Notting Hill Genesis (202405646)

Background

1. After receiving a rent and service charge increase letter in March 2024, the resident contacted the landlord and asked for this to be reconsidered. In April 2024 he raised a complaint as no response had been received, and he did not understand the reason for the increase. Following the landlord’s response to his complaint in October 2024, the resident referred the case to us. To resolve the complaint he wanted the landlord to answer questions in a timely manner and correct any errors made on his account.

What the complaint is about

2. The complaint is about:
   1. the level of rent and service charge increase
   2. the landlord’s response to a query about the rent and service charge increase
   3. the landlord’s decision to use credit on the rent account to recover arrears
   4. the response to the resident’s complaint

Our decision (determination)

3. We have found the complaint about the level of rent and service charge increase is outside our jurisdiction and have not investigated it.
4. We found there was maladministration in the landlord’s response to a query about the rent and service charge increase.
5. We found there was no maladministration in the landlord’s decision to use credit on the resident’s rent account to recover arrears.
6. We have found reasonable redress in the landlord’s response to the complaint.

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

Reasons

The level of rent or service charge increase

7. In the resident’s complaint he told the landlord he was unhappy that his service charge and rent had increased. He was concerned the service charge had increased by over 50% and the rent had increased by around 10%. Our scheme rules say we may not investigate complaints which concern the level of a service charge or rent, or the amount of a service charge or rent increase. Therefore, we have not investigated this complaint.

The response to a request for service charge information

8. On 16 March 2024 the resident contacted the landlord to appeal the rent and service charge increase due to start on 1 April 2024. He said the calculation was too high and asked the landlord to reconsider it. The landlord did not acknowledge the enquiry, provide a holding response, or explain any delay. This did not align with the landlord’s Service Charge Policy, which says it will take a proactive and supportive approach when dealing with service charges.
9. The resident repeated his concerns on 10 April 2024 and confirmed he had not received a response. He chased the matter again on 6 May 2024. The landlord still did not reply, which extended the delay and reduced the opportunity to resolve the issue informally.
10. The landlord did not provide a substantive response to the service charge query until 29 August 2024, when it addressed the issue in the stage 1 complaint response. This meant the resident waited over 5 months for an explanation.
11. When the landlord did respond, it explained how the rent and service charge increase was calculated. It referred to the resident’s lease when explaining that it used the Retail Price Index to calculate the increase in rent and set out how the charge was apportioned based on the percentage of the property the resident owned. It also explained why the service charge had increased, stating this was largely due to higher insurance costs linked to wider market conditions outside its control. It signposted the resident to its website and service charge booklet. This response addressed the key points in the original query, but it should have been provided much earlier.
12. In its complaint responses, the landlord offered £100 in compensation for delays in issuing its complaint replies. However, it did not recognise the impact of the delay in responding to the service charge query itself. The landlord had several opportunities to respond to the query before it escalated into a complaint but failed to do so.
13. The impact on the resident was increased because, during this period, the landlord contacted him at least 5 times about alleged arrears. The resident told us this made him feel frustrated, worried, and confused, as he was receiving arrears correspondence before being given an explanation of the service charge.
14. We have ordered a further £100 in compensation to recognise this impact. This is in line with our remedies guidance for failures that adversely affect a resident, while recognising the resident would still have been required to pay the rent and service charge even if the response had been provided earlier.

The decision to use a credit to recover arrears in October 2023

15. When escalating his complaint, the resident said he was unhappy the landlord used credit on his rent account to cover a later service charge shortfall. He felt this was not an appropriate way to manage the account. In its stage 2 response, the landlord explained that the credit on the account in October 2023 was not a refund, but part of the estimated service charge. Once the final accounts were completed, the landlord used this credit to reduce an overall shortfall. It also explained what caused the shortfall and confirmed the costs were shared between all homes.
16. We consider the landlord’s decision to use the credit was reasonable and in line with section 7 of the lease. The lease explains that service charges are paid in advance as estimates and reconciled at year-end against actual expenditure. Where residents have overpaid, the balance is treated as a credit. Where they have underpaid, they must pay the difference. This allows the landlord to use a credit to offset a shortfall once final figures are known. In this case, the landlord acted in accordance with the lease by using the credit to reduce the final balance.

Response to the resident’s complaint

17. The resident’s email of 10 April 2024 expressed dissatisfaction and referred to the lack of response to his earlier enquiry. Under the Complaint Handling Code, the landlord should have recognised and logged this as a complaint at that point, but it did not do so.
18. The landlord issued the stage 1 complaint response on 29 August 2024, apologised for the delay, and offered in £50 compensation. This exceeded the timescales set out in the Complaint Handling Code, which requires a stage 1 response within 10 working days.
19. The landlord issued the stage 2 response on 15 October 2024. It apologised again for exceeding the 20‑working‑day timescale set out in the Complaint Handling Code. It explained the reasons for the delays, identified learning to improve future complaint handling, and offered a further £50 in compensation, bringing the total to £100. This was a positive step and in line with the landlord’s compensation policy for service failures that cause inconvenience. The amount also aligns with our remedies guidance for a failure that did not significantly affect the overall outcome for the resident.

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.