London & Quadrant Housing Trust (202403437)

Background

1. The resident’s concerns relate to the landlord not issuing its final service charge statements for 2017/2018. The landlord issued a notice under section 20B of the Landlord and Tenant Act 1985. The resident has complained that the landlord said it would issue the accounts but has failed to do so. As the landlord has not issued its 2017/2018 final accounts, he asked us to investigate.

What the complaint is about

2. The landlord’s handling of:
   1. The resident’s requests for its final service charge accounts for 2017/2018.
   2. The resident’s complaint.

Our decision (determination)

3. We have found:
   1. The landlord is responsible for maladministration for the landlord’s response to the resident’s requests for the 2017/2018 final accounts.
   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 requests for the 2017/2018 final service charge accounts

5. The resident’s lease says the landlord must calculate the actual service charges at the end of each financial year. It must then compare the actual costs with the estimated service charges it previously charged the resident. The lease also says the landlord must issue a statement, confirming the actual costs and whether they were higher or lower than the estimates and how this affects what the resident must pay.
6. Under Section 20B of the Landlord and Tenant Act 1985 (LTA 1985), landlords must issue notice – if it wants to recover costs after 18 months of being incurred – that the resident will be required to contribute towards them. The notice preserves the landlord’s ability to recover costs at a later date (usually once it has completed its accounting).
7. The landlord provided a copy of the section 20B notice, dated 28 September 2018. It said the accounts would not be finalised by 30 September 2018 because of anomalies with transferring records and invoices after the recent merger. The landlord provided the notice within the required timescales. It also provided a summary of tenant’s rights and obligations and a summary of expenditure for year ending 31 March 2018. This information was in line with what it needed to include with the section 20B notice.
8. After the landlord issued the section 20B notice, the resident complained on 23 March 2023 that it had still not provided the 2017/2018 final accounts. He said the landlord explained in January 2019 that it was struggling to obtain the data needed to prepare the accounts. The resident also complained that the landlord said it would issue the accounts by September 2021, but this was not done. The landlord confirmed it told the resident it could issue the 2017/2018 final statements. It said it would aim to issue them with its 2020/2021 reconciliation work by September 2021. While this was not a guarantee, the landlord was suggesting it could issue them and was raising the resident’s expectations. By failing to provide them, this may have contributed to the resident raising a formal complaint.
9. We note the resident complained around 18 months after the landlord did not meet the proposed date. Under paragraph 42(c) of the Housing Ombudsman’s Scheme, the resident should have flagged this earlier. In similar circumstances, we may consider the matter outside of our jurisdiction. However, we have decided to investigate this complaint as the issue is still live and it was not unreasonable that the resident gave the landlord more time to complete the accounting. We appreciate the lack of communication and updates from the landlord led the resident to raise a complaint.
10. In its stage 1 complaint response on 31 March 2023, the landlord confirmed it was working on the 2017/2018 service charge finals. It said the delays were due to the complexity of the information. It explained that when it merged with the previous landlord, it was given the apportionment for how the costs were split. It said most of the block percentages did not equal 100% and the apportionment it received exceeded 100%. This meant residents would be contributing more than they should. To work out the final costs, it said it needed to look at individual costs for each unit to work out apportionment split. It said this was a long process as going through each set of estimates take time and costs need to be checked against the estimates sent to the resident on 20 February 2017. It said it could only look to issue the 2017/2018 finals once this work was completed. It was reasonable for the landlord to be open about the process involved.
11. The landlord issued its stage 2 response on 21 February 2024. It acknowledged that the resident’s complaint was about the delays in it issuing the 2017/2018 service charges statements. However, it focused on rent and service charge increases in the complaint response. This would understandably cause frustration for the resident, as it did not focus on the basis of his complaint.
12. Following the complaints process, the landlord continued to investigate the situation internally in February 2024. It noted that it last updated the resident on 31 March 2023 and said the figures and percentages from the previous landlord did not match. This meant the estimates on its system were incorrect. It noted that this would require it to go through each block and check each estimate to record what residents were charged. It said it would then need to change the system to match the estimate and suspected the total would not equal 100%.
13. During our investigation, we asked the landlord for an update on it providing the 2017/2018 service charge accounts. It reiterated that it issued a section 20B in 2018 because of anomalies with transferring records and invoices during the merger with the previous landlord. It said it needed to resolve this before it could provide an accurate statement. It explained that it was not currently in a position to give a date of when it could issue the accounts. It is unclear why this could not be done.
14. It would be reasonable, however, for the landlord to provide the resident with updates and an approximate timescale for when he can expect the final accounts. From what we have seen, it only provided information when the resident chased or raised complaints.
15. Based on everything we have seen, the landlord issued the section 20B notice within the required timescales and therefore preserved its right to seek contribution towards costs in the future. Nevertheless, it would have been reasonable for it to have been more proactive in providing updates and explanations to the resident about the cause of the delay. It should have shared the timescales it was working towards to provide the accounts. The landlord missed opportunities to keep the resident updated over a significant time, especially when it suggested that the accounts would be ready in September 2021 and did not provide them (or a reason for missing the deadline).
16. It was unreasonable that the landlord did not provide regular updates or keep the resident regularly informed about when it could provide the 2017/2018 final accounts. It was also unreasonable that the landlord provided a stage 2 response which did not adequately address the resident’s complaint.
17. As the landlord did not proactively update the resident, this meant he had to chase it several times and this likely caused distress and inconvenience. We have therefore found maladministration and order the landlord to pay the resident £150 compensation. We also order it to provide a timescale for when the resident should receive the 2017/2018 final accounts.

Complaint handling

18. The resident raised his complaint on 26 March 2023. The landlord provided its acknowledgement the following day, which was within the timescales set out within the Service’s Complaint Handling Code (“the Code”).
19. The landlord provided its stage 1 complaint response on 31 March 2023, which was within the required timescales. The resident escalated his complaint on 3 April 2023, and we have not seen any acknowledgement from the landlord to the resident. However, on 1 February 2024, the landlord emailed the resident stating it wanted to discuss the stage 2 complaint. The Code states that landlords should acknowledge stage 2 escalations within 5 working days. This was a delay from the landlord of 10 months.
20. The landlord subsequently issued its stage 2 response on 21 February 2024, which was within 20 working days from its acknowledgement on 1 February 2024.
21. From reviewing the stage 2 complaint response, it failed to address the resident’s concerns raised. This was despite demonstrating that it had captured the complaint issues that were raised.
22. The landlord caused significant delays during its complaints process, which would have likely caused distress and inconvenience for the resident. We note that the landlord offered £50 compensation, however, do not consider this to go far enough to put things right given the significant delay of 10 months. We have therefore found maladministration and order the landlord to pay the resident an additional £100 compensation.

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.