London Borough of Hackney (202414183)

Background

1. The resident purchased her property in July 2022 and complained that the landlord took nearly 2 years to set up an account for her service charges. She said she received limited information during this period, including no bills, actuals or estimates until June 2024. She also queried parts of the bill, including the services that she had received. As she was unable to resolve these concerns with the landlord, she asked us to investigate.

What the complaint is about

2. The complaint is about the landlord’s:
   1. Handling of the resident’s service charge queries and the information it provided.
   2. Complaint handling.

Our decision (determination)

3. We have found:
   1. The landlord is responsible for maladministration in its response to the resident’s service charge queries and the information it provided.
   2. The landlord is responsible for maladministration for its complaint handling.

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.

The landlord’s handling of the resident’s service charge queries and the information it provided

5. The crux of the resident’s complaint is that the landlord did not set up a service charge account, provide account details or issue a welcome pack until June 2024. After purchasing the property, the resident made several attempts to obtain information about her service charges. She did not dispute that services were being received which she would have to contribute towards. When the landlord issued the welcome pack in June 2024, it also sent a bill for nearly £4000. This was 23 months after she moved into the property. The resident complained that she was not made aware of these costs until she received the bill. At this point, the landlord apologised for the delay and requested for its finance team to provide her service charge estimates.
6. In its stage 1 complaint response, the landlord apologised for the delay in providing the welcome pack. It confirmed that it would not be recovering the service charges for January-March 2024. It acknowledged that it had failed to notify the resident of a demand for payment of the service charges within 18 months, which meant it could not recover them under Section 20B of the Landlord and Tenant Act 1985 (LTA 1985). The landlord still said the resident was liable for arrears on her account and offered to discuss a payment plan. It did not explain which periods these arrears related to.
7. In its stage 2 complaint response, the landlord accepted that it had failed to reply to the resident on several occasions, when she had repeatedly contacted it for updates. It recognised that there had been a failure in its service due to the time taken between receiving the notice of transfer on 30 October 2022 and updating its records. This led to the welcome pack being issued only in June 2024. It was positive that it recognised its failings.
8. The landlord also said it was taking steps to improve its service, including a restructure to improve its processes and reduce response times, the introduction of an electronic housing management system to support more efficient document and communication management. These measures demonstrate learning from the feedback it has received and attempts to improve in the future.
9. Since the resident’s complaint came to our Service, the landlord has provided inconsistent information. Although it said in its stage 2 response that it received the notice of transfer on 30 October 2022, it later said that when the resident was requesting information in April 2023, it had not received a notice of transfer from the resident’s solicitors. It said this meant it could not issue the welcome pack and that, between July 2022 and June 2024, it sent service charge documentation to the previous leaseholder. This discrepancy demonstrates poor record keeping and clarification is required on the exact date the landlord received the notice of transfer.
10. We note that the landlord sent the resident’s sales agents the actual service charge figures for 2018-2021 and the estimates for 2021-2022, which was reasonable. However, the landlord should have communicated more clearly if it believed it needed further information from the resident’s solicitor before it could provide the requested information about the resident’s service charges.
11. The landlord has said that it would not recover charges for January-March 2024, as it did not provide the resident with proper notice of the costs incurred in good time. However, it has also said the resident was liable for service charge arrears, despite stating that service charge documents between July 2022 and June 2024 were sent to the previous leaseholder.
12. The resident said that the landlord issued a demand for costs for the first time in June 2024. The landlord has not provided us with any evidence that it sent her earlier demands for payment of previous years or that a section 20B notice to preserve its right to recover costs was sent to the resident over the course of this period.
13. We are therefore unable to establish how the landlord determined that only the costs from January – March 2024 were not recoverable. Along with the discrepancy between the dates the landlord has provided for receiving the notice of transfer, it should undertake a review and confirm both the date it received the notice of transfer and subsequently, whether it has the legal basis to recover all costs going back to when the resident purchased the property.
14. The resident said in her complaint that the lift was regularly out of order, and she does not use it as she lives on the first floor. The landlord has shown that it carried out regular lift servicing and attended to breakdowns throughout 2024. In its stage 1 complaint response, the landlord acknowledged that there had been ongoing issues with the lift and said it had escalated this to the head of service. The service charge estimates and actual statements supplied to the resident’s vendor clearly stated that lift maintenance was a cost the resident would be liable for, and it was the vendor’s responsibility to pass on this information. The landlord’s response to this element of the resident’s complaint was reasonable and it has clearly demonstrated both its attendance to issues and the resident’s liability for the cost.
15. Based on everything we have seen, the landlord could have communicated with the resident in a more timely and reasonable way. It took several months to issue the welcome pack, and it did not tell the resident that it needed further information from her solicitor during this time. This understandably caused distress and inconvenience.
16. We have also been unable to establish that it was appropriate for the landlord to seek payment for all previous years, given that it does not appear it had issued a demand or notice to the resident prior to June 2024.
17. The landlord has offered £400 compensation, which is reasonable compensation. However, further action is still required, and we have therefore found maladministration. The landlord should review its records for the date it received the notice of transfer and reassess how much of the service charge the resident is liable to pay. It should not recharge the resident costs which are out of time and that it did not give the resident proper notice for.

Complaint handling

18. As part of her complaint, the resident said the block cleaning was inadequate, and the block was consistently dirty. The landlord did not address this in either of its complaint responses. This was a failure in service, as it is important that the landlord responds to all aspects of the resident’s complaint.
19. The resident raised her complaint on 17 June 2024. The landlord acknowledged it on 19 June 2024, which was within the timescale set in the Service’s Complaint Handling Code (“the Code”). It issued its stage 1 complaint response on 2 August 2024, which was 22 working days over the timescale set out in the Code.
20. The resident escalated her complaint to stage 2 on 5 August 2024 and the landlord acknowledged this request on 12 August 2024, within the required timescale. It subsequently provided its stage 2 response on 23 August 2024, which was reasonable.
21. The landlord’s delay in providing its stage 1 complaint response was significant and there is no evidence that the landlord kept the resident updated or informed her that there would be a delay. While it recognised in its stage 2 response that there was a delay and provided £40 compensation, we do not think this goes far enough to put things right for the resident. As it failed to fully respond to the resident’s complaint and for the delay, we have found maladministration in the landlord’s complaint handling and order it to pay further compensation and respond to her complaint about the block cleaning.

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.