Peabody Trust (202407614)

Background

1. On 11 April 2024 the landlord told the resident about new rent and estimate service charges for the financial year 1 April 2024 to 31 March 2025. It explained that the estimated service charges would increase from £250.79 to £271.92 per month from 1 April 2024. The resident felt he had not been given enough notice and asked how the new amount had been calculated. He remained unhappy with the landlord’s response and referred his complaint to us for further consideration.

What the complaint is about

2. The complaint is about the landlord’s:
   1. Response to queries about service charges.
   2. Complaint handling.

Our decision (determination)

3. There was reasonable redress in the landlord’s:
   1. Response to queries about service charges.
   2. Complaint handling.

Reasons

4. The circumstances of this complaint are well known by the parties involved, so it is not necessary to detail everything that’s happened or comment on all the information we’ve reviewed. We’ve only included the key information that forms the basis of our decision of whether the landlord is responsible for maladministration.

Response to queries about service charges

5. The lease explains how the gross rent should be calculated, it says:
6. The gross rent is to be the greater amount of (i) the gross rent under the lease immediately preceding the relevant review date x 1.005; and (ii) the gross rent under the lease immediately preceding the relevant review date x ((B/A) + 0.005). For the calculation mentioned within part (ii), ‘A’ is the monthly figure shown in the index published for September for the year immediately preceding. ‘B’ is the monthly figure shown in the retail price index (RPI) for September in the year immediately preceding.
7. Following the resident’s queries about the calculations used for the rent increase, the landlord explained how it used September’s RPI plus 0.5%. The landlord’s explanation was in line with the lease.
8. The resident has told us that he wants an explanation on the indexation level and base rate applied. He believes the landlord should use the monthly figure given at start of his lease in June 2023. The lease does not require this. The lease allows the landlord to apply increases, as mentioned previously, and to use September’s RPI.
9. The landlord’s stage 2 response explained how it provided a provisional budget as it had not received budget details from the managing agent. It said it used an 8.9% increase based on the previous September’s RPI. It further offered to provide the resident with a breakdown of service charges once it had the actuals. Given the circumstances, the landlord gave a reasonable explanation of how it calculated the estimated charges.
10. The landlord has accepted that there was a delay in it telling the resident about an increase in its service charge estimate for the financial year 2024 to 2025. Its stage 1 response said it would have been best practice to have given 1 months’ notice but due to a system error it could not do this. It offered £25 in compensation and within its stage 2 response increased this to £100. The landlord acknowledged the distress caused by its late notice, apologised and explained how in the future it would give the relevant notice. The evidence shows it did this for the following year.
11. While the lack of notice was a shortfall in the landlord’s service, its complaint responses show insight into its failings and it took reasonable steps to put things right. The landlord’s total compensation offer satisfactorily resolves this aspect of the resident’s complaint.

Complaint handling

12. The resident raised his complaint on 26 April 2024 and followed up on the lack of response a month later. On 4 June 2024 the landlord said it would respond by 21 June 2024. It did not meet this timeframe and instead took around 3 months to issue its stage 1 response, on 8 July 2024. This timeframe was not appropriate.
13. It is unclear when the resident escalated his complaint. On 30 August 2024 the landlord said it would respond by 25 September 2024. The landlord responded within this timeframe and issued its stage 2 response on 10 September 2024. The stage 2 response accepted complaint handling could have been better and acknowledged delays. Here the landlord offered £350 compensation to recognise its ‘multiple delays’. The landlord’s total compensation offer falls within the maladministration banding of our remedies guidance and satisfactorily resolves this aspect of the resident’s complaint.

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.

Recommendation

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