider performance, and their compliance with agreed specifications including health and safety and environmental standards the extra cost of which it will seek to recover through the service charge process.
2. The landlord will take prompt action where a contractor or service provider fails to perform to the contract standards.
3. The landlord will involve residents in the monitoring of service standards and collecting information from them as to their satisfaction with the services provided.
4. The landlord will provide clear, easily understood information about the services delivered.
The residents received a service charge statement for the period 2019/2020 in June 2020. Due to the pandemic, the landlord did not organise its annual service charge meeting with the residents, and they emailed their concerns about the service charges in June 2020. This service had not seen the original email containing their concerns. The residents chased a response in July and August 2020.
On 10 August 2020, the landlord wrote in response to the residents’ concerns and said:
1. It acknowledged the residents’ letter of 16 July 2020, sent on behalf of 14 leaseholds and the comments about the lack of the usual service charge meeting. However, it could not undertake a meeting until the risk of Coronavirus was reduced. Communal repairs should be reported to its customer service in the meantime.
2. Regardless of who reports the repair, the responsibility to contribute collectively to the cost was embedded as part of the lease.
3. It provided an explanation as to the different “vouchers” raised by the residents and their charges as follows:
  1. Voucher number 2598241 for £310.09 had been removed from the service charges. No explanation was given as to why it was initially included.
  2. Voucher 2618529 (main switch), cost £470.80 had been removed from accounts as the landlord had not been able to confirm the works had been for communal electricity or for its rented properties.
  3. It had removed the last of the three vouchers for works to the locks as there had been less than 3 months since the previous works.
  4. The landlord could not link the downpipe voucher and repair with the leasehold block and as such it had removed the charge.
  5. The drains were underlinked for the whole estate. The landlord requested the charges to be changed to reflect the proportion payable by leaseholders. It confirmed that leaseholders should contribute proportionately for both visits of the drainage contractors.
  6. It confirmed the cost of maintenance had been the proportionate cost for leaseholders.
  7. The vouchers for the guttering were multiple as they related to different jobs at different parts of the building and had been raised by different residents. It explained that one of the vouchers was for 31 meters of guttering clearance. The wording of the reported issues was the wording the landlord had used to describe the orders. The landlord had not been the one to assess what works were necessary, but its contractors had done so. As such, respective orders had been raised to resolve the issues reported.
  8. It clarified which flats the communal electricity bill was for and the charge for the TV system, which had been applied after 2 callouts.
  9. It identified issues with the communal lighting vouchers where two separate residents reported the same fault, but two invoices were donated. As such voucher 2615710 was removed for the charges.
  10. Emergency lighting had been included at £570.82 per block as a consequence of fire risk assessment carried out by the landlord. The remaining costs were for the monthly checking and testing of the emergency lighting in all 4 blocks.
4. With regards to the reserve fund the landlord stated that the stock condition survey fee had been paid through the reserve as per the preference for residents of other schemes. The alternative would be for it to be paid through monthly charges – a sum of £110 for each leaseholder. The stock condition survey had identified that higher maintenance costs were expected over the next ten years and more. As such, the existing contribution from all the leaseholders of £1760 per year was not sufficient. The proposal, it had sent in June 2020 to increase the reserve contribution from £1760 to £4000 was due to predicted figures for major works. However, this was difficult to estimate and in light of the residents’ comments, the landlord could reduce this figure for 2020/2021 from £4000 to £3000.
5. With regards to the health and safety issues raised by the residents for pest control, it confirmed the existing contract and that the residents could report any issues to it.
6. The grounds maintenance contractor had their own issues due to the pandemic but had now resumed services with grass maintenance.
On 21 August 2020, the residents wrote further to the landlord dissatisfied that some of the points raised had not been addressed. They stated:
