Shepherds Bush Housing Association Limited (202203085)

REPORT

COMPLAINT 202203085

Shepherds Bush Housing Association Limited

23 February 2023

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 leaseholder’s concerns about the service charge.

Background

2. The resident is the non-resident leaseholder of a first floor one bedroom flat. The landlord is the freeholder of the building.
3. The leaseholder telephoned the landlord in October 2021 disputing the service charge overspend for 2020/2021 and arranging to pay the resulting arrears. He also requested a copy of the related invoices. The landlord responded by email with an explanation of the increase in costs and invited the leaseholder to request the invoices in writing, which would be provided in 30 days. The leaseholder sent an email in November 2021 chasing the invoices. In February 2022 he also contacted the landlord to update his new correspondence address.
4. In April 2022 the leaseholder asked the landlord why the direct debit collected was less than had been agreed, and again asked for a breakdown of the service charge. A few days later the leaseholder reported that the company collecting the direct debit had again written to his previous address. The landlord explained the error with the direct debit and address and apologised. The leaseholder submitted a complaint about the errors, as well as the failure to provide the invoices he had requested.
5. The landlord’s response explained that its staff did not have access to the direct debit collection company systems to update the address, but it apologised for the confusion. It also said it could have handled the issue better and offered £25 for the service delivery issues. The landlord asked if the leaseholder wanted all the invoices or just the cleaning ones as it could not locate his formal request for invoices.
6. The leaseholder escalated the complaint, and stated he wanted all invoices where he had to pay extra, and it was not acceptable he had been told to contact a third party to change the address. The landlord responded that service charge disputes did not fall under its complaint process, but all the invoices had been requested as previously explained.
7. The landlord advised that a transaction list was provided to the leaseholder following the original request for invoices in October 2021, when he was invited to request specific invoices. The landlord says it asked the leaseholder again on 11 April 2022 which invoices he wished to inspect, but its records indicate it did not receive a response.
8. The leaseholder is seeking compensation due to the time spent pursuing the matter and a refund of the management charges and overspend for the year 2020/2021.

Assessment and findings

Scope of investigation

9. The Housing Ombudsman will not generally investigate complaints which are about the level of a service charge. Paragraph 42 (e) of the Housing Ombudsman Scheme says: ‘The Ombudsman will not investigate complaints which, in the Ombudsman’s opinion concern the level of rent or service charge or the amount of the rent or service charge increase.’
10. However, the Ombudsman will consider complaints in the context of a member landlord’s: management of service charge accounts, handling of enquiries relating to service charges and the standard of services received for these charges. Concerns about the level of service charges are more appropriately directed at the Leasehold Advisory Service or a solicitor. Leaseholders may also consider applying to the Tribunal for arbitration of the reasonableness or increase of service charges. Further information can be found at https://www.justice.gov.uk/tribunals/residential-property#leasehold
11. Therefore, this investigation is not about the level of the service charge requested by the landlord and any refund of service charge the leaseholder feels is due. It is about whether the landlord has shown that the leaseholder’s concerns about his direct debit and address, request for copies of invoices and an explanation of additional charges were responded to appropriately.

