Hyde Housing Association Limited (202306741)

REPORT

COMPLAINT 202306741

Hyde Housing Association Limited

8 May 2025

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 handling of the resident’s service charge queries.
The Ombudsman has also considered the landlord’s complaint handling.

Background

The resident has an assured tenancy under an agreement dated 10 December 2007. The landlord is a housing association. The property is a 2 bedroom, first floor flat, occupied by the resident and her son. The resident said she has mental health difficulties that are known to the landlord.
The resident’s 2022 rent invoice included a service charge of £73.52. Prior to this invoice, the resident said she had never had service charges included in her rent. The resident’s 2023 rent invoice had an increased service charge of £712.65 for the year.
On 26 April 2023 the resident raised a complaint. She stated that:
1. she felt ignored by the landlord after getting no response to information requests about the reason for the service charge increase.
2. she wanted an explanation for the increase in service charges after having none for 13 years.
3. despite many requests in 15 years, there had been no upkeep to her property whilst she had seen the flat below hers renovated.
4. the landlord had ignored her repair requests.
On 15 May 2023 the landlord issued its stage 1 response and upheld the resident’s complaint. The landlord:
1. apologised for the distress and inconvenience caused to the resident.
2. agreed that it should have completed the repairs sooner and arranged for completion later that month.
3. advised that a specialist team would contact her to discuss her service charge concerns.
4. offered a compensation award of £350, comprising of:
  1. £50 for the delay in acknowledging the complaint.
  2. £100 for the poor communication, her time and trouble.
  3. £100 for the delays completing the repairs.
  4. £100 for the distress and inconvenience caused.
The resident said she was not happy with the landlord’s response and requested to escalate her complaint to stage 2 on 24 May 2023. The resident sent several emails chasing the landlord for acknowledgement of her request. The landlord acknowledged the resident’s escalation request on 21 June 2023.
On 24 May 2023 the landlord sent the resident an explanation of how it had calculated her fixed service charge. It stated:
1. the multi occupancy building had a fire safety system, which required periodic inspection, maintenance and servicing.
2. it carried out Fire Risk Assessments (FRA) on a 1, 2, or 3 year cycle, depending on the nature of the building.
3. the estimate has been set at £712.65, mainly because of the FRA and a new management charge structure.
The resident responded by telling the landlord she was not satisfied with the response. She said she could not understand how the increase in service charges was proportionate to the services she received. She felt that the landlord had given her a standard response which had not considered her property specifically.
On the same day, the landlord apologised and provided further details on the charges stating:
1. for fire safety servicing and repairs:
  1. the building required quarterly maintenance.
  2. it would test the emergency lighting monthly.
2. for FRA’s:
  1. the building required a periodic full inspection to identify any hazards and reduce risks.
  2. independent contractors would complete the FRA then the landlord would carry out any recommended works.
3. for the cost analysis:
  1. an FRA was now due.
  2. the fire detection system required quarterly servicing.
  3. with only two flats in the premises, the landlord understood that the costs seemed high but confirmed the charges were correct.
The resident responded to the landlord on 24 May 2023 stating that her building did not contain any emergency lighting or a fire system, just a battery powered fire alarm in the communal hallway. She said she still did not understand why there had been no service charges for the previous 13 years.
On 12 July 2023 the landlord issued its stage 2 complaint response. The landlord:
1. apologised for its late response to the resident’s escalation request.
2. acknowledged that the repairs promised in its stage 1 response were still outstanding and that communication had been poor.
3. acknowledged that its stage 1 response had not answered the resident’s service charge query.
4. provided the following service charge breakdown:
  1. quarterly fire detection test.
  2. provision towards any identified repairs.
  3. FRA every 2 years which was due that year.
  4. a change to the fixed management fee had increased costs, which it said it had explained in a Q&A sheet sent with the resident’s rent notice.
5. said it was unable to comment on why it had not included service charges in the resident’s previous annual costs.
6. increased its total offer of compensation to £550, comprising of:
  1. £100 for the complaint handling failures.
  2. £150 for the delays in service delivery.
  3. £150 for the resident’s time and trouble.
  4. £150 for the distress and inconvenience.

