Notting Hill Genesis (NHG) (202224771)

REPORT

COMPLAINT 202224771

Notting Hill Genesis (NHG)

31 October 2023

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:
   1. The landlord’s handling of the resident’s queries and comments in relation to a service charge consultation.
   2. The landlord’s complaints handling.

Background

2. The resident is a tenant of the landlord of a flat.
3. On 17 December 2021, the landlord sent its proposed service charge budget for 2022-23 to the resident’s scheme and invited their comments, stating that these would be collated for each estate/building and a single response sent to the residents of each estate/building. It stated that, if there were any necessary adjustments, these would be completed before the 2022-23 rent and service charge increase notices were sent out. The resident emailed the landlord on 23 December 2021 with queries about possible duplicate costs for block lighting and internal cleaning.
4. Following receipt of his 2022-23 rent and service charge increase notice on 22 February 2022, the resident advised the landlord that he had not received a response to his queries of 23 December 2021. He also pointed out that charges for bulk refuse disposal, gardening, external cleaning, and usage had not been included in the proposed service charge budget. He additionally raised the matter of the Form 4 notices proposing a new rent he had received over the past 2 years. He queried whether his understanding was correct that the gross weekly charge (comprising rent charge and service charge) should be shown in the Form only when there is a fixed service charge. Whereas, in his case, as the service charge is variable, only the rent charge should be shown. He further said a weekly credit was showing on his service charge prior year balance, but he had no documentation to support this.
5. Throughout March 2022, the resident and landlord exchanged a number of emails about errors in the service charge budget. The landlord acknowledged that errors had been made, and it said the service charges would be reviewed to establish the actual spending for the block. It would then adjust its final account in accordance with the findings ,and in line with the resident’s tenancy agreement. It said that, at this point, it was unable to give a timescale as to when its review would be completed, but it would keep the resident updated. On 29 March 2022, the landlord sent residents the response it had promised on 17 December 2021 to the queries raised about the 2022-23 proposed service charge budget. It apologised that errors had been made, as follows:
   1. there had been no bulk refuse jobs in the period 1 April 2020 to 30 September 2021, which had been used to set this element of the 2022-23 budget.
   2. the gardening and external cleaning budget for 2022-23 had been shown as nil, but there should have been a gardening budget of around £570.
   3. there should have been a “depreciation or usage” charge.
   4. there had incorrectly been an amount in the “fixed service charge” box on the Form 4 notice proposing a new rent, so this had been corrected, and a revised letter and Form 4 notice had been sent out.
6. The resident made stage 1 complaints to the landlord on 29 March and 4 April 2022 about errors in the 2022-23 service charge budget, and said he would like the landlord to provide details of the action it would take to correct these errors. The resident was concerned that, if these errors were not corrected immediately, it could result in a deficit arising for the year. He was also concerned that his queries of 23 December 2021 had not been addressed in the letter to residents of 29 March 2022. The resident added that the weekly credit on his service charge previous year balance was incorrect, and should be excluded until the landlord had calculated the actual service charge costs for the previous year, and so arrived at the true prior year balance.
7. The landlord issued its stage 1 responses on 17 May and 15 July 2022. It apologised that this complaint was incorrectly showing as resolved at stage 2 on its dashboard system and for its delayed response. It also apologised that, throughout its correspondence, it did not make it clear whether it was providing a stage 1 response or simply setting out an action plan. It offered a goodwill gesture of £50. It repeated its intention to implement an action plan, namely that it would apply charges effective from 4 July 2022 to his account to remedy the errors made in its service charge estimate. On 9 June 2022, the landlord also apologised for these errors, and agreed to provide the resident with a full breakdown of this shortly.
8. However, in June and July 2022, the resident chased the landlord for a response to his complaint about the weekly credit on his service charge previous year balance. He also asked to escalate his complaint about the Form 4 notice proposing a new rent, and duplicate block lighting and internal cleaning costs, as only being partly addressed, and about its action plan not being fully implemented. The resident additionally wanted the landlord to clarify the differences between the various incorrect charges and the revised amounts, and noted that its total annual figure for service charge cost did not equate, as would be expected, to the sum of the block cost and the management fee cost.
9. The landlord issued its stage 2 responses on 13 and 14 September 2022. It acknowledged that it had not responded to the resident’s queries of 23 December 2021. It noted that its service charge policy stated that the landlord would consult with residents before service charges came into effect, and it was the first year it had introduced a consultation process to engage with residents about the costs of running their block or estate. It felt that it had not done so successfully, so lessons had been learnt and would be reviewed before future consultations. The landlord requested the resident’s original queries so that it could now respond. It apologised for its failures and offered a total of £350 compensation, comprising £100 for failure in its handling of his queries, £100 for failing to address all points in stage 1, and £150 for the delays in its stage 1 and stage 2 responses.
10. The landlord’s second stage 2 response then noted that the resident had received a revised service charge budget statement for 2022/23 on 6 September 2022. It also acknowledged the service provided was not up to standard, and offered a total of £250 further compensation, comprising £150 for its incomplete stage 1 complaint response, and £100 for providing its second stage 2 response late.
11. The resident subsequently complained to the Ombudsman, as he did not receive a response from the landlord to his original duplicate lighting and cleaning costs queries about the proposed service charge budget for 2022-23. Nor did he receive a response to his queries about the Form 4 notice proposing a new rent, and the weekly credit on his service charge previous year balance. As a resolution to his complaint, the resident would like the landlord to provide a response to these queries. He also remains concerned that the landlord has not implemented an action plan as promised.

