London Borough of Lambeth (202212829)

Background

1. The property is a 1-bedroom flat on the third floor of a block of flats. In 2017 and 2018 the landlord carried out major works to the building. On 28 March 2017, it sent the resident an estimated invoice of £9461.17 for the major works. On 24 November 2020, it sent the resident an actual invoice of £25175.72 for the major works.

What the complaint is about

2. The complaint is about the landlord’s:
   1. Response to a request for information on its service charges for major works.
   2. Response to reports of issues with major repairs.
   3. Administration of its recovery of service charges.
   4. Response to reports of property damage.
3. We have also considered the landlord’s complaint handling.

Our decision (determination)

4. There was maladministration with the landlord’s response to request for information on its service charges for major works.
5. The landlord’s response to reports of issues with the major repairs is outside our jurisdiction to investigate.
6. There was service failure with the landlord’s administration of its recovery of service charges.
7. The landlord’s response to reports of property damage is outside our jurisdiction to investigate.
8. There was maladministration with the landlord’s complaint handling.

Summary of reasons

9. The landlord has not provided evidence that it provided the resident with facilities to inspect the supporting information for its service charges for major works. This failing caused considerable time, trouble, and inconvenience to the resident.
10. The complaint about issues with the major repairs was not brought to the landlord within a reasonable period of time.
11. The landlord failed to communicate if it would continue to pursue recovery of service charges while it investigated the resident’s complaint.
12. We cannot consider the resident’s complaint about the landlord’s response to reports of property damage. It is not our role to determine liability for any damages caused. This would be dealt with as an insurance claim or through the courts.
13. The landlord failed to identify and investigate a complaint initially. When it did acknowledge the complaint, it delayed significantly in providing a stage 1 response and only did so after our intervention. It failed to provide agreed actions within a reasonable timeframe and failed to evidence that it put things right for the resident. The landlord’s complaint handling failures caused distress, inconvenience, time, and trouble to 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.

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.

What we have not looked at and why

14. A substantial part of the resident’s complaint is about the reasonableness and level of the service charge costs following major works to the block. The evidence shows that the landlord met with the resident and other leaseholders of the block as part of a mediation process after its stage 2 complaint response and made an offer to reduce the major works service charges bill for the resident.
15. We cannot investigate complaints that concern the level of service charge or the amount of service charge increase. However, we can assess whether the landlord’s overall communication with the resident was fair and reasonable. Complaints that relate to the level, reasonableness, or liability to pay variable service charges are within the jurisdiction of the First-Tier Tribunal (FTT). The resident may wish to seek legal advice or contact the FTT.

