London & Quadrant Housing Trust (202125842)

REPORT

COMPLAINT 202125842

London & Quadrant Housing Trust

18 April 2023

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

The complaint is about the landlord’s response to the resident’s enquiries about:
1. The increase in level, apportionment and reasonableness of service charges.
2. Estimated service charges for the year 2021 to 2022.
3. The landlord’s handling of the complaint.

Jurisdiction

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 will not be investigated.
After carefully considering all the evidence, in accordance with paragraph 42 (e) of the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction:
1. The increase in level, apportionment and reasonableness of service charges.
In accordance with paragraph 42 (e) this Service cannot investigate complaints which concern the level of rent or service charge or the amount of the rent or service charge increase. The resident queried the 28% increase in service charge for the caretaking service since its introduction. This Service can look at whether the landlord provided an explanation but is unable to determine the reasonableness of any increase in service charge. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are within the jurisdiction of the First Tier Tribunal. The resident may wish to seek further advice on this issue from the Leasehold Advisory Service or First Tier Tribunal.
This service can however investigate complaints which are in relation to the management of service charge accounts and handling of enquiries relating to service charges. The resident’s complaint about the landlord’s response to her service charge enquiries is therefore considered below, together with the landlord’s complaint handling.

Background and summary of events

Background

The resident is a shared ownership leaseholder of the landlord. The resident’s lease commenced on 26 January 2010. The property is a two-bedroom flat in a communal building. The landlord has no vulnerabilities recorded for the resident.
The resident contacted the landlord in February 2021 following receipt of the estimated service charges for the year 2021 to 2022. The resident raised several queries about the costs and services set out in the estimate.
The lease says the resident is responsible to “pay the service charge and ground rent in accordance with clause 7”.
The lease says the landlord is responsible under clause 7(3) for:
1. “The service provision in respect of any account year shall be computed before the beginning of the account year and shall be computed in accordance with clause 7(4) and shall state separately expenditure relating to:
  1. The service provision.
  2. The ground rent.
  3. Any expenditure relating to any block of flats forming part of the estate other than the block in which the premises situate.
2. Clause 7(4) “The service provision shall consist of a sum comprising the expenditure estimated by the surveyors as likely to be incurred in the account year by the landlord”.
The estate management policy says “Caretaking is a service provided by the landlord and the costs cover the vehicle used by staff, equipment and staff costs such as salary and pension”.
The landlord’s compensation policy says that “compensation may be considered where we fail to follow our policies and procedures”. It also says “We may also offer discretionary payment to customers who have suffered undue stress and upset because of our failure to respond to their complaints within specific timescales or done so inadequately”.
The landlord operates a two stage complaints policy. A stage one complaint is acknowledged by the end of the next working day and a response in writing within ten working days. A stage two complaint is acknowledged within two working days and a response provided within 20 working days. If the landlord is unable to provide responses within those timescales it will explain the reason for the delay to the resident and provide a response within a further ten working days.

