Peabody Trust (202216080)

REPORT

COMPLAINT 202216080

Peabody Trust

3 March 2025

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 the landlord’s handling of:
1. The resident’s queries about his service charges.
2. The associated complaint.

Background

At the time of his complaint, the resident was a leaseholder with the landlord. The resident’s property was in a block of 5 other properties, set in a wider housing estate.
In February 2015, the landlord carried out a consultation under Section 20 of the Landlord and Tenant Act 1985, in relation to setting up 10-year contracts for the maintenance and repair of fire alarms. The estimated total cost per year was £2,157 which worked out as £107.85 per property based on a block of 20 properties.
At the time of the resident’s complaint, the landlord contracted out some estate services to a managing agent. On 3 February 2021, the managing agent wrote to residents setting out its estimated service charges for the year. On 28 September 2021, the managing agent provided a copy of its annual accounts for 2020-2021. The charges included grounds maintenance, general maintenance, carpark gates, professional fees and a contribution to a reserve fund. It is unclear whether the resident received a copy of this information prior to the landlord forwarding it to him in May 2022 as the landlord has only provided a generic copy of this letter.
On 24 January 2022, the resident sent the landlord several queries (set out below) about his service charges as he wanted to extend his lease. The resident accepted the landlord’s responses to some of his queries, but others remain in dispute. The queries the landlord answered to the resident’s satisfaction have not been included in this assessment.
1. 2017-2018
  1. The service charge account statement stated that he had paid £1,176.35 for the year, which worked out as £98 each month. However, his monthly payments had been £152.53.
  2. He asked why the estate management fee was nearly 3 times the estimate.
  3. His contribution to the reserve fund was £849. He asked how this was calculated and asked the landlord to indicate the clause in his lease which set out the requirement to pay this charge.
2. 2018-2019
  1. He asked what additional cleaning had been carried out to justify the 400% increase in these costs.
  2. The communal decorating works had cost the block £1,890 and therefore the contribution per leaseholder was £378. He asked the landlord to send him copies of the consultation regarding the cost of the contract for this.
  3. The cost of the fire alarms had increased to £136 per month. He asked the landlord to explain the reasons for this and to provide copies of the consultation documents.
  4. He asked the landlord to confirm the tender process for the fire alarm contracts and the decorating works.
3. 2019-2020
  1. He asked the landlord to provide a service charge account statement for this year.
4. 2020-2021
  1. The estate management costs of his property had increased from £183 in 2018-19 to £1,776 in 2020-21 (an increase of 910%) and were £1,497 (637%) over the estimate for the year of £279. He asked for a breakdown of the costs and an explanation of the reasons for the increase, and the disparity between the estimated and actual costs.
The resident complained to the landlord on 21 April 2022. He said he had not had a response to his queries about his service charges. He was awaiting the landlord’s explanation so that he could make arrangements to settle any outstanding charges and extend his lease.
On 12 May 2022, the landlord responded to the resident’s queries as follows:
1. 2017-2018
  1. It advised the resident to contact its leasehold collections department with regard to the disparity in his monthly payments and the amount set out on his service charge statement.
  2. It said the estate management fee was set at 20% of the total block and estate costs. The actual costs had exceeded the estimated costs therefore the estate management fee was £195.
  3. It had applied a refund of £193.20 to the resident’s service charge account on 4 April 2019 in respect of the reserve fund. The reserve fund fee was set at £681.24. It said the resident would have been advised of this when he purchased the property.
2. 2018-2019
  1. It provided a breakdown of cleaning costs for the resident’s estate. It said the increase was primarily due to an annual cost for hiring a bin.
  2. It had not needed to consult residents in relation to the costs of the communal decoration as these were under £250 per property.
  3. The cost of the fire alarms was an accumulation of various works, and no single piece of work cost more than £250. It had a long-term agreement in place with its fire-alarm contractor to cover any works under the threshold of £250, therefore it had not needed to follow a consultation process in relation to these costs.
3. 2020-2021