What we have looked at

16. When investigating a complaint, we apply our Dispute Resolution Principles. These are high level good practice guidance developed from our experience of resolving disputes, for use by everyone involved in the complaints process. We must first consider whether a failing on the part of the landlord occurred, and if so, whether this led to any adverse effect on or detriment to the resident. If it is found that a failing did lead to an adverse effect, the investigation will then consider whether the landlord has taken enough action to ‘put things right’ and ‘learn from outcomes.’
17. Under section 22 of the Landlord and Tenant Act 1985, leaseholders have the right to request certain information about service charges. The relevant regulations state that a leaseholder may “inspect accounts, receipts and any other documents that are relevant to the service charge.” The leaseholder must make this request in writing and the landlord must provide this information, or the facilities to inspect this information, within one month of the request.
18. Based on the records provided to us it is not clear when the resident first requested supporting information. After she received the actual works invoice, the resident called the landlord on 19 February 2021. She said that she and other leaseholders of the block were disputing the estimated works. This indicates a dispute and it would be reasonable to expect that the landlord investigated this further.
19. On 15 March 2021, the resident raised a complaint which included dissatisfaction with over-inflated costs. There is no evidence that the landlord acknowledged this complaint. While this complaint did not specifically request supporting information and invoices, had the landlord acknowledged and investigated the complaint it is reasonable to consider that the provision of invoices would have been an outcome requested by the resident..
20. On 29 June 2022, the resident raised a complaint which included the landlord’s “deflection” when “repeatedly asked for the contractors invoices, depicting a full breakdown of costs apparently occurred”. The resident further said that leaseholders have written to the landlord “on several occasions to request a full and detailed breakdown of the contractor costs demanded in our invoices, a fair and reasonable act given the grossly inflated invoices received, but as yet, none of us have received a satisfactory response”.
21. On 27 January 2023, in its stage 1 complaint response, the landlord apologised that it had delayed in responding to her complaint and said that its contractor and consultant no longer worked for them, which meant that obtaining information took longer than expected. As a resolution, it said that it would scrutinise the final account and arrange to meet with leaseholders to go through the final outcome.
22. In its stage 2 complaint response, the landlord offered mediation. The resident attended mediation but a resolution was not reached. It is not clear to us what information was provided to the resident at mediation. When she brought her complaint to us, she said she still had not received the supporting documentation. The landlord is expected to keep robust records of its repair works, invoices, and correspondence with residents. When there is a dispute between itself and the resident, it is responsible for providing documentary evidence showing how it satisfied itself that it had acted reasonably. Because the landlord did not provide evidence to show how it responded to the resident’s request for information, it has not demonstrated that it provided a reasonable response.
23. It is considered that the landlord followed up on agreed actions and made a ‘without prejudice’ offer to settle the complaint which was positive. However, we are unable to establish if the offer was proportionate because there were other aspects raised by the resident which we are unable to consider. It is apparent that the landlord has not yet provided the requested information to the resident and so has not yet put things right for the resident.
24. The landlord’s delay in providing the resident with a resolution has had a significant impact on the resident. The evidence shows that she went to considerable time and trouble to obtain the requested information requested and the landlord either failed to respond to her enquiries or delayed significantly. Given the amount of the increase in the service charges, these failing this caused considerable frustration and distress to the resident.

25. We encourage residents to raise complaints with their landlords at the time the events happened. This is because with the passage of time, evidence may be unavailable and personnel involved may have left an organisation, which makes it difficult for a thorough investigation to be carried out and for informed decisions to be made.
26. Based on the evidence provided to us, the resident first made a complaint about the standard of the major repairs on 15 March 2023. She was unhappy with the quality of the works, the supervision of the works by the landlord, and that works were not completed. The evidence indicates that the works were complete in 2019. As such, it would not be considered a reasonable period of time to bring the complaint to the attention of the landlord.

27. The resident’s lease says that the landlord is responsible for the repair and maintenance of the exterior of the building and flat. The landlord is also responsible for recovering its costs in upholding these obligations from the leaseholder as a service charge.
28. The landlord’s handbook sets out what a leaseholder should do if they disagree with service charges. It provides contact details for its collections teams, signposts its complaints process, signposts the FTT, and signposts the Housing Ombudsman Service.
29. We have not seen the landlords correspondence to the resident about its recovery of service charges. However, it is not disputed that the landlord contacted her mortgage company to recover the charges. In its stage 1 complaint response, it said that it would only contact a leaseholders mortgage company as a last resort, before issuing legal proceedings.
30. The resident is legally obliged to pay the service charges as per the terms of her lease. The landlord appropriately signposted the resident to the FTT should she have wished to challenge the costs. However, it would have been reasonable for the landlord to have provided the resident with the supporting documentation so she could make an informed decision on challenging the costs.
31. In its stage 1 complaint response, the landlord said it would source and provide the requested invoices and arrange to discuss with the leaseholders of the block. When the resident brought her complaint to us, she said that she was of the understanding at that point that the landlord would not continue to pursue recovery of the service charges until the relevant information was provided and the landlord held a meeting with the leaseholders as a resolution to the complaint. In the absence of indications to the contrary, this was not an unreasonable assumption for the resident to make.
32. The landlord is entitled to recover its service charges. It is not clear if the landlord’s collections team were made aware of the complaint. While its stage 1 complaint response explained its reasons for contacting the mortgage company and appropriately signposted the FTT, it would have been reasonable for the landlord to communicate that it intended to continue to pursue its recovery of service charges while the complaint investigation was ongoing. Its failure to clearly explain this, was a service failing.
33. The resident reported that as a result of this service failing, she experienced increased mortgage costs. While we have not seen evidence of this, at a minimum the landlord’s failure to clearly communicate its intention to continue to pursue recovery of the service charges caused avoidable distress, time, and trouble to the resident.

