Clarion Housing Association Limited (202324653)

Background

1. The resident’s flat is located within a building containing 2 flats. The landlord is the freeholder of the building. It carried out major works to the building in line with its responsibilities under the resident’s lease. It told the resident that under the service charge provisions of his lease, he was required to pay for 50% of the overall cost of this work. When it completed the work and invoiced the resident, he complained about the invoice and the landlord’s interpretation of the lease. He was unhappy with its final response to the complaint and asked us to investigate.

What the complaint is about

2. The complaint is about the landlord’s administration of service charges for major works.
3. We have also investigated the landlord’s handling of the complaint.

Our decision (determination)

4. There was no maladministration in the landlord’s administration of service charges for major works.
5. The landlord provided reasonable redress to failings in its handling of the complaint.

We have not made orders for the landlord but we have made a recommendation.

Summary of reasons

Administration of service charges for major works

6. The landlord consulted with the resident in line with its legal obligations prior to carrying out major works. It charged him for this work as it was entitled to do under the terms of the lease.

Handling of the complaint

7. The landlord acknowledged it delayed in raising a stage 1 complaint and delayed in issuing its stage 2 response in line with its complaints policy.  It apologised to the resident and offered him a reasonable amount of compensation in line with its compensation policy.

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.

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.

8. The resident is required by his shared ownership lease to pay the landlord a service charge. The amount he must pay varies from year to year. The lease states that he must pay 50% of the “service provision” costs. The other 50% is to be paid by the landlord, unless it has leased the other flat out on similar terms. If that were the case, the leaseholder or shared owner of the other flat would be responsible for paying it. As the landlord has not leased the other flat, and instead a tenant lives there, the landlord is responsible for paying the other 50% share.
9. The resident’s lease defines the “service provision” as including the landlord’s costs in carrying out its repair and maintenance obligations. These obligations include keeping the roof, foundations and main structure of the building in good repair. The lease states this includes the external windows and doors for both flats.
10. This means that if the landlord intends to carry out work to the building in line with its lease obligations, it may ask the resident to pay 50% of the cost. If the cost to the resident is likely to be more than £250, it is legally required to consult with him prior to carrying out the work. This legal obligation is set out in section 20 of the Landlord and Tenant Act 1985.
11. We are satisfied that the landlord complied with section 20 in this case. Prior to issuing a Notice of Intention letter, it informally consulted with the resident and told him about the work it intended to carry out. This is evidenced within a project brief document dated 7 October 2020. It then sent him the Notice of Intention letter on 14 October 2020 in line with the requirements of section 20.
12. The landlord listed the work it intended to carry out within the Notice of Intention. As all of the work involved it fulfilling its repairs responsibilities under the lease, it was entitled to recover 50% of the overall cost from the resident. It made this clear within the Notice of Intention which contained an estimate of how much the resident would owe once it had completed the work.
13. Part of the resident’s complaint was that the landlord had been telling him for a number of years that it would replace the windows in his flat. He suggested that it had never indicated during these previous conversations that he would have to contribute towards the cost. While that may be the case, we have seen no evidence that it specifically said it would cover the cost. Importantly, it did not carry out any work to the windows until after it sent him the Notice of Intention. This stated it would charge him for 50% of the window replacement costs for the “whole property”. It was therefore entitled to include these costs within its final invoice once it had completed the work.
14. It took the landlord almost 2 years, between September 2021 and June 2023, to carry out and complete all the work. This was due to delays associated with the COVID-19 pandemic. In September 2022 it sent the resident a Notice of Costs Incurred to advise him that due to these delays, it was not yet in a position to issue him with a final invoice. It said it would issue the final invoice no later than September 2023. This was in line with the notification requirements of section 20B of the Landlord and Tenant Act 1985 which relates to time limits for reclaiming costs. The landlord subsequently met its proposed deadline and sent the resident its final invoice in August 2023.
15. The resident suggested within his complaint that the landlord had incorrectly interpreted the lease. He said that it should only have charged him for 50% of the cost of works directly benefitting his flat. He said this meant it should not have charged him for 50% of the cost of the windows which the landlord installed in the neighbouring flat.
16. We are satisfied that the landlord’s interpretation of the resident’s lease is correct. As we have explained above, the lease requires the landlord to keep the external windows of both flats in repair. Repairs to window glass or internal issues, such as broken handles, are not the landlord’s responsibility. However, full window replacement is.
17. A simpler way to understand the lease may be to think of the windows in both flats as common parts of the building. The resident pays the landlord to maintain all common parts through his service charge. Therefore, when it replaced the windows in the other flat, it carried out work to a common part. It was entitled to reclaim 50% of its costs for this work to a common part from the resident. It told him in advance it intended to do this through the Notice of Intention.
18. The resident told us he does not think it is fair that he should have to contribute towards the cost of windows in the other flat. However, this is a term of the lease that he entered into. It is also in his interests that the windows in the other flat are efficient and secure. If they are not, it may give rise to issues that could affect the whole building, including his flat. For example, damp, loss of heat, pest infestation or entry by intruders.
19. Although the resident has to pay for 50% of the windows installed in the other flat, this is a reciprocal arrangement that he also benefits from. The landlord, as holder of the full title to the other flat, paid for 50% of the windows in the resident’s flat. It has essentially asked him to pay for one full set of windows (i.e. 50% of 2 sets of windows) and he has gained a full set of windows in return.
20. If the resident continues to disagree with the landlord’s interpretation of the lease, he may refer the matter to the First-Tier Tribunal (Property Chamber). The Tribunal can make determinations about liability to pay and the reasonableness of service charges. Advice about how to apply to the Tribunal is available through the Leasehold Advisory Service website.

