Slough Borough Council (202308133)

REPORT

COMPLAINT 202308133

Slough Borough Council

30 January 2025

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

The complaint is about the landlord’s handling of:
1. the resident’s queries relating to service charges.
2. the subsequent complaint.

Background

The resident is a leaseholder for a second-floor flat within a block of 5 flats. The landlord is the freeholder for the block. It has no vulnerabilities recorded for the resident.
On 27 May 2022, the resident contacted the landlord to dispute how it had calculated the service charges for the property. He stated that the landlord had overcharged him around £2,600 since the financial year 2015-16. On 13 July 2022, the resident made a formal complaint that the landlord had not provided an explanation and was refusing to respond to his claim that he had been overcharged.
On 20 January 2023, the landlord issued its stage 1 response after requests from the Ombudsman for it to do so. In this it:
1. said it understood that the resident’s complaint centred on the understanding that the service charge was approximately £500 per year. From this the resident had said he should have been charged around £3,000 since 2015-16 but had been charged a total of around £5,600 by the landlord.
2. explained that the resident’s understanding of the service charge was incorrect, as it is variable and not fixed. It described that it issued leaseholders with 2 invoices each financial year, one with estimated charges and another 6 months later when the landlord records the actual charges. It said it added any surplus or deficit between the estimated and actual charges invoiced to the invoice for the following year.
3. said that the breakdown of the charges each financial year is detailed in the statement provided by the landlord and the resident should have kept a copy of these. It stated it could provide additional copies of the resident’s annual service charge statements if he needed them.
The resident escalated his complaint on 10 February 2023. He complained that the landlord had not explained why the service charge for the property had doubled from the financial year 2018-19 onwards. He also said he was dissatisfied with the landlord’s explanation for why it took so long to provide this information, and that he was denied a remortgage offer for the property due to the delay.
The landlord issued its stage 2 response on 12 July 2023 after further requests from the Ombudsman for it to do so. In this it:
1. outlined it understood the resident’s complaint was about the service charge increase and the delay in it handling the resident’s complaint.
2. provided the resident with a breakdown of the service charge demands it had invoiced the resident for since the financial year 2015-16. It outlined that it considered that there had been valid increases in its service charges due to factors such as increased costs of living and contractor’s services.
3. explained that the resident still had service charge arrears on his account since his original query in May 2022. The landlord said it was required to provide accurate information to a prospective mortgage provider if asked. It stated if a mortgage provider had a policy not to agree to a remortgage if there were service charge arrears, this decision was not in its control.
4. accepted that there had been severe delays in its response to the resident’s complaint and offered him £300 as a remedy for the distress and inconvenience caused.
The resident remained dissatisfied with the landlord’s decision and escalated his complaint to the Ombudsman. He wants the landlord to reimburse him for the financial loss from not being able to remortgage the property.

Assessment and findings

Scope of investigation

What the Ombudsman can and cannot consider is called our jurisdiction. This is set out in the Scheme.
Paragraph 41.c. of the Scheme says the Ombudsman cannot consider complaints which, in the Ombudsman’s opinion, concern matters that are the subject of court proceedings or were the subject of court proceedings where judgement on the merits was given.
From the available evidence, the landlord obtained a county court judgement (CCJ) for the resident’s service charge arrears up until, and including, the financial year 2018-19. The resident agreed to pay the service charges held against the CCJ in March 2021. The landlord told the resident that, if he disputed any of the charges that were subject to the CCJ, he should have challenged these during the proceedings and that the court found in favour of the landlord’s case. Therefore, the Ombudsman has decided we cannot consider the landlord’s handling of the resident’s queries around service charges before the financial year 2019-20 in line with paragraph 41.c. of the Scheme. This is because his charges before then were the subject of court proceedings where a CCJ on the merits was given.
Paragraph 42.d. of the Scheme says the Ombudsman may not consider 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.
The resident raised concerns with the landlord about how it had calculated the service charge and communicated the charges with him. However, at various points the resident phrased his complaint in terms that the service charges he had been invoiced for were unreasonable. In line with paragraph 42.d. of the Scheme, we cannot consider if a service charge is reasonable or represents value for money compared to the services provided. Therefore, we have not commented on this aspect of the resident’s complaint about the service charge. However, we have still investigated whether there is any evidence the landlord miscalculated the charges when it invoiced the resident and how it communicated this to the resident.
Finally, when the resident originally raised his query, he also asked about the service charges he had received for a different property he said he owned (for which the landlord was the freeholder) but was not residing in. The landlord separated these into 2 complaints due to complications about whether the resident was the leaseholder for the other property. For clarity, this investigation report will not address the resident’s other complaint and has only considered the handling of the service charges for the property where the resident resides. This is because we are separately investigating his other complaint in another case under a different reference number.

