London & Quadrant Housing Trust (202343720)

Background

1. The resident lives on an estate comprising multiple blocks of flats of differing heights, with a mix of tenures, and varying flat sizes. The freeholder, or its agent, procures the buildings insurance for the estate. The landlord issues its service charge budget to the residents each year, including the buildings insurance charge. The resident raised a query about the insurance increasing 3-fold and how this charge was apportioned. They discussed this from February 2023 until she raised her complaint in September 2023 as she was not satisfied with its responses.

What the complaint is about

2. The landlord’s response to the resident’s buildings insurance queries.
3. The landlord’s complaint handling.

Our decision (determination)

4. There was maladministration in the landlord’s response to the resident’s buildings insurance queries.
5. There was service failure in the landlord’s complaint handling.

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

Summary of reasons

6. The landlord did not acknowledge its failures and so did not attempt to put things right. While the landlord passed on the information it obtained from the freeholder’s agent about the premium, there was no consideration for why the apportionment of this premium across properties was not in line with the resident’s lease. After not achieving the responses she wanted from the landlord, the resident tried to contact different agencies to resolve her queries. This took considerable commitment, time, and effort.
7. While the landlord recognised it was late with its final response letter, it did not provide adequate redress for this. It also did not recognise its other complaint handling failings.

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.

Our investigation

The complaint procedure

What we found and why

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

8. We do not investigate complaints about the level or reasonableness of service charges. The resident’s concerns relate to the buildings insurance increase and whether this was reasonable, so the complaint falls in this category. Therefore, we have not investigated this aspect of the complaint. The tribunal or court are more likely to consider this matter, given their powers and expertise.
9. We cannot order the resident’s desired outcome for the landlord to apportion the buildings insurance according to risk. The lease outlines the way the landlord apportions charges, this does not refer to risk. We cannot order the landlord acts outside the lease. We have advised the resident to take independent legal advice on whether to apply to the tribunal or court for them to consider the matter.
10. The resident also wanted us to consider the procurement process and any commission received for taking out the insurance policy. We have not seen evidence this formed part of the resident’s complaint to the landlord, and it did not consider this in its responses. Therefore, we cannot assess this. The resident may wish to raise this as a new query with the landlord or seek independent legal advice.

What we have considered

11. The resident’s block forms part of a wider estate, “the total development.” The total development contains different tenures, flat sizes, and blocks of differing heights. The lease says the resident is liable for paying estate costs including buildings insurance on the total development. This is not disputed by the parties.
12. The lease says estate costs are “payable by all tenants on a square footage basis.”
13. In both its complaint responses, the landlord told the resident it apportioned buildings insurance on an “equal share basis”. We contacted the landlord for further clarification, and it told us that this was not the case. It said insurance is a tariffed charge; it charges each unit the same amount. This created confusion, but with either calculation, we do not believe the landlord’s responses were in line with the resident’s lease.
14. On a number of occasions, the resident questioned how the landlord apportioned the insurance costs amongst properties. The landlord’s service charge policy says prior to October 2019, it would commonly apportion service charges for new schemes on an equal share basis. From October 2019 it used the fairest overall of 3 methods either: equal share, number of bedrooms, or floor area. These policies would not override the lease, however.
15. There is no evidence the landlord explained how the resident’s charge was calculated in accordance with her lease. Had it done so, it would have established that the resident’s lease indicates that her cost would be based on floor area. From its explanation to the resident and us, it appears its approach differed from this.
16. While we are limited in assessing whether the landlord responded to all of the specific points raised by the resident (as we cannot evidence what these were), we are concerned with the method and calculation used to arrive at the resident’s insurance cost. We have therefore made an order for the landlord to review its position on how the cost has been apportioned, and to ensure that the approach is in accordance with the lease. If the approach differs from the lease, the landlord should explain why. The explanation should be shared with the resident and this Service.
17. Despite the absence of some records, we have seen the resident’s tenacity in this matter – contacting the landlord, its fire safety team, and other agents involved in procuring the insurance. We recognise the time and trouble to do this over the past 3 years. Along with our order for the landlord to provide further information, we have therefore also awarded the resident £200 for her time and trouble in pursuing this issue.

18. The landlord did not act in line with its complaints policy or our Complaint Handling Code (the Code) when it issued its stage 1 response 9 days late, without notifying the resident of the delay and the reason for this. It did not acknowledge this or apologise for this.
19. The landlord’s complaints policy says it will monitor progress until it completes all outstanding actions. In addition, the Code said that landlords must keep resident’s regularly updated on the investigation’s progress, even when there is no new substantive information to give.
20. In the stage 1 response the landlord said it would update the resident once the freeholder had provided the information. In the evidence the landlord provided us with, we have seen no contact from it to the resident until its final response letter. Therefore, we have not seen evidence the landlord acted in line with its policy or the Code in this matter.
21. Again, the landlord was outside its complaints policy and the Code when it provided the final response letter 79 working days late. It did this without notifying the resident of the delay and the reason for this. It apologisedin the letter and awarded £80 compensation.
22. We do not believe this compensation offer adequately recognised this substantial delay. In addition, it had failed to recognise the stage 1 delay and failure to keep the resident updated throughout the complaint.

Learning

Knowledge information management (record keeping)

23. The landlord did not provide us with a copy of:

• The resident’s complaint.
• Her escalation reasons.
• The email which it referred to in its final response letter dated 26 October 2023.

24. This indicates poor record keeping and is contrary to expectations under the Code.
25. We note this occurred in 2023, however we encourage the landlord to review this and consider whether its record keeping has improved since then.

Communication

26. The landlord used the term ‘equal share’ regularly. This could mean different things. It may be helpful to clarify this in future.
27. In addition, the landlord copied text from the freeholder’s agent, which was not easy to understand. We believe the landlord should have adjusted this, if necessary, consulting with the agent, to produce a plain English summary.