Assessment and findings

Scope of investigation

12. In accordance with the Scheme, the Ombudsman may not consider complaints concerning the level of rent or service charge, or the amount of the rent or service charge increase, and so this investigation will not consider the level or reasonableness of the resident’s service charges. However, the Ombudsman may investigate the landlord’s handling of resident’s queries and comments about its service charge consultation, and so this investigation has done so below by examining whether the landlord followed its policies and treated the resident fairly in all the circumstances.

The landlord’s handling of the resident’s queries and comments in relation to a service charge consultation

13. Under the terms of the resident’s tenancy, the landlord is obliged to provide services for which he is obliged to pay by way of a variable service charge. The landlord is committed in line with its service charge policy to providing clear and accurate service charge budgets for residents, with commentary where applicable. It will provide details on how the charges were calculated and what service they represent. The landlord may use automation when setting service charge budgets, and is committed to consulting with residents on a proposed service charge budget prior to it coming into effect. It is expected to respond to service charge queries politely and professionally in a reasonable timescale, thoroughly responding possible errors with the reasons for these errors, if any, and what steps it will take to correct them.
14. The landlord sent a proposed service charge budget for 2022-23 for the resident’s scheme on 17 December 2021 for consultation with residents. The resident emailed his feedback on 23 December 2021, and he acknowledged that he would not receive an individual response, but he specifically asked that his queries be included in the single response. It was appropriate and in line with its service charge policy for the landlord to carry out such a consultation, however it did not respond to the queries raised by the resident.
15. The landlord’s single service charge budget consultation response was sent to all residents on 29 March 2022. This single addressed 3 errors in the 2022-23 budget, all of which had been pointed out by the resident, and apologised for any inconvenience caused. This was a satisfactory approach for the landlord to take and, given that its deadline for feedback was 16 January 2022, it was not unreasonable to provide its single response just over 2 months later. However, this response did not address the resident’s queries.
16. It was not until the landlord’s first stage 2 response that it requested a copy of the resident’s original queries, which he had chased several times. However, the resident reports that the landlord has still not provided an answer to these to date, nor has it responded to the resident’s query about the weekly charge on its Form 4 notice proposing a new rent. These omissions would have caused frustration to the resident.
17. With regard to the action plan promised by the landlord to the resident in its email in its first stage 1 response, which he believed had not been fully implemented and chased, it promised in July 2022 that this would be covered in its stage 2 response, but this did not happen. This would have caused further frustration to the resident.
18. The landlord’s single service charge budget consultation response to the residents, corrected within a reasonable timeframe some of the errors raised by residents. This shows the landlord’s willingness to resolve residents’ concerns amicably and demonstrates why consultation is needed for proposed service charges. The Ombudsman appreciates that it was the first time that the landlord had attempted to carry out a consultation with the residents about the proposed service charge budget, and has made a recommendation below that it review its handling of this to ensure that lessons are learnt for future consultations.
19. Despite its efforts to put things right and the amount of communication between the resident and the landlord, the landlord continued to miss points that the resident wished to have addressed. The resident has also said that the landlord has not provided details of the action it will take to correct the incorrect weekly credit for the previous year’s balance. The resident wanted to establish if his current standing order was acceptable in light of this, but the landlord failed to address this query despite chasing from the resident. This would have caused further distress to the resident.
20. In March 2022, the resident chased the landlord about his outstanding concerns, and he was told some of his queries raised were under review and would be responded to in due course based on its findings. This was a satisfactory approach to take, however the landlord could have provided more information about when the resident might expect to receive this. Upon responding to queries, the landlord should have identified what information the resident was requesting, and sought to provide an answer within a reasonable timescale, but it did not do so.
