Sovereign Network Group (202336504)

REPORT

COMPLAINT 202336504

Sovereign Network Homes (Former Network Homes)

29 August 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 resident’s complaint is about:
1. The landlord’s response after March 2022 to the resident’s dissatisfaction with the costs for communal lighting.
2. The landlord’s response prior to March 2022 to the resident’s dissatisfaction with the costs for communal lighting.
3. The increase in service charges.

Background

The resident was a leaseholder of the landlord. According to the Landlord Registry records, he acquired the lease in approximately 1998. The landlord sourced the electrical supply through an intermediary it referred to as a “utility partner”.
The resident had made a previous complaint in 2021 that the costs of communal lighting he was liable for had dramatically increased. The landlord’s position at stage 2 of that complaint in July 2021 was that it was investigating the matter.
We investigated the resident’s first complaint under case reference 202127215. We found that the landlord was investigating the matter but belatedly. The delay required the resident to pursue the matter. We found reasonable redress on the basis of the compensation the landlord had offered the resident.
In summary, the resident had been paying about £30 a year from 2016 to 2019. The charges rose to £747.22 a year then to £971.80 a year from 2020 to 2024. The charges fell to £124.88 in 2024 to 2025.
On 8 March 2024 the resident made a second complaint through this Service. We asked the landlord to respond to the resident’s second complaint

the landlord’s handling of the resident’s reports about the cost of communal lighting.

The resident wanted as an outcome for the landlord to recognise that there was an overcharge and for the landlord to make it a priority to get the issue resolved.
On 28 March 2024 the landlord wrote with its Stage 1 response as follows:
1. It attached a summary of the invoices from the supplier going back to 2018.
2. The landlord’s explanation was that the billing had been based on underestimated consumption, and the spikes were due to adjusting the billing following actual readings.
3. The supplier had told the landlord that the supplier had not been accurately estimating the consumption, and the earlier bills had been underestimated. Following a reading taken in October 2019, the supplier recalculated the bills which led to the initial abrupt increase, in order to catch up on the historical underestimation.
4. There was a change in supplier in April 2021. An actual reading was taken prior to the handover.
5. It had provided its own readings to rule out any misreads by the supplier and instructed its electrical contractor to inspect the equipment, to ensure that there was no faults or evidence of tampering. The contractor verified that the equipment was all “OK”.
6. It did not uphold the complaint. There was no evidence of overcharging.
7. It acknowledged that the nature of the billing from the supplier had caused considerable distress and inconvenience for residents.
8. It would submit readings to avoid any large swings in the billing.
On the same day, the resident wrote to state he did not accept the figures, and he asked that the landlord arrange for an electrician to calculate the figures.
On 24 April 2024 the resident asked to escalate the complaint.
On 24 May 2024 the landlord replied with its Stage 2 response as follows:
1. The landlord noted that the resident’s concerns were about the level of costs of the communal lighting. In the resident’s view, it was not feasible that the lighting had used the amount of electricity which amounted to thousands and thousands of pounds for the block.
2. The costs tied back to invoices and the information provided by the supplier via its utility partner.
3. The information provided by the supplier tied in with the readings and “so as far as we can tell”, the charge was legitimate.
4. In response to the resident’s request that an electrician carried out the calculations, it said the purpose of an electrical meter was to measure current/voltage of all equipment connected. If the meter was working as it should be, then there should be no need to instruct an electrician to manually calculate what the meter was already measuring.
5. It had incurred non rechargeable costs instructing contractors to check the equipment and having an electrician attend “again”. The outcome from the contractor checking the equipment in February 2022 was that it was “ok”.
6. It would have to pass any further costs to the leaseholders unless there was a “confirmed” problem.
7. It suggested the resident could commission an independent survey, with an offer to reimburse him if the results had merit where a problem was identified that justified the involvement of an electrician.
8. It considered the charges to be accurate and correct.
9. It did not uphold the resident’s complaint.

