Notting Hill Genesis (202345691)

Background

1. The resident is the shared owner of the property. The landlord is the joint shared owner. The landlord is not the freeholder. The freehold is owned by the superior landlord. The property is a 1 bedroom flat.

What the complaint is about

2. The complaint is about:
   1. The landlord’s response to the resident’s request for information about service charges.
   2. How the landlord responded to the complaint.

Our decision (determination)

3. There was maladministration by the landlord in response to the resident’s request for information about service charges.
4. There was service failure by the landlord in how it responded to the complaint.

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

Summary of reasons

5. The landlord has not provided a comprehensive response or clarified its position which satisfactorily addresses the service charge queries which the resident started raising in December 2020. In addition the landlord has not set out how it will work with the superior landlord in the future to ensure that the resident’s service charge account is managed and administered appropriately.
6. The landlord acted inappropriately in advising the resident to not make a formal complaint about service charges in September 2021.

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.

Recommendations

Our recommendations are not binding, and a landlord may decide not to follow them.

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.

7. As detailed in the complaint chronology the resident has raised concerns about the accuracy and reasonableness of the service charges for the property dating back to financial year 2013-14. In considering this part of the complaint we will not comment on the accuracy or reasonableness of the service charges. This is because these matters would be better dealt with by the FTT who deal with residential leasehold disputes. The FTT can make determinations on all aspects of liability to pay a service charge and whether the charges have been reasonably incurred. As part of that process the FTT are able to forensically examine service charge accounts in detail.
8. In considering this part of the complaint we will look at how the landlord responded to the resident’s request for information about the service charges for the property.
9. The evidence shows the resident contacted the landlord on 13 October 2020 to request a breakdown of service charges. She explained that she needed the information as she had received an invoice for unpaid service charges dating back to the financial year 2013-14. The landlord responded on 14 October 2020 providing actual service charge statements for financial years 2012-13 through 2018-19 and an estimate service charge statement for the financial year 2019-20. This was appropriate in order to show how the service charges had been calculated and applied to the property.
10. The landlord has explained that an invoice for unpaid service charges for financial years 2013-14 to 2020-21 was issued to the resident in October 2020 as the superior landlord had been serving demands on the resident directly, rather than to it. The resident has confirmed to us that this was not the case. While the landlord’s position is noted, it is concerning that during the period it did not recognise that service charge demands had not been received for the property. This demonstrates poor administration and management by the landlord in managing its portfolio of properties.
11. We acknowledge that the resident, as the shared owner of the property, would have been aware that a service charge payment was due yearly as it was a contractual requirement of the lease. However this does not mitigate that the landlord failed to ensure that its administration of the service charges for the property was managed appropriately.
12. On 9 December 2020 the resident wrote to the landlord providing a list of service charge queries following review of the actual and estimate statements. The landlord responded on 21 December 2020 to confirm that it would liaise with the superior landlord in order to be able to respond to the queries raised. This was reasonable as the superior landlord sets the service charges for the property.
13. The evidence shows that during 2021, 2022 and 2023 the resident contacted the landlord on many occasions to request a response to the questions which she had raised regarding the service charges in December 2020. The resident also began raising queries relating to the actual service charges for the financial year 2020-21. Despite the resident’s repeated contacts we cannot see that the landlord provided the resident with a comprehensive response to address the queries she had raised. The only information the landlord provided was to confirm that no ground rent was due and it would issue a refund. This is unsatisfactory, including as the landlord acknowledged that there were “a lot of inconsistencies which needed resolving” (email to resident dated 23 September 2021).
14. Between 2021 and 2022 we have not identified any evidence to demonstrate that the landlord was working with the superior landlord in order to respond to the resident’s service charge queries. This is a failing. As the resident had no relationship with the superior landlord, it was for the landlord to obtain the information necessary in order to provide a response.
15. In 2023 and early 2024 the evidence shows that the landlord contacted the superior landlord on a small number of times in relation to the service charges for the property. However the landlord’s communication does not demonstrate that it was seeking the information necessary in order to provide the resident with a comprehensive response to address the concerns which she stated raising in December 2020.
16. In May 2024 as part of its stage 2 investigation the landlord carried out a review of the service charges for the period 2013-14 to 2020-21. This was appropriate as it acknowledged that it had not provided a satisfactory response to address the resident’s service charge queries from December 2020. We however note that the review did not address the individual and specific queries which the resident had raised. If the landlord was unable to address the queries following its review it should have acknowledged this within its response to make its position clear. In an update to us in October 2025 the landlord confirmed that its records did not show that it had provided a response to the resident to address the resident’s correspondence dated December 2020.
17. As part of its stage 2 response the landlord offered the resident a settlement offer based on the findings of its review. We understand that figure was to the value of around £1,000. We are not able to comment on whether this figure was reasonable in recognition of the charges the resident was querying. We understand that the resident has not accepted the offer as she does not feel the settlement offer clearly addresses or resolves all the queries which she has raised about the service charges raised.
18. As noted above disputes relating to the reasonableness and accuracy of service charges are matters which are most effectively dealt with by the FTT. The landlord did not signpost the resident to the FTT until May 2024. It would have been appropriate for the landlord to have signposted her at a much earlier time. This was a missed opportunity.
19. The landlord awarded the resident £600 compensation in recognition of how it had responded to her queries relating to service charges. While it was appropriate that the landlord awarded compensation, for the impact on the resident, in our opinion it does not fully resolve the complaint. This is because the landlord has not confirmed its position on the specific service charge queries which the resident had raised from December 2020 and on repeated occasions after this. Where it was unable to provide a response the landlord should have clearly stated this. It was not sufficient for the landlord to signpost the resident to the FTT without providing any other information or explanation to address those queries. 
20. In addition we cannot see that the landlord provided reassurances or an explanation setting out how it would work with the superior landlord in the future. A landlord must ensure that it is proactive in pursuing a superior landlord for meaningful account information in relation to service charges. This is to ensure information is provided in a timely manner and there are appropriate arrangements in place for related queries to be raised.