The landlord’s handling of queries around service charges

The lease between the resident and the landlord says that:
1. the resident agrees to pay the landlord “at the times and in the manner specified” the annual service charge, which is calculated in accordance with the fourth schedule of the lease.
2. the landlord agrees that it shall calculate the resident’s service charge for the year in line with the fourth schedule of the lease.
3. The fourth schedule of the lease specifies how the service charge will be calculated. Including that:
  1. the amount of the service charge shall be decided and certified by a certificate annually and as soon as practicable after the Specified Annual Period (the financial year).
  2. a copy of the certificate for each financial year shall be supplied by the landlord to the resident.
  3. the certificate shall contain a summary of the landlord’s expenses and outgoings it incurred during the financial year, together with a summary of the relevant details which form the basis of the tenant’s service charge.
The landlord’s service charge policy at the time of the events the resident complained about stated that:
1. each April it will send the resident an estimate of how much it thinks it will spend on the property in the coming financial year. The bill will specify the date by which the resident must pay this.
2. each September it will send the resident details of how much it actually spent on the property in the previous financial year and a breakdown of these costs.
3. if the landlord spent less in the previous financial year than it estimated, it will credit the resident’s account and offset this against the estimate for the current financial year. If it spent more than it estimated, the landlord will add this to the estimate.
In March 2021, at the same time the landlord pursued the resident for the charges which were subject to the CCJ, it informed the resident he had additional service charge arrears totalling £1,185.90 (£376.55 for the estimated charges for financial year 2020-21, £799.35 in estimated charges for 2021-22 and £10 in ground rent). On 9 March 2021, the landlord contacted the resident to discuss the money owed and recorded:
1. the resident would pay off the charges held against the CCJ in full.
2. it had agreed with the resident for him to pay off the other service charge arrears over a 10-month payment plan of £117.59 per month and he would pay the ground rent separately.
3. it had reminded the resident that estimated costs for financial year 2021-22 would be adjusted once the actual costs for the year were known, so the payment plan would likely need to be adjusted later.
The resident told the landlord and the Ombudsman that he had an agreement with the landlord to pay it £50 a month by direct debit, which covered the service charge. The resident has not provided any evidence of this arrangement.
The resident’s explanation is not consistent with how the terms of the lease state the service charge would be calculated and billed. Furthermore, we have seen that, on 22 March 2021, the landlord told the resident that it did not have a direct debit option for service charges, and he would need to set up a standing order from the payment information.
On 17 September 2021, the landlord provided the resident with the annual leaseholder service charge for financial year 2020-21. This stated that the resident’s service charge for the year would be adjusted by £353.49, due to the difference between the actual and estimated costs, and that the resident should pay this by 1 October 2021. It also set out the costs incurred by the landlord to show how it had calculated the actual costs. The landlord’s communication with the resident about the service charge was appropriate, as it was consistent with its policy.
On 8 April 2022, the landlord contacted the resident to provide the estimates for financial year 2022-23. As part of this, it informed the resident that he still had £363.48 in service charge arrears and that he would need to clear these. The resident stated that the landlord had miscalculated and there should not be any arrears, as he had been paying the landlord through the payment plan and direct debit.
The Ombudsman’s view is that the landlord did not miscalculate the resident’s service charge arrears. There is no evidence that the resident made arrangements to pay the adjusted service charge for the financial year 2020-21 (or the separate payment for ground rent) which the arrears consisted of. The landlord had taken appropriate steps in March 2021 to advise the resident that he would need to look at adjusting his payments once the actual service charges for 2020-21 were issued.
On 11 April 2022, the landlord sent the resident a list of the service charges it had invoiced him for and its records of the payments it had received. It advised the resident that, if he had previously made payments to clear the service charge arrears which were not recorded, he would need to provide evidence of this.
The resident responded on 27 May 2022 and confirmed that he had copies of the annual leaseholder service charge statements and wanted to dispute the amount the landlord had charged him. He said that “taking the service charge average of £500 [approximately] a year” he should only have been charged £3,000 since April 2016 but complained that the landlord had calculated the service charges for that period to be approximately £5,600.
The landlord responded on the same day. It told the resident that service charges vary every year, so it was inadvisable for a resident to rely on an average annual figure. It stated that the landlord sends annual leaseholder service charge statements to leaseholders to support its account of the actual charges and the resident should keep copies of these.
Following further correspondence from the resident, the landlord told him on 31 May 2022 that it would provide him with copies of the actual service charges back to financial year 2016-17. It said it would aim to do this in 10 working days. There is no evidence that the landlord provided the resident with a response before his formal complaint on 13 July 2022. This was inappropriate as it was not consistent with what the landlord said it would do. Notwithstanding this, the landlord had previously sent the resident copies of the relevant annual leaseholder service charge statements, which contained the actual charges. There is no evidence that the resident was caused any detriment here that would be significant enough for the Ombudsman to consider it a service failure.
In the Ombudsman’s view the landlord’s actions to respond to the resident’s queries about the service charge were appropriate because:
1. it clearly explained why the resident’s understanding of how the service charge was incorrect and how it calculated the service charge with the landlord’s service charge policy and the lease.
2. from the evidence provided, for each financial year following 2018-19, the landlord had sent the resident a service charge estimate in (or before) April and an annual leaseholder service charge statement in September. This was consistent with the landlord’s policy.
3. the annual leaseholder service charge statements contained a breakdown of the costs incurred by the landlord as specified in the policy and the lease.
From the available records, the Ombudsman has also seen no evidence that the landlord miscalculated any of the resident’s service charges after the adjusted service charge for financial year 2020-21. The service charge demands are consistent with each other and accurately take into account the adjustments from each year.
In conclusion, the Ombudsman’s finding is that there was no maladministration in how the landlord responded to the resident’s queries relating to the service charge.

