Peabody Trust (202224366)

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REPORT

COMPLAINT 202224366

Peabody Trust

28 March 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 complaint is about the landlord’s response to the resident’s service charge queries.
  2. This Service has also considered the landlord’s complaint handling.

Background

  1. The resident was a shared ownership leaseholder of the property. The landlord was the head leaseholder of the property but not the freeholder of the building. The service charges for the building are managed by a managing agent on behalf of the freeholder.
  2. On 15 July 2021 the resident (along with other tenants of the block) wrote to the landlord requesting a written summary of service charge costs incurred. It is unclear when the resident brought her complaint to the landlord. Another leaseholder in the block complained on 29 July 2022 about the landlord’s response to the tenant’s service charge queries and referenced the letter of 15 July 2021 signed by the resident. The evidence shows that the landlord opened a complaint investigation for the resident on 1 August 2022.
  3. On 4 November 2022, the landlord provided its stage 1 complaint response. It upheld the complaint. The landlord accepted that there were customer service failings and a delay in providing the requested information. It advised that it is reliant on receiving information from the managing agent. It recently provided its year end 2019 accounts, and it hoped to receive the 2020 accounts soon. It confirmed that it would provide the resident with timely responses going forward. It apologised and offered £50 for time and trouble, inconvenience, and poor complaint handling.
  4. The resident remained unhappy and requested that the accounts provided are signed off by a qualified accountant to ensure transparency about the actual costs paid. She also wanted to understand why the service charges had increased significantly from the 2019 budget to the 2020 budget onwards. The resident felt that the landlord should take accountability for the managing agents administration of the accounts. She felt that the fact that 2020 accounts were not available in 2022 represented poor practice and requested a complaint escalation on 22 November 2022.
  5. The landlord provided its stage 2 complaint response on 6 January 2023. It agreed that the fact the managing agent had not provided 2020 accounts is poor practice, however, it did not have any control over this as the managing agent had not breached the Landlord and Tenant Act and could delay in publishing the accounts. The landlord reviewed its contact with the managing agent and agreed that it could have taken more effort to get information in response to the resident’s enquiries from the managing agent. The landlord made an increased offer of £100 compensation.
  6. When the resident brought her complaint to this Service on 7 February 2023, she remained unhappy because the landlord had not provided accounts for the last 4 years and there had been no justification provided for significant increases in the service charges. As a resolution, the resident wanted a written summary of the accounts from 2019 until 2022 and information on why service charges increased on the block.

Assessment and findings

Scope of investigation

  1. This Service cannot consider complaints related to the level, reasonableness, or liability to pay rent or service charges as these complaints are within the jurisdiction of the First-Tier Tribunal (Property Chamber). However, we can look at the landlord’s communication around the service charge and whether it correctly followed its relevant policies and procedures.

The landlord’s response to the resident’s service charge queries.

