Metropolitan Housing Trust Limited (201912991)

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REPORT

COMPLAINT 201912991

Metropolitan Housing Trust Limited

18 June 2021


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

  1. The complaint is about the landlord’s response to the resident’s reports about delays in cyclical works to the property.

Background and summary of events

Background

  1. The resident is a leaseholder of the landlord, a housing association. The property is a flat in a block. The resident’s lease commenced in 2008.
  2. The lease obliges the landlord to maintain, repair, redecorate and renew the structure of the building, and covenants the leaseholder to pay the service charge. The service charge comprises expenditure estimated to be incurred each year in relation to the repair, management, maintenance and provision of services for the buildings, along with an appropriate reserve amount held in trust until applied for expenditure. The lease advises the reserve is for matters such as the decoration of the exterior of the buildings likely only to arise once during the unexpired term of the lease, or at intervals of more than one year. The lease states that, subject to any tax liability, interest or income on sums held by the landlord is added to the reserve.
  3. The landlord’s repairs policy advises that major repairs may be carried out outside of its normal emergency and routine repairs priorities and under a separate programme. The landlord’s website confirms it runs a planned maintenance programme to keep its properties in good condition and it normally redecorates external and communal areas every five years, although this may be longer if properties are in good condition. It advises it will inform residents when work is scheduled and what is going to be done before this takes place.
  4. The Landlord and Tenant Act 1985, The Commonhold and Leasehold Reform Act 2002 and The Service Charges (Consultation Requirements) (England) Regulations 2003 set out consultation requirements if relevant costs to carry out major works exceed an appropriate amount, including invitation of observations within a specified period. The Landlord and Tenant Act 1985 further sets out that applications can be made to the First-Tier Tribunal (Property Chamber) to decide the reasonableness of service charges, which includes those for major works and sinking funds.
  5. The Leasehold Advisory Service (LEASE) details the process involved for major works consultation, as well as outlines that reserves can be used to pay some or all of the cost of major works dependent on the amount built up.
  6. While it now operates a two stage complaints procedure in line with this Service’s guidance, at the time of the complaint the landlord operated a three stage complaints procedure and a ‘pilot’ two stage complaints procedure:
    1. It aimed to respond in its three stage complaints procedure within ten working days at each stage. At each stage, it aimed to take action to put things right and liaise with customers to ensure actions are complete prior to closure of a complaint.
    2. It aimed to respond in its ‘pilot’ two stage complaints procedure within 28 working days at each stage. This involved regular contact with the customer and closure when the customer was satisfied a plan of action was in place to resolve the complaint and communication detailing this had been provided.

