Peabody Trust (202337005)

Background

1. After receiving her actual service charge statement for 2021/22, the resident raised several queries about the costs allocated to her block. The landlord responded and agreed to adjust the incorrect charges. However, the resident remained dissatisfied with the landlord’s explanation of how it would prevent similar errors in future and its lack of clarity about which types of charges applied to each block.
2. In her referral to us, the resident sought reassurance that future service charges would accurately reflect the services provided. She requested a clear explanation of the external areas belonging to her block, evidence showing why the fire safety work did not fall under the Building Safety Act 2022, and compensation for the time, trouble and distress caused by repeatedly having to correct the accounts.

What the complaint is about

3. The complaint is about the landlord’s:
   1. handling of service charge calculations
   2. response to the resident’s request for information about her service charge
   3. handling of the resident’s complaint

Our decision (determination)

4. We have found the landlord responsible for:
   1. maladministration in relation to the handling of service charge calculations
   2. maladministration in its response to the resident’s request for information about her service charge
   3. reasonable redress in its handling of the resident’s complaint

We have made orders for the landlord to put things right. 

Reasons

Calculation of service charges

5. Between June and November 2023 the resident repeatedly challenged the landlord’s breakdown of the 2021/22 service charge. She identified repair costs that were either not recoverable under the lease or had been wrongly allocated to her block. After reviewing the figures, the landlord accepted that around £16,000 of repairs had been misattributed. The volume of incorrect charges for 2021/22 was disproportionate and showed that the landlord had not apportioned charges in line with the lease or in a fair and transparent way, as required by its service charge policy.
6. The resident also explained that similar mistakes had occurred in previous years and she had needed to challenge the landlord each time. Although the landlord apologised and corrected the figures, it did not show evidence that it had learned from earlier issues or that it had taken effective steps to prevent them recurring. We would expect the landlord to acknowledge errors and take corrective action to reduce the risk of future mistakes. The repeated misallocation of charges indicates that the landlord may need to do more to establish whether there is a systemic weakness in its approach.
7. The level of error during both the 2020/21 and 2021/22 years was significant, and the resident spent several months pursuing corrections. The resident told us that it caused her some distress and inconvenience. To recognise this impact, we have ordered the landlord to pay £250 compensation. This is consistent with our remedies guidance for cases where failures caused an adverse impact to the resident but were not permanent.
8. While the landlord said at stage 2 that it had provided internal feedback to improve how repairs are coded and allocated, the resident reported that the same issues continued in later years. Where problems are repeated, landlords must introduce lasting changes to prevent further impact on residents. We have therefore ordered the landlord to set out what specific improvements it has undertaken and will continue to review to strengthen its accounting processes and ensure charges are allocated correctly in future.

Request for information about service charges

9. Between June and November 2023 the resident sought explanations in 3 areas: how the landlord applied charges for fire door works, whether those charges were covered by the Building Safety Act 2022, and how the landlord defined which parts of the estate belonged to her block.
10. The landlord provided timely and clear information about the fire door charges. It explained on 30 August 2023 that costs were capped at £250 due to the absence of a section 20 consultation and later clarified that the 2 separate jobs reflected an inspection and subsequent repair. These were distinct tasks that both fell within the landlord’s recoverable repairing responsibilities under the lease, so its explanation and the information given to the resident in October and November 2023 was reasonable.
11. The landlord also gave a fair explanation of why the fire door works were not covered by the Building Safety Act 2022. At both stages of its complaint response, it confirmed that the doors were original installations, replaced due to damage identified during routine checks rather than any safety defects linked to historic construction. Government guidance (Remediation costs: what leaseholders do and do not have to pay – GOV.UK) confirms that non‑cladding repairs, such as replacing a degraded fire door, may still be recoverable from leaseholders. The information given to the resident on this point was therefore adequate.
12. However, the landlord did not give clear or consistent information about which external and common areas were attributable to the resident’s block. Between August and November 2023 it gave differing accounts about the car park, garden areas, and other external features. It also directed the resident to her lease, even though the lease did not describe the areas in dispute. Its stage 1 and stage 2 complaint responses did not resolve these inconsistencies or clearly set out its understanding of the common parts. This lack of clarity caused the resident inconvenience and contributed to her raising a complaint.
13. While the landlord acted reasonably in relation to the fire door charges, it failed to communicate clearly about the allocation of external areas and how charges were applied as a result. To recognise the inconvenience caused by this poor communication, we have ordered the landlord to pay the resident £150 compensation. This recognises the reasonable actions of the landlord, while also acknowledging the failure to provide clear information. This is consistent with our remedies guidance for failures that caused adverse impact but did not change the overall outcome of the case.

Complaint handling

14. In August 2023 the resident attempted to raise a formal complaint about the service charge issues, but the landlord did not recognise this or open a complaint. It did not log the complaint until November 2023, which was an unnecessary delay and meant the resident waited several months before the concerns were formally considered. This was not in line with the requirement to accept complaints promptly and caused inconvenience for the resident.
15. Once the complaint was raised, the landlord handled it appropriately. It issued its stage 1 response within 10 working days and its stage 2 response within 20 working days, in line with both the Complaint Handling Code and its own policy. The stage 2 response also acknowledged the earlier failings, apologised for the delay, and recognised that this had caused inconvenience to the resident.
16. The landlord offered £75 compensation for its delay in acknowledging and opening the complaint. This offer was fair and proportionate, as it reflects our remedies guidance for complaint‑handling failures of this type and aligns with the landlord’s own compensation policy.

 Putting things right

Where we find service failure, maladministration or severe maladministration we can make orders for the landlord to put things right. We have the discretion to make recommendations in all other cases within our jurisdiction.

Orders

Landlords must comply with our orders in the manner and timescales we specify. The landlord must provide documentary evidence of compliance with our orders by the due date set.

Recommendations

Our recommendations are not binding, and a landlord may decide not to follow them.