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.
Paragraph 42.l of the Scheme states that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, seek to raise again matters which the Housing Ombudsman, or any other Ombudsman has already decided upon.
Paragraph 42.d of the Housing Ombudsman 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.
Such issues can be referred to the First Tier Tribunal (Property Chamber). (“FTT”). However, we can consider the way in which a landlord has administered the resident’s service charge account. This would include looking at the quality of the information provided to the resident, whether the accounts contain errors, and any delays in providing information about charges.
On 26 January 2023 we determined the resident’s first complaint about the landlord’s handling of his enquiries about service charges for communal electricity. We concluded that the landlord was investigating the costs but belatedly. We also found that the landlord’s offer of compensation for the delays, requiring the resident to chase it, was reasonable.
The landlord’s position was that it was entitled to charge on the basis of the invoices rendered but would not chase payment while its investigation was ongoing. We made a recommendation that the resident could raise a complaint about the costs being included in the service charges.
After carefully considering all the evidence, in accordance with paragraph 42.l and 42.d of the Scheme, it is considered that the following aspects of the current complaint are outside of the Ombudsman’s jurisdiction.
1. The landlord’s response prior to March 2022 to the resident’s dissatisfaction with the costs for communal lighting.
2. the increase in service charges.
While we can consider a landlord’s decision to include disputed costs in a service charge demand, we cannot consider whether the costs or increase were correct. That is for the FTT. We have investigated how the landlord addressed the increase at the time (2021/2022) in our investigation reference 202127215.
We can investigate how the landlord handled the resident’s further enquiries in 2023. It is not clear whether the resident raised a complaint about the inclusion of the costs in the service charge invoices, however it was implied in his complaint. This is because he continued to dispute the charges themselves. He withheld payment for a period as he considered the charges to be still in dispute. We can consider how the landlord addressed that dispute.

Assessment and findings

We understand the resident’s consternation that there was a dramatic increase in the costs of the communal lighting.
We will not be re-investigating the landlord’s response to the resident’s queries prior to March 2022, but we will refer to it in the context of this investigation. We will be focussing on the further actions the landlord took in continuing and then closing its investigation.
We consider that the landlord reasonably took further actions, albeit with some delay. This is in the context that it had, according to the Stage 2 response, and the documents provided for the first investigation, already carried out a number of investigations at its cost in 2022. The resident’s further requests and steps the landlord took in response were as follows:
1. On 21 February 2023, the resident requested the costs from 2020 to 2023 and, in March 2023, he requested a breakdown of the charges 2020 to date.
2. On 12 April 2023, the landlord provided a breakdown of the actual costs, 2019-2022 (£747.22, £617.42 and £538.99 respectively) and estimated costs 2022 to 2024 (844.44 and £971.80 respectively)
3. On 18 April 2023 the resident carried out a calculation based on his assessment of the use of electricity at £400/700 a year for the block not per flat. He said either the meter was faulty or the unit charge was incorrect, or someone was extracting electricity illegally.
4. On 20 June 2023 the landlord offered copies of the invoices it had paid to the resident. It could not see a way of challenging the charges but would consider the resident’s suggestions.
5. On 22 June 2023 the landlord provided to the resident two charts it explained as follows:
  1. One chart went back to April 2020 and showed the “spike” around March 2021, which was to catch up for the underestimated charges.
  2. The other chart showed consumption from April 2021 to April 2023 which was the period following the “spike”. The landlord stated that the consumption had remained relatively consistent since, with some slight increases in the winter months that was to be expected. The costs had varied due to the increase in energy costs in 2022, but the consumption seemed “OK”.
The landlord’s explanation that the meter was working was reasonable as there was no reason to doubt its accuracy, given it had been checked. It was reasonable of the landlord to suggest the resident employed his own electrician to work out the charges. It had reasonably borne costs the costs of the previous investigations. The landlord has an obligation to ensure service charges are reasonable and reasonably incurred under the Landlord and Tenant Act 1985. It was also reasonable because it stated that if the charges were incorrect, then it would reimburse those costs.
However we are not satisfied that the landlord demonstrated that it provided a sufficient explanation as it might have done or offered the resident sufficient data as follows:
1. There was no evidence that the landlord addressed the resident’s calculation of 18 April 2023.
2. On 12 May 2023 the landlord stated that the amounts (presumably those referred to in its email of 21 April 2023) were for the block. However, the figures in the email of 21 April 2023 were the same figures that were charged to the resident. For the year 2019 to 31 March 2020, the landlord had billed the resident £747.22 for “Communal Electricity and Electrical Repairs-Block”. This was confusing.
3. It was not clear from the charts whether it was using actual or estimated usage.
4. There was no evidence the landlord considered whether there was any discrepancy of calculations when changing supplier or, while the meter number was the same in one of the charts, if there had been a meter exchange, or what the average usage should be.
It was reasonable the landlord offered to provide copies of the invoices it had paid. It is not clear whether it was offering a summary or detailed invoices. We will therefore also make an order that the landlord provides the detailed invoices and that, if the resident decides to commission an expert, that the landlord gives access to the necessary information as is reasonable.
We have considered how the landlord has addressed the handling of its service charge demands. This is closely connected to the resident’s complaint and implicit in the complaint. The resident considered that, as the charges were still disputed, the landlord should not expect payment. However the landlord’s position was that the invoices were due unless they were proved to be incorrect. This is usual business and housing management practice. We note that the landlord also had an obligation to collect service charges on behalf of all the leaseholders. It mitigated the resident’s position by stating it would not chase payment while it was carrying out an investigation.
On 22 July 2024 the landlord said the account was not on hold but it would not chase the resident. On 2 August 2024, by which time the landlord considered the matter closed, it wrote that there was “nothing to adjust” and requested payment. Further to the landlord’s threat of legal proceedings, and while he still disputed the charges, the resident paid the service charges in early 2025.
Once the investigation was at an end, it was reasonable and fair to other leaseholders to expect payment. A leaseholder can always make payment and be clear this was without prejudice to their rights. Leaseholders can also refer disputes to the FTT.
We recognise that it was distressing for the resident to have had this debt hanging over him. However the landlord had made enquiries. It responded to the resident’s queries and said it would reimburse the costs of an expert if, as a result, the charges proved to be incorrect. We would expect an increase following a supplier underestimating charges, but this did not explain the overall increase. We have noted that the resident has informed us that the yearly costs decreased in the previous service charge year 2024/5 which may indicate a further adjustment.
However, the landlord did not demonstrate that it gave the resident sufficient and clear data. We cannot conclude whether the charges were correct or not, but we recognise the frustration and distress that the ongoing dispute has caused the resident. In the circumstances, we find service failure and will make orders for further information to be provided to the resident.