21. It is apparent that the landlord made amendments in respect of certain parts of the resident’s service charge. It sent an amended service charge letter for 2022-23 on 9 June 2022. Unfortunately, it appears there was some confusion about this date, as the landlord subsequently referred to its date as being “06/09/22”, which the resident understandably believed to be 6 September 2022. However, it appears that the month and day were switched around by the landlord. The landlord should ensure that dates are recorded clearly, and that it refers to the correct date in a clear manner when referencing previous correspondence. In this respect, a recommendation has therefore been made below for it to consider using a standard method to clearly record dates.
22. Even following an adjustment by the landlord, the block cost and the management fee cost did not, as they should have, add up to the service charge, and this was pointed out by the resident on 10 June 2022. This was a significant error which may have confused residents. The landlord acted appropriately by taking steps to correct the error, which it did on 1 July 2022. However, there still appeared to be further issues with the estimated service charge costs for 2022-23, including the usage charge not being included and an incorrect gardening charge shown as the amount of usage charge. The resident said that, despite the landlord’s promising to carry out the changes to reflect these charges effective from 4 July 2022, this has not happened.
23. The resident did not want an unnecessary deficit being incurred which would then be payable in a future year. He also commented that missing estimated service charges could have an impact on the management fee. It is noted that, in line with its service charge policy, the landlord may use automation when setting service charge budgets and calculating estimated costs. However, it should ensure that a human checks its estimated service charge figures to avoid discrepancies that may lead to queries and possibly complaints.
24. The landlord’s failure to respond to queries appropriately would have caused distress and inconvenience to the resident from having to repeatedly chase it for a response to a service charge enquiry. He was also understandably concerned that the service charges, if not corrected, could affect those in the next year.
25. Following its final responses, the landlord’s internal records indicated that these matters have been escalated to its operations managers, however it is unclear if there are any further developments. This is a significant failure in that the landlord has not abided by commitments it has made.
26. In this case, the landlord acknowledged its errors in its service charges, and it treated the resident fairly by making efforts to its errors made right by way of sending amended and corrected letters out within a reasonable time. However, it failed to answer all his queries. and did not follow its service charge policy, in that it will provide the resident with clear and concise responses following a query.
27. The landlord’s £50 goodwill gesture and offer of £100 compensation for its failure to respond to all of the resident’s service charge queries was in line with its compensation and goodwill gestures policy, whereby it may make discretionary payments up to £250 depending on the level of impact experienced by the resident. However, considering that there are still outstanding queries that were initially raised from December 2021 onwards, this amount is not proportionate to recognise this ongoing delay given the circumstances. Additionally, while the landlord mentioned there were lessons learnt from this complaint, which it will review ahead of a future consultation this year, it did not provide specific details of the suggested steps it would take to prevent a recurrence of this situation.
28. Overall, the landlord’s handling of the resident’s queries relating to service charges was unsatisfactory. It failed to adequately assist the resident with all of his queries despite a number of opportunities to do so and having completed its internal complaints procedure. Furthermore, it failed to keep to the commitments as set out in its complaint responses and its subsequent correspondence to the resident on 23 November 2022. Given that this is an ongoing situation, and there was no evidence that the landlord had actively sought to try to resolve the issue, this amounts to a failure on its part, and orders have been made below for it to remedy this by apologising, responding to his outstanding service charge queries, and checking and confirming his service charge accounts.
29. As the landlord’s offer of redress did not proportionately reflect the level of detriment caused to the resident by the length of time he has waited for a response to his queries, and its inability to provide what he requested, it has been ordered to increase this below. It has been ordered to pay him its previous £50 goodwill gesture and compensation offer of £100, if it has not done so already, as well as £250 further compensation in line with its above compensation and goodwill gestures policy. This is also in accordance with the Ombudsman’s remedies guidance, which suggests that compensation of over £100 should be considered where the offer of redress was not proportionate to the failings identified.