  1. It provided an invoice which listed the year-end balancing charge applied by the managing agent, and its statement of expenditure which provided a breakdown of the deficit.
The resident responded to the landlord on 13 May 2022. He raised further queries as follows:
1. 2017-18
  1. He asked why the actual costs for the management fee of £195 were so much higher than the estimated costs of £66.94. He said the landlord would have known the management fee in advance and could therefore have provided a much more accurate estimate.
  2. He had not been advised of the annual charge for the reserve fund when he purchased the property. He asked the landlord to point him to the provision in his lease that referenced the annual charge.
  3. He asked why the landlord was paying £643 to rent a bin and why it had not needed to rent a bin previously.
2. 2018-2019
  1. He reiterated his query about the costs of the communal decoration and again asked why the landlord had not consulted residents in relation to this cost.
  2. He again asked the landlord to explain how it had spent £136 every month on fire alarms for a small block of just 5 flats with a small communal area. The £1,632 annual charge for the fire alarms exceeded £250 per flat. He reiterated that the landlord should have consulted residents on these charges, therefore.
3. 2020-2021
  1. He asked the landlord to explain the managing agent’s costs further. In the information it had sent him, the estimated and actual costs were similar, however this was not reflected in his service charge statement. Furthermore, the sums in the spreadsheet it had sent him seemed to relate to a different block.
On 17 May 2022, the landlord’s leasehold collection department advised the resident that the estimated monthly charge of £152.53 in 2017-18 included a reserve fund contribution of £56.77. It said therefore, the resident’s estimated service charge for that year was £152.53 less £56.77.
The resident contacted the landlord’s collection department the same day. He asked why, if he had been charged £56.77 each month to cover the reserve fund costs, he had been charged an additional £848.76 for the reserve fund on his service charge account statement for 2017-2018. This meant he had been charged twice for the reserve fund. He asked the landlord to rectify this and refund him. He also asked it to review the reserve fund charges for each year since he had purchased the property.
On 26 May 2022, the landlord responded to the resident. It said it had not charged him twice for the reserve fund. It gave the 2018-2019 service charge account statement as an example. It said that although the reserve fund charge had been listed in the actual amount charged for the year, it did not make up part of the additional amounts to pay.
The resident responded to the landlord the same day. He said whilst the landlord’s explanation may have been correct for the year 2018-2019, his query related to the 2017-2018 and 2020-2021 financial years. He reiterated that he wanted the landlord to check he had not been charged twice in relation to the reserve fund costs for each year since he had bought the property. He said that for 2017-2018:
1. He had paid £1,830.36 (£152.53 per month) in service charges.
2. The landlord had said that the actual total costs for the year were £2,189.70.
3. The additional amount he owed therefore should be £2,189.70 – £1,830.36 = £359.34. However, the landlord had said that the additional amount he owed was £1,013.55
The landlord responded to the resident the same day. It said it could not confirm whether the resident had paid £1830.39, from its records this amount appeared to be £984.23. It asked its leasehold collection department to confirm the amount paid. It said:
1. In 2017-2018: the estimated service charges were £1,176.35 less the reserve fund of £681.24 = £495.11. The actual service charges were £2189.70 less the reserve fund of £681.24 = £1508.46. £1508.46 – £495.11 = £1,013.35 was the additional amount owing.
2. In 2020-2021: the actual service charges were £2950.01 – £1263 (the estimated service charges less the reserve fund) = £1,327.01 was the additional amount owing.
The resident responded to the landlord again. He raised the following queries:
1. 2017-2018
  1. He asked the landlord’s leasehold collection department to confirm the amount he had paid that year.
2. 2020-2021
  1. The landlord said that he owed £2,590.01 and he had paid £1,944.24. The amount of reserve fund was included in these amounts. He asked the landlord to explain therefore, why it had deducted the reserve fund costs from these figures.
3. He asked the landlord to confirm how much he had actually paid each year (the monthly amounts without any deductions) and the total amount owed (including the reserve fund).
