Notting Hill Genesis (NHG) (202306173)

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REPORT

COMPLAINT 202306173

Notting Hill Genesis (NHG)

28 June 2024


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 resident’s complaint is about the landlord’s handling of his queries about an increase in heating and hot water charges.

Background

  1. The resident holds an assured tenancy with the landlord which began in November 2011. The property is a 3 bedroom ground floor maisonette which is connected to a heat network operated by a third party and billed by the landlord.
  2. The landlord sent a letter to the resident on 12 October 2022 notifying him that the tariff for his heating and water bill would be increasing. The letter also noted that the Energy Bills Support Scheme would be providing every household with £400 to put towards the cost of their utility bills. An amended letter was sent on 18 November 2022 due to an error.
  3. The resident queried the reasons for the increase on 20 December 2022 with the landlord. His correspondence included the following:
    1. He expressed dissatisfaction with the “short notice” given by the landlord regarding the increase.
    2. The resident sought clarity on who the “third party” referenced by the landlord was.
    3. The resident sought details on where a “communal gas boiler” was on site.
    4. The resident requested evidence in the form of communications with the “third party” to see why the increase had occurred.
    5. The resident queried why the landlord had only just notified him of the increase when the cost of gas had been a matter in the news for some time.
    6. Clarification on whether all residents in the complex were sent the letter or if it was just him.

The resident requested a meeting to discuss the above queries. He chased the landlord for a response on 3 occasions between 9 February and 21 March 2023

  1. Due to a lack of response from the landlord, the resident raised a formal complaint on 21 March 2023. The landlord apologised for its delay on 21 March 2023 and logged a stage 1 complaint.
  2. The landlord issued a stage 1 response on 4 April 2023. The landlord explained that the letter regarding the cost increase had been issued on 12 October 2022, and it was expected to be delivered within 2 days. This provided the resident with 4 weeks’ notice of the increase in charges.
  3. The landlord apologised if the letter did not arrive on time. The landlord clarified who the third party was and explained that it was bulk billed by the third party and then it passed on the costs to residents. The landlord also explained that it was originally due to raise heat tariffs in April 2022 due to a rise in gas costs, however, as the landlord required time to consider costs before passing it on to its customers, the rise in gas costs was delayed for 7 months. The landlord clarified that all its residents received the correspondence and the resident received a generic letter.
  4. The resident escalated his complaint to stage 2 on 12 April 2023 as he remained dissatisfied with the increase in charges by the energy company and he did not feel he had enough access to data to conclude whether he had been overcharged.
  5. The landlord issued a stage 2 response on 16 May 2023. The landlord stated it had reviewed the calculation and heat costs received from the energy company and it was unable to find anything to indicate the calculations had been done incorrectly. The landlord stated that it had been expecting an increase in April 2022 due to market pressures in relation to the high rise in gas and while the landlord took time to consider the costs that would be passed to its residents, the market had not improved and an increase was therefore required 7 months later in November 2022. The landlord apologised for the delays in responding to the resident’s queries and stated it had taken action such as closing redundant inboxes and introduced more rigorous procedure to cover staff changes to ensure it did not happen again.
  6. The resident referred his complaint to this Service on 3 July 2023. He explained that the increase in heating and hot water charges had impacted his household’s financial circumstances. The resident noted that the variable tariff had increased from 0.08p p/kWh to 0.20p p/kWh and he did not believe this was in line with the national average. The resident wanted the landlord to reduce the increase in charges and compensate for the time and trouble taken to pursue the complaint. The resident has also requested for the landlord to provide evidence showing that the Energy Bill Relief Discount has been applied to their bills.

Assessment and findings

Scope of investigation

  1. This report will consider whether the landlord sufficiently responded to the resident’s queries regarding the heating and hot water charges. An element of the resident’s complaint is regarding the increased energy costs and the calculations of the costs by the third party who are the heat network supplier. Disputes about the costs set by the third party are outside of the Ombudsman’s remit and may be better suited for the Energy Ombudsman. This is because paragraph 42 (j) of the Housing Ombudsman Scheme, explains that the service cannot investigate complaints that fall properly within the jurisdiction of another Ombudsman, regulator, or complaint-handling body. Therefore, the Ombudsman will not respond to the resident’s concerns about the level of the charge made, including whether it represented good value for money.
  2. The resident signed a heat supply agreement in November 2011 at the same time as signing the tenancy agreement. This document set out the terms upon which the landlord would provide heating and hot water to the resident’s address. The agreement states that the landlord may use its discretion to vary charges for the supply of energy at any time upon reasonable notice to the resident.
  3. This document defines how the landlord procures energy for the heat system. If there is any dispute by the resident arising from how the landlord has exercised its responsibilities under the agreement he has entered into, this matter is beyond the scope of this investigation. This is because paragraph 42 (f) of the Housing Ombudsman Scheme states that we may not consider the matters where the Ombudsman considers it quicker and fairer to seek remedy through the courts.

