Peabody Trust (202214350)

REPORT

COMPLAINT 202214350

Peabody Trust

20 November 2024

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:
1. The landlord’s handling of the resident’s queries about the service charge account.
2. The landlord’s complaint handling.

Background

The resident was a shared owner of the property, a 2 bedroom maisonette, until 7 August 2022, when the property was sold. The property is within a block of flats, but is on the ground floor and has its own private entrance. The landlord is a housing association. The landlord has no vulnerabilities recorded for the resident.
On 1 April 2022, the resident contacted the landlord to dispute items that had appeared on the service charges for 1 April 2021 to 31 March 2022 and had not been on the list previously. The resident stated she did not have access to the main block as she had not been given a key fob to access it. The resident stated:
1. There was a charge for an entry phone which she did not use to access her property.
2. There was a charge for lift maintenance, but her property was not accessed via the lift.
3. There was a charge for communal electricity when the property is not part of the communal block of flats.
The resident asked the landlord to investigate the service charges and asked that the charges be refunded. The resident contacted the landlord again on at least 3 occasions between April 2022 and July 2022 to chase a response to her queries.
The resident made her stage 1 complaint on 5 September 2022. The resident expressed frustration that she had not received a response to her initial query and has not received a resolution.
The landlord provided its stage 1 complaint response on 18 November 2022. The landlord apologised for the delay in providing a response and cited staff shortages. In its response, the landlord stated that the appropriate adjustments had been applied to the service charges. It also stated that any further adjustments would be the responsibility of the new owner of the property rather than the resident. The new owner would be entitled to receive any overpayment. The landlord advised the resident to discuss the matter with her solicitor as there may have been a provision for reclaiming service charges as part of the transfer of ownership.
The resident thanked the landlord for its response on 20 November 2022, but noted that this was the first response she had received since April 2022 which meant that the matter was not resolved by the time the resident sold the property. The resident requested a stage 2 complaint escalation and a full reimbursement of the overpaid service charges. The landlord acknowledged the request on 12 December 2022 and a response was provided on 17 January 2023.
In the landlord’s stage 2 response, it stated:
1. It did not respond to the resident’s enquiry in good time.
2. It considered all charges to be legitimate, but it has removed the charge for the door entry system as it had not worked for over a year.
3. Any overpayment of service charges should have been chased by the resident’s solicitor.
4. Once a sale is complete, it is the new owner who becomes responsible for the service charges.
5. It offered the resident £150 compensation for the inconvenience caused by the delay, and noted that this amount exceeded the overpayment refund it considered was due for the entry phone.
The resident remained dissatisfied with the landlord’s final response, and the matter was referred to this Service.

Assessment and findings

Scope of investigation

It is understood that the resident’s complaint partly concerns the information she was provided about the service charges, and the landlord’s response to the queries she raised about the service charge. The Ombudsman cannot review complaints about the increase of service charges and determine whether service charges are reasonable or payable. However, we can review complaints that relate to the collection of service charges or how information about service charges was communicated. This is in line with paragraph 42 .e. of the Housing Ombudsman Scheme, which states we may not consider complaints that concern the level of service charge or rent or the increase of service charge or rent.

Policies and procedures

The lease agreement between the resident and the landlord provides that the resident must pay the service charge.
The landlord’s service charge policy defines a service charge as a payment made by a tenant or licensee towards the costs of providing and maintaining services and benefits beyond the benefit of enjoying occupation of their own home. The policy states that, when a homeowner sells their property, any surplus will be repaid to the resident leaving that property. The policy also states that the landlord will add a new service if it is obligated to do so, and will give reasonable notice to residents.

The landlord’s handling of the resident’s queries about the service charge account.

