Camden Council (202017557)

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REPORT

COMPLAINT 202017557

Camden Council

31 January 2023


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

  1. The complaint concerns:
    1. The cost of the communal district heating renewal to leaseholders.
    2. The landlord’s response to concerns raised regarding the communal district heating renewal.
    3. The related complaint.

Jurisdiction

  1. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
  2. Under paragraph 42 (e) of the Scheme, the Ombudsman will not investigate complaints concerning the level of rent or service charge or the amount of a rent or service charge increase.
  3. Under paragraph 42 (g) of the Scheme, the Ombudsman will not investigate complaints concerning matters where we consider it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure.
  4. The landlord first consulted with residents regarding the five year framework contract for major building works for a communal heating renewal in relation to the estate, in 2015. The statutory consultation regarding for the major building works commenced on 13 February 2018. The consultation period closed in October 2018.
  5. In March 2019, the resident contacted the landlord to raise concerns about the estimate cost of the major works. On 12 April 2019, the landlord advised the resident that her apportioned estimated cost for the heating works was £14,216.67, paid via the service charge over five years. It advised that this was the sum in which she was consulted on in 2016 and this had not changed.
  6. The resident raised her first formal complaint with the landlord regarding the cost and invoices received for the major works on 29 April 2019. The  landlord provided a stage one complaint response on 14 May 2019.
  7. The resident subsequently contacted the landlord regarding the cost of works on 17 April 2020 advising she had received further service charge invoices for upcoming works but had not received any further information about the cost of installation works within the flats. She told the landlord that leaseholders would struggle with the “huge” cost of the replacement heating system. On 20 July 2020, she raised a further formal complaint regarding the proposed cost of the new heating system.
  8. In its response to the resident dated 27 July 2020, the landlord acknowledged that major work bills could cause financial hardship and said therefore that it had introduced a range of payment options that would allow leaseholders to spread interest free payments over a longer period.
  9. The landlord advised the resident that she would receive a formal stage complaint response and in September 2020, the resident chased the landlord for the response at which point she also queried the cost of other major works that she said was showing on her leasehold account.
  10. The landlord provided a stage one response to the resident in which it confirmed that her estimated contribution towards this heating work was £14,216.67, as per the original estimate. The landlord provided a copy of the original Notice of Intention. It also advised the resident that following completion of the works, she would receive an itemised final account breakdown and final adjustment invoice or credit note. It provided an explanation in regards to her query regarding the cost of additional major works.
  11. In its final response dated 28 May 2021, the landlord advised that the First Tier Tribunal (FTT) could make decisions on service charges with respect to the reasonableness of the costs incurred or the standard of the service or work charged for, or the charge itself. It provided the customer with their contact details.
  12. On 28 June 2021, the resident told the Ombudsman she was unhappy with the costs of the communal district heating renewal and said she believed that a large part of the cost were management fees and overheads.
  13. After carefully considering all the evidence, in accordance with paragraphs 42(e) and 42(g) of the Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction:
    1. the cost of the communal district heating renewal to leaseholders.
  14. It is not the role of the Ombudsman to consider the level of the cost of major works that the landlord recovers from leaseholders through the service charge. The FTT would be the appropriate body to consider the issues raised including the reasonableness of the costs incurred and the processes followed for consultation about the renewal works. For this reason, this aspect of the resident’s complaint is outside of the Ombudsman’s jurisdiction.
  15. This Service advised the resident of our limited jurisdiction regarding the level, amount, or reasonableness of service charges when she first brought the complaint to us in 2021 and was signposted to FTT in respect of the element of the complaint.