1. The landlord had been unable to identify whether a leaseholder or a tenant had reported the jobs for the main switch and the downpipe. Hence it had removed them.
2. In relation to the drain issue, the resident raised concerns that there seemed to be a regular issue with the proportional payments between the leaseholders and the tenants when calculating the actual charges. This had been previously raised and the residents were concerned that if they did not query this every time the landlord would charge them for something that did not relate to them and their services.
3. The residents had become aware that the voucher number 259841 had been for gas works carried out on the rented flats and houses. As such, they were concerned how the landlord was going to prevent leaseholders being billed for works carried out to the tenants in future as this had been happening every year.
4. The guttering issues had been ongoing a number of years and had remained unresolved after the works in question. There were no details on the invoice as to which parts had been replaced or cleaned. The residents asked for evidence the landlord had checked the quality of the works or proof that the guttering had been resolved after the contractor’s work. Additionally, the residents had checked the price for guttering clearance online and it was very different from the price they had been charged by the landlord – a 3m length of black plastic guttering costed £13.65 in a building materials shop; however, the landlord was charging £70.14 for cleaning such guttering. (As this related to the reasonableness of charges, this Service will not comment on this).
5. With regards to communal lighting, the correct voucher to be removed was not 2615710. The voucher that should be removed is one of the two vouchers with the same price as the same job had been reported by two different residents. As such £52.70 should be removed rather than £25.55.
6. There were two vouchers for the blocked drains and the reason was because the drains had not been cleared on the first visit. The residents questioned why they were charged twice for a job that had not been completed correctly in the first instance.
7. With regards to the locks and removing the voucher for jobs performed in less than a 3-month period, the residents asked if the landlord meant that the guarantee of works was for 3 months only.
8. The landlord had not responded to the communal electricity question and particularly why the costs were shared. The lighting in one of the stair wells was permanently on following works for emergency lighting and this was affecting the electricity bills of the residents. The residents also queried who was paying for the 2 stairwells lights that the landlord was not paying for. Additionally, the residents raised issues with the landlord referring in its response to a block that did not exist in the estate.
9. There were 2 TV ariels. They asked why residents who were connected to number 1 would pay for faults to number 2.
10. With regards to the explanation of the fire safety costs related to emergency lighting, the residents asked whether the landlord only consulted them when there was a statutory requirement.
11. The residents requested further clarification with regards the stock condition survey of the reserved fund, which was priced at £1,093. When this was divided by 16 leasehold properties, this fee was £68.32 each, but the landlord stated it would be £110.
12. The residents had received in the past the service charges early enough to pay them over a 10-month period. They would like this practice to be reinstated.
In September 2020 the residents sent the landlord some original documents about health and safety in the post (this Service has not seen them), which were marked as delivered on 9 September 2020. However, in October 2020, the PM changed, and the new manager stated that the documents had not been received. On 10 November 2020 the landlord sent another letter to the residents. It stated:
1. The delays in responding were due to the change of the PM. The new manager would try to provide a more consistent service. It acknowledged the resident’s frustration in relation to its service charge handling.
2. The previous property manager had fully addressed many of the points. The landlord had provided correct information in relation to the vouchers and their removal, including the communal lighting.
3. With regards to the drains, a second visit was required as this had been a different job.
4. With regards to the locks, the warranty time on each job would vary depending on the work carried out. If parts were to be found to be faulty within their guarantee period, they would be replaced depending on the product type and manufacturer.
5. It acknowledged the residents’ frustration with regards to the proportioning of service charges and said this would be further discussed at the service charges meetings. It apologised for the inconvenience the errors had caused and committed to ensure that it would avoid such situations in future.
