Magna Housing Limited (202400091)

Background

1. The resident complained after receiving his annual rent and service charge notification in February 2024. He complained the information in the notification was not sufficient and also about the level of the service charge increases and being charged for an extra week. 

What the complaint is about

2. The complaint is about the:
   1. Reasonableness of the service charges and level of increases from April 2024.
   2. Landlord’s responses to his queries and concerns about the rent and service charges.
3. We have also assessed the landlord’s handling of the complaint.

Our decision (determination)

4. The resident’s complaint about the reasonableness of the service charges and level of increases is outside the Ombudsman’s jurisdiction.
5. There was service failure in the landlord’s response to the resident’s queries and concerns about the rent and service charges.
6. There was reasonable redress in the landlord’s handling of the complaint.

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

Summary of reasons

7. We do not consider complaints about the reasonableness of service charges or levels of increase.
8. The landlord did not respond to the resident’s queries of 17 March 2024.
9. The landlord did not log a complaint when it should have. However, its explanation, apology and compensation offer resolved the matter satisfactorily.

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.

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.

10. The resident complained his service charges had increased too much from April 2024. He is also unhappy that he pays a higher service charge than another resident and believes the landlord is not calculating the charges correctly.
11. We do not investigate complaints about the reasonableness of service charges or the level of increase. As the resident’s complaint is about both of these factors, it would be more appropriate for his concerns to be considered by a court or the First Tier Tribunal (Property Chamber).

12. The resident pays a variable service charge in addition to his weekly rent. This means the landlord seeks to recover its full costs of providing services by reconciling its estimated and actual costs each year.
13. We looked at the queries and concerns the resident raised between 15 March and 15 May 2024 and the landlord’s responses.
14. The landlord’s stage 1 response answered the points the resident raised in his email of 15 March 2024. It explained it estimated the cost of providing services when setting service charges, and how it reconciled the estimates with actual costs to adjust future charges. It explained what the charges for fire detection and the sheltered housing service covered and how it calculated the charge for cleaning. It explained there were 53 weeks in the financial year 2024-25 rather than the usual 52 weeks.
15. Its stage 2 response answered the points the resident raised in his escalation request of 15 May 2024. It gave a detailed explanation of how it estimated costs, reconciled the estimated charges with actual costs, and carried differences forward to the next year. It explained what the sinking fund was for and gave details of the income, expenditure and balance of the fund. It explained why residents may pay different service charges and how it calculated his weekly rent and service charge into a monthly direct debit payment.
16. It also explained why it had stopped cleaning the windows of residents’ flats and the consultation it did before making the decision. It explained the gutter cleaning service was new and still under review. It was reasonable the landlord pointed out that more frequent gutter cleaning would result in higher charges.
17. We understand the resident does not agree with the landlord’s responses. In our view, its responses were clear and in line with the Tenancy Agreement and its Rent Setting, Service Charges and Sinking Funds Policy. The detail given shows the landlord wanted to resolve the resident’s queries and concerns.
18. It was reasonable it said it would investigate the quality of the cleaning service and could help the resident find a window cleaner if he wanted.
19. However, there is no evidence the landlord responded to the points the resident raised on 17 March 2024. He had asked if the costs of the fire alarm and helpline systems were maintenance items and should be covered by the rent charge. There is no evidence the landlord has responded to this at any point and this amounts to service failure.

20. It is not disputed that the landlord did not log a complaint following the resident’s emails of 15 and 17 March 2024. Its stage 1 response of 13 May 2024 explained what had caused the service failure which shows the landlord had investigated what went wrong. It was reasonable that it apologised and offered compensation.
21. The landlord acted reasonably following our intervention on 29 April 2024. It logged the complaint and gave its stage 1 response 9 working days later. While this did not meet the 5 working day timescale we gave, the landlord gave the resident a revised timescale in its acknowledgement email. This meant the resident knew when to expect the response and the landlord met the timescale it gave. Its response time was reasonable in the circumstances.
22. The landlord acknowledged the resident’s escalation request promptly and said it would respond by 18 June 2024. It gave its stage 2 response within the timescale it gave.
23. There was a service failure because the landlord did not log the resident’s initial complaint. However, its explanation, apology and offer of £100 compensation resolved the complaint satisfactorily in our view.

Learning

24. The landlord offered the resident a referral to its money advice team during the complaint process. This was a good way of letting him know it may be able to help if he had concerns about being able to pay his rent and service charge.

Knowledge information management (record keeping)

25. The landlord’s records were sufficient to enable it to respond to the complaint.

Communication

26. The landlord investigated its communication failure during its complaints process.