Summary of events

  1. According to the resident’s account, the block last received external decoration in 2006. In May 2016, a Section 20 Notice of Intention was issued, after which no further action was taken with no explanation to the resident as to why. In April 2019, a Section 20 Notice of Intention was issued, and in June 2019 a meeting about cyclical works was held at the block. In August 2019, the resident contacted the landlord about a lack of update. In September 2019, the landlord advised that it awaited a schedule of works, which it hoped to receive within two weeks, in order to progress to the next stage and issue a Section 20 Notice of Estimate. It stated it aimed for works to be completed by the end of the financial year (31 March 2020) or by the end of 2020.
  2. On 3 October 2019, the resident complained to the landlord. She raised dissatisfaction about the lack of cyclical works to her block and with the lack of action, explanation, correspondence and estimates in relation to the Section 20 Notices that had been issued. She complained that leaseholders paid into the sinking fund each month while the landlord breached its lease obligations. She stated that if works were not carried out, legal action may be taken for failure to comply with the lease.
  3. On 12 November 2019, the landlord issued its stage one response. It explained that planned works in 2016 had not gone ahead due to budget constraints and staff changes. It apologised for the lack of communication and recognised this left unanswered questions. It confirmed a current Section 20 was progressing through a tender process, and in the coming weeks it expected to issue estimates that leaseholders would have the opportunity to respond to. It provided information about works that would be done once the Section 20 process had been completed. It explained that as this was a legal process, this could not be expedited, but assured the resident that it was determined to complete this as soon as possible.
  4. On 18 November 2019, the resident requested escalation of the complaint. She stated that the reasons provided did not justify failures to deliver cyclical works or communicate. She advised a basic schedule of works provided reassurance, but raised concern the process may become protracted without a specified timeframe.
  5. On 19 November 2019, the landlord acknowledged the resident’s escalation request and noted she sought a definitive timeframe. It explained that before being in a position to confirm when works would commence, the process involved a tender process anticipated to take six weeks; issuing of a Section 20 Notice of Estimate with a mandatory consultation period; consideration of resident representations; contractor approval; and drawing up of agreements such as health and safety and risk management agreements. It explained this meant there were many variables that dictated the length of time the entire process would take and it was not possible to categorically state when work would start. It confirmed it would seek to clarify when the tender process would start, which would allow an informed estimate of when work may start at the earliest.
  6. In December 2019, the landlord’s records advised it needed to reissue the current Section 20 Notice of Intention as this was based on inaccurate information. Following correspondence from the landlord that explained this, the resident raised concern at the process starting again.
  7. Between January and April 2020, the landlord corresponded with the resident. In January 2020, it updated about meetings with consultants to discuss the cyclical works, after which it advised a revised Section 20 Notice of Intention would be drafted and issued once agreed. In February 2020, the landlord advised specialists had completed a site survey and were formulating a feasibility report to set out a scope of recommended works, which would be reviewed and the Section 20 Notice of Intention issued once works were approved. In March 2020, the landlord advised it was in a position to send the Section 20 Notice of Intention in the coming weeks. The coronavirus pandemic started soon after, which the landlord explained impacted progress and administration of planned works, for which it apologised. In April 2020, the landlord advised that it had received a feasibility report and it was awaiting information on the next steps.
  8. In June 2020, the landlord’s specialist conducted an inspection of the resident’s block and compiled a scope and estimate of works for cyclical redecoration and maintenance. These works were recommended to be carried out in the 2021/22 financial year due to risks in the 2020/21 financial year arising from weather and issues caused by the pandemic. The landlord subsequently updated the resident that it understood it would be in a position to commence works before the end of the current financial year (31 March 2021).
  9. On 8 July 2020, the landlord issued its final response to the resident’s complaint, after correspondence from this Service.
    1. It committed to completion of the cyclical works before April 2021, subject to weather and unforeseen circumstances. It explained the Section 20 process was due to commence in August 2020 and, following this, works were anticipated to take approximately six months.
    2. It acknowledged cyclical works had been requested over several years, and a Section 20 process had been initiated most recently in April 2019, however necessary follow on actions were not completed and so works were not completed.
    3. It acknowledged its approach to delivering planned works had not been to an acceptable standard; promises made had not been tracked or delivered; and staff changes and lack of ownership had affected works delivery. It explained that a new team was in place to oversee improvements to housing stock and service delivery and it aimed to ensure effective management of planned programmes going forward. It noted improvements were already being seen as required works to properties like the resident’s were now progressing, and it would continue to use customer feedback to implement lasting change.
    4. It acknowledged it had not complied with its complaints policy; the complaint had been open longer than advertised timeframes; and correspondence should have been more frequent. It explained it had made changes to improve its complaints handling which included quality checks and review of service and communication.
    5. It concluded that it recognised that there was room for improvement in the way it managed works, communicated with the resident and managed the complaint. It apologised and offered £750 compensation in recognition of time and trouble; distress and inconvenience; failure to deliver the works over a prolonged period; and complaints handling.
  10. On 3 September 2020, the landlord issued a Section 20 Notice of Intention.
  11. From December 2020, the resident complained to this Service about no further correspondence or response to emails being received. She raised concern about cyclical works not being undertaken at the property for a long time and paying a charge for this which was not being provided. She raised concern about the landlord’s ability to manage its housing stock, manage expectations, and manage money. She expressed a desire for it to be audited, investigated and held to account for its failures, and for it to increase the lease term to 999 years due to value for money not being received.
  12. Following contact from this Service, the landlord advised tender and analysis was complete; a Section 20 Notice of Estimate was issued on 31 March 2021; and the resident’s block had been included in the 2021 to 2022 cyclical works programme. It additionally provided information that it had identified a number of properties that had not been originally served Section 20 Notices of Intention which were now undergoing consultation. It advised that subject to the Section 20 consultation and observations, it hoped to award the contract in May 2021 so that works could commence in June 2021 or before.
  13. The resident subsequently advises that she received a “stage two S20 letter” from the landlord dated 25 May 2021, which she highlighted was almost nine months after the letter dated 3 September 2020. This Service understands the resident may now be currently seeking to challenge the Section 20 Notice of Estimate rather than seeking for the cyclical works to go ahead, due to issues which include concerns about the first choice contractor and having to pay an additional £5,754.42 in a 12 month period, rather than this being met by the sinking fund.