The landlord responded to the resident. It said that in 2020-2021 the total amount spent was £2,590.01. The additional amount owed was £1,327.01. It said that its calculations deducted the reserve fund from the amount paid as the reserve fund had not changed. It said the figure of £2,590.01 did not include the reserve fund.
The resident responded again to the landlord on 26 May 2022. He asked the landlord to confirm whether the charge of £1776.48 referred to in the 2020-2021 service charge account statement included the reserve fund. If it did not include the reserve fund, why had the charge been so high, given that this was during the COVID-19 government restrictions and many services were not provided during that time. He asked it to confirm whether the total charge for the year was £3,271.25. He wanted to know why the landlord had incurred such high costs in relation to a small block of 5 flats, with no lift, no outside gardens, or communal areas.
On 31 May 2022, the resident asked the landlord:
1. To confirm the amount of service charge he had paid in 2016-2017 and 2019-2020 and for 2020-2021 and 2021-2022 (once the accounts for these years became available).
2. How much service charge remained due for 2020-2021. His service charge account statement indicated that £2,950.01 was due, however the landlord had now informed him that the actual amount was £3,271.25.
3. To explain why it retained £33,960.07 in reserve fund for his block. He said the landlord had not spent any of these funds since he had purchased his property.
4. To explain why the cost of hiring a bin was so high.
5. To explain why it had listed the cost of the communal decoration of the property as separate items. He queried whether this was so that it could say that the work cost less than £250. The total decorating costs were £1890. Under Section 20 of the Landlord and Tenant Act 1985, the landlord should have consulted residents on this work, therefore.
6. To explain its external managing agent’s costs.
7. To provide a copy of the service account statements for 2019-2020 and 2020-2021.
On 6 June 2022, the resident asked the landlord to set out in straightforward terms what was spent, what was paid and what was owed. He said the fact that its account statements seemed to include the reserve fund in both the total amount payable and the estimate; but only deductedit from the estimate, did not make sense. The landlord responded with the same example it had given previously for the year 2018-2019.
The resident contacted the landlord on 10 June 2022. He reiterated that he accepted the landlord’s explanation in relation to the reserve fund for the year 2018-2019 but it had not sufficiently answered his queries in relation to other years. He queried whether he was being charged for work taking place in other blocks. He said there was a charge of £455 for shrubs outside the caretaker’s office which he had never seen and for plants outside other blocks. He said there was a charge for paving works but no explanation as to what that meant. He said that there was an entry of £3,000 which had no explanation.
The landlord responded to the resident on 17 June 2022. It said:
1. The resident’s housing estate was managed by a managing agent; therefore, charges were calculated by the managing agent. It worked to try and secure value for money, but variances occurred due to changes in the cost of services provided by the managing agent.
2. The reserve fund was a provision for the costs of the scheduled works; as such it covered not just the decoration, but also the fabric of the building. So, if for example roof works were needed, the reserve fund would be used towards materials, labour, scaffolding and health and safety etc, as well as covering the costs of administering the major works.
3. The managing agent’s costs were for the entire housing estate, not just the resident’s block. The actual costs for 2020-21 for the resident’s block were £8,882.40.
The landlord responded to some of the resident’s queries further. It is unclear when it did so from the evidence provided. It said:
1. It appeared that the managing agent had underestimated its costs for the financial year 2019-2020. This was primarily due to the costs of grounds maintenance and gates to the carpark.
2. It had applied a refund to the resident’s account on 24 June 2020 of £128.17 which had brought the cost of the communal decoration, down to £250 per household.
On 23 October 2022, the resident complained to the Ombudsman. He reiterated that he believed the landlord had charged him twice for the reserve fund for each year since 2016-17 (apart from 2018-2019 when it had calculated the figures correctly). He reiterated that the monthly service charge he paid included an amount for the reserve fund. He said he wanted the landlord to engage an accountant to ensure that he was not being overcharged and for it to refund him any monies he had been overcharged. He wanted the landlord to explain why he was being charged for shrubs and plants outside other blocks, for paving and to explain an unspecified charge of £3000.
