Westminster City Council (202125028)

REPORT

COMPLAINT 202125028

Westminster City Council

16 February 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:
1. Level of the service charge for a repair to a railing.
2. Landlord’s compliance with the section 20 process.
3. Landlord’s compliance with the terms of sale.

Jurisdiction

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.
After carefully considering all the evidence, in accordance with paragraph 42(e) of the Housing Ombudsman Scheme, the following aspects of the complaint are outside of the Ombudsman’s jurisdiction:
1. The level of the service charges for major works.
Paragraph 42(e) of the Scheme states that ‘the Ombudsman may not consider complaints which, in the Ombudsman’s opinion concern the level of rent or service charge or the amount of the rent or service charge increase’.
Paragraph 42(g) of the Scheme states that the Ombudsman may not consider complaints which ‘concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure’.
The Ombudsman cannot determine whether service charges are reasonable in themselves or when compared with other charges levied against other properties. Complaints about the suitability of specific service charges are therefore outside of the jurisdiction of this service.
The First Tier Tribunal (Property Chamber) is better placed to consider issues relating to the setting of service charges. Whilst we are unable to consider this aspect of the complaint, we can assess the landlord’s response to the resident’s queries and complaint concerning the charges and services.
The assessment and findings will therefore focus on the remaining elements of the case which are within the Ombudsman’s jurisdiction.

Background and summary of events

The resident is a leaseholder, and the landlord is the freeholder of the property which is a lower ground floor flat. The lease started in June 2017.
The lease obliged the resident to pay the landlord the ‘reasonable proportion…to cover the costs and expenses incurred or to be incurred…in carrying out…any additional services’ to the reserved property.
Under the lease, the landlord is obliged ‘to keep in good and substantial repair and condition (and whenever necessary rebuild and reinstate and renew and replace all worn or damaged parts…[including] all such parts of the reserved property not hereinbefore mentioned’. ‘Reserved property’ is defined as ‘all those areas forecourts courtyards fences…and other parts of the property which are used in common by the owner or owners or occupiers of any of the flats forming part of the property’.
Under Section 20 of the Landlord and Tenant Act 1985 (the Act) a landlord is required to consult with a leaseholder before it undertakes any work which will cost any leaseholder more than £250, including repairs, maintenance and improvements. The notice must describe the proposed work, set out the estimates and total expenditure, and invite any written observations.
On 25 August 2022 the resident emailed this service and said that there was an additional complaint in relation to “confusing billing” and that the charges relating to this dispute had not been removed from the chargeable balance. In the interest of fairness, the scope of this investigation is limited to the issues raised during the resident’s formal complaint. This is because the landlord needs to be given a fair opportunity to investigate and respond to any reported dissatisfaction with its actions prior to the involvement of this Service. Any new issues that have not been subject to a formal complaint can be addressed directly with the landlord and progressed as a new formal complaint if required.

Summary of events

It is not disputed that a railing, situated in a communal part of the block, came away and fell to the ground. The evidence indicates that the resident reported this in March 2019.
The resident emailed the landlord on 17 October 2019. She said, during a meeting on 16 October 2019, it was agreed that the “owner would repair the iron railing, provided the Council would install an iron gate to the front”.
It is not disputed that the repair was subsequently completed; however, there is a gap in the correspondence provided until the complaint was raised. No repair records have been provided so the exact date of the repair cannot be specified.
It is not disputed that a previous round of electrical works was undertaken by the landlord without issuing a section 20 notice. While the landlord confirmed that the resident’s liability would be limited to £250, no information on the specific nature of the work has been provided.
On 26 April 2021, the resident raised a formal complaint for “the installation of [the] iron railing fence at the property”. The resident said that the charge was “illegal” as:
1. The fence did not need to be replaced and the original fence could have been repaired. The £1400 charged for the work between the four leaseholders was disproportionate to the work required.
2. There was no section 20 notice served in relation to the works.
3. A condition of sale was that the landlord would not charge for any works where a section 20 was applicable, until 2022.
4. The landlord previously charged her for electrical works in 2019 and subsequently withdrew the charges.
The resident requested compensation for time wasted and distress caused, as a result of the service charges applied. The resident also requested the return of the “illegal charge” together with compensation for maladministration.
The landlord issued a stage one response on 6 May 2021. The landlord said that:
1. The railing was not replaced, but repaired and reattached. This involved sandblasting the affected rail, which was then primed and glossed before being refitted.
2. It did not serve a section 20 notice in error, for which it apologised. The landlord limited the resident’s liability to £250 of the total work costs.
3. It was unable to locate any agreement relating to not charging for works for which a section 20 notice was required; however, that it reserved the right to “serve notice and recharge reasonable costs as the per the terms of the lease”.
4. The complaint was upheld as a result of the error in not serving a section 20 notice. The landlord reiterated that the resident’s liability for the works would be limited to £250.
The resident raised a stage two complaint on 9 July 2021. In summary, she said:
1. The railing just needed to be reattached. The work carried out by the landlord was disproportionate and could have been carried out for £100.
2. The offer made to the landlord to repair the railing on 17 October 2019 was rejected.
3. Since it failed to issue a section 20 notice, the landlord was not legally entitled to charge for the works. Therefore, the chargeable balance should be zero.
4. The landlord offered the “unnecessary work” to its “preferred contractor”.
The landlord responded on 29 July 2021 and issued the stage two response. In summary the landlord said:
1. The railing fell into a basement and was damaged. Sandblasting was therefore necessary to assess the damage.
2. That it did not issue a section 20 notice due to a “system error”. A further apology was made, together with confirmation that the charges would be limited to £250.
3. The addendum to the special conditions of sale stated that no major works were planned until 2022, which was true at the point of sale.
4. It would pay the resident compensation of £150; comprising, £100 for the service failures identified in relation to the section 20 process; and £50 for time and trouble in pursuing the complaint.
The resident referred to complaint to the Ombudsman as she remained unsatisfied with the landlord’s response.

