London & Quadrant Housing Trust (202017301)

REPORT

COMPLAINT 202017301

London & Quadrant Housing Trust

28 March 2022

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration,’ for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

1. The complaint is about the landlord’s response to the resident’s concerns about:
   1. The level of service charges; and
   2. Charges for services she alleges she was not receiving.

Jurisdiction

2. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint, or part of a complaint, will not be investigated.
3. After carefully considering all the evidence, in accordance with paragraph 39(g) of the Housing Ombudsman Scheme, this Service has determined that complaint point (a) falls outside of the Ombudsman’s jurisdiction.
4. This is as the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion concern the level of rent or service charge or the amount of the rent or service charge increase.
5. Should the resident wish to pursue this matter, it would be more appropriate for her to do so via the First Tier Tribunal (FTT). The FTT will be able to properly decide on the reasonableness of any service charges, and of any subsequent increases in costs in line with “fair” or “market” rates.

Background and summary of events

Background

6. The resident has been a tenant since 2003.
7. The property is a two-bedroom house.

The service charge policy

8. Section 5.1 of the landlord’s service charge policy explains that a management fee cost is incurred on essential activities to manage and provide services to customers. It highlights that third party managing agent’s fees are included where the landlord has appointed a managing agent to provide services.

The complaints policy

9. The landlord’s complaints policy says that complaints will be responded to within 10 working days at stage one and 20 working days at stage two of the landlord’s complaint process. Section 3 of the policy says that complaint can be made via social media including the landlord’s Facebook page.