The Ombudsman contacted the landlord on 17 January 2023 and asked that it provide the resident with a complaint response by 31 January 2023.
On 3 February 2023, the landlord issued its stage 1 complaint response. It said:
1. It apologised for the delay in its response. It said this was due to staff shortages. However, it accepted that the service it had provided to the resident had been below standard. It would ensure that it sent timely responses going forward. It offered the resident £75 compensation for the time, trouble and inconvenience caused by its poor complaint handling.
2. It had responded to his queries on 17 June 2022 about balancing charges, the costs at both block and estate level and the layout and display of costs in relation to the reserve funds. It said he had not been charged twice for the reserve fund, and it had provided further details for several accounting years. The examples it had given applied to all the years the resident had queried.
3. It had a duty to ensure that it set aside money to cover the cost of future major works and large individual items of expenditure. The resident’s reserve fund contribution was assessed based on projected capital repairs and replacement costs of building components and services. It was carrying out a stock condition survey of all its properties. This survey would conclude at the end of the year, and it would review the reserve fund contributions accordingly.
The resident escalated his complaint to stage 2 of the landlord’s complaint procedure on 4 February 2023. He said the landlord:
1. Had not answered his query regarding the reserve fund charges for 2017-2018. He said the landlord kept providing the calculation for 2018-19 and told him that this calculation applied to all other years. He reiterated that he had accepted the calculation worked for 2018-19 but he had asked the landlord to provide the calculations for each financial year.
2. Had not explained why he had been charged hundreds of pounds for plants nor why the costs were 4 times more in 2020-2021 than they had been in 2016-2017.
The landlord acknowledged the resident’s complaint on 20 February 2023 and said it would respond within 20 working days.
On 18 April 2023, the landlord met with the resident. On 23 April 2023, the resident wrote to the landlord. He said it had told him at the meeting there were 2 reserve funds, but he had never been informed of this previously. He said his block of 5 flats had been charged £15,000 for gates to the car park. The gates did not work and served other blocks as well, not just his block. He asked for receipts for the charges and a breakdown of how many properties paid towards the services the landlord and its managing agents said they provided. He asked that the landlord credit his account with the refunds it had promised during the meeting.
The resident contacted the Ombudsman on 28 April 2023. He said the landlord had not responded to his stage 2 complaint and had not provided him with a written response to the meeting he had had with it.
Between 24 May 2023 and 22 June 2023, the resident asked the landlord to confirm which estate his property was part of. The landlord said his block was situated on estate A, but he was charged under estate B.
On 17 August 2023, the landlord issued its stage 2 complaint response. It said:
1. It apologised for the length of time it had taken to respond. It said that this was partly due to it arranging to meet with the resident in person to answer his queries in more detail.
2. It had answered his queries in relation to his service charge in its stage 1 complaint response. It said it could not answer any specific accounting queries in its stage 2 response.
3. It said the resident’s concerns related to the costs incurred by the landlord’s external managing agent. It said that if the resident believed the service charges were not permitted under his lease, he could refer the matter to the First Tier Tribunal (Property Chamber). It said however, that it was seeking clarity from its external managing agent about its charges.
4. It said that the resident contributed to 2 reserve funds, one for work undertaken by the landlord and one for work undertaken by the managing agent. It was querying the managing agent’s reserve fund with it.
5. It said there were no refunds due to the resident on its part, however it was investigating as to whether he was owed a refund by the managing agent. It said that if there was a dispute as to these charges, it may need to refer the matter to the Leasehold Valuation Tribunal which could take several months.
6. It offered the resident £500 compensation, broken down as £250 compensation for raising the issues about the managing agent’s service charges and £250 compensation for its delay in responding to his complaints.