The landlord’s response to the resident’s concerns about the service charge

12. The Landlord and Tenant Act 1985 section 22 requires a landlord to provide access to information about the service charges and relevant costs relating to the charges within 30 days of a written request. Online information from the landlord says that service charges will be estimated, and the landlord will then be sent a service charge statement with the actual costs. The service charge will include maintenance of communal areas, lighting and electrics in common parts, building insurance, fire risk assessments, a reserve fund and management costs, to include maintaining accounts, records of income and expenditure and providing general information to residents.
13. The lease for the property dated 2005 says in section 3 (2) (c) that the leaseholder agrees to pay the service charge. Section 5 (3) (a) says that the landlord shall renew, maintain, repair and redecorate the foundation and main structure including the roof, external parts, doors and all parts not the responsibility of the leaseholder. Section 5 (2) (c) includes common parts. Section 5 (4) covers the cleaning and lighting of common parts. Section 7 (2) says the leaseholder will pay the service charge each month. Section 7 (4) (a) says the service charge will consist of an estimate of costs plus a reserve. Section 7 (6) covers payment of the shortfall.
14. In this case, the landlord responded to the leaseholder’s enquiry about the service charge increase within two weeks of the request, on 19 October 2021. It provided detail covering all aspects of the costs and explained the reason for the increase. It directed the leaseholder to request sight of the invoices in writing, in accordance with the Landlord and Tenant Act. However, the landlord’s communication log shows that the leaseholder emailed on 29 November 2021 stating that he had requested the invoices on 21 October 2021 (although this correspondence and any response have not been seen). The landlord has said it provided a list of transactions around this time.
15. Once the leaseholder enquired about the direct debit amount in April 2022 the landlord acted quickly to resolve its error. The leaseholder again requested the service charge breakdown and landlord staff recorded sending an email to request this. When the amended direct debit notice was issued to the leaseholder’s former address, landlord staff explained that it needed to be changed by the direct debit collection company. The leaseholder believed however that the landlord staff should be able to do this. In the event, landlord staff were able to speak with the collection company whilst the leaseholder was on the phone to provide reassurance that the address had been corrected by them.
16. Errors will occur in any organisation, and it is not reasonable to expect this can be completely eliminated. The Ombudsman will look to see that when a landlord is alerted to an error, it takes timely and appropriate action to rectify it. In this case, the landlord staff quickly took steps to amend the leaseholder’s direct debit and address details. Unfortunately, the order this was done in resulted in a further letter being issued to the leaseholder’s former address. Once made aware, landlord staff rectified this and asked the collection company to re-send the direct debit statement to the correct address.
17. The landlord has explained that landlord staff did not have access to the direct debit collection system to make changes themselves. The resident made clear his frustration at this issue and the evidence, and the landlord staff tasked with responding were both polite and apologetic about its failures here. The explanation of what was a simple, albeit frustrating, series of errors was clear, and it took responsibility for what had happened. The landlord apologised early on and several times for the issues with the direct debit and change of address and offered £25 compensation which is considered reasonable and proportionate in the circumstances. Although the issue was infuriating for the leaseholder, it appears to have been resolved without any serious repercussions.
18. In respect of the invoices for the service charge and the explanation of the overspend, it is evident from the leaseholder’s emails that he wanted sight of those particular invoices which explained the overspend in the estimated service charge. There are landlord notes which say that invoices had been requested, but it is not known what happened after this. The landlord has said that it was not clear whether the leaseholder wanted only the cleaning invoices, or all of them, and that this was the reason the invoices were not provided.
19. The leaseholder could not reasonably be expected to know which elements of the landlord’s expenditure caused the overspend. The landlord’s email of 19 October 2021 invited the leaseholder to request the specific invoices he wished to see and said that under the Landlord and Tennant Act it would then supply these in 30 days. The resident’s email dated 29 November 2021 said he was chasing his request of 21 October 2021 (which has not been seen) but there is no record that this email was responded to.
20. There would seem to be no reasonable explanation why the landlord did not provide the invoices relating to areas of the service charge which exceeded the estimates within 30 days of 29 November 2021 at the latest. It may have been helpful for a phone call to be made to the leaseholder to quickly confirm what invoices he wanted sight of so these could be made available to him. The landlord also had the option of providing the leaseholder with all the invoices in relation to the service charge. This would have ensured that the leaseholder had at his disposal all relevant information in relation to his concerns, albeit he would also have been in receipt of additional information not relevant to his complaint.
21. While the concerns the leaseholder had about the direct debit and the change of address were dealt with in a reasonable manner and timeframe, the request for the invoices was not dealt with appropriately. Whilst this Service has seen no evidence of the explicit written request sent by the resident in relation to his invoice request, it is clear that the landlord was aware that he wanted access to invoices and that it had the option of providing him with all invoices. In all the circumstances of the case, the Ombudsman is not satisfied that the leaseholder has been given a reasonable and appropriate response to the request for invoices relating to the overspend.
22. To remedy these failures, an additional award of £75 compensation has been made here, in addition to the £25 already offered by the landlord. This sum is within the Ombudsman’s remedy scale for cases involving service failure where the impact for the leaseholder included time and trouble and delays in getting matters resolved. It is also recommended that the landlord make further contact with the leaseholder to enquire about any outstanding concerns he has about the service charge, paying particular attention to any supporting evidence he wishes to have sight of.

Determination

23. In accordance with paragraph 52 of the Scheme there was service failure in respect of the landlord’s handling of the leaseholder’s concerns about service charge.

Orders and recommendations

Order

24. Within four weeks of the date of this determination, the landlord is to pay the leaseholder £100 in compensation for the failures identified. This sum to include the £25 offered during its complaints process.
25. The landlord to evidence to this Service that it has complied with this order within four weeks of this determination.

Recommendation

26. The landlord to contact the leaseholder to discuss any ongoing concerns about the service charge, ensuring that he is provided with any supporting evidence he requests.