  1. Under section 22 of the Landlord and Tenant Act 1985, leaseholders have the right to request certain information about service charges. The relevant regulations state that a leaseholder may “inspect accounts, receipts and any other documents that are relevant to the service charge”. The landlord’s service charge policy states that following a request to inspect documentation, it will comply with section 22 of the Landlord and Tenant Act 1985, to accommodate access to the required information, including from third party managing agents.
  2. The service charge policy also explains that the landlord will carry out the following actions where appropriate and applicable:
    1. Provide customers with a statement of actual service charge expenditure within 6 months of the year-end, or if the agreement states, earlier where possible.
    2. Provide clear and transparent supporting information to explain any larger or unusual increases in service charges.
  3. This Service recognises that the landlord was not the freeholder of the building and that the freeholder had employed a managing agent to manage the service charges. Therefore, the landlord could only provide its residents with a response to service charge queries after it had received the relevant information from the managing agent. However, the landlord still had a responsibility to its leaseholder to provide an accurate summary of the service charges.
  4. After the tenants of the block requested information on service charges on 15 July 2021 there is no evidence of any communication with the resident until it provided its stage 1 complaint response on 4 November 2022. This was 15 months after resident’s service charge queries. This was an unreasonable delay.
  5. In its complaint response, the landlord accepted that there was a delay in providing the requested information and acknowledged that it could have done more to obtain information from the managing agent. When a landlord has accepted a failing, it is the role of this Service to consider if redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily. In considering this the Ombudsman considers whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: be fair, put things right and learn from outcomes.
  6. The landlord has not provided any evidence to this Service of correspondence between it and the managing agent since 15 July 2021 (when the resident requested service charge information) until 1 August 2022, (when the complaint was opened). This Service cannot reasonably determine if the landlord was proactive in obtaining the information, however, it did acknowledge it could have done more. The Housing Ombudsman’s spotlight report on managing agents recommends that landlords ensure that they are proactive in pursuing managing agents for meaningful account information in relation to service charges to ensure it is provided in a timely manner.
  7. It is evident that after the landlord received the complaint that it was more proactive in chasing information from the managing agent. There was numerous correspondence between the landlord and managing agent requesting the relevant information. The landlord also committed to providing more timely responses to the resident going forward. This is positive and demonstrates learning in this case. The landlord should consider its processes going forward to ensure that it not reacting to complaints but proactively managing its correspondence with managing agents and its resident’s.
  8. In its stage 2 complaint response the landlord stated that it was reliant on the management agent to provide timely provision of accounts and responses to enquiries. It further advised that while the resident can bring a complaint to the Housing Ombudsman Service, “there is no such thing in place for (the landlord) to access if (the managing agent) do not provide timely responses.” As a leaseholder, the landlord does have rights under Section 22 of the Landlord and Tenant Act 1985 and could have sought legal advice or considered bringing a case to the First Tier Tribunal (Property Chamber).
  9. The landlord’s complaint response indicates that it had not considered all available options to obtain the requested service charge information. While it is acknowledged that the landlord is reliant on the management agent to an extent, it still has a responsibility to its leaseholders and should be able to demonstrate that it had considered all reasonable steps to obtain the requested information. Importantly, it should have been open and transparent with the resident and communicated what actions it was taking to meet its obligations to its leaseholders.
  10. The Housing Ombudsman Spotlight report on managing agents recommends that landlords clearly outline their approach when it comes to escalating performance concerns with managing agents, and ultimately to freeholders. It also explains that landlords should also be clear at what point they would consider legal enforcement of contract or lease terms and ensure they openly and transparently communicate this to all relevant parties, in particular its residents.
  11. This Service finds that there was maladministration with the landlord’s response to the resident’s service charge queries. This is because the landlord failed to demonstrate that it was proactive in pursuing the managing agent for the information on service charges and it failed to effectively communicate the delay to the resident. The landlord made an offer of £50 compensation for distress, inconvenience, time, and trouble caused.
  12. This Service does not consider the offer of redress is sufficient considering the significant amount of time the resident has been waiting for a response to the queries. It would be appropriate for the landlord to pay the resident further compensation to acknowledge the failures identified in this report. This an order has been made in line with this Service’s remedies guidance (published on our website) which suggests awards of £100 to £600 where there has been a failure by the landlord which adversely affected the resident.

Complaint Handling.

  1. The landlord operates a 2-stage complaints policy. At stage 1, the landlord will investigate and respond to the resident within 10 working days. If the resident remains dissatisfied the complaint can be escalated to stage 2. After this they will provide a formal written response within 20 working days. If the resident remains dissatisfied, they can escalate the complaint to the relevant Ombudsman. These timescales align with those set out in the Housing Ombudsman’s Complaint Handling Code (the Code)
  2. The landlord logged the complaint on 1 August 2022. After this, it provided its stage 1 complaint response on 4 November 2022. This is 3 months after it logged the complaint and significantly outside its policy timeframe and not compliant with the Code.
  3. On 22 November 2021, the resident requested a complaint escalation. The landlord provided is stage 2 complaint response 30 working days later on 6 January 2022.  This caused a further slight delay to the resident in obtaining a complaint response.
  4. The landlord acknowledged the delay in its complaint handling and offered £50. Given the significant delay by the landlord in providing the stage 1 complaint response, and the slight delay in providing its stage 2 complaint response, this Service finds that there was maladministration with the landlord’s complaint handling. An order of further compensation has been made below in line with this Service’s Remedies Guidance.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration with the landlord’s response to the resident’s service charge queries.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration with the landlord’s complaint handling.

Orders and recommendations

Orders

  1. It is ordered that the landlord pay the resident additional compensation of £350, compromising:
    1. £250 for the distress and inconvenience caused by the failures identified in in its response to the resident service charge enquiries.
    2. £100 for its complaint handling failures.
  2. The landlord should provide evidence to this Service that it has complied with the above order within 4 weeks of the date of this report.

Recommendations

  1. It is recommended that the landlord review the Housing Ombudsman’s Spotlight report (below) and considers any improvements it can implement to its processes to ensure it proactively manages its relationships with managing agents and improvements with its communications to its resident’s.

https://www.housing-ombudsman.org.uk/wp-content/uploads/2022/03/Spotlight-Report-Managing-Agents-March-2022.pdf