Summary of events

10. The rent notification dated February 2019 showed a reduction in the rent and service charge, the later reducing from £8.13 per week to £3.17. Information issued with the rent notification in February 2020 advised residents that the landlord had changed from charging 10% of the total service charge as its management fee, to charging a flat fee, which was set at the start of the year and was best practice according to the Royal Institute of Chartered Surveyors.
11. A rent notification issued on 1 February 2021 showed an increase from £134.61 to £136.77 rent for 2021/22 to include service increasing from £3.93 to £4.13 per week. Notes explained that this was a 1.5% increase and details were given to appeal the new rent. The statement attached showed the annual service charge was made up of managing agents costs of £136.67 and management fee of £78.00, to make a weekly charge of £4.13. Guidance notes explained what tenants could do to appeal the increase.
12. The resident emailed the landlord on 4 February 2021 and said she wished to appeal against the increased service charges for the four properties in her block for 2021/22 as they did not receive communal services or ground maintenance, there were no caretakers, no cleaning or TV ariels. The tenants were paying more than the privately owned dwellings and there should be no administrative charges as they are not having anything done. The resident was appealing the continuing fee on behalf of the four properties, as they were being overcharged and not receiving any services. The resident wanted to know why they were being charged more than the private houses and said this had been going on for five years.
13. The landlord responded on 6 February 2021 and said that the service charges for her road had been estimated to increase to £10.40 per resident, they were not unfairly charged and the management charge for 2021/22 was a fixed fee of £4.13. The charges had increased due to the VAT payable which they were obliged to recover and pay to HMRC. The managing agent fee was paid as land was owned by a third party who charged the landlord for vehicular and pedestrian access.
14. A further email from the landlord on 9 February 2021 said that the managing agent charges were for the right to use the land on the estate and were split between all tenants and included grounds maintenance and all tenants were obliged to pay these. The resident was referred to the rent notification guidance notes which explained the resident may appeal to a tribunal if she believed her rent, which included service charges, was unreasonable.
15. The resident responded and asked for contact details for the rent and service charge tribunal and the landlord sent the resident the link the following day.
16. On 1 March 2021, the resident submitted a complaint regarding the increased service charge. On 5 March 2021, the landlord emailed the resident and advised that this query had already been answered, the service charge team reconfirmed what she was previously advised, regarding the increase in service charge. This was due to an increase in the management fee and VAT. The managing agents owned the land in front of the four houses, so the landlord had to pay to access the land. A link to the FTT was again provided.
17. The resident responded on 9 March 2021 and said she wished to escalate the appeal against the service charges. She said there was no proof of the agreement between the managing agents about access to the road and it was not on the tenancy agreement. The resident wanted evidence under the Freedom of Information Act as she understood that the road was owned by the council so did not believe they should pay for access.
18. The landlord acknowledged the complaint and said it would write by 19 March 2021. Contact details for this Service were given.
19. The stage one complaint response was issued on 19 March 2021:
    1. The service charge had been explained in full under previous complaints.
    2. Charges from the managing agent were attached.
    3. The service charge included a management fee of £78 a year from the landlord, which privately owned properties did not pay.
    4. Escalation details given and contact details for this Service were provided.
20. The resident responded on 30 March 2021 and said this was a stage three complaint as the landlord had not answered her emails and she was appealing against the increase in service charge for the four properties paying more than the privately owned residents when they did not receive any communal services.
21. The landlord replied on 6 May 2021 and gave a breakdown of the service charges relating to the property divided equally between all the residents and including a management fee to the landlord. It explained that tenants paid an additional £1.50 each week in respect of a management fee, which included the landlord’s costs of property and contract management, dealing with customer queries and accounts and providing statements.
22. The resident replied that she felt that the landlord had not answered her complaint and she would progress with this Service. The landlord had not explained why the resident had not been provided with grounds maintenance services and said it was going to contact the managing agents, but nothing had been answered. She stated:
    1.  She was mortified that residents were paying towards 28 properties.
    2. Residents had not received the gardening that the private properties got in maintenance of lawns, bushes, and tree pruning.
    3. The bushes and trees had overgrown.
    4. Residents were not on the contract but were still contributing.
    5. The accounts were from the management company who ran the close which she was not part of.
    6. The contract was £2260 but the cul-de-sac was not part of the contract.
    7. She questioned why they contributed towards bank charges.
    8. Sundries had not been explained and she did not understand why she contributed to this.
23. The landlord replied on 17 May 2021 and said that the charge was not just for the bushes which were not maintained, and this had been raised with the managing agents. The resident replied that there were nine issues unanswered.
24. The landlord replied to the resident the next day and explained the fees paid to the managing agents for the estate, including the pruning of trees on the estate, that the charge was split equally between all the landlord’s tenants and not all trees will have been pruned. The landlord said it was not clear why the resident felt she should not pay an equal share of the charge other than the fact that two bushes she mentioned had not been maintained, but it had advised the managing agents of this issue. The management fee was explained, and the landlord asked the resident to provide in bullet point form any remaining issues.
25. The resident posted a message via Facebook on 29 July 2021 regarding the service charge and no maintenance being done.
26. The resident posted further Facebook messages on 5, 6 and 12 August 2021 and said that issues were outstanding.
27. On 24 August 2021, the resident was advised by this Service that the Ombudsman cannot investigate the level of the service charge. The Ombudsman could look at issues such as accounting errors, communication and refunds. The FTT would consider if the charge was too high, and applications about reasonableness or the increase of a variable service charge could also be considered.
28. A complaint was logged via the landlord’s website on 17 August 2021 regarding the service charge. The resident said she contributed towards the whole estate, but her cul-de-sac had not been touched for four years. The resident wanted a refund for the charges since 2018.
29. The landlord replied on the next day and said that the majority of the service charge was for grounds maintenance, and the landlord had noted when visiting the estate that the grounds were well maintained. The landlord reminded the resident that they were entitled to appeal the rent as advised each year when the change in rent letter was sent. A breakdown of the new rent charge was given.
30. The resident responded and said the cul-de-sac was not being maintained and she had complained about this for three years.
31. The landlord issued its final response letter on 27 September 2021:
    1. The resident’s complaint was that the estate was run by a management company who submit accounts to the landlord, but the private residents pay £150 for service charges in 2019/20 and the landlord’s tenants pay £204.36.
    2. The landlord had explained in its response dated 6 May 2021 that the charge included a share of the service charge for the estate paid to the managing agent, and that the landlord makes a charge of £1.50 per week for a management fee. This charge for the landlord is not paid by private residents.
    3. Service charges increased from 2020/21 to 2021/22 by 5p for the managing agents charges and 15p for the landlord management fee.
    4. Charges for communal areas and grounds maintenance was also included for areas that tenants had access to.
    5. The resident had complained in subsequent correspondence that the landlord was not maintaining the tenants’ communal shrubs and hedges. However, grounds maintenance was previously done by the landlord and a charge of £4.31 per week was made. This had been stopped as requested by the tenants, who agreed to maintain the grounds themselves, but this could be reinstated if required.
    6. Appeal rights to this Service were given.

