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Platform Housing Group Limited (202117760)

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REPORT

COMPLAINT 202117760

Platform Housing Group Limited

23 December 2022

 

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 handling of:
    1. The resident’s request for service charge information.
    2. The resident’s reports that they had been overcharged.
    3. The resident’s concerns about whether the lease allows the landlord to charge an administration fee.

Background

  1. The resident occupies a one bedroomed flat under the terms of a Shared Ownership Lease dated 5 June 2014. His occupation is subject to the payment of both amenity and service charges. The property is part of a large, supported housing scheme, owned by the landlord which notes that the resident has vulnerabilities, namely visual impairment, and dementia.
  2. On 11 October 2020 the resident complained to the landlord that the service charge accounts for 2018/19 contained inaccurate information and were “false”. Accordingly, he considered leaseholders had been overcharged. He had previously submitted extensive queries on the accounts to the landlord to answer and relied upon these and its replies in support of his view.
  3. In its response to the complaint the landlord denied that the figures were false, but accepted that there had been “unintentional errors during the assembly” of the figures. It confirmed it was reviewing “all aspects of service charge accounts” and that it was working with the resident to address his concerns. It also confirmed that it was taking legal advice regarding one of the charges and that the review of its accounting processes was in progress.
  4. The resident remained dissatisfied with this response and referred the matter to this Service. This is because he considered there were so many issues with the accounts that neither himself, nor his fellow residents at his complex, could have confidence with the accounting process. He was concerned that the landlord considered it was entitled to charge a 10% administration charge on top of energy costs – particularly given the current rise in prices. He queried whether it was entitled, under the terms of the lease, to do so. The resident believes that any overcharging should be refunded to residents. He wanted to see a system introduced by the landlord that was accurate and reliable.

Assessment and findings

Scope of Investigation

  1. Before assessing this complaint, it is necessary to clarify the extent of our investigation of the issues raised by the resident as follows:
    1. In accordance with paragraph 42(e) of the Housing Ombudsman Scheme (the Scheme), this Service cannot consider complaints about the level, or the amount of increase, of service charges. Such issues can be referred to the First Tier Tribunal (Property Chamber). However, we can consider the way in which a landlord has administered the resident’s service charge account. This would include looking at the quality of the information provided to the resident, whether the accounts contain errors, and delays in providing information about charges.
    2. This Service is unable to provide an interpretation of the Shared Ownership Lease where a dispute on the intention of the clauses arises. It cannot, therefore, determine whether the landlord’s practice of applying a 10% administration charge to energy costs is or is not properly covered by the terms of the lease. This Service also cannot decide whether it is reasonable for the landlord to levy a charge for a service which it renders as part of its management of leasehold property.
    3. Our position is in accordance with paragraph 42(p) of the Scheme which provides that this Service cannot consider complaints whichconcern matters where the complainant is seeking an outcome which is not within the Ombudsman’s authority to provide.” This is a legal issue regarding which the resident may wish to seek legal advice. Shelter (https://england.shelter.org.uk/housing_advice) and LEASE (Leasehold Advisory Service – https://www.lease-advice.org/) provide free legal advice.
    4. Some evidence of concerns/complaints raised by the leaseholder to the landlord over the accounts for previous years has been supplied to this Service. It is now historic, and this Service’s assessment will focus on events relating to this complaint – that is since late 2019/early 2020.

The resident’s request for service charge information.