The landlord’s complaint handling

The landlord operates a 2 stage complaints process. Its complaints policy says that it will acknowledge all complaints within 2 working days and respond to a stage 1 complaint within 10 working days of logging the complaint. It will respond at stage 2 within 20 working days of the resident escalating the complaint.
The Housing Ombudsman’s Complaint Handling Code (the Code) sets out the Ombudsman’s expectations for how landlords should handle complaints, including the above timescales. The Code encourages landlords to adopt a positive complaint-handling culture that enables them to resolve disputes, improve the quality of the service they provide, and ensure that complaints provide an opportunity for learning and improvement. The Code was updated in 2024, following the previous version in 2022 that was in place during the time of the events complained about.
The resident formally complained to the landlord on 13 July 2022, both in relation to the property he resided in and the other property referred to in paragraph 13 of this report. Regarding the landlord’s complaint handling at stage 1, the Ombudsman has seen that:
1. on 26 August 2022, the landlord recorded that the resident said he was unhappy as the landlord had told him twice that there would be a delay in responding to his complaint. The landlord asked for an update to be sent to the resident. There is no evidence that the landlord gave an update or explanation for the delays to the resident at this time.
2. on 9 September 2022, the resident’s local councillor contacted the landlord on the resident’s behalf and requested it respond to the complaint as a matter of urgency. There is no evidence that the landlord responded to the resident, or the local councillor, until 7 October 2022, when it told the resident that, due to the complexity of the case, it would not be able to respond until the following week.
3. the landlord contacted the resident again on 14 October 2022 that it would need a further week to respond. It did not provide an explanation for this delay.
4. the landlord acknowledged and defined the complaint with the resident on 21 October 2022. It outlined that there was difficulty in responding to the complaint, as it believed the resident may not currently be the legal owner of the other property. It said it aimed to provide the stage 1 response by 28 October 2022.
5. the Ombudsman contacted the landlord on 24 November 2022, as the resident said he had not received a response. We asked it to formally respond within 10 working days. There is no evidence the landlord did this and we contacted the landlord again on 15 December 2022 and asked it to provide a response to the resident in 5 working days.
6. on 22 December 2022, the landlord sent the resident a holding email. It told the resident that it would not be able to provide a formal response until 20 January 2023 due to staffing issues and the legal issue about the other property.
7. on 20 January 2023, the landlord wrote to the resident with its stage 1 response. It explained the investigation into his complaint about the other property was ongoing. However, it had decided to separate the 2 complaints, so it could address the complaint about the service charges for the property where the resident resided. As such, it took the landlord a total of 132 working days to respond at stage 1.
This was unacceptable. The landlord greatly exceeded the timescales from the Code and its policy for acknowledging and responding to the complaint. Though the landlord updated the resident at points, it repeatedly did not meet the timeframes it said it would respond by. The landlord also required 2 interventions from the Ombudsman before it provided a response, which should not have been necessary. The Ombudsman expects landlords to be able to handle complaints in a way that is consistent with the Code and its policy without our involvement.
The resident escalated his complaint on 10 February 2023. From the complaint file, the landlord referred the stage 2 complaint back to the same complaint handler who had provided the stage 1 response. This was inappropriate, as the Code specifies that the person considering the complaint at stage 2 must not be the same person who considered it at stage 1.
On 4 April 2023, the landlord noted that the stage 2 response should have been sent to the resident by 27 February 2023, but this was still outstanding and it had not updated the resident since his escalation request. It asked the complaint handler to provide the response to the resident’s complaint as a priority.
The landlord issued the resident with a response on 20 April 2023, which was signed by the same complaint handler who responded at stage 1. However, the letter described that it was providing further information at stage 1 of the complaints process about the service charges for the resident’s property. The response stated that “the Council views this matter still at Stage 1 of its complaints procedure and that the information requested should help you consider whether you are happy with the original response to the complaint”.