Events post-ICP (internal complaints procedure)

On 11 January 2024 the landlord reviewed its compensation offer and increased it to £900 because of its poor communication and significant delays to the repairs. The £900 comprised of:
1. £100 for the complaint handling failures.
2. £300 for the delays in service delivery.
3. £200 for the customer effort.
4. £300 for the distress and inconvenience.
The resident brought her complaint to the Ombudsman as she said she was not satisfied with the landlord’s explanation of the service charges. As an outcome, she said she wanted a complete breakdown of the charges with relevance to her specific property. She also wanted an explanation for why there had been no service charges for the previous 13 years.

Assessment and findings

Scope of the investigation

In her complaint the resident raised concerns about the increase in service charges that made up part of her rent. The Ombudsman cannot review complaints about the level or increase of rent or service charges and determine whether they are reasonable or payable. Complaints that relate to the level, reasonableness, or liability to pay rent fall within the jurisdiction of the First-Tier Tribunal (FTT). As such, the resident may wish to refer her complaint to it accordingly.
While we have not assessed the reasonableness of the service charge itself, we have investigated whether the landlord responded appropriately to the resident’s queries about her service charges and the information it provided.
The landlord’s internal complaint procedure investigated and responded to several issues. However, the resident only referred the issue regarding the landlord’s response about the service charges to this Service. In correspondence with this Service, the resident said the repair issues had been resolved. Accordingly, this investigation has focussed on and assessed the landlord’s handling of the resident’s queries about her service charges.