21. The landlord’s handling of the complaint was not satisfactory. This is because the landlord provided its stage 2 response significantly outside of the 20 working days prescribed by the Ombudsman’s Complaint Handling Code (the code); a delay of approximately 117 working days. The evidence further shows that the stage 2 response was only provided following intervention from us. This is unsatisfactory and will have resulted in uncertainty, inconvenience and distress to the resident in addition to the resident feeling that her concerns were not being taken seriously. It was also unsatisfactory as the purpose of a formal complaint procedure is to address complaints at the earliest stage.
22. The landlord acknowledged that its handling of the complaint had not been satisfactory and therefore awarded  £375. This was appropriate. We consider the landlord’s offer for delays in complaint handling reasonable in recognition of the impact on the resident including inconvenience, distress, time and trouble.
23. The evidence shows that on 21 September 2021 the landlord told the resident in an email that “a formal complaint [would] not enable this to be dealt with more speedily…” It is concerning that the resident was discouraged from complaining by the landlord. This goes against the Ombudsman’s principles to be fair and to put things right. A complaint response in Autumn 2021 may have provided the resident with a resolution she was happy with at that time; including as the information needed in order to provide a response may have been more readily available at the time.

Learning

24. The landlord should consider reviewing the Ombudsman’s spotlight report on Landlords’ engagement with private freeholders and managing agents dated March 2022. The report provides recommendations on actions and best practices a landlord can take to ensure it meets its obligations where they have to rely on a third party.
25. In this case the landlord’s communication with the resident was poor. The resident frequently chased the landlord for updates on the status of her queries regarding the service charges. Frustration and dissatisfaction may have been avoided if the landlord had kept the resident updated regularly on the status of its work to address the queries. It may also have resulted in a better outcome for the resident.