Notting Hill Genesis (202306301)

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REPORT

COMPLAINT 202306301

Notting Hill Genesis (NHG)

29 April 2025

 

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 handling of the resident’s concerns that service charges were not aligned with her tenancy agreement.
  2. The Ombudsman has also considered the landlord’s associated complaint handling.

Background

  1. The resident is an assured tenant of the landlord of a flat. The resident’s tenancy began in 1992. The landlord is a housing association.
  2. In March 2023, the resident raised concerns that she had been charged service charges that were not included in her tenancy agreement. She stated that the service charge for the years 2022-2023 and 2023-2024 included charges for fire service and maintenance. She said that her tenancy agreement only included charges for communal lighting.
  3. The landlord responded on 12 April 2023 and stated that there had been an increase to service charges due to fire safety works being carried out in the block. The resident responded to state that she had sought legal advice which confirmed that she should only pay service charges for communal lighting, as per the tenancy agreement.
  4. The resident raised a complaint about the service charge issue in April 2023.  She stated that the landlord’s justification for charging the fire servicing and maintenance cost was based on staff members’ belief, rather than housing law. The resident said that the landlord should refund the charges already paid, apologise and pay compensation due to the stress caused.
  5. The landlord issued its stage 1 complaint response on 5 May 2023. It stated that:
    1. Fire safety and maintenance services had been provided historically but the charges were not applied to service charges collected.
    2. The resident’s rent and service charges could be varied by giving notice, under the terms of the tenancy agreement.
    3. It had miscommunicated with the resident regarding the section 20 notice it had issued, which had resulted in a lack of clarity over what service charges apply to tenants. It apologised for the stress and inconvenience caused due to the miscommunication.
    4. If the resident was unhappy with the outcome, she had the right to appeal which would be heard by the First Tier Tribunal.
    5. It offered £100 compensation, made up of:
      1. £50 for delays in communicating with the resident.
      2. £50 for stress and inconvenience caused.
  6. The resident escalated her complaint to stage 2 on 8 May 2023. The landlord issued its stage 2 complaint response on 16 October 2023, in which it stated that:
    1. It did not uphold the resident’s complaint that she should not be paying fire safety service charges because of her tenancy agreement.
    2. It would not offer a refund for last year’s charge as fire service maintenance was a crucial service to keep residents safe.
    3. It had sought legal advice which confirmed that the landlord is able to vary the charges as per the terms of her tenancy.
    4. It offered a further £100 compensation for the failure to escalate the complaint to stage 2.
  7. The resident asked the Ombudsman to investigate her complaint on 18 October 2023. The resident stated that:
    1. She had obtained legal advice which confirmed that she should only pay rent for communal lighting, in line with her tenancy agreement.
    2. She was unhappy that the landlord had not offered a refund for fire safety charges for 2022-2023 and since April 2023.
    3. She was struggling financially and the landlord’s handling of the issue had caused her stress.
    4. The landlord had misinformed her and she had to spend time trying to obtain the correct information about her rent account.
    5. In order to resolve her complaint, the landlord should:
      1. Refund the fire safety and maintenance charges.
      2. Apologise for the stress caused, the poor handling of her concerns and for the delays and time spent trying to resolve the issue.
      3. Pay compensation to reflect the distress and inconvenience experienced.

Assessment and findings

The landlord’s handling of the resident’s concerns that service charges were not aligned with her tenancy agreement.