It is unclear why the landlord decided to issue a further response for stage 1, considering its internal emails from 4 April 2023 indicated it expected a stage 2 response to be issued. In the absence of further explanation, it is the Ombudsman’s view that the landlord’s response of 20 April 2023, in particular its comment that “the Council views this matter still at Stage 1” indicates that it had refused to accept the resident’s escalation request from 10 February 2023.
This was inappropriate. In line with the Code, a landlord must progress the complaint to stage 2 of its complaints procedure if the resident requests that it is escalated, unless an exclusion ground applies. There is no evidence that the landlord had a valid reason to exclude the escalation request under its policy (such as the resident having started legal proceedings). Its response on 20 April 2023 also did not set out any explanation about why it had decided the complaint was not suitable to consider under stage 2 of its process, which would be required in line with the Code if the landlord did not accept the resident’s escalation request.
From the available records, it is not known whether the resident replied directly to the landlord’s response of 20 April 2023. However, in terms of the landlord’s complaint handling at stage 2 the Ombudsman has seen that:
1. on 6 June 2023, we wrote to the landlord to explain that the resident had escalated his complaint on 10 February 2023, which the landlord had acknowledged, but the resident stated he had not received a stage 2 response. We told the landlord it must provide the resident with a stage 2 response within 5 working days or explain why it is unable to do so. There is no evidence that the landlord responded to us to explain any delay.
2. on 16 June 2023, we sent the landlord a final request for action. We said that the landlord must send the resident its stage 2 response no later than 23 June 2023. We informed the landlord that we would consider issuing it with a Complaint Handling Failure Order (CHFO) if it did not do so.
3. on 30 June 2023, we informed the landlord we would likely issue it a CHFO next week if no response was provided. Following a discussion with the landlord on the same day, we agreed to pause issuing the CHFO if the landlord was able to agree an extension with the resident.
4. the landlord told us Service on 3 July 2023 that it had agreed with the resident to extend its response until 12 July 2023. The landlord provided its stage 2 response to the resident on 12 July 2023, 103 working days after his escalation request.
This was unacceptable. The landlord greatly exceeded the timescales from the Code and its policy for responding to the complaint. The landlord also required 3 interventions from the Ombudsman before it provided a response, which should not have been necessary. As with the stage 1 response, the Ombudsman expects landlords to be able to handle complaints in a way that is consistent with the Code and its policy without our involvement.
In its stage 2 response, the landlord accepted that there had been “severe delays” in responding to the complaint. It apologised to the resident for this and offered him £300 as compensation for the delay and inconvenience it caused. In the Ombudsman’s opinion, this is not a reasonable remedy to fully put things right for the resident, considering the extent of the delays and the other complaint handling failings, which the landlord did not acknowledge. We have therefore ordered it to pay him the above award plus another £100 compensation to fully recognise its delays and other failings. This is in line with our remedies guidance’s recommendation of compensation of up to £100 for delays in getting matters resolved. The landlord also provided no explanation of what it would do to reduce the likelihood of a similar issue happening to another resident, which we would have expected it to do in line with our guidance on remedies.
In summary, the Ombudsman’s opinion is that there was severe maladministration by the landlord in its handling of the complaint, in that it:
1. significantly delayed responding to the complaint at both stages, taking approximately a year to complete the complaints process and requiring a total of 5 interventions by us.
2. did not keep the resident updated at multiple points throughout the complaints process. When it did update the resident, the landlord repeatedly failed to provide its response in the timescales that it said it would follow.
3. inappropriately referred the resident’s escalated stage 2 complaint back to the original complaint handler to respond to.
4. initially refused to escalate the resident’s complaint to stage 2 without a valid reason.