Assessment and findings

Scope of the complaint

  1. The Ombudsman’s remit in relation to complaints is limited by the Housing Ombudsman Scheme (‘the Scheme’), which sets out the type of complaints which the Ombudsman will and may not investigate.
  2. The Ombudsman’s main remit is to investigate complaints about the actions or omissions of a landlord in respect of a complainant’s occupation of their property. This means the Ombudsman investigates a specific complaint at hand, rather than ‘auditing’ or investigating a landlord’s overall management of housing stock.
  3. Paragraph 39(g) of the Scheme sets out that the Ombudsman will not investigate complaints which, in its opinion, concern the level of service charge. The appropriate body that has jurisdiction to consider complaints about the level of the service charge is the First-Tier Tribunal (Property Chamber – Residential Property), which can determine the appropriate level and amount of service charges recoverable by a landlord; decide if the charges were reasonably incurred; by whom they are payable, and when.
  4. Paragraph 39(i) of the Scheme states that the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion, “concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure.”
  5. It is therefore not within the Ombudsman’s authority or expertise to decide on matters such as breach of the lease, service charges, the sinking fund and Section 20 Notices, in the same way as the courts. These have separate procedures in which to challenge matters, such as through legal action, submission of observations under the Section 20 process, or application to the First-Tier Tribunal. For example, payment into the sinking fund is an obligation in the lease and dispute about the reasonableness of the charges, because of the length of time it has taken for the landlord to carry out cyclical works, would be a matter for the First-Tier Tribunal to consider rather than this Service.
  6. Paragraph 39(a) of the Scheme also states that the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion, “are made prior to having exhausted a member’s complaints procedure, unless there is evidence of a complaint handling failure and the Ombudsman is satisfied that the member has not taken action within a reasonable timescale.” In this case, this means that the Ombudsman cannot consider issues raised after the landlord’s final complaint response in July 2020, such as extension of the lease term or issues arising from a Section 20 Notice of Estimate.
  7. As set out above, while the Ombudsman can take a view on a position by reference to law and the lease agreement, if this is disputed, only a court or tribunal can offer a definitive and legally binding decision. However, the Ombudsman can assess whether the landlord has followed proper procedure, followed good practice, and behaved reasonably, taking account of all the circumstances of the case. This Service has therefore considered how the landlord dealt with the resident’s concerns and queries about the cyclical works and consultation process. Delays in cyclical works to the property
  8. The landlord has a responsibility in the lease to maintain the structure of the building, and the lease advises that the resident pays towards a sinking fund/reserve for works, that will likely take place once during the unexpired term of the lease or at intervals of more than one year. While the lease is vague as to how frequent cyclical works occur, the landlord’s website confirms it runs a planned maintenance programme and normally redecorates external and communal areas every five years, although this may be longer if properties are in good condition. The 15 years since cyclical works were reportedly last carried out clearly exceeds this, and the landlord has not disputed that it is behind on works for the resident’s block.
  9. It is not within the Ombudsman’s authority or expertise to determine at what point cyclical works should have been carried out. However, in light of the above, when the resident complained, it was appropriate that the landlord sought to initially manage expectations by explaining the complexity the process can involve, and committed to clarifying when the process and works may start.
  10. In this instance, the Ombudsman notes that the landlord identified and acknowledged service failures in its management of the case. The Ombudsman understands that the course of events will have been frustrating for the resident, as this involved identification of the need for the Section 20 Notice of Intention to be reissued, then delay in this being reissued; delay due to the coronavirus pandemic; communication that did not manage expectations; and delay in response to the complaint. This Service recognises errors and delays can happen, and the landlord’s actions to acknowledge and try to remedy these was in accordance with what this Service expects to see.
  11. The Ombudsman will not make a finding of maladministration where a landlord has offered suitable redress to resolve a complaint, and this further assessment considers whether the landlord has offered reasonable redress for its acknowledged failings.
  12. The Ombudsman’s Dispute Resolution Principles are:
    1. Be fair – treat people fairly and follow fair processes
    2. Put things right
    3. Learn from outcomes