Events after the end of the landlord’s complaints process

On 22 August 2023, the resident contacted the landlord. He said it had provided him with conflicting and contradictory information and explanations in relation to the service charges themselves and the reserve funds. He asked whether the managing agent’s reserve fund related to his block or to the wider estate. He asked when this charge had been introduced and whether the landlord had carried out a consultation. He asked why there did not appear to be 2 reserve funds in 2018-2019. He asked the landlord to confirm the amount he was paying towards the 2 reserve funds. He asked why his annual service charge statements did not specify that there were 2 separate reserve funds.
On 18 February 2025, the Ombudsman asked the landlord to confirm the outcome of its queries to its managing agent and to provide evidence that it had responded to the resident as to the outcome of these queries. The Ombudsman also asked the landlord to confirm what its managing agent’s reserve fund covered and the amount of any refunds due to the resident. The landlord confirmed that the managing agent agreed that a refund was due for 2021-2022 but has not explained the reasons for this, nor how much is due. Nor has it provided clarity on any of our other queries.
It should be noted that since his complaint to the Ombudsman, the resident has sold his property. The landlord has also appointed a new managing agent.

Assessment

Scope of investigation

Part of the resident’s complaint concerns the level and reasonableness of his service charge. It is outside the Ombudsman’s remit to review complaints about the increase of service charges and nor can we 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. Complaints that relate to the level, reasonableness, or liability to pay service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber) and the resident can seek free and independent legal advice from the Leasehold Advisory Service (LEASE) in relation to how to proceed with a case to the FTT.
The landlord is obliged to provide the resident with information relating to his service charges for the current account year or up to 12 months from the date of the resident’s request. Paragraph 42(c) of the Housing Ombudsman Scheme states that the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, were not brought to the attention of the landlord as a formal complaint within a reasonable period which would normally be within 12 months of the matters arising. Therefore, the landlord was not obliged to provide service charge information for any years which were more than 12 months prior to his request for information on his service charge. However, it would have been good customer service for the landlord to provide the information if it had it or to confirm if it was not available.

Policies and procedures

Under the terms of his lease, the resident is liable to pay a charge for services provided by the landlord. The lease states that the resident will pay a monthly service charge. It states that the landlord will provide a statement detailing actual expenditure at the end of each financial year and the resident is liable for the difference between the estimated and actual service charge costs. The lease also states that the service charge includes costs relating to the resident’s block, the estate and the major estate.
The resident is entitled, on making a written request to the landlord, to a summary of the relevant costs incurred in the last accounting year or the previous 12 months. The summary should give details of all the costs incurred by the landlord for repairs and services. It should also include the total of any money received by the landlord for service charges yet to be used.
Section 20 of the Landlord and Tenant Act 1985, governs the process landlords must follow where repairs or services exceed a cost of more than £250 per property. Landlords should issue a notice of intention to leaseholders that describes the proposed works or services, explaining why they are necessary and should invite leaseholder comments during a consultation period of at least 30 days.
The landlord’s service charge policy explains that its service charge includes an amount held in a reserve fund to meet anticipated future costs of replacement, maintenance, and upkeep of its properties. It states that the setting and management of reserve funds must be consistent and transparent. The policy also states that the landlord should ensure that residents can clearly understand what they are paying for through these funds and the associated contributions included in their annual service charge, that the charges are reasonable, and should be regularly reviewed.
The landlord’s complaint process has 2 stages. At stage 1 it will provide a response in 10 working days. At stage 2 it will provide a response in 20 working days.

