London & Quadrant Housing Trust (202424011)

Background

1. The resident pays a variable service charge. The landlord sent its actual costs for 2022-23 and the resident asked to see invoices supporting the service charges. He complained the landlord’s charges were unreasonable and said it had not answered his queries and information requests. He remained dissatisfied after completing the landlord’s complaint process because he felt it had not answered his queries or provided enough information. He was also unhappy with how the landlord approached this.

What the complaint is about

2. The complaint is about the landlord’s handling of the resident’s:
   1. Queries about the service charges and requests for further information.
   2. Complaints.

Our decision (determination)

3. There was maladministration in the landlord’s handling of the resident’s:
   1. Queries about the service charges and requests for further information.
   2. Complaints.

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 happened or comment on all the information we reviewed. We have only included the key information that forms the basis of our decision of whether the landlord is responsible for maladministration.

Queries about the service charges and requests for further information

5. We do not investigate complaints about the reasonableness of service charges or levels of increase. The resident wanted us to decide if the landlord had complied with its legal obligations to keep the service charges reasonable. This is ultimately about the reasonableness of the charges and we did not investigate it. A court or First-tier Tribunal (Property Chamber) is best placed to consider this part of the complaint.
6. The resident told us he raised queries and concerns about the service charges from 2018. Our investigation focussed on events from September 23 which led to his complaints in December 2023, March 2024 and July 2024.
7. We can see the landlord and resident have communicated extensively about the service charges. The resident raised multiple queries seeking to understand how the landlord set them and justification for increases. The landlord gave information with its estimated charges and actual costs, and in responding to his queries including:
   1. Explaining what charge headings include and why some may appear under block, phase and estate service charges.
   2. Explaining how it estimates charges and why charges can differ between neighbours.
   3. Confirming the methods it may use to apportion charges.
   4. What its actual costs were, the resident’s share of them and how his share compared with its estimated charges.
   5. Confirming income into the sinking funds, interest added and the balances carried forward.
   6. Providing additional breakdowns of its actual costs giving invoice numbers and amounts and contractor names.
   7. Confirming some of its charges are fixed rates. For example, its charges for water testing, fire risk assessments and its management fee.
8. However, there is no evidence it explained to the resident how it calculated his charges from its actual costs and the apportionment methods it used for them. Without this, he could not reasonably understand how it set his charges and be assured its approach was fair. This principle applies to fixed rates too and the landlord should have been able to explain how it had arrived at a fixed rate charge and why it felt the amount was fair.
9. There were failings in the landlord’s handling of the resident’s requests for further information. On 22 December 2023 he asked for the invoice pack supporting its actual costs for 2022-23. It sent him a further breakdown of the costs including invoice numbers, amounts and contractor names. However, it said he needed to submit a “formal” request if he wanted to view invoices and other information and gave him a link to a template it “required” him to use.
10. It would have been appropriate for the landlord to have given access to the invoices and other information without the need for a further request. The resident had requested the invoice pack in writing within 6 months of receiving the landlord’s summary of September 2023. There is no legal requirement for a resident to use a specific format or quote the relevant clause when exercising their right to inspect supporting information under section 22 of the Landlord and Tenant Act 1985 (the Act). The landlord’s requirement for a formal request in a specific form was an unnecessary barrier to the resident receiving information to which he was entitled.
11. There is no evidence the landlord gave access to the invoices and information supporting its actual costs for 2022-23 at any point. The resident said in his complaints he was still waiting for the invoice pack. The landlord’s stage 1 response of 5 August 2024 suggests it had misunderstood his complaint because it explained how he could request supporting information after it issued its actual costs for 2024-25. In a separate email the same day it wrongly said he had not requested information supporting its 2022-23 actual costs within 6 months of receiving them.
12. In his escalation request, the resident clarified he was referring to his request for information supporting the 2022-23 actual costs. The landlord again sent him a link to the form it required him to use. The resident replied he had used the link before and still not received the information. It was reasonable the landlord said it would raise a request for him. The landlord did not address this in its stage 2 response and there is no evidence it provided the information or investigated if its process for further information requests was working.
13. The landlord spoke with the resident during its stage 2 investigation. This should have enabled it to understand the complaint and the resolutions he wanted. However, the landlord’s stage 2 response of 9 September 2024 focussed on specific service items and costs raised in the call without reflecting what the resident’s queries about them were.
14. The stage 2 response referred the resident to its website for general information about its charges for water testing, fire risk assessment and buildings insurance. It referred him to a previous response it had given on 2 March 2022 regarding its management fee, caretaking costs and sinking fund.
15. It is not clear if the responses given addressed the resident’s queries about the charges because the landlord had not recorded what his queries were. However, the resident’s reply said he felt the landlord had not properly considered the issues he raised and had not resolved his complaint.
16. In summary, the landlord did not provide sufficient information to explain its charges and mishandled the resident’s request for information supporting its 2022-23 actual costs. Further, it did not properly address the matters complained about.
17. We have ordered it to apologise, explain how it calculated the charges and provide the supporting information. We have also ordered it to pay £200 compensation for the distress and inconvenience caused. This sum is in line with our Compensation Guidance considering the impact and duration of the failings identified.
18. We can see the landlord gave further responses to the resident after the end of its complaint process. This did not form part of our assessment but we noticed it told him it could not provide invoices for services it provided directly. While this will be the case for direct services, a landlord’s obligations under section 22 are not limited to providing access to invoices. They should also be able to explain their costs for direct services and provide supporting information to enable residents to understand the charges.