The resident states that several items were added to the service charge and that she discovered this when she received the service charge statement. While this service cannot consider whether the items added to the service charge were reasonable, we can consider the method of collection and the related communication.
The landlord’s service charge policy states that it will give reasonable notice to resident when adding items to the service charge. The resident asserts that the items appears on the statement for the financial year 2021-2022 and had not been present previously. There is no evidence to suggest that the landlord took steps to inform the resident of the change. This is a failure of service.
The resident contacted the landlord on 1 April 2022 to enquire about the changes to the service charges. The landlord did not provide a response until its stage 1 complaint response which was 7 months after the resident’s first contact. This was inappropriate and caused inconvenience to the resident who needed to chase the landlord for a response. Internal correspondence provided to this Service by the landlord shows that it was evidently aware it had not responded to the resident original contact or chasers, but it did not act on this which was inappropriate and a failure of service.
The resident asserts that she should not have had to pay the service charges related to block electricity, the lift, or the entrance phone as the entrance to her property was separate to the main block and she did not use these facilities. While the resident states she did not have a key fob so could not use these facilities even if she wanted to, the landlord could have provided her with a fob if she had requested one. Additionally, while the property has its own private entrance, it is part of a block of flats and the service charge is to provide and maintain services for all residents.
The landlord has agreed to refund the service charge for the entry phone for the block because it did not work for the period covered by the service charge statement in question. However, the landlord has not refunded this to the resident because the resident no longer owns the property. It asserts that any surplus will be paid to the new owner of the property and that the resident’s solicitor is responsible for obtaining the refund.
The landlord’s service charge policy states that when a homeowner sells their property it will repay any surplus to that resident. The landlord did not follow this policy in its handling of the resident’s request for a refund which was inappropriate.
The resident contacted the landlord 4 months before the property was sold to request the refund but the landlord did not act until the resident had moved. This was an inappropriate response and meant the resident suffered a detriment as a result of the landlord’s own failure to act. An order has been made to reflect this at the end of this determination.
In its stage 2 complaint response, the landlord offered the resident £100 for the time, trouble, and inconvenience caused by the delay in responding to the resident’s enquiry. It noted that this sum was greater than the amount of service charge refund owed for the entry phone. This was an inappropriate response as it suggests that the resident was not entitled to the refund because it had offered compensation for its handling instead.
The landlord’s response in relation to the resident’s enquiry about the service charge amounts to maladministration. The landlord took too long to address the resident’s concerns and relied on the fact that the resident had sold the property by the time it responded as a justification to not repay the surplus. The landlord should have responded to the resident within a reasonable time frame to ensure that it handled the matter appropriately.
The resident was evidently inconvenienced by having to contact the landlord to request a response, and the landlord’s late reply to her queries. The resident has reported to this Service that the matter has had a significant impact on her wellbeing. The landlord has not demonstrated any learning or reflection in this case.
The Ombudsman considers that £400 compensation is reasonable to redress the inconvenience caused to the resident by the maladministration identified.

The landlord’s complaint handling.

The Ombudsman’s Complaint Handling Code (the Code) states that landlords must have an effective complaint process to provide a good service to their residents. An effective complaint process means landlords can fix problems quickly, learn from their mistakes and build good relationships with residents. In this case the landlord’s complaint process lacked customer focus and took too long.
The landlord’s complaint policy outlines that it will acknowledge stage 1 complaints within 5 working days and respond within 10 working days. Where it requires more than 10 working days, it will communicate this to the resident. Stage 2 complaints will be responded to within 20 working days. Where more time is needed, the landlord will let the resident know why and when a response will be provided.
The resident first complained to the landlord on 5 September 2022 and the landlord responded on 18 November 2022. This is outside of the 10 working day time frame for a response. There is no evidence that the landlord acknowledged the resident’s complaint or provided updates or explanations for the delay.
The resident requested escalation to stage 2 on 20 November 2022. The landlord acknowledged the request on 12 December 2022 and responded on 17 January 2023. This is outside of the landlord’s advertised time frame for a stage 2 response.
Failure to adhere to timeframes for responses is a failure of service. This Service acknowledges that on occasions there will be circumstances that mean a complaint response cannot be provided by the initial time given by the landlord. In these cases, it would be reasonable to expect that a landlord would contact the resident to explain in detail the reasons for the delay. The landlord is also expected to provide a new timeframe whereby the resident would expect to receive a response. However, the landlord did not provide any updates nor reasoning for why it had exceeded the promised timeframe. This response was inappropriate.
It is particularly concerning that the landlord did not respond to the resident until this Service had intervened on the request of the resident. The landlord missed the opportunity to demonstrate to the resident that it was taking her experience and complaint seriously.
The landlord addressed the resident’s complaints in turn and set out its position. It accepted that it did not respond to the resident in a reasonable time frame and cited staff shortages as the reason. It did not provide any learning to prevent the same thing happening again or to show it had taken the resident’s concerns on board.
The complaint response states that the compensation can be credited to the resident’s rent account. This was inappropriate as the resident had left the property and was no longer a resident of the landlord. This suggests the landlord did not take due care when formulating its response.
The complaint handling failures had a detrimental impact on the resident, including having to chase the landlord for a response and reach out to this Service to facilitate the complaint. The resident was evidently distressed by not receiving the complaint responses on time.
The landlord offered £50 for the delay in responding to the complaint. In the Ombudsman’s opinion, this is not sufficient to recognise and redress the inconvenience caused to the resident.
The Ombudsman finds maladministration in the landlord’s complaint handling. An award has been made below in line with this Service’s remedies guidance which is available on our website.

Determination

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

Orders and recommendations

The landlord must apologise to the resident in writing for the failures noted in this determination. A copy should also be provided to the Ombudsman within 4 weeks of this determination.
Within 4 weeks of this determination, the landlord is ordered to pay the resident a total compensation of £600. £150 of the landlord’s previous compensation offer can be deducted from this total, if already paid. The compensation is broken down as follows:
1. £400 to acknowledge and redress the failures identified in relation to the service charges.
2. £200 in recognition of the complaint handling failures.
Within 6 weeks of the date of this determination, the landlord must write to the resident to confirm the amount of refund owed to the resident for the entry phone service charge between 1 April 2021 and the day the resident ceased to own the property. The landlord must refund this amount to the resident and provide evidence it has done so to the Ombudsman, also within 6 weeks.