London Borough of Hounslow (202435278)

Background

1. The resident raised concerns on 20 April 2024 about the building insurance procurement. The landlord advised only one insurer submitted a quote. The resident raised a complaint on 5 July 2024 as she did not think the landlord had sufficiently attempted to obtain quotes from other insurance providers. She referred her complaint to the Service as she wanted to independently obtain building insurance.

What the complaint is about

2. The complaint is about the landlord’s response to the resident’s concerns about the building insurance procurement.

Our decision (determination)

3. There was no maladministration in the landlord’s response to the resident’s concerns about the building insurance procurement.

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.

What we have not considered

5. We do not investigate complaints about the level or increase of service charges. Part of the resident’s complaint centres on the level and increase of the building insurance costs, which is ultimately about the level or increase of service charge and so we will not investigate it. The tribunal or court are more likely to be best placed to consider this matter, given their powers and expertise.

What we have considered

6. The lease states that the landlord is responsible for obtaining building insurance and the resident must pay the service charge which includes insurance costs. The landlord’s website also explains as the freeholder it is responsible for providing comprehensive building insurance, which the resident cannot opt out of.
7. The resident was dissatisfied with the building insurance procurement process, as only one supplier submitted a quote. The landlord explained it used a dynamic purchasing system to tender the insurance, which was open to multiple insurers for a reasonable timeframe. It said it had evaluated the quote to ensure it met necessary requirements and provided value for money. The landlord appropriately justified its method of obtaining building insurance quotes, and it was not responsible for the low number of bids received.
8. The landlord explained that many insurance companies have withdrawn from the social housing market, which resulted in fewer bids and increased premiums. The availability and pricing of insurance is outside its control. It also explained wider sector action to seek legislative change to address the issues. It therefore reasonably managed the resident’s expectations about the current insurance climate.
9. It is understood that the resident wants to arrange her building insurance independently, in attempt to reduce the costs. However, both parties must comply with the lease terms, which requires the landlord to arrange building insurance and recover the cost through the service charge. The landlord’s position is consistent with the lease, and it provided a clear and reasonable explanation in response to the complaint. Although the resident remains dissatisfied with the cost and lack of alternative options, this was not due to a failing by the landlord. As such, there was no maladministration in its handling of the complaint.