6. The communal electricity bill related to two blocks and was something that the PM could contact the energy supplier about for any ongoing charges and further clarification.
7. All leaseholders were responsible equally for repairs to the TV system so charges had been split accordingly.
8. With regards to the guttering vouchers, the 5 invoices related to two separate parts of the scheme as explained previously. The clearing of the guttering would be done twice per year and the residents would not be asked before instruction unless they reported an issue. For works up to £1000 the property managers would provide authorisation, any works over this amount would be authorised by the maintenance surveyor. The cost for replacement of the guttering which was referred as better value by the residents was not including labour or the downpipes and clips, which would be necessary for the guttering replacement.
9. The charge of £110 per resident for the reserve fund survey was incorrect. It confirmed, the correct charge increases if paid across the year would have been £68.32. This charge had been taken from the reserve fund in order to avoid increasing of the annual service charges.
10. The length of time given for the service charge payment depends on how fast the final invoices are processed and service charges calculated. This would usually leave 8-10 months. However, due to the pandemic there had been no meeting. This slowed down the process which involved a 30-day consultation period. It would endeavour to get the payment period back to 10 months in future.
Following exchange of a few emails between the landlord and the residents in relation to the misplaced documents the residents wrote to the landlord on 23 November 2020. They said:
1. They had sent an email on 23 August 2020 but did not get a response until 10 October 2020. They had sent an email about the posted documents on 12 September 2020, but the landlord did not respond until 10 November 2020 stating that the documents had been lost. The whole experience had been “time consuming and frustrating”, given the landlord had signed for receipt of the posted documents.
2. The removal of the vouchers did not solve the main problem of why the issues had occurred. The landlord had not offered a solution related to extra checks or an improved system as the current one was not “fit for purpose”.
3. They again raised the issues related to the vouchers for the guttering works and particularly who had recommended them. They also asked whether the maintenance surveyor had checked their quality and had obtained proof from the contractors that the ongoing issues would be resolved.
4. They were not satisfied with the cost of clearing the gutters not the landlord’s explanation that the gutters had been cleared twice. They said that if the cost for one clearing of 31m of guttering for one block was £752.25, then for 4 blocks twice per year would be £6018. This would put up the current year’s repairs and maintenance summary from £2675.93 to £8675.90. As such, the residents considered there to be an error in the calculation.
5. The communal light fittings incorporated the emergency lights, and the sensors meant they were always on. They asked for the landlord to replace them with ones which switched off when the stairwell was empty. The residents’ understanding was that the landlord had charged them for replacing the switches with sensors once and then had charged them again to replace the sensors with switches.
6. They had resent the health and safety documents.
The residents sent copies of the requested health and safety documents and had further correspondence with the landlord which this Service has not seen due to gaps in the evidence available to this investigation. On 9 March 2021, the residents acknowledged the landlord’s correspondence from 18 February 2021, which this Service has not seen. The residents said:
1. They were not satisfied with the health and safety response related to the pest control contractor’s handling of the rodent infestation. They requested documents from the landlord to explain why the contractor believed that permanent baiting would resolve the issues. With regards to the squirrel infestation, they asked what the 6 visits of the contractors had entailed.
2. They questioned why the stock survey had been performed by an outsourced company when the landlord had its own surveyors. They asked for a copy of the original stock survey report and information of how the reserve fund would be affected and how long the increase would be for.
3. Further clarification to the consumer units was required and explanation as to which flats had consumer units.