Determination

In accordance with paragraph 52. of the Scheme, there was no maladministration in the landlord’s handling of the resident’s queries about the service charges.
In accordance with paragraph 52. of the Scheme, there was severe maladministration in the landlord’s subsequent complaint handling.

Orders

The landlord must, within 28 days of the date of this determination:
1. provide a copy of this decision to its chief executive and ask them to issue the resident with a written apology. This must recognise the landlord’s failings in its handling of the resident’s complaint and the impact this had on him.
2. pay the resident £400 (inclusive of the £300 previously offered) in recognition of the time and trouble of pursuing a complaint and the frustration caused by the significant failures in the landlord’s complaint handling.
3. provide the Ombudsman with evidence of compliance with these orders.
The landlord must carry out a senior management review of its handling of the resident’s complaint. This should consider:
1. how the complaint handling failings occurred and how the landlord will make improvements to reduce the likelihood of a reoccurrence.
2. its current policies and procedures for handling complaints. The landlord should review these against the findings highlighted in this investigation and the statutory Code that was issued by the Ombudsman on 8 February 2024 and applicable from 1 April 2024.
3. any staff training that may improve its future response to similar cases.
The landlord must provide a written report to the Ombudsman setting out its findings to the senior management review specified in paragraph 45 of this report. The landlord must provide this report within 56 days of the date of this determination.