  1. On or around 10 October 2019 the resident gave the landlord notice that he wished to inspect the supporting records relating to the 2018/19 service charge accounts. By July 2020, the resident had prepared a document with five central queries about the accounts. These revolved around charges for room hire, cleaning, site management, and central office management. The landlord had provided its response, which shows that it was not clear as to where the resident had obtained the figures he was referring to and asking him to “elaborate” upon them, asking “which particular data set and lines are you looking at”?
  2. The evidence does not confirm when these communications originated. There is reference to the resident having raised them six months prior to this but also that a delay was agreed when the Covid-19 pandemic hit in March 2020, albeit both sides had different expectations as to how long that delay might last.
  3. There is then a second document containing questions, answers, and counter questions and answers, which was passing between resident and landlord and is dated 5 July 2020. It is reasonable to conclude that this was when the resident first generated it. It is 43 pages long including queries and responses and poses an extensive number of questions on most of the aspects contained in the accounts. For example, it asks about items such as utility charges, grounds maintenance, cleaning, room hire, repairs, catering, and office management charges. What is apparent from this document is that the resident was in possession of more accounting information than simply the final accounts. It is reasonable to conclude that access to the records behind those accounts had been supplied by the landlord. It is not possible to determine when that was.
  4. What is also apparent from both documents is that the resident tended to question figures which he had learned about from other sources, leaving the landlord unclear as to what was being asked. This led to further clarifying questions and answers being passed back and forth.
  5. The evidence shows it took until 28 August 2020 for the main document to pass from resident to landlord, back to resident and back again to landlord – each time with a different coloured ink used for what had been added. At the end of July 2020, the landlord had reported that it was having to draw information from various sources making it challenging to answer all of the queries without any delay.
  6. On 7 September 2020 the resident wrote to the landlord responding to its last set of responses. He stated, “the document attached is getting very complicated and covers so many issues that I thought it would be best to raise my comments as a separate format”. The letter then made comment on 32 separate aspects of the accounts/accounting process – some by way of acknowledgement and some with further questions. The resident chased for responses on his additional questions on 14 October 2020 and the landlord made its responses on this document in red ink and returned it to the resident on 5 November 2020.
  7. In the meantime, the resident made his complaint on 11 October 2020 relying on these documents and stating the accounts were false. He did not specifically set out in what aspect this was the case but expressed concern that residents of his complex were being overcharged. An agreement was reached that the landlord have additional time to look into the complaint and, as set out above, in the meantime the landlord provided its answers to the latest set of additional queries.
  8. In its complaint response the landlord then conceded that “unintentional errors” had been made in the assembly of the accounts and that it would be working with the leaseholder to resolve them. It did not set out what those admitted errors were. The landlord also committed to reviewing “All aspects of service charge accounts across the business”.
  9. The resident requested the complaint be escalated, setting out ten separate representations as to why the issues raised by him had not been sufficiently addressed and the landlord referred this to an independent “Leasehold Consultant” for a Stage Two response to be prepared. A Stage Two response was then given which provided answers to these further queries, where it could, and pointed out further meetings were taking place to discuss aspects of the accounting process, after which the leaseholder would be contacted further. On 1 March 2021, the landlord wrote to the resident again, providing its further and final response on the outstanding issues.
  10. In terms of responding to requests for information/the resident’s queries, as set out above (including those raised during the complaints process), the Ombudsman’s view is that those requests/queries were extensive and covered a wide range of issues. The landlord supplied the requested information and within a reasonable time period given the breadth of enquiries it needed to conduct. The landlord’s service was reasonable in this regard.
  11. However, the resident’s enquiries did lead to the discovery of “unintentional errors” in the accounts and it is reasonable to conclude that this might not have been the case had the resident not taken the time and trouble to analyse the accounting records in some detail. The fact the accounts contained multiple errors amounts to maladministration on the landlord’s part and the landlord might reasonably have been expected to offer the resident some compensation for his effort in driving improvements, not just for himself, but for the other leaseholders of the complex.
  12. The Ombudsman’s remedies guidance provides for an order of compensation to be made in cases where “the landlord has acknowledged failings and/or made some attempt to put things right but failed to address the detriment to the resident and/or the offer was not proportionate to the failings identified by our investigation.” Thus, an order for compensation to reflect the impact on him has been made below. In making the order, this Service has also considered that it was a protracted and difficult case for the landlord due to both the frequency and nature of requests.

The leaseholder’s reports that they had been overcharged.

  1. In the resident’s complaint, he raised the prospect of leaseholders in his complex being overcharged because of errors in the accounts. He did not set out what those overcharges were. However, it can be seen that in the main document of queries and responses that was passing between him and the landlord, the latter confirmed that a number of charges were to “be removed”.
  2. This became apparent shortly before the complaint was made, and the focus of subsequent communications centred around reviewing accounting processes and correcting errors. It is reasonable to conclude that until that process had been completed, the question of any refunds could not be properly assessed and actioned by the landlord.
  3. The landlord responded in a reasonable way to the leaseholder’s requests for information which exposed these charges – as assessed above. Its handling of the leaseholder’s reports was reasonable and appropriate.

The landlord’s handling of the resident’s concerns about whether the lease allows the landlord to charge an administration fee

  1. As part of the queries raised by the leaseholder on the accounts, he questioned whether the landlord was entitled to charge a 10% administration charge on residents’ utility bills. As set out above, this Service cannot give a defining legal opinion as to whether the lease allows for this charge to be made, or the basis on which it is made. The First Tier Tribunal (Property Chamber) is the appropriate body to consider the level of service charges – and the Ombudsman’s view is that the possible percentage basis for the charge can reasonably be included in the definition of “level of charges”. However, this Service can consider how the landlord responded to the leaseholder’s query about this point.
  2. The landlord’s response to the initial query was that it needed clarity as to where the figure accompanying the leaseholder’s query had come from as it could not be located in the accounts. It was reasonable that the landlord asked for this information.
  3. The resident then sought advice on the issue from the Federation Of Private Residents Associations (FPRA) and in his escalation request of December 2020, he stated to the landlord that the actual charge for administration of the utility accounts should be charged rather than a percentage of the cost of those utilities.
  4. In its stage two response of January 2021, the landlord confirmed it was taking legal advice as to whether the basis of the charge was allowed for under the terms of the lease. One month later it confirmed its view that it was allowed to recover the cost, although it did not specifically set out whether this was on a percentage basis.
  5. In the Ombudsman’s view the landlord’s handling of the leaseholder’s query was reasonable. It committed resources to seeking legal advice and this evidences that it took the point seriously and made sure its approach to the issue was being properly charged for in the accounts.

Determination

The resident’s request for service charge information.

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration by the landlord in respect of its handling of this issue.

The resident’s reports that they had been overcharged.

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its handling of this issue

The landlord’s handling of the resident’s concerns about whether the lease allows the landlord to charge an administration fee.

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its handling of this issue.

Orders and recommendations

Orders

  1. The landlord should pay the resident compensation of £250 for his time and trouble in raising queries on the 2018/19 accounts.
  2. It should confirm with this Service that it has complied with the Order within four weeks of receiving this determination.

Recommendations

  1. The landlord to ensure that any refunds due to all residents in this complex as a result of its account review process and the errors identified in its 2018/19 accounts have now been actioned.