4. Additionally, the landlord had quoted the lease on a few occasions, which was referring to common parts. However, the landlord used in its explanation communal areas instead of common parts. The residents were unsure of what these terms meant.
5. They had sent an email on 2 December 2020 (this Service has not seen it) which had not been responded to. This was in relation to previously mentioned vouchers related to the stairwell. The residents had requested an explanation as to why the landlord had installed emergency lighting in the stairwell when there had been no legal obligation to do so and why it had not consulted the residents. The leaseholders did not want to pay those charges and considered the lease “not good enough”.
6. They should be provided with an explanation as to why the current parking system was not working and the residents that had misused the parking should be contacted.
7. With regards to the ground maintenance works, they wanted further clarification on the Section 20 process and the landlord’s obligation in terms of the assessment, quality and monitoring of the works.
A formal complaint was raised on 7 May 2021 in a telephone conversation. The landlord’s records of the lead resident’s call confirmed that he was raising the issues on behalf of the leaseholders referring to the email of 9 March 2021. The landlord acknowledged the complaint and said it would respond by 21 May 2021. It issued its stage 1 response on 24 May 2021. It said:
1. It apologised for the lack of response and the communication issues. It had discussed those issues with its retirement living manager (RLM). The queries for the charges from July 2020 had been dealt with by several members of staff until it was picked up by the current RLM. The delays had also been due to changes in the roles and responsibilities, which had had an impact on the communication. The landlord would acknowledge any queries in future even though it might be unable to provide an immediate response.
2. The pest infestation contract included prevention of pests. There was no permanent baiting, and the activity was monitored monthly for rodents and bi-monthly for squirrels. There were 10 external non-toxic baits stations to prevent the rodents from entering the scheme.
3. The pest contract covered not only monitoring and prevention, but the additional visits should they have been required due to an issue occurring.
4. In further investigation it had identified that a squirrel trap was located above the rented properties rather than the leaseholds. As such credit would be added for previous years’ visits for which it had already charged. As service charges notices had been already issued for this year, the residents would be notified in writing at the end of the consultation period for those credits.
5. With regards to the stock condition survey, the surveyor had to be independent. It provided a copy for the residents.
6. The report only covered the leasehold properties and costs were applied for those. Any major works costs would be estimated and a full consultation process under Section 20 would be followed if the price dictated so.
7. Contributions to the fund had increased as a result of the survey due to identified larger works required. As such the contributions had been set out at £3,000 per annum. However, this would be reassessed depending on works required.
8. It looked further into 2 invoices raised in June 2020 about the emergency lighting where the issue was not rectified following one visit of a contractor and stated it would remove the charge for the second visit at the end of the consultation period.
9. It provided clarification of the word “common” and stated that under the terms of the lease, charges were issued between all the residents for the stairwell. If the residents were not satisfied with how the charges were split, it should undertake a Section 37 process for any variation of the lease and the costs would be covered by the residents. The landlord could bring the costs to the next meeting, but this was not common practice for communal lighting charges.
10. The Section 20 process was the legal process of consultation to enter a long-term contract for cost over £100 for property per annum and for major works over £250 per property.
11. There were no issues with the maintenance contractors. However, if the residents found any issues, they could report it to the landlord.
12. As soon as the pandemic guidance changed, the landlord would be able to resume the monthly visits and service charge meetings.
In June 2021, the residents discussed with the landlord ongoing issues with the grass cutter and grass not being collected. The residents also requested the “call out” warden service to be removed. The residents had a meeting with the landlord, however, this Service has not seen any details of it. The residents also wrote to the landlord about the 2020/2021 service charges as per their previous emails of 23 November 2020 and 9 March 2021. They reiterated the previous concerns and added concerns regarding:
1. increase into the insurance contribution;
2. refund for not receiving services during the pandemic;
3. breakdown of management charges as no management visits had been performed.
In an email of 22 July 2021, the residents escalated their complaint. The landlord acknowledged this on 9 August 2021, and issued its stage 2 response on 27 August 2021. It said:
1. It had taken the resident’s complaint seriously. It acknowledged its communication had been slow due to the changes in the service charge responsibilities. It would aim to acknowledge correspondence even when an update was currently unavailable.
2. It was confident that it had responded in detail to the issues raised at stage 1 and in the subsequent correspondence. The landlord provided the stock survey and the explanation for the pest control.
3. The RLM had investigated the issues with the pest control charges for rented properties and arranged for a credit into the accounts due to the error.
4. The landlord was satisfied that a detailed response and reassurance had been provided that it was working hard to resolve the communication issue.
5. If the residents were not satisfied with the information provided and had further evidence, they could contact it by 9 September 2021 for further review as part of the stage 2 investigation. Otherwise, the landlord would consider the complaint as closed.
Following further correspondence between the landlord and the residents, the landlord sent a letter about the vote for the warden service. This Service has not seen this letter.
On 1 February 2022, this Service contacted the landlord to chase a further response to the resident’s queries related to their concerns of no consultation for the sensor emergency lights and their subsequent change back switches, which increased the service charges and the electric bills. The landlord acknowledged the complaint on 8 February 2022 and issued a response on 9 March 2022. It stated:
1. The emergency lighting had been introduced after fire risk assessment recommendations.
2. There had been no need for consultation as the cost per property was less than £250. The costs had been £171.25 per property whereas this could have been £273 had the residents been consulted.
3. As the sensors were very sensitive and the emergency lighting had to stay, the only alternative to stop the lights staying on had been for switches to be introduced. This enabled the residents to switch off lights when they were not required.
4. The share of the electricity charges was covered in the lease and as such if the residents wanted this changed, a variation to the lease would be required.
The residents escalated their complaint. This Service has not seen the escalation request, however, the landlord acknowledged the escalation on 29 March 2022, and issued another stage 2 response on 12 April 2022. It said:
1. It reiterated its position from stage 1 and added that it was a legal requirement to follow risk assessment recommendations. Following the residents’ feedback about the energy costs increase due to the lights remaining on, it had fitted switches to the new sensor lights.
2. The landlord would check how it had charged the residents for the switches and would update the residents by 20 April 2022.
On 14 April 2022, the landlord further clarified that no costs were transferred to the residents for fitting the switches. It said that this had been performed under the contract from its suppliers.
The residents contacted the landlord to ask further questions about the lack of consultation for the emergency lightning and the decision for the fitting to be incorporated in the communal lighting rather than fitted separately. They were dissatisfied that there were many communal stairwells where the lightings worked with sensor, but their landlord “only got it so badly wrong” that switches had to be introduced to turn off the lights.
In further correspondence, the residents continued to ask questions about the lack of service charge meetings, the monitoring of the parking permits contract and the communal electricity issue. The residents brought the complaint to the Housing Ombudsman in August 2022, they were dissatisfied with the “lack of accountability for the money the landlord spent on the residents’ behalf”. The residents also wanted the cost for the survey report to be refunded as the landlord had its own surveyors but had charged for an external company to conduct it. Additionally, the increase in contribution to the reserve fund as advised by the survey was then reassessed by the landlord from £4000 to £3000. As such, the residents were not clear on what value this survey had.
In further correspondence during the course of this investigation, the landlord confirmed that it had restricted services during the pandemic. However, it had retendered all services in 2022, and new guttering contractors had been in place since April 2023.