Summary of events

The resident contacted the landlord on 28 February 2021 to raise queries about the 2021 to 2022 service charge estimate. The resident queried:
1. The costs relating to CCTV equipment maintenance and servicing. It was estimated at £86.80 for the year per resident. She asked for an explanation for:
  1. Whether there were plans for a “big spend this year”.
  2. Confirmation of the last time a cost was actually made to the resident’s accounts for this service.
2. The two costs for the cleaning contract of £11.40 for the scheme and £139.96 for the block. A caretaking service was introduced in 2019 which incorporated cleaning. The resident believed this to be an error and asked the landlord to investigate.
3. The reason for the 28% increase in caretaking costs since its introduction in 2019.
The landlord responded on 11 March 2021 and said that:
1. There had been an administration error for the CCTV costs. The cost was associated to each block however one cost should have been split between all blocks. The landlord said that a credit would be made.
2. The estimated charges for cleaning were reviewed on a yearly basis. It was the nature of service charges to differ year on year depending on the previous year’s actual expenditure and the services being provided. The costs represented the anticipated expenditure likely to be incurred in the coming year for carpet and window cleaning.
3. The mobile caretaker provided a handyman service and the caretaker provided a weekly cleaning service in the block.
The resident responded to the landlord on 29 March 2021 as she was dissatisfied that the landlord had not responded to her question about the increase in caretaking costs. She also asked whether a Section 20 consultation should have taken place about the cleaning charges which she believed appeared to be new.
On 19 April 2021 the resident raised a complaint as she did not feel the landlord had responded to her enquiries. The landlord acknowledged the complaint on 20 April 2021 and provided a response at stage one on 30 April 2021. The landlord said:
1. It believed that there had been a miscommunication about the CCTV charges. The CCTV charge was correct and there was no credit due. It provided a breakdown of the charge per leaseholder per month and said that its service charge team had correctly apportioned the charges between 75 properties.
2. Scheme costs for communal cleaning were for the provision of bin rotation in bin stores. Block costs were for the internal cleaning at the resident’s block and apportioned between 27 properties. The cost was worked out block by block depending on the number of hours spent and the tasks carried out by the cleaners.
3. The caretaker that provided services to the estate was an employee of the landlord. In previous years it had calculated the contribution using the caretaker’s annual salary plus overheads and apportioned it by the number of hours spent at the estate, then divided by the number of properties. The calculation process had changed to ensure the costs were apportioned more accurately to each block. It had assessed the frequency and number of hours the caretaker had spent completing internal and external works over the course of the year. The value had then been divided by the number of properties in the block. As a result the contribution towards the service had increased.
4. The mobile caretaking service was an ad hoc service provided by a multi-skilled operative who provided a wide range of services across a number of schemes. It would carry out minor communal works which included communal repairs, assisting with environmental anti-social behaviour, and attending schemes if required for health and safety. The purpose of the service was to have a flexible and responsive operative that could react quickly and save costs and time in calling out specialist contractors. There was no set rota which meant it could respond as and when required, this was particularly useful when services such as gritting or graffiti removal were needed. The cost for the mobile caretaker had been moved from scheme to block level to ensure that apportionment was on a block basis.
5. Prior to any qualifying long term agreement exceeding £100 it would need to consult before the contract was entered into. All services provided on a contractual basis had undergone the relevant consultations. This did not include the landlord’s staff as it had not entered into a contract with a third party supplier. The landlord did not re-tender annually as contracts were on a rolling basis until the contract ended.
The resident responded on 8 May 2021. She said that:
1. In the first response the landlord had said there was an error in relation to the CCTV charge and in the next response said that there was no error and she asked for clarification.
2. The landlord had not answered the question about cleaning charges. In 2019 the caretaker service had been introduced which had removed the cleaning contract. The only element that was not transferred to the caretaker was window cleaning. Previous responses referred to carpet cleaning which was not a service that had been provided before by either the cleaning contractor or the caretaker and therefore residents should have been consulted about a new contract.
3. The landlord had not responded to her query about the reason for a 28% increase in caretaker costs.
On 25 May 2021 the landlord responded and said:
1. There was no credit due for the CCTV costs.
2. It had asked the estate services team to investigate the query for cleaning charges and would provide a response as soon as it could.
3. In relation to carpet cleaning, if the cost of any service triggered a Section 20 consultation then this would have been carried out. However, if it was in scope of any contract already in place on which it had previously consulted there would be no Section 20 trigger. It asked the resident to contact another member of staff to ask when the carpet cleaning would take place.
4. It provided caretaking costs for the previous three years. It confirmed an increase in the caretaker hours from 21.16 to 23.6 hours per month.
On 12 July 2021 the resident responded to the landlord and thanked it for confirming the CCTV costs. She asked the landlord:
1. For a response in relation to the cleaning charges.
2. For a response to the carpet cleaning. She did not recall the carpets ever being cleaned and asked if this was a new service.
3. Why it was necessary to increase the caretaker’s hours. She asked why the sign in sheets did not reflect the number of hours the caretaker was on site.
4. Why were there charges for internal communal cleaning when the introduction of a caretaker saw an end to the cleaning contract.
The landlord provided further responses on 15 July 2021 and 26 July 2021. It said:
1. The caretaking costs related only to the agile caretaking team who carry out basic cleaning of the blocks and communal areas. There was additional cleaning not carried out by the agile caretaking team such as deep floor/carpet cleaning and window cleaning. Included in the cleaning costs was the jet washing of the communal bins.
2. There was an administrative error in the estimates which would be adjusted in the final reconciliation which would be sent in six weeks for service charge year 2020 to 2021. The carpet and window cleaning contract ended when agile caretaking was introduced. The landlord said it had put forward a request for these services to be added to the 2021 to 2022 contract. The charges for each of these services did not meet the threshold for Section 20 consultation as neither of the services was more than £100 per leaseholder.
On 27 July 2021 the resident repeated her questions to the landlord. The landlord responded on the same day that the quotation for annual window cleaning was £277.20 and for carpet cleaning was £270.00 which was less than £100 per leaseholder. It had referred the caretaking query to a supervisor for comments.
The resident chased the landlord on 12 August 2021 and 20 August 2021 for a response to her queries. The landlord responded on 25 August 2021 and told the resident to use the information previously provided to address the complaint about cleaning and caretaking services. It said it had raised a query regarding the difference between the time being charged and the time recorded on the sign in sheets.
The resident made a request to escalate her complaint to stage two of the landlord’s complaints process on 18 October 2021. The resident chased a response to her request on several occasions. The landlord acknowledged the resident’s request to escalate to stage two on 21 January 2022. It said that it had passed the complaint to a member of the complaints team and that due to this Service’s guidance, its new approach was taking longer to investigate. It said it would be in touch as soon as possible but did not provide a timescale.
The landlord responded at stage two on 14 March 2022. The landlord said:
1. It introduced the mobile cleaning service in April 2019 and the service was provided by the caretakers.
2. There were 2 caretakers who worked 7 hours on the patch weekly and therefore the areas were serviced by 14 hours each week.
3. The hours spent in 2020 to 2021 remained in line with 2021 to 2022. There was more attention to detail on the work done for continued improvement of standard but no significant variance in terms of time spent.
4. The caretaking team operated a signing in and out form to track their attendance, which would not necessarily tell the full story as it does not take into account the time spent on other common areas such as the car park and the grounds. The increase was based on how the caretaking costs were calculated.
5. There was an element of communal cleaning at scheme level, this was to cover jet washing & bin rotation. This was not carried out by the caretakers but by a contractor and therefore the costs incurred form part of the scheme service charges.
6. Within the 2021 to 2022 estimate communal cleaning was included at block level in error. It was aware that this would need to be corrected in the final accounts as the block level communal cleaning had ceased and was now carried out by caretakers. This would be reflected in the 2021 to 2022 final accounts issued between April and September 2022.
7. The landlord apologised for the delayed response to the stage two complaint and explained that it had made changes to its approach to complaints handling. This meant that it carried out a thorough investigation to make sure the resident received a fair and consistent outcome. It offered £100 in compensation in recognition of the time that the matter had been outstanding.
The landlord’s letter dated 14 March 2022 was its final response to the resident’s complaint, confirming that her complaint had exhausted the landlord’s internal complaints process.