What we have not looked at and why

34. There is evidence that the resident raised a complaint to the landlord on 15 March 2021 about damage caused to her property by its contractors during the major works. The landlord failed to acknowledge this complaint and the subsequent complaint that went through the complaint procedure did not include this element of the complaint. This was a complaint handling failure which has been assessed below.
35. When the resident brought her complaint to us, she was unhappy that the landlord had not re-imbursed her for damage caused to her property by its contractors during the major works. We cannot assess liability for property damage in the same way a court or an insurance company would. The resident may wish to seek legal advice.

36. The Ombudsman’s Complaint Handling Code (The Code) sets out the Ombudsman’s expectations for landlord’s complaint handling practices. The Code states that a stage 1 response should be provided within 10 working days of the complaint. It also states that a stage 2 response should be provided within 20 working days. The landlord’s complaints policy references the same timescales.
37. The evidence provided indicates that the landlord failed to acknowledge or investigate the resident’s initial complaint on 15 March 2021. This was inappropriate. The Code makes it clear that landlords should make it easy for residents to complain through its complaint’s procedure. Failure to identify and acknowledge a complaint is a service failing. This had a significant impact on the resident as the initial complaint included an issue about property damage which was not responded to.
38. The resident raised a further complaint on 29 June 2022. The landlord provided its stage 1 complaint response 148 working days later, on 27 January 2023. This was a significant delay. The evidence shows that the resident chased the landlord for a complaint response 3 times and the landlord only responded after the intervention of the Ombudsman. This was inappropriate and caused time, trouble, distress, and inconvenience to the resident.
39. Its stage 1 complaint said that it would source the requested invoices and send them to her. It proposed arranging a meeting with all leaseholders to discuss the issues. The landlord failed to follow up on these agreed actions within a reasonable timeframe and only responded to the resident after she escalated her complaint 5 months later. This was inappropriate and caused further delay to the resident in receiving a response to her enquiries.
40. The landlord’s stage 2 complaint response was on 21 July 2023. This was over 2 years since the initial complaint, which was not acknowledged, and over 1 year since the initial complaint that was investigated. This was a significant delay and the landlord’s failure to provide a response within the Codes timescales exacerbated the distress to the resident by its failing to provide a response to the substantive issue of the complaint.
41. Its stage 2 complaint response the landlord apologised an acknowledged the time, trouble, and distress caused to the resident and distress caused by the delay in handling her enquiries. While it offered mediation to discuss the service charges, it should have used its complaints procedure to offer compensation for the distress and inconvenience caused. Its failure to do so considering the significant delays was unreasonable.

Learning

Complaint handling

42. In January 2024, the Housing Ombudsman investigated the landlord’s complaint handling. This investigation focussed on the landlord’s complaint handling between April 2022 and March 2023. (The same timeframe as this complaint). That investigation found the same failings identified in this report and the landlord provided a commitment to improving its complaint handling. As such, we have not made any learning orders which would duplicate the landlord’s commitment. We would ask the landlord to review this case and ensure any learning is incorporated into its complaint handling. A copy of the report can be found below.

https://www.housing-ombudsman.org.uk/2024/01/11/report-urges-lambeth-council-to-tackle-cause-of-complaints/ 

Knowledge information management (record keeping)

43. The Ombudsman’s Knowledge and Information Management (KIM) spotlight report highlights the importance of good record keeping. The evidence assessed in this investigation shows the landlord’s practice was not in line with that recommended in the Spotlight report. We encourage the landlord to consider the findings and recommendations of our Spotlight report if it has not already done so.