Assessment and findings

Scope of investigation

The issues raised by the leaseholders in August 2020 and later raised as a formal complaint in May 2021 were raised by 14 households as a group complaint. From the history of the case and the correspondence of the lead complaint, it is evident that he intended to raise it on behalf of the rest of the leaseholders. Whilst the landlord addressed its correspondence only to the lead resident, it is clear that it treated the complaint as a group complaint. It acknowledged that the lead resident raised the complaint on behalf of the other leaseholder in its internal notes and it also acknowledged to this Service that the escalation was raised after the lead resident discussed the stage 1 response with the other leaseholders. Whilst only 11 household brought the complaint to this Service, it is appreciated that the matters raised equally affect all the 16 leaseholds that are part of the over 55 scheme in the estate.
In line with para 48 and 54(f) of the Housing Ombudsman Scheme (The Scheme), the Ombudsman may adopt a wider approach in accepting an individual complaint as a test case. If any failures are identified, the Ombudsman can make a wider order for all the affected households.

The landlord’s response to the residents’ concerns of service charge administration, their calculation and breakdown.

In June 2020, the residents raised queries in relation to duplicate invoices being issued for the same jobs. They were also concerned about errors being made in the calculation of the actual service charges due to mixing up invoices and jobs related to rented properties with jobs and charges related to the leasehold properties. The landlord acknowledged its failures and said it would take further action to improve its system in order to avoid any future errors. It also agreed to reduce the costs of the reserve fund from £4000 to £3000, which demonstrated a flexible and customer focused approach. However, it did not provide any clear information as to what steps it would take or how it intended to improve its services and system.
In their further escalation and formal complaint, the residents raised additional issues related to the pest control and the landlord again acknowledged that it had incorrectly invoiced the leaseholders as it had mixed the rented properties squirrel trap with the leaseholders. Whilst the landlord admitted failures, amended the charges and refunded the residents, it again did not provide any information of how it intended to improve its system or what learning it had taken from its failures. As such, the landlord could not demonstrate what action it would take and how it would reassure the residents that those errors would not happen again in the future. The landlord did not follow its service charge policy to ensure that service charges meet all reasonable costs incurred in the provision of services.
As such, it was understandable that the residents were caused uncertainty and doubted whether any future actuals would be correctly calculated and if they would be proportionate to the service received to the leasehold properties. Whilst the landlord had provided to this Service the invoices to the guttering and an explanation of how it calculated the charges for them, it failed to provide this information to the resident in a timely manner and be transparent as to its calculation of charges.
The residents also asked the landlord in 2020 to monitor its contracts and the services provided. This was in relation to the ongoing guttering issues and the quality of jobs to the main switch. Whilst the landlord admitted failures in charging twice for a job that could have been completed in one visit, it did not provide any information as to how it assessed the quality of the works. It did not demonstrate that it had inspected the property and the works performed. Additionally, it did not provide any reassurance as to how it would monitor its contracts in the future. The landlord could not demonstrate that it had regularly assessed and monitored the performance of its contractors as per its service charge policy.
Whilst it was considered that the period of time was related to the pandemic restriction, this service has not seen any effort of the landlord in the times of lifting the restrictions to organise and attempt to visit the property to monitor the works. In its guttering notes, there is no entries of any inspections since 2017. This is a further failure of the landlord to follow its service charge policy and ensure the standard of works performed.
The landlord could not demonstrate a consistent approach to addressing the service charge concerns and monitoring the contracts and quality of works involved. As such there was maladministration in the landlord’s response to the residents’ concerns of service charge administration, calculation and services’ monitoring. An order has been made for the landlord to improve its system of calculation and monitoring of contracts and services (including any new contractors it has in place). An additional order of compensation of £250 per each household in the group complaint is awarded for the landlord’s failures identified in this report and in line with the Housing Ombudsman remedy guidance for failures to respond to the residents’ concerns in full for a prolonged period of time.

The landlord’s communication and overall handling of the complaint.

While the Ombudsman cannot look into matters concerning the increase in sinking fund or reasonableness of charges or services introduced and cannot alter the lease, we can assess the landlord’s overall communication and explanations provided for the issues raised. According to the limited information and communication available for the case, it is evident that some of the issues raised in June 2020, and particularly the emergency lighting, were not responded to until the landlord dealt with the second complaint in April 2022. This was a delay of almost 2 years.
Some of the other issues raised in June 2020, such as charges being applied for second visits, the pest control contract or charges for rented properties applied to the leaseholders were not addressed appropriately until the stage 1 response from May 2021. This was nearly 1 year after the issues were raised. Within this time the residents contacted the landlord on multiple occasions to request explanations. They explained that they were dissatisfied with the responses provided. It would have been reasonable for the landlord to have identified their concerns as a complaint at a much earlier stage and dealt with them under its complaints process.
In its final stage response of August 2021, it did not demonstrate a full and extensive approach in addressing all the issues and providing reassurance to the residents as to the follow up. It is noted that the landlord admitted failures in its communication. However, given the amount of time the residents were chasing clarification, it would have been reasonable for the landlord to have provided a detailed response addressing all the issues raised. However, it failed to address some points related to the emergency lighting and the way it would improve its system in calculating and administering service charges.
When contacted by this service in February 2022 about the emergency lighting, the landlord failed to recognise that it had dealt with those issues in the past, it delayed considerably its response to them and as such the residents had to raise them again. While it was appreciated that it raised another complaint, this caused additional confusion as to its complaint process.
Overall, there was maladministration in the landlord’s communication and complaints handling. An order has been made for the landlord to improve its services and provide training to its staff. Compensation of £100 per leasehold household is considered proportionate as per the Housing Ombudsman remedy guidance. Additional £150 is ordered as compensation for the time and trouble caused to the lead resident in this complaint due to the additional efforts put in to ensure that the case progressed through the landlord’s complaints process.

