Clarion Housing Association Limited (202316391)

Background

1. The resident is a shared-ownership leaseholder of the landlord and lives in a flat in a block. The landlord is a leaseholder of the building and does not own the freehold of the building. The developer owns the freehold. A management company manages the building and there is a separate managing agent who manages the service charges for the building, which was not appointed by the landlord. The managing agent changed during December 2022. In February 2023, the landlord sent a letter to the resident with his new rent and service charge costs for the financial year, and he raised he was unhappy with the new service charge costs.

What the complaint is about

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

Our decision (determination)

3. There was maladministration in the landlord’s response to the resident’s service charge queries.
4. The landlord made a reasonable offer of redress, which in our opinion, resolved the errors of the landlord’s handling of the complaint.

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

Summary of reasons

5. The landlord failed to provide the resident with the service charge invoices he requested. There was also a lack of communication and updates from the landlord to the resident about the outstanding service charge invoices.
6. The landlord acknowledged there were delays in providing its responses at stage 1 and 2 of its complaints process and offered the resident sufficient compensation to recognise the delays.

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.

7. The resident raised in his complaint that he is unhappy about the increase in his service charge costs. This report will consider whether the landlord sufficiently responded to the resident’s service charge queries. We do not investigate complaints about the level or increase of service charges. The First Tier Tribunal (Property Chamber) is best placed to consider this matter, given its powers and expertise.
8. In February 2023, the resident along with other residents from the same block asked the landlord to explain the recent increase in service charge costs. The landlord provided a partial response to the resident’s service charge queries in May 2023 and explained it used the previous managing agents budget from June 2022 to June 2023 to work out the estimated service charges for the year 2023 to 2024. It also explained there had been an increase in gas costs. It confirmed it was in contact with the managing agent to obtain further information and would provide the resident with a further update. The landlord’s response was reasonable.
9. The resident complained that the landlord failed to provide the resident with a further update about his service charges. The landlord explained the increase in the resident’s service charges was due to additional gas costs of £155,000 and a £7,500 increase for lift maintenance works. It also provided a table with a breakdown of the increased costs. This was an appropriate response to the resident’s query. The landlord also explained the parties who were involved in the ownership and management of the resident’s block. It offered the resident £100 compensation to recognise the delay in responding to his service charge query. The amount offered was sufficient to recognise the delay.
10. In November 2023, the resident asked if the landlord would join the board of the management company who manages the building. The landlord explained the management company which manages the block appointed the management agent. It stated as a property holder it was a member but had no plans to volunteer to sit on the board of directors. This was a reasonable response as the landlord was not obliged to sit on the board.
11. The resident also requested a copy of invoices from the landlord for costs relating to the service charges for the financial year of 2022 to 2023. The landlord responded appropriately and confirmed it would request the invoices relating to service charges from the managing agent once it had received the end of year account for the year ending June 2023. This was in line with Section 22 of the Landlord and Tenant Act which states within 6 months of obtaining a summary of relevant costs a request can be made for receipts and other documents relating to the service charge costs.
12. The resident confirmed that the landlord has not updated him about the invoices, and his request still remains outstanding. This is unreasonable. Although, the landlord needed to wait for the managing agent to provide the relevant invoices, we would have expected the landlord to regularly chase the managing agent for the invoices. In addition, it would have been reasonable for the landlord to seek legal advice and take the relevant action if chasing the managing agent was ineffective. However, there is no evidence the landlord did this, and the landlord confirmed in its file submission to us that it was continuing to work with the managing agent to understand the service charge costs.
13. Considering the significant amount of time which had passed since the resident first requested the service charge invoices, we order the landlord to provide him with the invoices for the actual costs for 2022 to 2023. If it is unable to do so, it should write to the resident to explain why. Also, if the landlord is experiencing issues obtaining the invoices we recommend that the landlord seeks legal advice to confirm the steps it can take to obtain the outstanding service charge information from the managing agent.
14. The landlord should also pay the resident £250 compensation to recognise the distress and inconvenience caused by its failure to provide the invoices and its lack of communication to the resident about reasons for the delay. The amount is in addition to the £100 the landlord offered during its complaints process for its initial delay in responding to the resident’s service charge queries. The amount of compensation awarded complies with our approach to compensation set out in our remedies guidance (published on our website). The remedies guidance suggests awards of £100 to £600 where there has been a failure by the landlord, which adversely affected the resident, but there may be no permanent impact.

15. The landlord’s complaints process has 2 stages. Its interim complaints policy explains it will provide a stage 1 complaint response within 20 working days and a stage 2 complaint response within 40 working days. These timescales were not compliant with the Ombudsman’s Complaint handling Code (the Code) which sets out our expectations of landlords’ complaints processes. However, the landlord’s recent complaints policy includes the same timescales referenced in the Code. The Code states a stage 1 response will be provided within 10 working days and a stage 2 complaint response will be provided within 20 working days.
16. The resident submitted a complaint to the landlord on 29 September 2023. He asked the landlord to consider the complaint at stage 2, as he explained he had previously made a joint complaint about the service charges with other residents in his block. The landlord emailed the resident on 5 October 2023 and confirmed it would be logging his complaint at stage 1, because the other complaint was made by another resident. The landlord issued it stage 1 complaint response on 24 November 2023. The complaint response was late and outside the 10-working day timescale referenced in the Code and the 20 working days referenced in its complaints policy.

17. On 24 November 2023, the resident escalated his complaint to stage 2 of the landlord’s complaints process. There was a delay in the landlord providing its stage 2 complaint response. The landlord did not issue its stage 2 complaint response until 3 January 2024. Overall, it took the landlord approximately 26 working days to provide its response. This would have caused inconvenience for the resident, as he had to wait to receive his stage
18. The landlord acknowledged in both its complaint responses that there were delays in it providing its stage 1 and 2 complaint response. It also acknowledged that it should have logged a stage 1 complaint for the resident sooner than it did and offered the resident £200 compensation. The compensation offered to the resident complies with the Ombudsman’s remedies guidance referenced above. The compensation proportionately reflects the impact of the delay on the resident and amounts to reasonable redress for this aspect of the complaint.

Learning

Knowledge information management (record keeping)

19. The landlord’s records were detailed enough for us to investigate its overall handling of the complaint.

Communication

20. The landlord’s communication with the resident since he requested the service charge invoices has been poor. The landlord did not provide updates or an explanation to the resident about why it had not provided him with the requested invoices.