Clarion Housing Association Limited (202304992)

Background

1. The resident queried her service charges, after receiving a letter from the landlord which said her weekly charge would increase from April 2023. She said the service charge was excessive and the landlord charged her for services it did not provide. She raised a formal complaint because she remained dissatisfied with the landlord’s response to her queries. As she could not resolve her concerns with the landlord, she asked us to investigate.

What the complaint is about

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

Our decision (determination)

3. We have found:
   1. The landlord is responsible for maladministration in its handling of the resident’s service charge queries.
   2. The landlord is responsible for service failure in its complaint handling.

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

Reasons

4. 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.

What we did not investigate

5. We do not investigate complaints about the level or reasonableness of the service charge. As part of her complaint, the resident has raised that she considers the increase of the service charge to be excessive. The tribunal or court are better placed to consider any concerns relating to the level of the service charge, given their powers and expertise.

The landlord’s handling of the resident’s service charge queries

6. The crux of the resident’s complaint was that she believes the landlord charged for services it did not provide, including communal electricity and cleaning. She requested the actual accounts and an explanation on how the new proposed charges had been calculated. We have therefore considered how the landlord handled her requests for information.
7. The resident raised her formal complaint on 27 March 2023 and requested accounts and receipts for her increased service charge. The landlord acknowledged this on 28 March 2023 and said it would pass the query to its service charge team. It was reasonable that it responded promptly. The landlord emailed the resident again on 14 April 2023, confirming that her service charge dispute was in progress. It said that if she was not happy with the resolution, it would raise a formal complaint for her.
8. We have not seen evidence that the landlord provided any further response to the resident’s service charge queries. This would likely have caused distress and inconvenience, and we note the resident had to contact our service for assistance.
9. The landlord issued its stage 1 complaint response on 22 August 2023 and apologised for the delay and inconvenience. It was reasonable that the landlord took accountability for the delays. It explained that it calculated the 2023/2024 service charge estimate using actual expenditure from previous years and applying inflation. It confirmed that the resident has a variable service charge and that it will send her a statement of actual expenditure each year.
10. The landlord recognised there had been an exceptional increase in various charges for 2023/2024 due to a deficit in the 2021/2022 actual expenditure. It explained that it needed to increase the charges to make up for the increase in actual expenditure. It provided a breakdown, demonstrating how the 2023/2024 estimated weekly service charge was calculated. This showed the resident had a £12.72 weekly deficit from the 2021/2022 financial year, which was carried forward into 2023/2024. This meant the landlord spent more than it estimated, so the resident owed the difference. However, after further investigation, it identified that it had overcharged her for 3 services in 2021/2022. It reduced caretaking from £385.25 to £148.00, refuse collection from £81.68 to £31.41 and communal water from £113.49 to £31.45. As these charges for 2021/2022 were reduced, the total amount the resident owed from that year also reduced.
11. The deficit from 2021/22 reduced from £12.72 to £5.54 per week, meaning the resident was no longer being charged the higher figure. It also confirmed that its actual expenditure for 2022/23 was due in September 2023 and any surplus or deficit would be applied automatically. We accept that it could not provide the requested documents until the accounts were finalised.
12. The landlord addressed the resident’s concerns about the services provided and said a caretaker attends weekly to clean internal communal areas, including cleaning windows, floors and doors. It said its weekly inspections had not raised concerns about the standard of the services. The landlord also confirmed that it asked its caretaker to liaise with the resident directly to inspect the cleaning after works are completed. This was a reasonable step and showed a willingness to respond to the resident’s feedback.
13. The resident remained unhappy because she had asked to see the accounts and proof of costs for 2021/22. She also said no cleaner has been visiting the property and asked for an explanation about the communal water, grounds maintenance, refuse collection and administration charges. She was unhappy that she had not received any refunds for the overpaid charges or an explanation for the overcharging.
14. The landlord issued its stage 2 complaint response on 4 April 2024. It said it had attached its 2021/2022 accounts and evidence of actual costs. We have not seen these documents in the evidence provided and will order the landlord to provide them if it has not already done so. It confirmed that the caretaking charge includes vehicle hire, cleaning materials, a proportion of the caretaker’s salary, estate management costs and any equipment used. It reviewed its caretaking records and found no evidence of caretaking visits between May and October 2022, December 2022 and January 2023. However, it evidenced inspections or caretaker visits in April 2022, November 2022 and February and March 2023.
15. As the landlord found caretaking was not provided for 8 months, it had approved a partial refund of the 2022/2023 service charges and reduced the caretaking costs for 2021/2022 to £148, as previously confirmed in its stage 1 complaint response. It confirmed this adjustment would be reflected in the resident’s weekly charges from 1 April 2024.
16. In response to the resident’s queries, the landlord confirmed the actual communal water costs had been reduced and provided a copy of its water bill. It explained that the grounds maintenance charge included services such as grass cutting and flowerbed maintenance and provided a copy of its invoice. For refuse collection, it said this charge covers the removal of large items when it cannot identify who was responsible and confirmed this cost had previously been reduced. It explained that the administration fee is based on the total communal service costs and covers the landlord’s management of services.
17. The landlord explained that its system applies any in-year service charge adjustments retrospectively, so residents can see the revised charges. It said these adjustments do not change payments already made, which means the resident’s account will show a credit. It provided a reconciliation showing the transactions on the resident’s account between 1 April 2023 and 18 March 2024 and confirmed that the resident’s total weekly service charge for 2023/2024 was £18.19. This included the estimate and the balancing adjustment for 2021/2022. It explained that when it corrects an overcharge, the system updates the charges from the start of the financial year. It confirmed that her account was in £569.14 credit and provided a full statement for 1 April 2023 to 18 March 2024 for the resident’s reference.
18. Based on the evidence, the landlord acted reasonably by explaining the resident’s service charges and providing the requested invoices and account breakdowns. It also acted reasonably by investigating her concerns, identifying overcharging and making the appropriate adjustments to her service charge accounts. It offered practical resolutions, including asking its caretaker to liaise directly with the resident about the internal cleaning. However, the £150 compensation that the landlord offered did not proportionately recognise the length of time it took to provide the resident with the requested information.
19. Given the delay in providing the explanations and the 2021/2022 service charge accounts, we have found maladministration. We order the landlord to pay the resident a further £150 compensation, which is in line with our remedies guidance where a landlord has failed in its service and has not reasonably addressed that failure. We also order it to provide evidence the resident with evidence of its actual costs for 2021/2022, if it has not already done so.