Determination

In accordance with Paragraph 52 of the Housing Ombudsman Scheme, there was service failure in relation to the landlord’s response after March 2022 to the resident’s dissatisfaction with the costs for communal lighting.
In the opinion of the Ombudsman, in accordance with paragraph 42.l and 42.d respectively of the Housing Ombudsman Scheme, the following complaints are outside of the Ombudsman’s jurisdiction:
1. The landlord’s response prior to March 2022 to the resident’s dissatisfaction with the costs for communal lighting.
2. The increase in service charges.

Orders

The Ombudsman makes the following orders:
1. Within 4 weeks, the landlord should pay the resident the sum of £100 in recognition of the distress and inconvenience caused by him needing to pursue this matter.
2. Within 4 weeks, the landlord should address the resident’s calculation of 18 April 2023.
3. Within 6 weeks, the landlord should provide the following information to the resident:
  1. Copies of all itemised bills for the communal area from the energy suppliers from 2018 to present.
  2. A dated list of actual meter readings that specifies what meter the reading is from, including any photographs of readings, if available, going as far back as possible.
  3. A photograph of the current meter, a photograph of any meter exchange tags near the meter, and an up-to-date meter reading.
  4. The information provided by the supplier via its utility partner in 2021 including the previous utility partner’s ‘zone report’ chart.
  5. A clear explanation of how the resident’s communal charges for electricity relate to the bills and electricity usage, with reference to various charts that the landlord has provided.
4. Within 6 weeks, the landlord should commit to giving any expert of the resident access to any further necessary information and equipment as is reasonable, should the resident decide to commission an expert to investigate the issues.
5. Within 8 weeks, the landlord should review the information it has available and any information provided by the resident’s expert, if an expert is commissioned. It should then consider whether it should make further enquiries and write to the resident and the Ombudsman confirming whether it will reopen its investigation and provide an estimated timescale.
The landlord should confirm compliance with the above orders to the Housing Ombudsman Service within 4, 6 and 8 weeks of this report.