The landlord’s handling of the resident’s service charge queries

The landlord’s service charge policy states that for fixed service charges, the landlord will review actual expenditure, known costs and services received to determine the service charge for the following year, including any known budgeted costs.
It states that service charges are distributed between properties according to the terms of individual tenancy agreements. Where such agreements are silent upon the issue of distribution, it divides the charges amongst the dwellings that receive the service.
The landlord’s occupancy agreement sets the resident’s service charge payments as nil. It states that it will inform the resident of any changes to the rent by giving at least 28 days’ notice in writing.
The landlord’s complaints policy states the following:
1. the landlord has a responsibility to explain its services and, if necessary, to put things right for the customer.
2. it is important that it is certain there is nothing further it can do before it decides the complaint procedure has reached an end.
The resident contacted the landlord on 9 March 2023 querying the increase in her service charges. We have seen no evidence that the landlord responded to her query. The lack of communication with the resident would have likely added to the resident’s distress and was not in line with the landlord’s policy to explain its services. This was inappropriate.
After receiving no response from the landlord, the resident raised a complaint to it on 26 April 2023. She said she felt ignored by the landlord and asked for an explanation of the service charge increase. She said she also wanted to know why there had been no service charge for 13 years prior.
In its stage 1 response, the landlord apologised for its poor communication and offered the resident compensation. It said it had passed the service charge element of the complaint to another team to deal with, and that the team was delayed due to working through a backlog. Whilst the landlord identified its delays in responding to the resident, it would have been reasonable for it to have provided her with a date by which she could expect to hear back about the service charge queries. The landlord failed to manage the resident’s expectations.
On 24 May 2023 the landlord provided the resident with an explanation of its service charges. This was more than 2 months after the resident had initially queried the charges, which was an unreasonable delay in the circumstances. The landlord summarised which services it was charging the resident for, in line with its policy. However, the resident said she was not happy with the explanation, stating that she felt the landlord had given her a standard response which had not taken her specific property into consideration.
The landlord responded on the same day apologising that the explanation had not fully answered the resident’s queries and provided a further breakdown of the charges. The breakdown included services such as testing of the emergency lighting in her building. It was reasonable for the landlord to provide more detail about the service charges to help the resident understand the charges.
The resident responded to the landlord stating that there was no emergency lighting in her building. She also said that she felt she was not going to get an explanation that justified the increase or for why there had been no charge for the previous 13 years. This Service has seen no evidence that the landlord responded to the resident or addressed her concern regarding charges for services that did not exist in her building. This was unreasonable.
The landlord’s website states that it is committed to operating in an open and transparent way and being accountable to its residents. Whilst the landlord provided the resident with breakdown summaries of the service charges, it failed to respond to her specific queries about the introduction of the service charges and the emergency lighting. The landlord communicated poorly and failed to show transparency in the way it was charging the resident.
The resident requested to escalate her complaint to stage 2 on 24 May 2023. On 20 June 2023 the landlord asked the resident for the reasons for her escalation. The resident gave the following reasons:
1. the lack of communication from the landlord was stressful and disappointing.
2. her service charge had gone from £0 to over £700 in 2 years whilst the landlord had failed its own obligations regarding the upkeep of her property as per her tenancy agreement.
In its stage 2 response issued on 12 July 2023, the landlord increased its offer of compensation to £550 and apologised for its poor communication. It acknowledged that it had not answered the service charge queries in its stage 1 response and then provided the resident with the same explanation it had given previously. It added that part of the increase was a result of a change in its fixed management fee. The landlord said it had sent the resident a Q&A sheet about this with her rent notice. The landlord could have provided this again in its stage 1 response to help with the resident’s understanding of the charges.
The 2023 rent invoice sent by the landlord to the resident included additional information on how it estimated service charges. As the resident was unsure about what had contributed towards the increase, it would have been reasonable for the landlord to have provided her with the Q&A sheet and the additional information on estimates in its stage 2 response. This could have helped to provide clarity on the charges. The landlord failed to do everything it could to resolve the resident’s query which was unreasonable and not in line with its policy.
In its stage 2 response the landlord also stated it was unable to comment on why the resident had no service charges for the first 13 years of her tenancy. The 2022 rent invoice sent by the landlord to the resident included notice of a fixed service charge and a breakdown of the charges. In its response the landlord referred to the rent notice, however it would have reasonable for it to answer the resident’s query by explaining its power to claim the charge under the tenancy agreement and why the charges had increased. That it failed to do so was unreasonable.
In summary, we have found maladministration in the handling of the resident’s service charge queries because the landlord:
1. failed to respond to the resident’s initial queries within a reasonable time.
2. failed to provide clear information and manage the resident’s expectations in its complaint responses.
3. failed to acknowledge the resident’s concerns about emergency lighting in the building in order for her to understand the charge payable.
4. failed to respond to the resident’s query that there had been no service charges for several years.
5. failed to ensure it had done everything possible to resolve the complaint.
The landlord’s failures likely caused the resident distress and inconvenience. The landlord made an offer of compensation to the resident of £800 on 11 January 2024, however this was approximately 6 months after the landlord’s internal complaints procedure had been exhausted. The offer was also made in relation to other aspects of the resident’s complaint and not the service charge concerns.
Whilst such responses and any additional redress offered in follow-on responses can be noted and assessed, it will not be considered in the same way as redress offered during ICP. The Ombudsman’s outcomes guidance is clear that a finding of reasonable redress cannot be determined under such circumstances. Landlords should undertake a sufficient investigation and review all circumstances of the case at stage 2 of their complaints process.
The offer was made in respect of all aspects of the resident’s complaint, including the service charge concerns. It is essential for landlords to break down any offers of compensation so that a resident can understand to what extent it has acknowledged the impact of each individual failure. It was not clear in the breakdown provided, how much of the £800 was attributed to each aspect of the complaint. Therefore, for the purpose of the investigation, this has been attributed equally, with £400 considered to be for each complaint element.
After carefully considering the distress to the resident and the redress offered by the landlord, we consider the offer of £400 reasonable and in line with the Ombudsman’s remedies guidance. We have made an order for the landlord to reoffer this compensation if it has not been paid already.
We have also ordered the landlord to respond to the resident’s queries about the emergency lighting in her building and provide an explanation about the introduction of the service charges to assist her in understanding the charge.