  13. Following the resident’s original complaint, the landlord took 28 working days to respond, which was in accordance with its ‘pilot’ complaints procedure at that time. While the landlord gave budget constraints as a reason for delay in works, it was understandable that the resident was dissatisfied with other reasons such as staff changes, as it would be expected for the landlord to manage housing stock works programmes in a centralised way that minimises the impact of the departure of individual staff. It then took the landlord eight months to respond at its final stage, which was not in accordance with its policies and not appropriate. Although during this time the landlord was in regular correspondence with the resident and generally responsive to her queries, it should have provided a formal written response that confirmed its position/actions and detailed options to take the complaint further.
  14. In its final response the landlord subsequently acknowledged, apologised and offered compensation for the cyclical works delays and failings and its complaints handling. In our Remedies Guidance the Housing Ombudsman Service sets out three compensation ranges which this Service takes into account when determining cases. The financial remedy provided by the landlord totalling £750 falls in the highest range, where there has been considerable service failure or maladministration and long-term impact, which in the Ombudsman’s opinion appears reasonable for the failings in this case.
  15. The landlord also provided assurances that service improvements were being made, and made commitments that a Section 20 Notice of Intention would be reissued in August 2020 and that cyclical works would be completed before April 2021, subject to weather and unforeseen circumstances. As the landlord’s specialist recommended works to be completed in the 2021/22 financial year and highlighted risks achieving this earlier, the latter was presumably to try to resolve matters earlier for the resident. This demonstrates a further attempt by the landlord to be customer and resolution focused, to try to repair the landlord and resident relationship.
  16. This Service notes that the Section 20 Notice of Intention was issued in early September 2020. This was reasonable, as this is close to the landlord’s specified timeframe of August 2020, however the commitment to complete cyclical works before April 2021 was not met. The landlord has noted in information it supplied that the resident’s block has been included in the 2021/22 cyclical works programme; a Section 20 Notice of Estimate was issued on 31 March 2021; and it was hopeful works could commence in June 2021 or before. The landlord also provided information that a number of properties which had originally been omitted needed to be issued Section 20 Notices of Intention and undergo a consultation period. As previously outlined, this Service recognises errors can happen and the information supplied suggests the consequent impact of this, in terms of delay, is minor.
  17. It is unclear to what extent the landlord attempted to meet its commitment to complete works before April 2021, and it is also unclear if the landlord subsequently updated the resident to revise the expectations it previously gave, which would have demonstrated effective communication and good customer service on the part of the landlord. However, the current delay in completion of the works represents a two month delay. In the Ombudsman’s opinion, this is not unreasonable, considering all the circumstances of the case, which includes progression of the matter during the coronavirus pandemic. Furthermore, the resident has not detailed any adverse effect in delay in the works, apart from the delays themselves, while the landlord’s specialists appeared to find it acceptable for works to be completed in the current 2021/22 financial year based on the stock condition.
  18. Ultimately, the subsequent Section 20 Notices of Intention and Estimate demonstrate that the landlord took effective steps to progress the cyclical works, and demonstrate that there is no reason to doubt a commitment to try to complete works as close as reasonably possible to original timeframes given, which is appropriate.
  19. While delays, communication and complaint handling in this case were not appropriate, the landlord’s subsequent response was in accordance with this Service’s Dispute Resolution Principles to try to ‘put things right’ and learn from outcomes, and the financial remedy it provided was reasonable for the failings. The landlord’s subsequent actions also demonstrate a commitment to complete the cyclical works to the property during the coronavirus pandemic, and what it is recognised will remain a challenging period. In the Ombudsman’s opinion therefore, considering all of the circumstances of the case, the landlord has responded reasonably to the resident’s complaint.

Determination (decision)

  1. In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, and in the Ombudsman’s opinion, there was reasonable redress offered by the landlord in its response to the resident’s reports about delays in cyclical works to the property.

Reasons

  1. While there were issues in delays, communication and complaint handling, the landlord’s response, apology and financial remedy of £750 provide, in the Ombudsman’s opinion, an appropriate level of redress in accordance with this Service’s Dispute Resolution Principles and remedies guidance. The landlord’s subsequent actions also demonstrate a commitment to complete the cyclical works to the property as close as reasonably possible to original timeframes given.

Orders and Recommendations

Recommendation

  1. The landlord to re-offer the compensation of £750, if it has not paid this already.