The landlord’s handling of the resident’s queries about an increase in heating and hot water charges.

  1. The landlord’s internal logs indicate that while the heat network that the resident is connected to is operated by a third party who bill the landlord, it is the landlord who sets the tariff that is applied to residents’ accounts for their heating and hot water usage.
  2. The landlord notified the resident by letter about the increase in his heating and hot water tariff which was due to be implemented by 14 November 2022. It was appropriate for the landlord to notify the resident of an expected increase prior to it taking place. While the letter was dated 12 October 2022, the resident stated that they did not receive the letter till 18 October 2022. This was approximately 2 working days after the expected delivery date. The landlord’s policy does not specify a specific notice period by which to communicate any tariff changes, and this service does not deem a 2 working day delay to have had a long term impact on the resident for it to constitute it as being unfair. It was, however, reasonable for the landlord to apologise for any delays in its communication
  3. Due to an error made by the landlord in its letter dated 12 October 2022, an amended letter was sent on 18 November 2022. The error in question was that the landlord had used incorrect figures regarding the ‘current tariff’. As it was not an error regarding the new tariff amount, it is reasonable to conclude that the error did not detract from the purpose of the communication, which was to inform residents of an increase in energy tariffs. Regardless, an error in the figures was likely to have caused confusion for the resident and may have contributed further to concerns about the landlord conveying incorrect calculations. It was reasonable and appropriate for the landlord to apologise for its error in communication, which it acknowledged in its amended letter.
  4. While this Service has not been provided with the contents of the resident’s emails to the landlord between 9 February and 21 March 2023 in which they queried the new charges, it is evident the resident was dissatisfied with the increase in charges and required further clarity to be provided. It was unreasonable for the resident’s queries to be left unanswered by the landlord for approximately 29 working days. This was a service failure by the landlord, and while the landlord acknowledged and apologised for this failing, it would have been reasonable for the landlord to have considered compensating the resident in recognition of the time and trouble spent chasing a response.
  5. The landlord stated it reviewed the calculations and heat costs it had received from the third party who bulk bill the landlord for energy costs in response to the concerns raised by the resident. It explained the reasons for the increase in costs was due to rising gas prices and the pressure of the market. While it was reasonable for the landlord to provide an explanation for the increase in the tariff as being beyond its control, it should have considered providing the resident with a breakdown of the calculations and heat costs received from the third party in order to justify the new tariff it had set. This would have also enabled the resident to inspect the calculations themselves and raise any specific concerns they may have had.
  6. The landlord did provide the resident with details of a standing charge and price p/kWh and the change in tariff, however, the resident had specifically requested for evidence in relation to the landlord’s communication about costs with the third party. The landlord should have considered the request and either provided the requested information or explained why it could not provide this to the resident. Given the level of increase, it was important for the landlord to be as transparent as possible with the resident with regards to its explanations for the increase. The landlord’s failure to do this meant the resident did not feel reassured that the costs were accurate as he did not have sight of the figures themselves. This was a failure by the landlord as the lack of clarity is likely to have distressed the resident.
  7. While the landlord has informed the resident that they would be in receipt of the Energy Bill Relief Scheme discount, the resident has not been provided with clarity on whether this has happened. As the landlord has reassured the resident on more than one occasion that the discount would be applied, it would be reasonable for the landlord to confirm whether this has happened and provide evidence to support this.
  8. Overall, it was reasonable for the landlord to communicate the increase in the heating and hot water tariff and provide an explanation for this as being due to increasing gas costs which were beyond the landlord’s control. However, the landlord’s response to the resident’s queries about the increased tariff was delayed and insufficient as it did not provide the resident with requested evidence to support the increase in charges or an explanation as to why it could not provide this. The landlord’s lack of sufficient communication with the resident had a negative impact on the landlord and tenant relationship. There was service failure by the landlord in its handling of the residents queries about his heating and hot water charges.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in relation to the landlord’s handling of the resident’s queries about an increase in his heating and hot water charges. 

Orders

  1. The landlord should take the following actions within the next 4 weeks and provide evidence of compliance with these orders to the Ombudsman:
    1. Write to the resident an apologise for the failings identified in this report.
    2. Pay the resident £150 compensation in recognition of the failures identified in this report.
    3. The landlord should provide the resident with an opportunity to review and take copies, if required, of all accounts, receipts and other documents supporting the summary of heating and hot water charges for the period between November 2022 until present. If the landlord is unable to do this, it should write to the resident to explain this. Evidence of communication with the resident should be provided to this Service to review.

Recommendations

  1. It is recommended for the landlord to confirm to the resident whether the Energy Bill Relief Scheme discount has now been applied, and if so, provide evidence to support this.