Complaint handling

20. The Service’s Complaint Handling Code (“the Code”) requires landlords to address all points raised in a complaint.  As part of the resident’s complaint, she raised issues relating to communal electricity, however, we have not seen any evidence that this was addressed in either of the landlord’s complaint responses. As such, this was a failure in service.
21. The resident raised her complaint on 27 March 2023, however, the landlord treated this as a service charge dispute. The resident reiterated that she wanted to raise a formal complaint on 4 April 2023, and we have not seen any evidence of acknowledgement from the landlord until 2 May 2023. It should have provided an acknowledgement sooner. This was not in line with the timescale under the Code.
22. The landlord issued its stage 1 complaint response on 22 August 2023, after the resident contacted our service for assistance with the complaint. This was a significant delay by the landlord. The resident escalated her complaint to stage 2 on 4 September 2023, and we have not seen any evidence of the landlord’s acknowledgement of this. It subsequently provided its stage 2 complaint response on 4 April 2024.
23. The landlord unreasonably delayed its internal complaints process for the resident, causing significant distress and inconvenience, with the resident chasing the landlord and asking our service for assistance. We note the landlord has provided £300 for its complaint handling within its internal complaints process. As the landlord has admitted its failings, we have considered whether it went far enough to put things right. While the level of compensation is satisfactory, the landlord needs to take further steps. This is because it did not address the resident’s complaint relating to communal electricity.

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.