Assessment and findings

Scope of this investigation

32. As above, the issue of the level of rent or service charge or the amount of the rent or service charge increase is not within the remit of this Service and has not been investigated. The rent increase notice included details about the first-tier tribunal which the resident could have taken the matter to.
33. The Ombudsman’s role here is to decide if the landlord has responded reasonably to the resident’s queries, and this is the issue that has been investigated.

Assessment

34. The correct route for this dispute was to a tribunal and the landlord has given the correct information about this to the resident at each stage. The initial contact was treated as an appeal and the resident was correctly given the tribunal details although it is not known how or if this progressed.
35. The resident continued to ask the landlord for its response and the landlord could have issued a final response earlier, after the resident replied to the stage one response in May 2021. Instead, it entered into correspondence repeating the same points and asking the resident to clarify why she felt she should not pay the charge. The landlord’s complaints policy says that it will accept complaints via its Facebook page, but this did not happen until several posts were received.
36. There was an issue about the wider communal grounds on the estate not being maintained and the landlord said it raised this with the managing agents in May 2021. The landlord confirmed in August 2021 that when it had inspected the communal areas outside of the resident’s cul-de-sac it found them to be well maintained. It was reasonable that it confirmed this for itself.
37. The landlord also said that it had previously maintained communal areas within the cul-de-sac, but this had been stopped from the year 2019/20 as requested by the four residents of the cul-de-sac who agreed to maintain the grounds themselves. It was therefore reasonable that this maintenance stopped. The landlord provided the resident with the option of reinstating this if this was desired.
38. This being the case, it appears from the evidence given, the resident is not being charged for maintenance that the private owners are receiving and she is not. The landlord’s position has been that the residents are paying a charge to the landlord for the administration relating to the properties, which private owners would not incur as they have no housing association services. In addition, the resident pays a charge, in common with all residents in the estate, collected by the landlord and passed to the managing agents for access and the maintenance communal areas, which they may or may not make use of. The resident no longer pays a charge for the maintenance of her own garden, as she and the other tenants opted to manage this themselves, from 2019. The landlord said this was a charge of £4.31 per week prior to the residents agreeing to maintain their own land. The rent notice dated 4 February 2019 showed a reduction in the overall service charge from £8.13 to £3.17 per week which demonstrates that the charge was removed.
39. The landlord has not specifically said why it would not be refunding the charge back to 2018 but given its explanation about the charge, and that Services were being provided at this time, it would follow that it did not consider that a refund is due. The Ombudsman is unable to establish the extent of the service offered at this time. In any case, any issues with the service in 2018 should have been brought to the landlord’s attention within good time.
40. The landlord has responded reasonably to the enquiries by the resident and has returned to the same subject several times. It correctly signposted the resident to the tribunal at the outset and maintained this position throughout. It has responded to the grounds maintenance questions and has clarified why there was a management fee charge, but no demonstrable services. This was covered in its responses of 6 and 9 February 2021, as well as its final response.
41. There was a delay in the resident’s Facebook enquiries in July and August 2021 being responded to, despite the landlord’s complaint process being that concerns could be raised this way. It is noted nevertheless that the landlord had previously asked the resident to provide a list of remaining issue in bullet point form on 18 May 2021. However, the landlord should take care to respond to all complaints in accordance with its policy.
42. The resident may not agree with the landlord’s responses or overall position, but this would be something for her to address with the FTT.

Determination (decision)

43. In accordance with paragraph 39(g) of the Scheme, the resident’s concern about the level of service charges falls outside of this Service’s jurisdiction.
44. In accordance with paragraph 54 of the scheme, there was no maladministration in respect of the landlord’s handling of the resident’s concerns about charges for services she alleges she was not receiving.

Reasons

45. The landlord’s response to the resident’s concerns were reasonable and appropriate. The landlord had directed the resident correctly to the FTT from the outset and although there was some delay in the complaint response and the landlord has not yet made the position clear to the resident in a way that they are satisfied with, overall, the landlord has responded satisfactorily.

Recommendations

46. It is recommended that the landlord:
    1. Confirm in writing and with a drawing/plan, which areas are included in the managing agents’ grounds maintenance charge, if it has not done so already.
    2. Remind all salient staff of the need to follow the complaint process to ensure that residents are not delayed in accessing the Ombudsman Service.