Background and summary of events

  1. In her email to the landlord dated 17 April 2020, the resident advised there had been a lack of communication from the landlord about progress of district heating renewal works since 2016. She asked whether, given the huge cost, leaseholders could install her own individual boilers which she said would be a fraction of the cost. 
  2. On 12 June 2020, the resident contacted the landlord advising that she had not received a response to her 17 April 2020 communication.
  3. On 15 June 2020, the landlord replied advising that it had passed her email to the relevant team.
  4. On 20 July 2020, the resident advised the landlord that she had still not received a response and asked to raise a formal complaint. She also advised that there were no documents regarding the major works in her online account with the landlord. She asked what type of boiler was being installed and whether the landlord was following the latest advice for lowering greenhouse gases. She requested that it respond to the points raised in her original 17 April 2020 email.
  5. On 27 July 2020, the landlord provided a response advising that the existing heating and hot water system was over 30 years old. It explained its obligation to replace the obsolete and life expired equipment, with new, ‘like for like’ to match the existing plant and equipment.
  6. The landlord said it was committed to meaningful leaseholder consultation and engagement. It had conducted a Section 20 consultation for Leaseholders in which feedback and observations were exchanged. There had been a number of meetings about the district heating renewal works (phase 2) and additionally it  wrote to residents informing them of the progress. The landlord said it also posted monthly newsletters and arranged drop-in sessions to enable residents to ask any questions of the contractors and officers. 
  7. The landlord advised it had signed up to Climate Emergency and was committed to achieving zero carbon by 2030.It said it had identified that installing individual gas boilers in each flat, as opposed to one central boiler plant room, would generate far more carbon. Due to this and the increased maintenance life cycle cost, this option was discounted. The landlord explained however that in order to reduce the central plant load and help with the estate pipework, some smaller blocks had been taken off the communal boiler system and individual boilers in these blocks were currently being installed. This work was known as phase 1 and its building contractor was currently are on site working on this however, as a result of the Covid-19 outbreak, access to individual flats has been restricted. The landlord explained that currently it was also carrying out investigation surveys and design for the phase 2 works.
  8. The landlord’s internal communications between 7 September to 29 October 2020 show that it told the resident that she would be provided with a formal stage one complaint response.
  9. Following contact from the Ombudsman, the landlord provided a stage one response to the resident on 21 April 2021.
  10. Within its response, the landlord explained that due to Covid-19, its program of works was frequently changing but it had provided frequent updates to residents. It advised  that the stage 2 works were scheduled to start works at the end of July (2021) and were due to finish in September 2022. It said this would include works to the resident’s individual property and explained this involved new pipework within her property, a heat interface unit fitted to where the old storage cylinder was, new radiators and a heat meter so that she would be paying for the energy that she was using.
  11. Regarding the alleged lack of communication with leaseholders, the landlord said that it had reviewed correspondence that had been issued and it had updated leaseholders and residents at every stage of the contract. This included at the pre-tender stage and section 20’s being issued, through to meetings with the contractor awarded for the works and then post the contract with correspondence being sent frequently as well as monthly newsletters and planning updates. It said it had attached correspondence for all the stages.
  12. The landlord stated it was sorry for the time taken for her complaint to be responded to but after carrying out its investigations, it did not uphold her complaint in respect of the planned works to her block. It advised the resident of the timeframe to request a review if she was dissatisfied with its response.
  13. On 7 May 2021, the resident requested escalation of her complaint. She advised the landlord it had not addressed her point raised in her 17 April 2020 email about whether leaseholders could install her own individual boilers which she said would be less than a third of the price (under 5k).
  14. She had received the newsletter for the first time on 1 May 2020. The resident reiterated her query in regards to the lack of details about the works in her online account. She explained that when she clicked the tab ‘View Major Works’, it listed ‘District Heating’ however it stated ‘no documents available’. The resident said this showed a lack of regard for leaseholders.
  15. Regarding the landlord’s policy on climate change, its stage one response did not address her queries about what type of boiler would be installed and if it was following the latest advice for lowering greenhouse gases.  She referred to the landlord’s point about replacing like for like however said replacing a gas boiler with a gas boiler, was not in line with its policy to phase out gas boilers.
  16. On 28 May 2021, the landlord provided a stage two response to the resident in which it said that the consultation process allowed leaseholders to have their voice heard. 
  17. The landlord advised: leaseholders were consulted on 5 January 2015 and 20 November 2015 regarding the five year framework contract for major building works; were invited to pre-statutory consultation meetings on 29 November 2017; statutory consultation commenced on 13 February 2018 and; a leaseholder-only meeting was held on 22 February 2018. The landlord stated that both meetings gave leaseholders an opportunity to raise any concerns. The end of observation period was 18 March 2018 and the consultation period closed on 24 October 2018, after all observations had been responded to. Since October 2018, it said further questions from leaseholders had been addressed, with meetings held with individual leaseholders to resolve their concerns. All letters and 104 newsletters had been sent and the Resident Liaison Officer was posting letters through letter-boxes for residents and leaseholders. It advised the resident that her e-mail address had now been added to receive these also.
  18. Regarding her comments regarding the lack of documents in her online account, it apologised for this and said it would now be rectified and all appropriate major works documents would be uploaded to her online account.
  19. It also apologised for the delay in responding to her further issues and stated it had awarded her £50 in compensation which would be paid to her within 20 working days.
  20. In answer to her query about what type of boiler was being installed, it said three Hoval condensing boilers were being fitted to the plant room. It said these were “far more efficient” than the current gas-fired boilers and had a lifespan of approximately 30 years. The landlord advised they will also reduce carbon emissions, due to being a condensing type boiler, in comparison with the current boilers in-situ.
  21. In her email to the Ombudsman dated 28 June 2021 the resident advised that she would prefer an individual boiler, referring to those blocks on the estate that had had individual boilers fitted. On communications, the resident advised that her online account still did not have details of major works despite the landlord’s final response advising this would be rectified. 
  22. The documents the landlord provided to this Service include ‘Options Appraisal report’, ‘Summary of Observations Received’ dated October 2018 and a ‘Resident Communication Strategy’ in relation to the district heating renewal for the resident’s estate.