  1. The legal basis for claiming a service charge is found in the tenancy agreement or lease, which is a contract. The basic principle is that, as a matter of fairness, the service charge provisions must set out the service the landlord is providing and what it is charging for that service. Put another way, if the tenancy agreement does not include the charges, the landlord will not be able to claim them, even if it provides the service.
  2. The tenancy agreement states that the weekly rent for the premises was £62, inclusive of 60p for the cost of the services. The only service listed in the tenancy agreement is communal lighting. Clause 1.5 of the agreement states that the landlord may increase or decrease the rent by giving the tenant at least 28 days notice in writing. Clause 1.6 refers to altering the agreement. This states that the landlord may vary the agreement provided that it has carried out proper consultation with tenants who may be affected by the variation prior to such resolution. It states that any variation shall be in writing and shall not take effect until the tenant is given 28 days notice in writing of the variation.
  3. The tenancy agreement does not clearly set out whether the service charges are fixed or variable. Variable service charges change based on the costs incurred by the landlord and fixed service charges are set by the tenancy or lease and are not based on the actual cost of the service provided. In tenancy agreements, fixed service charges often come within the definition of rent and are often increased or decreased at the same time and manner as the rent.
  4. The tenancy agreement includes the service charge within the total rent amount, which would suggest that the service charges are fixed. Further, the landlord’s notification of change in rent for the year 2021-2022, which was prior to the introduction of the fire service and maintenance charges, stated that there would be a fixed service charge of £2.26 per week.
  5. However, the notification of change in rent for 2022-2023 did not include a fixed service charge amount. It stated that the estimated service charge would be £6.87 per week, which included costs for communal electricity and fire servicing and maintenance. The estimates for the year 2023-2024 stated that the estimated service charge was £17.85 per week, inclusive of electricity and fire service and maintenance, plus a further charge for fire risk assessment charges.
  6. The Ombudsman expects a landlord to be able to provide clear information about a charge that is payable. It should be able to explain whether a charge is fixed or variable, as well as its power to claim the charge under the tenancy agreement. However, the information the landlord provided to the resident was unclear. This was a failing by the landlord.
  7. In its complaint responses, the landlord stated that it could vary the service charges by giving notice, under the terms of the tenancy agreement. However, this is not in line with clause 1.6 of the tenancy agreement, as set out above. Tenancy agreements can only be amended in certain ways, including an agreement by all parties.
  8. We would expect a landlord to fully explain the process it uses to vary a service charge provision. The landlord has not provided any policies or guidance relating to the process that it should follow when varying a tenancy agreement. Further, the landlord did not provide any evidence to indicate that it followed a process or that it carried out a consultation with residents prior to introducing charges for fire servicing and maintenance. The evidence therefore indicates that the landlord did not act in accordance with the tenancy agreement when making changes to the service charges, and it incorrectly added the fire service and maintenance charges, which was a significant failing.
  9. The landlord issued a section 20 notice to the resident regarding costs for fire safety works. The landlord has not provided a copy of the notice to us. The resident questioned the service charges in March 2023, and the landlord stated that there had been an increase in charges due to fire safety works carried out in the block. Following this, the landlord wrote to the resident on 24 April 2023 and 4 May 2023 and stated that the section 20 notice for fire safety remedial charges was issued in error, and the resident was not liable for any remedial works due to fire risk assessments.
  10. It is clear that this caused significant confusion and the resident was required to spend time contacting the landlord to clarify whether the charges for remedial works applied to her. In its complaint responses, the landlord explained that it had to consult with all residents on a variable service charge and any cost for works would not be recharged to an assured tenant. The landlord appropriately identified that there were delays in its response to the resident’s queries about this matter and that there had been miscommunication resulting in a lack of clarity about what service charges apply to tenants.
  11. The failings identified in this report amount to maladministration by the landlord. Where there are failings by a landlord, the Ombudsman’s role is to consider suitable remedies in line with the Ombudsman’s Dispute Resolution Principles: be fair, put things right, and learn from outcomes. The landlord offered the resident £100 compensation at stage 1 in recognition of the distress and inconvenience caused due to the communication issues identified. While the landlord made some efforts to put things right, it did not identify the failings associated with its handling of changes to service charges, and the amount offered was insufficient to remedy the failings identified in this report.
  12. The resident experienced distress and inconvenience due to the landlord’s handling of changes to the service charges and its communication with her about the issues raised. She also incurred significant time and trouble communicating with the landlord about the issue and seeking her own independent advice.
  13. We have made an order below for the landlord to pay additional compensation to remedy the distress and inconvenience caused due to its handling of the changes to the service charges. The amount offered is in accordance with the Ombudsman’s remedies guidance for failures that have adversely affected the resident and which the landlord has failed to acknowledge. We have also made a further order for the landlord to conduct a review of the service charges.

The landlord’s complaint handling

  1. The landlord’s complaints policy states that it will respond to stage 1 complaints within 10 working days and stage 2 complaints within 20 working days of the resident escalating the complaint. The policy states that in exceptional circumstances, the timescales for responding may need to be changed and it will agree a new timescale with the resident.
  2. The landlord responded to the stage 1 complaint within the 10-working day timeframe. However, there were delays in providing the stage 2 response, which the landlord identified. The resident escalated her complaint on 8 May 2023 and the landlord issued the stage 2 response on 15 October 2023. This was a significant delay outside of the 20-working day timeframe stipulated in the landlord’s complaints policy, and was a failing by the landlord. It is likely that the resident experienced distress and inconvenience due to the delay in the landlord resolving the complaint. The landlord offered the resident £100 compensation for the delay in escalating the complaint, which was reasonable to redress the failing identified.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord regarding its handling of the resident’s concerns that service charges were not aligned with her tenancy agreement.
  2. In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, the landlord offered redress that was reasonable to resolve the complaint handling failings.

Orders

  1. Within 4 weeks, the landlord must:
    1. Provide a written apology to the resident for the failings identified in this report.
    2. Pay the resident a total of £600 compensation. The landlord should pay this directly to the resident rather than credited to her rent account. The amount is made up as follows:
      1. £200 offered within its stage 1 and 2 responses if this has not already been paid.
      2. £400 for the landlord’s handling of the resident’s concerns that service charges were not aligned with her tenancy agreement.
  2. Within 6 weeks, the landlord must review its legal basis for charging a service charge to the resident for fire service and maintenance and fire risk assessment. The landlord must cease charging the resident for these charges until it has completed this review. The landlord should:
    1. Obtain independent legal advice.
    2. Establish whether the service charges are fixed or variable.
    3. Establish the correct process for varying a tenancy agreement.
    4. Consider whether it was permitted to charge the resident, and if it was not, the landlord must:
      1. Refund the service charges from the date the resident made each payment until the date the landlord repays the resident.
      2. Stop charging the service charge.
    5. The landlord must provide its decision in writing to the resident and the Ombudsman within 6 weeks of the date of this determination.

The landlord must provide the Ombudsman with evidence of compliance with the orders within the timeframe stipulated.