The landlord’s knowledge and information management

Good records assist housing providers to offer efficient and effective services by ensuring that decisions and actions are taken based on good quality information. Clear information is readily available to any member of staff who becomes responsible for a particular matter, easing handovers between staff. Communication with residents is improved when staff are able to access all of the relevant up to date information and get a good understanding of the issue, and what action has been taken (or not taken) and why.
It is not disputed that the landlord, in this case, was inconsistent in providing information and responses to its residents due to the change of staff. This also caused loss of documents and loss of important feedback and information from the residents related to the performance of contracts and provision of services. This considerably affected the landlord’s service delivery and delayed its responses. The landlord could not demonstrate that it had a working information and management system in place when staff were changing roles and responsibilities.
Additionally, the landlord failed to provide to this Service evidence requested in a timely manner. It provided some of the documents following the start of the actual investigation. However, it added documents and information that had not been requested. At each stage of the investigation this caused delays in this Service’s work. Furthermore, it still did not provide the following:
1. Any survey or inspection reports for the quality of works and their assessment.
2. Communal maintenance logs of the estate for the period 2019/2021.
3. Internal correspondence related to the concerns raised by the resident about the standard of services and their monitoring.
4. Copies of estimates, reconciliation statements and notices for the relevant period 2019/2020.
5. Copies of the contracts with the previous service providers.
Good record keeping would have enabled the landlord to respond to both this Service and the residents’ queries. However, the landlord failed to provide appropriate and timely responses and to support them with evidence. As such, there was maladministration in its knowledge and information management. This failure contributed to its ability to answer questions in a timely manner and impacted negatively on its credibility and relationship with the residents. An order has been made for the review of its practices and processes, which would contribute to the landlord’s monitoring of services and information management regarding service charges.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its:
1. Response to the residents’ concerns about the service charge calculation, administration and monitoring of services.
2. Communication and complaint handling.
3. Knowledge and information management.
In accordance with paragraph 42 (d) of the Housing Ombudsman Scheme, it is outside of the Housing Ombudsman’s remit to consider the landlord’s response to the residents’:
1. Concerns of reasonableness of the level of service charges for services provided, increase of service charges and lease variations.
2. Request to be refunded for service charges.

Reasons

The landlord could not demonstrate that it had investigated and inspected the performance of its contractors and the works completed. It did not provide any information as to how it would monitor those services in future.
Additionally, it could not provide appropriate explanation as to the system it had in place about calculating service charges. Whilst it admitted failures with wrong invoices and resident’s being charged for works completed to rented properties, it did not provide a plan for how it would improve its system and avoid such errors in the future.
The landlord failed to raise the residents’ complaints in a timely manner under its complaints process and address all the issues in full. Some of the issues raised by the residents, for example the emergency lighting, were responded to in detail 2 years after the initial concerns raised and under a different complaint only following this Service’s involvement. Whilst they were raised with the original complaint they were not addressed until the second stage 2.
The landlord did not demonstrate that its record keeping was appropriate in relation to the documents provided by the residents. It did not have a system for a consistent approach to knowledge and information management when changes were required to its staff’s roles and responsibilities. Additionally, it failed to provide documents which were requested for this investigation and as such it could not demonstrate good record keeping practice which is vital for handling service charge issues.

Orders and recommendations

Orders

Within 4 weeks of this determination, the landlord is ordered to pay each of the 11 group complaint households compensation of £350, broken down as follows:
1. £250 in recognition of the distress and inconvenience caused to the residents by its failures to respond in a timely manner and in full to the raised service charges concerns and the monitoring of the contracts.
2. £100 for the time and trouble caused to the residents for its failures in complaint handling.
3. An additional £150 for the time and trouble caused to the lead complainant in this complaint by the landlord’s failures.
Within 8 weeks of this complaint, the landlord to review its handling of the case and its staff training needs in relation to its application of its policies and procedures on service charge communication, contract monitoring, service charge calculation and complaint handling. The landlord to outline to this Service and the residents what steps it will take to avoid such failures identified in the report related to errors in the calculation of the actual service charges and monitoring of contracts.
Within 8 weeks of the date of this report, the landlord to review its record keeping and information management practices in relation to service charges and consistence when staff and responsibilities changes within its organisation.
In accordance with paragraph 54(f) of the Scheme and within 8 weeks of the date of this report, the landlord is ordered independently, and/or in liaison with the lead complainant, to identify whether there were further households (other than the 11 who brought the complaint to this Service and are included as group complainants here) affected by its handling of the issues and if so, to take appropriate steps to put things right for these additional households.