Clarion Housing Association Limited (202342416)

Background

1. The resident complained the landlord had not satisfactorily responded to his queries about increased service charges or explained how it calculated the charges.

What the complaint is about

2. The complaint is about the:
   1. Reasonableness of the resident’s service charge and level of increase from April 2023.
   2. Landlord’s responses to his queries and concerns about the service charges.
   3. Landlord’s handling of his complaint.

Our decision (determination)

3. The resident’s complaint about the reasonableness of the service charge and level of increase is outside the Ombudsman’s jurisdiction.
4. There was maladministration in the landlord’s responses to the resident’s queries and concerns about the service charges.
5. There was service failure in the landlord’s complaint handling.

We have made orders for the landlord to put things right.

Summary of reasons

6. We do not consider complaints about the reasonableness of service charges or levels of increase.
7. The landlord did not respond to all the resident’s specific queries and concerns. It gave an inaccurate response regarding the impact his change of ownership had on his service charge arrangements.
8. It failed to log the resident’s email of 21 August 2023 as a complaint.

Putting things right

Where we find service failure, maladministration or severe maladministration we can make orders for the landlord to put things right. We have the discretion to make recommendations in all other cases within our jurisdiction.

Orders

Landlords must comply with our orders in the manner and timescales we specify. The landlord must provide documentary evidence of compliance with our orders by the due date set.

Our investigation

The complaint procedure

What we found and why

The circumstances of this complaint are well known by the parties involved, so it is not necessary to detail everything that’s happened or comment on all the information we’ve reviewed. We’ve only included the key information that forms the basis of our decision of whether the landlord is responsible for maladministration.

9. The resident complained his service charge had increased too much from April 2023. He is also unhappy with the uplifts the landlord adds to the MA’s estimates and actual costs when setting the service charge and how it apportions the charges.
10. We do not investigate complaints about the reasonableness of service charges. As the resident’s complaint is about the reasonableness of the charges and level of increase, a court or First Tier Tribunal (Property Chamber) is best placed to consider this.

11. The landlord leases the block which includes the resident’s flat from a superior leaseholder. The superior leaseholder appoints a managing agent (MA) to maintain communal areas and provide services. There is a separate lease between the landlord and resident for his flat.
12. Initially, the resident was a shared owner. In March 2023, he bought the remaining share of his home after which he asked the landlord what the process would be for his service charges. During a web chat on 24 April 2023, the landlord told him there was no change to the process. This was inaccurate because shared owners pay their rent and service charges by monthly instalments but the landlord bills full owners annually in advance.
13. The resident also asked if he could pay his service charges directly to the MA. There is no evidence the landlord responded to this at any point. It should have explained the lease requires the resident to pay the charges to the landlord.
14. On 24 April 2023, the resident asked the landlord for a breakdown to help him understand the increases from April 2023. The landlord’s response of 19 May 2023 explained what information it had used from the MA and how it had calculated the service charges. It said the MA had changed from December 2022 and it was liaising with both the former and current MAs to understand the causes of the MA’s increased estimates. It said it would give a further response when it heard from the MA. This was a reasonable response to the resident’s request of 24 April 2023.
15. However, we have seen no evidence of the landlord’s enquiries with the MA and there is no evidence it gave any further response to the resident as it said it would.
16. On 21 August 2023, the resident asked why £5,000 of charges had been added to his account. He also raised concerns that the charges were not clear, the previous MA had mismanaged the charges resulting in additional costs, and the increases meant charges were unaffordable. There is no evidence the landlord responded at the time.
17. Between 27 September and 14 November 2023, the resident raised the following queries and concerns:
    1. Why he had received a demand for a further £1,064.
    2. If the MA’s addition of a charge to install a hot water monitoring system was fair.
    3. Concern that leaseholders in his block were subsidising another block.
    4. Why he was being charged for telephone lines to the lifts when the lines were not connected or active.
18. In its stage 2 complaint response of 12 January 2024, the landlord gave further explanation of how it calculated the charges. It explained the £1,064 demand was due to the MA’s actual costs in 2022-23 being higher than estimated. It included information from the MA to explain the cost of the lift telephone lines but did not address the resident’s point about the lines not being connected.
19. The stage 2 response did not address the query about the charge for the hot water monitoring system or how charges were apportioned between the resident’s block and the other block. There is no evidence the landlord gave a separate response to those queries.
20. In our view, the landlord gave a reasonable explanation of which information it used from the MA and how it calculated the charges. However, it did not give responses to all the resident’s specific queries and concerns. It gave an inaccurate response regarding the impact his change of ownership had on his service charge arrangements.
21. Further, there is no evidence it addressed his concerns about the MA’s charges with the MA before or during the complaint process. We would have expected it to do so to make sure it was passing on fair and reasonable charges to the resident and to be able to answer the queries he had raised about the MA’s charges.
22. The landlord’s failings amount to maladministration in its responses to the resident’s queries and concerns about his service charges.

23. We have assessed the landlord’s complaint handling against its policy at the time. It was an interim policy and the landlord has since changed its policy to meet the requirements of the statutory Complaint Handling Code (the Code) from April 2024.
24. The resident’s email of 21 August 2023 was an expression of dissatisfaction about the landlord’s failure to respond to queries he had previously raised. In line with its complaints policy, the landlord should have logged it as a complaint. Its failure to do so meant the resident sent further emails before the landlord recognised he was complaining.
25. After acknowledging the complaint on 3 October 2023, the landlord should have given a stage 1 response within 20 working days in line with its policy timescale. It was reasonable it offered £50 compensation for its late response when it did not meet that timescale.
26. The landlord’s policy said it would respond to stage 2 complaints within 40 working days. It gave its stage 2 response 31 working days after acknowledging the escalation so this was within its policy timescale. But it had given different timescales in its acknowledgement email and a later email extending its response timescale both of which it failed to meet. It was reasonable it offered a further £50 compensation for not meeting the timescales it had given.
27. The landlord’s failure to log a complaint from resident’s email of 21 August 2023 amounts to service failure in its handling of the complaint.

Learning

28. The landlord’s lease with the resident includes an appendix of key information for shared owners. This gave a good explanation of the shared ownership arrangements and lease obligations. The landlord could consider developing a key information document for shared owners staircasing to full ownership to explain the changes this involves.

Knowledge information management (record keeping)

29. The landlord did not send us all the relevant information with its evidence submission. For example, it did not send us its complaint acknowledgements. It should make sure it sends all relevant information for future investigations.

Communication

30. The landlord’s communication with the resident was inadequate because it did not respond to some of his queries and concerns and gave some inaccurate information.