The landlord’s handling of the complaint

The Ombudsman’s Complaint Handling Code (the Code) sets out good practice for a landlord’s complaint handling practices. It states that stage 1 complaints should be responded to within 10 working days, and stage 2 complaints within 20 working days.
The landlord operates a 2 stage complaints procedure and states it will respond to both stage 1 and stage 2 complaints within 20 working days. Its complaints policy states the following:
1. when a customer first contacts the landlord with an expression of dissatisfaction, it will always try to put things right within 48 hours to quickly resolve the issue.
2. the landlord will make sure its customers can easily make a complaint without restriction.
3. the customer must be kept informed and updated on the progress of their complaint until the resolution of the matter.
The resident contacted the landlord on 9 March 2023 asking for justification for the significant increase in her service charge. She said that the situation was not fair or right and that she felt ignored. This was a clear expression of dissatisfaction from the resident which the landlord should have treated as a complaint. The Ombudsman has seen no evidence that the landlord acknowledged or responded to the resident’s email. This was inappropriate and not in line with the landlord’s policy.
After getting no response from the landlord, the resident raised a complaint on 26 April 2023. The landlord acknowledged the complaint the following day and apologised for not responding to her concerns sooner. It said that it would liaise with a specialist team to deal with the service charge part of the complaint. This was reasonable.
The landlord issued its stage 1 response on 15 May 2023 which was appropriate and in line with the Code. It apologised for the delay in responding to the resident’s concerns and said that the specialist team dealing with the service charge aspect were experiencing delays and would contact the resident to discuss the matter soon. The landlord offered the resident £50 compensation for its complaint handling failures and advised it had concluded stage 1.
Whilst the landlord acknowledged its delays in responding to the resident, it would have been reasonable for it to monitor the service charge aspect of the complaint to ensure it was dealt with efficiently. The Code states that landlords should keep residents regularly updated about the progress of the investigation even where there is no new substantive information to provide. The landlord could have scheduled updates with the resident to offer reassurance that it was still dealing with the matter. The Code says that a complaint response must be provided to the resident when the answer to the complaint is known.
The resident said that she requested an escalation to stage 2 on 23 May 2023. The Ombudsman has not seen evidence of an escalation request on that date; however, we have seen that the resident expressed dissatisfaction with the service charge explanation in her response to the landlord on 24 May 2023. The resident then chased the landlord for a response to her escalation request on at least 4 occasions until it acknowledged the request on 21 June 2023.
The Code states that if all or part of the complaint is not resolved to the resident’s satisfaction at stage 1 it must be progressed to stage 2 of the landlord’s procedure. The landlord’s policy states that residents can easily complain without restriction. In this case, the landlord delayed the resident’s ability to escalate her complaint by not responding to her. Therefore, the landlord failed to comply with its own policy and the Code.
On 12 July 2023 the landlord issued its stage 2 response. This was 34 working days after the resident had shown dissatisfaction with the stage 1 response on 24 May 2023, and when it should have escalated the complaint. This was an unreasonable time to respond and not in line with the landlord’s policy or the Code.
The landlord apologised for its poor communication and acknowledged that it had not answered the resident’s service charge queries in its stage 1 response. The landlord increased its offer of compensation to £100 for its complaint handling failures and explained the service charge increase. The explanation was almost identical to the one given previously to the resident, offering little information to help with the resident’s understanding of the charges.
The landlord’s policy states that stage 2 should not be a repeat of the investigation carried out at stage 1 and should respond to the customer’s reasons for requesting an escalation. Although the landlord provided its explanation for the service charge increase after issuing the stage 1 response, it was clear from the resident’s responses that she was still not satisfied and wanted a better understanding. The landlord failed to recognise this and therefore failed to fully respond to the resident’s complaint.
There were several failings in the landlord’s handling of the complaint. In summary, the landlord:
1. failed to raise a complaint when the resident expressed dissatisfaction.
2. delayed in acknowledging and responding to the resident’s escalation request.
3. failed to provide its stage 2 response within its own policy time limits.
4. failed to effectively respond to the resident’s reasons for escalation by providing the same information in both complaint responses.
In its stage 2 response the landlord recognised its failures in responding to the resident and increased its offer of compensation to £100.This showed some attempt to put things right in line with our dispute resolution principles. However, this Service has found failures that were not identified or acknowledged by the landlord. This is not in line with our dispute resolution principles to learn from outcomes. Our outcomes guidance is clear that a finding of reasonable redress cannot be determined under such circumstances. We have therefore found service failure in the landlord’s handling of the complaint.
After carefully considering the distress to the resident and the redress offered by the landlord, the Ombudsman considers the offer of £100 proportionate and in line with the Ombudsman’s remedies guidance to put things right. However, we have ordered the landlord to apologise to the resident for the failures identified in this investigation. We have also ordered that the landlord reoffers the £100 compensation if this has not already been paid.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the resident’s service charge queries.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in its handling of the resident’s complaint.

Orders and recommendations

Orders

Within 4 weeks of this determination, the landlord must:
1. write to the resident with:
  1. an apology for the failings identified in this report.
  2. a response to her query about charges for emergency lighting in her building.
  3. a response to her concerns about the introduction of the service charges to assist her in understanding of the charge.
2. reoffer the resident compensation of £500 if this has not already been paid comprising of:
  1. £400 for any distress and inconvenience caused by its handling of the resident’s service charge concerns.
  2. £100 for any distress and inconvenience caused by its handling of the complaint.
The landlord must provide evidence of compliance with this order to the Ombudsman within 4 weeks. A copy of the letter sent to the resident must be provided to this Service.