Peabody Trust (202418031)

Background

1. The landlord sent the resident a section 20B service charge notice on 28 September 2023. It said it would be delayed in issuing its 2022-23 accounts. The resident responded that the notice was invalid, as it did not comply with the law. She said the service charges covered by the letter were not chargeable or recoverable by the landlord. As she was unhappy that the landlord continued to chase her to pay the service charges, she complained. She said the landlord had served an invalid notice and was charging for items that were not specifically stated in the lease. As the resident and landlord were unable to reach a resolution, the resident asked us to investigate.

What the complaint is about

2. The landlord’s handling of:
   1. The resident’s concerns about the landlord’s service charges’ section 20B notice and charges not being included in her lease.
   2. The resident’s complaint.

Our decision (determination)

3. We have found:
   1. There was no maladministration in the landlord’s handling of the resident’s concerns about her service charges.
   2. The landlord made an offer of redress in recognition of its handling of the complaint, which, in our opinion, resolved the complaint satisfactorily.

We have not made orders for the landlord to put things right.

Reasons

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.

The resident’s concerns about the landlord’s service charges’ section 20B notice and charges not being included in her lease

4. The resident’s lease states that the landlord must review the actual service charges at the end of each financial year. It must then compare the actual costs with the estimated service charges it previously charged the resident.
5. Under Section 20B of the Landlord and Tenant Act 1985 (LTA 1985) a landlord must give notice within 18 months of incurring costs. The landlord must do this if it intends to recover costs more than 18 months after they were incurred. This notice preserves the landlord’s ability to recover the costs at a later date (usually once it has completed its accounting).
6. The landlord provided a copy of the section 20B notice, dated 28 September 2023. In the notice, it said the accounts would not be finalised by 30 September 2023 and apologised for the delay. It said it was taking additional time to review its service charge accuracy following feedback. It said it would issue accounts comparing the estimated charges for 2022-23 with the actual costs incurred. It also provided an estimate of the total costs for the financial year. This information was in line with what it needed to include in the section 20B notice.
7. The resident responded to the notice, stating that she received the section 20B notice on 3 October 2023 and that the notice was invalid, as it did not comply with the law. She said that, as a result, the service charges were not recoverable. She repeated this in her formal complaint submitted on 7 March 2024. In her complaint, she also said the landlord was charging for items not specifically stated in the lease. She further stated that that she should not have to pay service charges for buildings insurance as she pays for her own buildings insurance policy.
8. We have noted the resident’s concerns that she did not receive the section 20B notice before 30 September 2023. The landlord is not responsible for postal delays once the notice has been sent. We are therefore satisfied the landlord issued the notice within the required timeframe, before the final accounts were due.
9. The landlord issued its stage 1 complaint response on 3 April 2024. It apologised for the delay, as it noted the resident’s query was logged on 7 March 2024. It said the standard of service fell below its expected level. It was positive that it recognised the delay. In its complaint response, the landlord referred to its previous correspondence with the resident. It also referred to the relevant lease clauses about service charges. It repeated that, where it cannot finalise accounts by 30 September, it issues a section 20B notice. This is to inform residents it intends to issue the accounts but requires additional time to ensure accuracy.
10. The resident escalated her complaint to stage 2 on 12 May 2024. She did not include any further details in the escalation. The landlord issued its stage 2 complaint response on 3 July 2024. It apologised for the delay in acknowledging the resident’s escalation request. It said it acts as the freeholder and is required by the lease to arrange buildings insurance for the resident’s building, which itrecovers via the service charge. It said any insurance arranged by the resident is separate from the landlord’s buildings insurance. It said the landlord’s buildings insurance applies to the common and shared parts of the building. It explained that only the freeholder or building owner can arrange this insurance, not individual leaseholders. The landlord confirmed that the lease allows it to recover costs for services in maintaining and improving the resident’s buildings.
11. It was reasonable for the landlord to provide a detailed response about the service charges the resident is liable for and that it covered the resident’s concerns about the charges for buildings insurance. During our investigation, we considered the terms of the resident’s lease. The lease states the resident must pay a service charge covering a proportion of the landlord’s costs for services connected to the building. These include repairs, maintenance, improvements, fuel costs, refuse disposal, electricity, and heating. The lease also includes clauses allowing the landlord to charge for other services, improvements, or facilities it provides for the building. Therefore, while we appreciate the resident’s concerns, the lease allows the landlord to charge for services not expressly listed where they are related to the building.
12. Following its internal complaints process, the landlord confirmed it wrote off arrears on the resident’s service charge account totalling £2,986.50. It said this write-off occurred on 12 November 2025 and included arrears from 2022-23. For the inconvenience of the resident raising a complaint, it offered £150 compensation. We are pleased to see it recognised this.
13. Based on everything we have seen, the landlord issued the section 20B notice for the 2022-23 accounts within the required timescales. We therefore consider it preserved its right to seek a contribution towards costs in the future. We are also satisfied that it provided reasonable explanations and responses to the resident’s concerns. We have therefore found no maladministration by the landlord in its handling of the resident’s concerns.

Complaint handling

14. The resident raised her complaint on 7 March 2024. The landlord acknowledged the complaint on the same day, which was within the 5-working-day timescale set out in the Housing Ombudsman’s Complaint Handling Code 2024 (‘the Code’) which the landlord’s complaints policy complied with.
15. The landlord provided its stage 1 complaint response on 3 April 2024. This was 8 working days outside the timescale set out in the Code. The resident escalated her complaint on 12 May 2024. The landlord acknowledged the escalation on 3 June 2024, which was 9 working days outside the timescale set out in the Code.
16. The landlord updated the resident on 1 July 2024. It said it was awaiting information from relevant departments and needed to extend the response deadline by 20 working days. It subsequently issued its stage 2 complaint response on 3 July 2024. The Code says stage 2 responses should be issued within 20 working days of the complaint being acknowledged, or an extension must be agreed before the deadline. The landlord therefore acted reasonably by contacting the resident on 1 July 2024, which was 20 working days after its acknowledgement, to inform her that it needed more time.
17. The landlord caused unreasonable delays throughout its complaints process, particularly with acknowledging the resident’s escalation request. We are pleased to see that it apologised and provided £200 compensation for its complaint handling failures. As the landlord has admitted its failings and provided this compensation, we think it has taken reasonable steps to put things right and made an offer of redress which satisfactorily resolves this element of the complaint. This is because its offer was within our compensation guidance’s recommended range of awards for complaint handling failures that significantly impact the resident. The landlord’s complaint responses also took appropriate learning to train and organise staff to give quicker and better replies.

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.

Recommendations

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