Lease and Policies

  1. Under the terms of the lease, the resident is responsible to pay a reasonable proportion of the cost of repairing and maintaining the heating and hot water systems serving the block and where necessary, the replacement of whole system.
  2. Under Section 20 of the Landlord and Tenant Act 1985, landlords are legally required to consult with leaseholders regarding major works for which they will be asked to pay (estimated to cost at least £250 per leaseholder).
  3. In its response to our recent information request, on 27 January 2023, the landlord confirmed it had now added the documents regarding the works to the resident’s online account

Assessment and findings

Response to concerns raised regarding the communal district heating renewal

  1. The resident’s estate is supplied with heat and hot water from central boilers, in a communal heating scheme. The resident’s block is one of 14 blocks in the estate. 
  2. The landlord is entitled under the terms of the lease to upgrade the heating and hot water system however it has a legal obligation to consult and communicate with residents regarding major works before the changes or during the installation.  This is echoed in the landlord’s own guidance titled ‘Major works Guide for leaseholders’. 
  3. In her formal complaint the resident raised a concern regarding the level of communication and consultation provided in relation to the renewal works “since 2016”. The landlord’s documentation shows it began appraising options to address an increased frequency of breakdowns with the  district communal heating serving the estate as early as 2012. By 2014, it had identified a need for replacing the heating system and in 2015, the landlord consulted leaseholders regarding the five year framework contract for major building works in relation to the district heating upgrade. This made clear that the district heating upgrade and works to the resident’s individual property were known as ‘phase 2’ of the works. 
  4. The evidence indicates consultation meetings were held with residents in November 2017 and February 2018 and on 13 February 2018, the statutory s.20 consultation process began during which communications were exchanged with leaseholders regarding the 5 year framework contract. The ‘Summary of Observations Received’ document provided to this Service details these. The formal consultation subsequently closed in October 2018.
  5. As such, the evidence shows that the landlord met its obligation to formally consult with residents regarding the major works. Furthermore, in its complaint responses, the landlord referred to the consultation meetings and s.20 consultation process that it advised had taken place, setting out the dates of all the formal consultations up to then.
  6. In its complaint responses, the landlord also confirmed works had been affected by Covid-19 but said it was keeping residents updated on the progress of the works by writing to them, issuing monthly newsletters, holding drop-ins on site and addressing further questions raised by individual leaseholders. The landlord has documented that it had a communication strategy in place which confirms it sent out monthly newsletters to residents and held drop-ins on site to keep them updated in relation to the major works. It is noted, however, during the complaints process, it became apparent that because the resident was residing at a different address, she may not have been receiving the newsletters which were being posted through letter boxes by its Resident Liaison Officer.  However, the landlord resolved this by sending newsletters to the resident by email, this was reasonable.
  7. The landlord also provided updates on the progress of the works to the resident in its 27 July 2020 response and again in its stage one response when it advised that the Phase 2 works including to the resident’s individual flat, were due to be completed by the end of 2022. Therefore, by providing additional detailed updates on the progress of works in its responses to the resident, the landlord appropriately responded to the resident’s concern raised about this.
  8. It is noted however that the resident told the landlord in July 2020 that there was  no documentation relating to the heating renewal available under the ‘Major works’ tab in her online leaseholder account. The landlord did not address this issue until its final response, some ten months later. Whilst at this point the landlord acknowledged and apologised for the error and told the resident that it would add the documents, the resident told this Service that the landlord failed to follow through with this. In its response to our recent information request, on 27 January 2023, the landlord confirmed it had now added the documents regarding the works to the resident’s online account. Therefore, its delay in addressing this point during its complaints process and then its failure to make the documents available to the resident via her online account within a reasonable timeframe of agreeing to in its final response, constitutes evidence of the landlord’s service provided not reaching a reasonable standard.
  9. In her formal complaint, the resident also asked the landlord about having an individual boiler installed in her flat as an alternative to the district heating heater which she argued would be “a fraction of cost”. In its July 2020 response, the landlord said it had considered  replacing the heating system with individual heating systems, however, had discounted this option as it generated more carbon. The landlord also explained why some smaller blocks on the estate were having individual boilers fitted. It gave a further explanation surrounding its decision not to install individual boilers in the resident’s block, in its final response.
  10. The landlord’s Options Appraisal report confirms that individual boilers across the estate including the resident’s block were considered by the landlord as an option. Therefore, its responses explaining this and the basis for rejecting this option when queried during the complaints process, were appropriate in the circumstances. 
  11. In regards to the resident’s concern raised about if the heating renewal complied with “the latest advice for lowering greenhouse gases”, the landlord Options Appraisal report shows it considered the renewal’s carbon emissions and its impact on the environment at this stage. In its July 2020 response, the landlord explained its aims around reducing carbon emissions and confirmed, as previously mentioned, that one central boiler room generated less carbon than individual heaters.
  12. However, in her escalation request, the resident disputed that the renewal complied with its climate policy ‘Climate Action Plan’ which she said was to phase out boilers.  Whilst in its final response the landlord  gave details regarding the type of boiler being installed which it said was more efficient and produced less emissions, it did not directly address the resident’s point about whether the district heating renewal complied with its policy to phase out boilers.
  13. Therefore, whilst the landlord, in the main, addressed the points raised in relation to the new heating system’s impact on the environment,  as it did not respond to the resident’s query about if the renewal was in line with its policy to phase out boilers, it is reasonable to recommend that the landlord provide the resident with an additional response which answers this specific point, making reference to its climate policy.
  14. Therefore, whilst there were instances of the landlord’s service provided not meeting the expected standard when  responding to concerns raised about the district heating renewal, overall, this review found that it took appropriate steps to engage with residents and address concerns regarding the district heating renewal both during the formal consultation phases and during the timeframe since.