Assessment and findings

In reaching a decision about the resident’s complaint we consider whether the landlord has kept to the law, followed proper procedure and good practice and acted in a reasonable way. Our duty is to determine the complaint by reference to what is, in this Service’s opinion, fair in all the circumstances of the case.
This service has received information about estimated service charge accounts for the years 2021 to 2022 and 2022 to 2023. However, this investigation concerns the accounts for the year 2021 to 2022, which were the subject of the resident’s complaint that exhausted the landlord’s complaints process on 14 March 2022.

The landlord’s response to enquiries relating to estimated service charge accounts for the year 2021 to 2022

The resident made a request for explanations to three specific concerns on the estimated service charge for 2021 to 2022. While the landlord has provided responses, it has not addressed the specific issues raised and has provided conflicting information.
In its response about CCTV charges the landlord initially said that there was an error and a credit would be due. In further responses it said that the charge had been apportioned correctly and no credit was due. The resident had asked whether there was a “big spend” anticipated for the coming year and also when CCTV had last been charged to residents’ accounts. The landlord has not responded to either of these queries.
The resident also queried the cleaning charges of £11.40 for the scheme and £139.96 for the block. She asked for an explanation of what the cleaning costs were for as she understood that the caretaking service introduced in 2019 replaced any cleaning contracts. The landlord provided several different responses to the resident’s query:
1. In its initial response in March 2021 it said that the cleaning cost was for carpet and window cleaning.
2. In its stage one response the landlord said that the scheme cost for communal cleaning was for bin rotation. The block cost was for internal cleaning of the block.
3. In its response in July 2021 it said that the cleaning costs were for window cleaning and carpet cleaning.
4. It later said that the carpet cleaning and window cleaning contract had ended when the caretaking service was introduced. This was an error and a credit would be made in the next service charge accounts. It then said that it had made a request for the same costs to be added to the 2021 to 2022 service charge.
5. The landlord’s responses are confusing and it has not provided a clear explanation to the resident’s query. It has not confirmed whether the carpet cleaning was a new service.
The resident asked why the caretaking costs were increasing. There was further conflicting information in the landlord’s responses about caretaking services and hours:
1. On 25 May 2021 the landlord said the hours were 23.6 hours per month an increase from 21.16 hours.
2. In its stage two response the landlord said that the caretakers spent 14 hours per week at the scheme. The hours spent in 2020 to 2021 remained in line with 2021 to 2022 with no significant variance in terms of time spent.
3. In its stage one response the landlord provided a breakdown of the caretaking duties and mobile caretaking duties but it was not clear whether this was the same service.
4. It would have been good practice for the landlord to have provided the resident with a clear calculation and explanation of the caretaking costs.
The landlord’s failure to respond to the specific queries, raised by the resident and its provision of conflicting information in its responses amounts to maladministration. Orders for the landlord to provide responses to these issues and to pay the resident compensation have been made below.

The landlord’s handling of the complaint

The landlord operates a two stage complaint process. The complaint policy says that a stage two response should be sent within 20 working days of the escalation request. It is not disputed that the landlord has failed to meet its complaint policy timescales.
The resident made a request to escalate her complaint on 18 October 2021. The landlord did not acknowledge her escalation request until January 2022. The landlord provided no timescale in which the resident could expect a response and she had to repeatedly chase the landlord. The resident did not receive a stage two response until 14 March 2022, 102 working days after she requested that her complaint be escalated and 84 working days later than the 20 working day timescale set out in the landlord’s complaints policy.
The landlord acknowledged its failings in providing a response within the timescale in its stage two response. It apologised and offered £100 in compensation for the delays.
There was no communication with the resident about needing additional time to investigate the stage two complaint. Extensions to timescales should not exceed a further ten working days. The stage two response is significantly outside of the timescale set out in the landlord’s complaints policy and this Services complaints handling code. The £100 compensation offer was therefore not proportionate to the time and trouble the resident experienced in repeatedly chasing responses.
The landlord’s failure to comply with its complaints policy timescales and significant delay in responding to the resident’s complaint amounts to service failure. This Service has made an order for additional compensation below.

Determination (decision)

In accordance with paragraph 52 of the Scheme, there was maladministration in relation to the landlord’s response to enquiries relating to the estimated service charge for the year 2021 to 2022.
In accordance with paragraph 52 of the Scheme, there was service failure in the landlord’s complaint handling.

Reasons

The landlord provided conflicting information to the resident’s queries and did not provide clear explanations. It failed to respond to the specific queries raised by the resident.
The landlord delayed in responding to the resident’s stage two escalation request and providing a response in line with its complaints policy.

Orders and recommendations

Within four weeks of this determination the landlord is ordered to pay the resident compensation totalling £400 made up as follows:
1. £150 in recognition of the distress and inconvenience caused to the resident by its failure to respond to enquiries relating to estimated service charge accounts for the year 2021 to 2022.
2. £150 in recognition of the time and trouble incurred by the resident as a result of the landlord’s complaint handling failures
3. £100 already offered if not previously paid.
Within four weeks of this determination the landlord is ordered to provide responses to the resident’s queries in relation to:
1. Whether a “big spend” was due in that year for CCTV and when it last made charges to the resident’s account
2. Provide a clear explanation for the cleaning charges and what these relate to.
3. Whether carpet cleaning was a new service introduced.
4. Whether a refund was due for block cleaning for 2021 to 2022 if not already done so.
5. A clear explanation for the caretaking service.