The landlord’s handling of the resident’s queries about his service charges

The resident first raised queries about his service charge on 24 January 2022. There was a delay of over 3 months in the landlord issuing a response to these initial queries. This was unreasonable as the resident had told the landlord that he wanted to understand the charges so that he could clear any arrears and extend his lease. The landlord was expected to respond to the queries within one month in line with its legal obligations.
On 24 January 2022, the resident asked the landlord to explain the increase in the estate management costs of his property. He asked for a breakdown of the costs and an explanation of the reasons for the increase from the previous year and from the estimate. On 12 May 2022, the landlord provided the resident with an invoice which listed the year-end balancing charge applied by the managing agent for 2020-2021, and its statement of expenditure which provided a breakdown of the deficit. However, the resident asked the landlord to explain the information it had sent and raised concerns that the costs set out in the spreadsheet it had sent, appeared to be in relation to a larger set of flats. It would have been reasonable therefore for the landlord to provide a further explanation to the resident, or if it was unable to do so, to follow-up with its managing agent on the resident’s behalf.
The landlord told the resident that it had had no obligation to undertake a consultation regarding the communal decoration, as the cost was under £250 per property. The total cost of the decoration came to £1890. The resident’s block comprised of 5 flats, so this cost would have come to £378.17 per household. Landlords must consult with residents if works will cost over £250 for any one contributing household. The landlord did not initially adequately explain its position that the costs of these works came to less than £250 per contributing household. However, it subsequently informed the resident that it had refunded him £178.17, which brought the cost of these works to £250 per household. The landlord’s explanation was reasonable. However, the fact the resident had to query these costs multiple times before the landlord was able to fully explain its figures relating to this issue was a failing which will have likely caused him time, trouble and inconvenience.
The landlord advised the resident, that the increase in cleaning costs for his estate in 2018-2019 was primarily due to the annual cost of hiring a bin. This was a reasonable response as it explained what the cost was for. It is acknowledged that the resident may have felt the cost of hiring the bin was too high, however, as set out above, the level or reasonableness of costs of service charges is not within the Ombudsman’s remit to investigate.
The resident asked the landlord to explain why the cost of the fire alarms had increased to £136 per month. The landlord did not provide an explanation as to whether this was the case, and if it was, what the reasons for this were. This was a failing as it left the resident without answers to his concerns about the cost of the fire alarms.
The resident raised concerns that the landlord was charging him twice in relation to the reserve fund. The resident has accepted the landlord’s calculations in relation to the reserve fund for the financial year 2018-2019. However, he repeatedly asked the landlord to provide calculations to explain the reserve funds for each year since he had moved into the property. The landlord has failed to adequately do so. It would have been reasonable for the landlord to provide a detailed explanation for each financial year in answer to his queries. If it was unable to provide any of the information he asked for, it should have confirmed this and explained why the information was not available. It is a concern that the property accounts department did not liaise with the leasehold collections department to provide a comprehensive answer as to whether the reserve fund was included in the amount the resident had already paid in monthly service charges. The responses provided by these departments appear contradictory and will therefore have been confusing for the resident.
On 18 April 2023, the landlord met with the resident to provide further detail in relation to his service charge queries. The landlord did not provide the resident with a written record of what was discussed or agreed during this meeting, despite the resident asking it to do so on 28 April 2023. This was unreasonable. If we investigate a complaint and there are no records to show what was discussed or agreed, we may not be able to conclude that an action took place or that the landlord followed its policies. It is important that the landlord keeps comprehensive and contemporaneous records of face-to-face meetings with residents so that it can evidence what was discussed and what was agreed, when asked to do so.
The resident asked the landlord to explain why its managing agent had incurred such high costs in relation to shrubs and plants, paving, charges for the carpark gates and an unexplained cost of £3000. The landlord said that its managing agent’s costs related to the entire estate, not just the resident’s block. This was in line with the terms of the resident’s lease, which states that he was liable for costs incurred in relation to both his block and the wider housing estate. However, the landlord should have contacted its managing agent to ask it to provide more detail, particularly in relation to the resident’s query about unexplained charges of £3000 and the Ombudsman has not seen evidence that it did so. This was a failing, which left the resident without answers to his queries.
In its stage 2 complaint response of 17 August 2023, the landlord told the resident it would contact the managing agent to seek clarity in relation to its charges. The Ombudsman expects landlords to have oversight and effectively pursue their managing agents on their residents’ behalf. On 18 February 2025, the Ombudsman asked the landlord to provide evidence that it had updated the resident as to the outcome of its queries to its managing agent. It has not done so. The landlord’s internal correspondence shows that the managing agent agreed a refund was due for the financial year 2021-2022, however it is not clear what the reasons for the refund were. The additional evidence provided by the landlord has not given any clarity as to the amount of the refund due to the resident nor whether any refund was due in relation to the other financial years he had queried. The landlord has not been able to confirm whether the refund identified for 2021-2022 has been passed onto the resident. This is unreasonable.
As set out above, the landlord did not answer the resident’s queries about his service charge satisfactorily. The landlord is therefore ordered to carry out a review of the resident’s service charge accounts for 2021-2022 with a specific focus on its reserve fund and that charged by its managing agent, to identify whether there are any further errors or discrepancies which need resolving. Due to limits set by legislation, we can only order the landlord to review the resident’s service charge accounts for the 12-month period preceding his queries, however it is recommended that it carry out a review of previous financial years if it is able to do so. The landlord should also set out formally to the resident, the outcome of its queries to its managing agent, the reasons for any identified refunds, and the amount of refund due.
The landlord is also ordered to carry out a case review, setting out points of learning from this complaint and improvements it will make to help prevent similar issues from occurring in future. This review should be presented to the landlord’s senior leadership team, and the landlord should provide a copy of the review to the Ombudsman.
The multiple failings identified in this case, over a prolonged period amount to maladministration by the landlord. The Ombudsman’s remedies guidance, published on our website, states that where maladministration has been identified which adversely affected the resident, £100-£600 compensation should be considered. The landlord offered the resident £250 compensation for bringing potential issues with its managing agent’s charges to its attention. The landlord is ordered to pay the resident an additional £150 compensation, bringing the total compensation for this aspect of the complaint to £400, including the landlord’s earlier offer of £250. This amount better reflects the distress and inconvenience caused to the resident over a prolonged period of time.