Assessment and findings

In reaching a decision we consider whether the landlord has kept to the law, followed proper procedure and good practice, and acted in a reasonable way. Our duty is to determine complaints by reference to what is, in this service’s opinion, fair in all the circumstances of the case.

The landlord’s compliance with the section 20 process

The landlord has acknowledged this as a service failure and accepts that a section 20 notice should have been served. It is evident that the landlord did not comply with its obligations in this regard. While not expressly stated, it is reasonable to conclude from the correspondence submitted, that a charge of £250 was applied to the resident’s account for both sets of works and that the full share applicable, without a reduction, would have been greater than £250.
The resident claims that the extent of the work commissioned by the landlord was disproportionate to the level of work required and that the charge applied to the balance should be zero, instead of £250. By reducing the resident’s liability to £250 for each round of works carried out, the landlord effectively reduced the cost of the works apportioned to the resident, to below the threshold required for the issuing of section 20 notices. Therefore, while the landlord should have issued the section 20 notices, the resident was charged less than the contributions she would otherwise be liable for. This was a reasonable approach by the landlord in mitigating the impact of its failure to issue section 20 notices.
The resident said that she would cover the cost of the work, rather than paying the proportion of the costs incurred by the landlord in service charges. However, no evidence has been provided, in the form of a quotation, description of works, or similar to show that they could have been completed at a lower cost or by a different method. Therefore, this service cannot comment on whether the nature of the work commissioned by the landlord was proportionate in repairing the railing. The First Tier Tribunal (Property Chamber) is better placed to consider issues relating to the setting of service charges and this applies to both instances where a failure to serve a section 20 notice occurred.
Section 4.2 of the landlord’s compensation and payment schemes allows for compensation payments for ‘time and trouble in pursuing the complaint’; the banding for which was listed between £50 and £250.
Section 4.3 of the landlord’s compensation and payment schemes states covers compensation; with the amount to be assessed on a case-by-case basis for service failures.
The landlord has offered the resident £100 for “service failures identified relating to the section 20 process”; and £50 for the time and trouble pursuing this complaint. While the landlord uses “time and trouble” as the basis for this award, there is no issue with the compliant handling; therefore, it would be more appropriate to allocate this under a payment for ‘distress and inconvenience’.
The landlord’s failure to serve the section 20 notices and keep the resident informed, led to the resident not having an opportunity to discuss the proposed works and raise any concerns. This led to the resident raising a complaint and the dispute with the landlord.
The landlord has provided a copy of its leaseholder consultation process. This sets out a comprehensive process for consulting leaseholders and is evidence that it has a process in place; however, it must be followed to be effective. The two instances of failures to serve section 20 notices, suggested that the process was not being implemented as intended.
The landlord acted fairly in acknowledging its mistakes and apologising to the resident regarding the service of two section 20 notices; one for the railing and one for electrical works. The landlord’s reduction of the contributions charged to the resident for the works demonstrated an acceptance of its failure to serve the section 20 notices. The landlord’s offer of compensation is further evidence that it sought to provide reasonable redress to the resident for the accepted service failure and the resultant inconvenience and distress caused.
Overall, although there was evidently a failure by the landlord in following the required process around section 20 notices, it has since taken sufficient steps to put it right and mitigate the impact on the resident.

The landlord’s response to the resident’s concerns around the conditions of sale

Clause 16 of the special conditions of sale, forming part of the contract of sale, stated: ‘see addendum’. Clause 4 of the addendum stated, ‘no major works are planned at the property until 2022’.
While special conditions of sale differ to standard conditions in that they can be considered to be individually negotiated, clause 4 of the addendum does not state that no works would be carried out until 2022. The issue of the railing repair was responsive following the railing coming away from the wall. It was not planned major works. The landlord responded to the resident’s complaint on this point by explaining the same, which was an appropriate in relation to its contractual obligations.

Determination (decision)

In accordance with paragraph 42e of the Housing Ombudsman Scheme, the complaint about the level of the service charges for major works is outside of jurisdiction.
In accordance with paragraph 53b of the Housing Ombudsman Scheme, the landlord has offered reasonable redress for the service failures identified in its handling of the section 20 process.
In accordance of paragraph 52 of the Housing Ombudsman Scheme there was no maladministration in relation to the application of the terms of sale in relation to the works.

Reasons

The Ombudsman cannot assess the level of services charges as it not within the jurisdiction of the Scheme.
The landlord accepted a service failure for which it provided reasonable redress in the form of compensation for the failure to serve section 20 notices and compensation for the time and trouble in dealing with the complaint. The reduction in service charge liability also sought to improve the resident’s position.
The special conditions of sale referred only to the cessation of planned major works. The works undertaken did not constitute planned works.

Recommendations

The landlord should reoffer the resident the £150, comprising:
1. £100 already offered in relation to the service failure (if it has not done so already).
2. £50 already offered for the distress and inconvenience suffered by the resident (if it has not done so already).
The landlord should review its section 20 process. This should include a review of the system which identifies the residents who require service of a notice. This is with a view to ensuring that residents are appropriately consulted when works are being planned. The landlord should confirm its intentions with regards to this recommendation within four weeks.