Complaint handling

19. The resident emailed the landlord on 22 December 2023 saying he wanted to complain about the lack of response to previous queries about his service charges. While the landlord responded to his email, it did not log a complaint. In line with its Complaints Policy and the Complaint Handling Code (the Code), it should have acknowledged the complaint within 5 working days and given a stage 1 response within 10 working days of its acknowledgement.
20. He emailed again on 8 March 2024 saying he wanted to cancel his direct debit because the service charges were not reasonable. He also said he had not been notified of the direct debit changing and was still waiting for the invoice pack supporting the 2022-23 actual costs and answers to previous queries. This time the landlord appropriately logged and acknowledged the complaint.
21. It gave a stage 1 response on 13 March 2024 confirming it had cancelled his direct debit and said it raised another complaint for him regarding the service charge issues. This was not in line with the Code and the landlord should have addressed the matters complained about on 8 March 2024.
22. While the landlord acknowledged the new complaint it had raised the same day, it failed to provide a stage 1 response. This led the resident to chase for an update on 10 June and 6 July 2024. There is no evidence the landlord responded to his emails at the time.
23. In his email of 6 July 2024, the resident asked the landlord to escalate his complaint to stage 2. The landlord was right not to escalate the complaint because the Code says complaints should not be escalated unless a stage 1 response has been given. However, it would have been reasonable for it to have expedited its stage 1 response given 80 working days had passed since it acknowledged the complaint. It took until 5 August 2024 for the landlord to give its stage 1 response.
24. The landlord logged and acknowledged the resident’s escalation request of 8 August 2024 within 5 working days which was in line with the Code. Its acknowledgement appropriately said it would provide a stage 2 response within 20 working days. The resident emailed on 13 August 2024 saying he was away and could not speak to the landlord until his return. He said would prefer the landlord to delay its response so it could deal with his complaint “properly”. The landlord could have extended its response timescale in line with the Code.
25. After speaking with the resident on 27 August 2024, the landlord’s email confirming the call noted the resident had agreed to it extending its response timescale. It is not clear then, why the landlord gave its stage 2 response of 9 September 2024 within the 20 working day timescale it gave originally. It may have reduced the resident’s dissatisfaction if it had explained why it did not need the extended timescale he asked for.
26. The landlord’s failings amount to maladministration. We have ordered it to apologise and pay £150 compensation for the distress and inconvenience caused. This amount is in line with our Compensation Guidance considering the impact and duration of the failings identified.

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.

Recommendations

Our recommendations are not binding, and a landlord may decide not to follow them.