Clarion Housing Association Limited (202405951)

Background

1. The resident raised a complaint on 19 March 2024 as he said the landlord had not provided actual service charge expenditure for 2021/2022, which he had been requesting since February 2023. To resolve his complaint, he asked for a full breakdown and calculations of his service charge from November 2020, when he moved in.

What the complaint is about

2. The complaint is about the landlord’s response to the resident’s request for rent and service charge information.

Our decision (determination)

3. There was service failure in the landlord’s response to the resident’s request for rent and service charge information.

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

Reasons

4. 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.
5. The landlord has not provided a full record of correspondence with the resident, including his initial service charge information request. This has somewhat impacted our ability to establish a full timeline of events and assess the handling of the resident’s request. It is vital that landlords maintain clear, accessible records to provide an audit trail.
6. Under section 21 of the Landlord and Tenant Act (LTA) 1985, the resident has the right to ask the landlord for a summary of the service charge account from the last accounting year, or the past 12 months if the accounts are not kept by accounting years. The landlord must provide a summary within 1 month of a resident’s request or 6 months of the end of the accounting period, whichever is later.
7. The landlord was not required to provide a summary of 2020/21 service charges, as the resident did not request this information until 19 March 2024. This was outside of the scope of the legislation. Nonetheless, the landlord should have explained this to manage the resident’s expectations. As it failed to address this element of the request, the resident spent additional time chasing the matter.
8. The landlord recognised delays in providing the 2021/22 service charge actuals, which it sent to the resident on 13 May 2023. It said this was due to a cyber incident. It was reasonable the landlord recognised the failing and offered compensation.
9. The landlord sent the 2022/23 service charge actuals on 27 September 2023. This was within the appropriate timeframe. At the time of the complaint, the 2023/24 accounting year was still ongoing, so the landlord was not required to provide a summary at that stage.
10. Under section 22 of the LTA 1985, within 6 months of receiving the service charge account summary, the resident can request facilities to inspect the accounts, invoices, records, and any other documents supporting that summary. The landlord’s record of the complaint noted the resident “believes charges to be incorrect and is requesting calculations / rent breakdown calculations and more detail of charges”. Although he did not explicitly request the supporting documents, it is evident the resident wanted further information to assess the service charges. The landlord should have provided the supporting documents or confirmed what information the resident wanted.
11. The landlord subsequently provided the annual total invoice from the managing agent, a breakdown of the service charges, a breakdown of repairs, and an accountant’s report for the 2021/22 and 2022/23 financial periods. However, the resident was dissatisfied as the information did not enable him to understand the charges and verify if they were fair.
12. Although the managing agent delivers the services, the landlord should have ensured it obtained sufficient information to enable the resident to assess the charges. This should include supporting evidence demonstrating how costs were incurred and allocated, such as specific invoices, repair logs, and energy bills. There is no evidence that the landlord attempted to obtain this information from the managing agent, so it has not appropriately fulfilled its obligations.
13. The resident requested audit reports carried out by an independent party. Section 21 of the LTA 1985 requires the report to be provided by a qualified person. The landlord fulfilled this requirement as it included an accountant’s report. It was not obliged to provide a full independent audit. As the resident repeatedly made this request, it would have been reasonable for the landlord to clearly outline its obligations to manage his expectations.
14. The resident also asked the landlord to confirm how it calculated rent increases. The landlord reasonably responded as it provided clear information in its stage 2 response about how it calculated the increases since the beginning of his tenancy. It is noted there was a slight delay in providing the information. The resident requested future rent increase letters to include a breakdown of calculations and summary of any increases. The landlord provided practical reasons why it was unable to fulfil his request in full but explained it would consider how to make the charges more transparent.
15. The landlord offered £500 compensation, comprised of £300 for failure to follow its policy and procedure, £100 for the delayed stage 2 response, and £100 for inconvenience of having to escalate the complaint. The compensation was proportionate to the failings identified by the landlord. However, as the resident had to continue to chase the full supporting documents, an additional £100 compensation is warranted for the additional time and effort expended.

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.