The landlord’s handling of the associated complaint

The resident submitted a complaint about the landlord’s lack of response to his queries about his service charges on 21 April 2022. It is acknowledged that the landlord responded to his queries on 12 May 2022 and continued to do so until 17 June 2022, however it did not issue a formal stage 1 complaint response, until 3 February 2023 after the Ombudsman asked it to do so. This was a failing. The fact that the landlord did not investigate the resident’s concerns as a complaint, meant there was no oversight as to whether the responses its staff had provided were correct or reasonable. Not issuing a complaint response led to a protracted back and forth in which the resident had to liaise with different departments in his attempts to get answers to his queries. It also prevented the resident from being able to bring his complaint to the Ombudsman in a timely manner.
The resident escalated his complaint to stage 2 of the landlord’s complaint procedure on 4 February 2023. The landlord did not issue a stage 2 complaint response until 23 August 2023, nearly 6 months outside of its timescales for responding to stage 2 complaints. This was an unacceptable delay which will have caused the resident considerable time, trouble, and inconvenience.
In both its stage 1 and stage 2 complaint responses, the landlord referred back to the responses its accounting staff had provided to the resident. This was a failing. When investigating a resident’s complaint, it is important for the landlord to take steps to ensure that the responses it provided previously were correct and put right any errors. It is accepted that complaint handling staff may not have had the expertise to answer complex accounting queries, however it would have been reasonable for the landlord to ensure that its previous responses were accurate, by asking a senior member of staff in the relevant department to review these as part of the complaint investigation.
The landlord has apologised for the delays in it issuing complaint responses. It has offered the resident total compensation of £325 for the failures in its complaint handling. This is in-line with the compensation suggested by the Ombudsman’s remedies guidance, set out above, of £100-£600. Therefore, the landlord has made an appropriate offer and does not need to do anything further in relation to this aspect of the complaint.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the resident’s queries about his service charge.
In accordance with paragraph 53.b. of the Housing Ombudsman Scheme, the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves its handling of the associated complaint, satisfactorily.

Orders and recommendations

Orders

The landlord is ordered to pay the resident an additional £150 compensation for its failings in its handling of his queries about his service charges, within 4 weeks of the date of this report, ensuring that the Ombudsman is provided with evidence of compliance by the same date.
The landlord is ordered to carry out a review of the resident’s service charge account for 2021-2022, with a specific focus on its reserve fund and that charged by its managing agent, to identify whether there are any errors or discrepancies which need resolving. The landlord should also formally set out the outcome of its queries to its managing agent, explaining the reasons for any identified refund and the amount of refund due. Copies should be sent to the resident and the Ombudsman within 8 weeks of the date of this report.
The landlord is also ordered to carry out a case review, setting out points of learning from this complaint and improvements it will make to help prevent similar issues from occurring in future. Copies of this case review should be sent to the resident and the Ombudsman within 12 weeks of the date of this report.

Recommendations

If the landlord identifies that further service charge refunds are due to the resident, it should consider issuing refunds to other residents who may be affected by the same issues.