Clarion Housing Association Limited (202340917)

Background

1. The resident pays variable service charges. The landlord provided its certificate of actual service charge expenditure for the tax year 2021 to 2022 in February 2023. At that time, it also provided its estimate of costs for the tax year 2023 to 2024.

What the complaint is about

2. The complaint is about the landlord’s:
   1. Handling of queries about actual service charges for tax year 2021 to 2022.
   2. Handling of service charge arrears.
   3. Complaint handling.

Our decision (determination)

3. There was reasonable redress in the landlord’s handling of queries about actual service charges for tax year 2021 to 2022.
4. There was a service failure for the landlord’s:
   1. Handling of service charge arrears.
   2. Complaint handling.

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

Summary of reasons

Handling of queries about actual service charges for tax year 2021 to 2022

5. The landlord took too long to respond to the resident’s queries about the actual service charges from 2021 to 2022. It responded quicker following the request for a breakdown of charges. Its internal complaints process recognised the delay and offered £250 in compensation in attempts to put things right. Its compensation offer satisfactorily resolves this aspect of the resident’s complaint.

Handling of service charge arrears

6. The landlord issued a final reminder for outstanding service charges when it was regularly collecting direct debit payments from the resident. It did not notify the resident of a need to change her monthly payments as per its process. The landlord missed opportunities to recognise the impact the final reminder would have had on the resident. Its handling of service charge arrears amounts to a service failure.

Complaint handling

7. The landlord exceeded the timeframes set within its complaints policy for a stage 1 and 2 response. While it made some attempt to put things right following its delayed stage 1 response, it missed opportunities do this when it took around 3 months to issue its stage 2 response. This amounts to a service failure.

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.

Recommendation

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.

8. On 7 February 2023 the landlord provided the resident with its certificate of actual service charge expenditure for tax year 2021 to 2022. This showed a variation of £778.85 in total from its estimate. The charges included, amongst other things, £596.53 for actual day to day repairs, from an estimate of £54.05, and £148.17 actual for caretaking from an estimate of zero costs. The lease allows the landlord to collect excess or deficit payments in this way.
9. In March 2023 the resident asked the landlord to clarify the increase in service charges for 2021 to 2022. The resident contacted the landlord again in April and August 2023 for a response. The landlord took until August 2023 to response to some queries. This was not within a reasonable time, and it missed opportunities to keep the resident updated on when it would respond.
10. Within the resident’s complaint from 18 October 2023 she asked for a detailed breakdown of costs, an explanation of works completed, when they were completed and how costs were apportioned. The landlord responded within one month, meeting the timeframe under section 21 of the Landlord and Tenant Act 1985, for a summary request. Its stage 1 response addressed the points and provided information on the day to day repairs, the costs and how caretaking costs were accrued.
11. However, when the resident raised further points as part of her stage 2 escalation, the landlord took around 3 months to respond (November 2023 until February 2024). The landlord’s stage 2 response added further detail on how the costs were apportioned equally between 19 units and explained the disputed charges in more detail. While the landlord appears to have provided an explanation, it should not have taken it as long as it did overall to do this.
12. As part of the landlord’s internal complaints process, it accepted there was a delay in responding to service charge queries and said additional training would be provided to staff. In attempts to put things right it offered the resident £250 compensation for its delayed response to service charges queries.
13. The compensation offer falls within the maladministration banding of our remedies guidance. While the landlord’s delay to respond are acknowledged, when it did respond it explained the charges due as per the terms of the lease. The landlord has offered reasonable redress. The compensation offer satisfactorily resolves this aspect of the complaint.
14. The resident has told us that the landlord has not provided her with evidence and invoices relating to the service charges for 2021 to 2022. We have not seen any evidence to show a request to inspect supporting documents was made by the resident, under section 22 of the Landlord and Tenants Act 1985. However, for completeness we have made a recommendation for the landlord to contact the resident about such a request.

15. On 7 February 2023 the landlord told the resident about the variation of £778.85 for actual service charges for 2021 to 2022, mentioned previously. At the same time, it provided its service charge estimate for the year 2023 to 2024 of £1,055.42. The total service charges due at that point were £1,834.27. The landlord issued its actual service charge expenditure for 2022 to 2023 on 25 September 2023. This included a variation of £264.33 due.
16. Both letters, from February 2023 and September 2023, explained how the landlord would contact the resident about a new direct debit payment amount, if required. It explained how she did not need to do anything else if she was paying by direct debit. The landlord’s factsheet on ‘how you can pay’ repeated this. 
17. The resident was paying her service charges by direct debit, and the landlord did not contact her about amending her direct debit payments at that time. Instead on 11 October 2023 it issued a final reminder for outstanding service charges amounting to £1,181.39 and said it would start recovery action if the amount was not paid within 7 days. It did this despite collecting regular payments for service charges.
18. The landlord’s stage 1 response explained the amount of £1,181.39 included the total of £1,834.27, mentioned previously for 2021 to 2022 and 2023 to 2024. It said it would not take recovery action, it had split the cost over 12 months and had been collecting regular monthly payments of £152.86 since April 2023. However, the landlord’s complaint responses failed to acknowledge the impact its final reminder had on the resident.
19. The landlord’s decision to issue a final reminder when it was collecting regular payments from the resident was unreasonable in the circumstances. Receiving such a letter would have caused the resident upset and worry. The landlord handling of this amounts to a service failure.
20. While the landlord did confirm it would not take recovery action, its complaint response failed to show insight into its failings and made no attempt to put things right. When considering the points mentioned, compensation of £100 has been as appropriate to acknowledge the upset caused to the resident. This amount falls within the service failure banding of our remedies guidance and has been decides as appropriate in the circumstances.

21. The resident raised her complaint on 18 October 2023. The landlord took until 7 November 2023 to acknowledge her complaint and until 17 November 2023 to issue its stage 1 response. This timeframe exceeded the 10 working days set within the landlord’s complaints policy for a stage 1 response. The landlord acknowledged this delay and offered £50 compensation in attempts to put things right.
22. The resident escalated her complaint on 22 November 2023. There is no evidence to show the landlord acknowledged the escalation request and it took until 9 February 2024 to issue its stage 2 response. The landlord took around 3 months to issue its stage 2 response, this timeframe significantly exceeded that set within its complaints policy (20 working days).
23. While the landlord’s stage 1 and 2 responses acknowledged its delayed response and apologised, its stage 2 response missed an opportunity to put things right. When considering this, the landlord’s complaint handling delays amount to a service failure. When deciding an appropriate remedy, our remedies guidance has been considered and a compensation amount of £100 has been decided as appropriate to acknowledge the stage 2 complaint handling delays. This amount falls within the service failure banding of our remedies guidance and is in addition to the £50 offered at stage 1.

Learning

24. The landlord may wish to consider the learning it can take from the report. It may wish to consider if it has sufficient processes in place to respond to service charge queries more promptly and whether its systems allow it to identify the correct process for issuing final reminders.