Complaint handling

  1. The landlord’s complaints process requires it to provide a response within 10 working days at stage one and within 25 working days at stage two although it states more complex complaints may take longer.
  2. The resident requested to raise a formal complaint on 20 July 2020. The landlord provided a response on 27 July 2020 which answered some of the concerns she had raised. However, its response was not labelled a stage one complaint response. Further, it is clear from the landlord’s internal communications  between 7 September to 29 October 2020 that it had told the resident it would provide a formal stage one complaint response yet the landlord failed to do so until 21 April 2021, after contact from the Ombudsman.
  3. Therefore, the landlord’s failure to follow the timescales in its complaints process when handling the resident’s complaint and the lack of clear labelling of its July 2020 response, constitutes evidence of poor complaint handling.  Whilst the landlord acknowledged the delay in its final response and offered the resident £50.00 in compensation, in light of the approximate eight month delay, the redress offered was insufficient in the circumstances.
  4. Furthermore, it is noted that the timescales for the landlord’s stage two response stated in its complaints policy does not comply with the Ombudsman’s Complaint Handling Code (the Code) which requires landlords to provide this within 20 working days.

Determination (decision)

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord when responding to concerns raised regarding the communal district heating renewal.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord when handling the resident’s related complaint.

Reasons

  1. The landlord met its obligation to formally consult with the resident regarding the district heating renewal and also showed it took reasonable steps to ensure its communication with residents at all stages regarding the works, was adequate.
  2. The landlord did not follow the timescales in its complaints process when handling the resident’s complaint and it did not clearly label all of its responses to the resident. The timescales for stage two responses in its complaints process do not comply with the Code.

Orders and recommendations

  1. The Ombudsman orders that the landlord:
    1. Pays the resident an additional £150 in compensation for poor complaint handling (£200 in total).
    2. Review its complaints policy with a view to revising the timescales for providing complaint responses so that they comply with the Code.
    3. Comply with the above orders within four weeks.
  2. The Ombudsman recommends that the landlord:
    1. Provides an additional response to the resident which answers her specific query about  if the district heating renewal is in line with its policy to phase out boilers, making reference to its climate policy.