The landlord’s complaint handling

30. The landlord operates a 2-stage complaints process under its complaints and compliments policy. When a complaint is received and the is unable to resolve this, it will provide a stage 1 response within 10 working days. If the resident is dissatisfied with the stage 1 response, they can request an escalation for a stage 2 (final) response within 20 working days.
31. The resident made stage 1 complaints on 29 March and 4 April 2022, but did not receive the landlord’s stage 1 responses within 10 working days. Instead, the landlord issued its stage 1 response to the first complaint on 17 May 2022, a timeframe of 32 working days. This delay would have caused frustration and upset to the resident. Additionally, there were further delays with its stage 2 response. The escalation request was received on 25 May 2022, and the landlord issued stage 2 responses on 13 and 14 September 2022, both of which were well outside its 20-working-day timeframe, as set out in its complaints and compliments policy. These were instead issued 76 and 77 working days later, respectively. It is also noted that the second stage 1 complaint of 4 April 2022 has not been formally responded to, as it was initially treated as forming part of the first complaint. These failings would have caused distress to the resident.
32. It is recognised that the landlord addressed the resident’s concerns by way of a number of complaint references, as the resident raised multiple expressions of dissatisfaction about its handling of matters at different times, all relating to service charges. This resulted in confusion over which matters should be dealt with under which complaint references, and in the missing of certain issues raised by the resident. The landlord should clearly distinguish between the resident’s complaints and respond to all of the points raised accordingly. It may have been prudent for the landlord to treat the 2 formal complaints made within a week of each other as one formal complaint, and to have looked at every matter raised under that one reference, which may have mitigated the possibility of missed complaints points and queries.
33. The landlord did not dispute that there were failings in its complaint handling. It acknowledged that its housing officer erroneously passed the complaint to investigation stage on its system. Additionally, it recognised that it used an incorrect postcode and complaint reference in a formal stage 2 response. The landlord also acknowledged that a number of emails were sent between teams to resolve the resident’s service charge queries, but that actual complaints were not addressed fully, despite the resident’s explicit requests for this. This indicates that there were issues with the landlord managing multiple complaints from the same resident, and it remains the case that it did not follow its timescales in its complaints policy, and so it has been recommended below to review its complaint management practices and staff training needs.
34. It was therefore appropriate for the landlord to apologise for the delays with its complaints handling. It offered the resident separate awards of £250 compensation in both of its stage 2 responses for its various failings with respect to complaint handling. This was in line with its compensation policy, which states compensation payments may be paid at the discretion of the landlord where residents experience distress and inconvenience following a service failure. The landlord can make discretionary payment up to £250, including cases of distress and inconvenience.
35. There were failings on the part of the landlord in its communication during the handling of the complaint, which it has acknowledged and apologised for. It was also appropriate for the landlord to offer compensation for this. The compensation awards for its complaint handling failures were also in line with the suggested award in the Ombudsman’s remedies guidance, which suggests an award of over £100 for failures that adversely affected the resident. The landlord therefore took appropriate steps to adequately put things right with respect to its complaint handling failures, and so it has been recommended below to pay the resident the compensation it previously offered him, if it has not done so already.

Determination

36. In accordance with paragraph 52 of the Scheme, there was maladministration in the landlord’s handling of handling of the resident’s queries and comments in relation to a service consultation.
37. In accordance with paragraph 53 (b) of the Scheme, the landlord has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, resolves the complaint about its complaint handling satisfactorily.

Orders and recommendations

38. The landlord is ordered to:
    1. Write to the resident within 4 weeks to apologise for the further failings identified by this report in its handling of his queries and comments in relation to a service charge consultation.
    2. Write to the resident within 4 weeks to respond to his queries about its 2022-23 proposed service charge budget charges for electricity, lighting; internal cleaning block costs, cleaning costs, its Form 4 notices proposing a new rent, and his weekly credit. The landlord should check and confirm that there has been no inadvertent double or incorrect charging in these respects, but if there has, it should take immediate appropriate action to correct this.
    3. Pay the resident compensation totalling £400 within 4 weeks, which is broken down into:
       1. £50 offered as a gesture of goodwill in its stage 1 response of 17 May 2022;
       2. £100 offered for its failings in handling his service charge queries in its stage 2 response of 13 September 2022; and
       3. £250 additional compensation for the further failings identified by this report in its handling of his queries and comments in relation to a service charge consultation.
39. It is recommended that the landlord:
    1. Pay the resident the £500 total compensation that it previously offered him for its complaint handling failings, if it has not done so already.
    2. Review its complaint management practices, in order to ensure that its complaint handling failures in the resident’s case do not occur again in the future. It should do so via practices including  always using its allocated complaint reference number, clearly distinguishing between different elements of a complaint, and avoiding confusion where a resident has raised more than one open complaint at the same time.
    3. Consider using a standard method to clearly record dates, in order to ensure that the correct date is clearly recorded and used when reference is made to previous correspondence.
    4. Review its staff’s training needs in relation to their application of its complaints and compliments policy and the Ombudsman’s complaint handling code, to ensure that these are followed in every case.
    5. Review the manner in which it carried out its consultation process for the proposed service charge budget for 2022-23, and ensure that lessons are learnt from the omissions and errors that arose during that process.
40. The landlord shall contact the Ombudsman within 4 weeks to confirm that it has complied with the above orders, and whether it will follow the above recommendations.