21. When the resident first complained in October 2023, the landlord failed to raise a stage 1 complaint and process it in line withits complaints policy. Itacknowledged this and apologised to the resident in its stage 1 response the following year. It offered him £250 compensation. It explained that £50 of this was for its failure to raise a stage 1 complaint in October 2023. The other £200 was to compensate the residentfor the time and trouble he then spent in chasing it for a response. This was in keeping with its compensation policy which stated it would award compensation of between £50 and £250 for complaint handling failures such as this.
22. At the time of the resident’s escalation request, the landlord’s complaints policy required it to issue a stage 2 response within 40 working days of receiving the request. It took 42 working days to respond. However, it told the resident in advance of the deadline that its response would be delayed. It also apologised for the delay in its stage 2 response and offered him £50 compensation in line with its compensation policy. This was reasonable.
23. The landlord has since updated its complaints policy to bring it into line with the Housing Ombudsman’s Complaint Handling Code (the Code). It is now required to acknowledge escalation requests within 5 working days and issue its stage 2 response within 20 working days of its acknowledgement. It may extend the response date, usually by no more than a further 20 working days. If doing so, it must notify the resident of the extension in advance of the original deadline, as it did in this case.
24. The landlord has paid the resident the £250 offered in its stage 1 response. We do not know if it has paid him the £50 offered in its stage 2 response. If it has not, we recommend that it does so now.

Learning

Knowledge information management (record keeping)

25. We have no concerns about the landlord’s record keeping in this case. It retained records of key documents such as the project brief for the works and the section 20 notification letter. This meant that when it was investigating the resident’s complaint over 3 years later, it was able to satisfy itself that it had complied with its statutory consultation obligations. It also enabled us to reach the same conclusion.

Communication

26. The landlord’s communication with the resident during the complaints process was good. It spoke to him at the start of its investigation at both stages to ensure it understood what his complaint was about. It spoke to him again during its stage 2 investigation when it became aware its response would be delayed. It clearly explained its reasoning within its responses. Although it was unable to offer him the outcome he sought, it recognised his financial concerns and signposted him to support services. This was good practice.