Southern Housing (202414368)

Background

1. Following receipt of the 2024/25 service charge estimates, on 2 March 2024 the resident raised concerns that the external management agent costs were incorrectly apportioned, and the service charges and rent had increased above inflation. He asked for a full breakdown of the costs. He raised a complaint on 26 April 2024 due to the landlord’s lack of response. He then referred the complaint to the Service as he remained dissatisfied with the landlord’s response as he said it lacked transparency about the apportionment changes.

What the complaint is about

2. The complaint is about the landlord’s response to the resident’s service charge queries.
3. The landlord’s handling of the complaint has also been considered.

Our decision (determination)

4. There was maladministration in the landlord’s response to the resident’s service charge queries.
5. There was service failure in the landlord’s handling of the complaint.

We have made orders for the landlord to put things right.

Reasons

6. 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 landlord’s response to the resident’s service charge queries

What we have not considered

7. We do not investigate complaints about the level or increase of service charge. Part of the resident’s complaint was about the level and increase of service charge and so we will not investigate it. The tribunal or court are more likely to be best placed to consider this matter, given their powers and expertise.
8. In his complaint to the Service, the resident said he was dissatisfied with the landlord’s explanation of what the service charge costs covered and the reasons for the increase. The resident asked for a breakdown of costs in his stage 1 complaint, but this issue was not included in the complaint escalation. As such, the issue has not exhausted the landlord’s complaint process. We have no power to investigate complaints which the landlord has not had the chance to put right first. Therefore, we have no power to investigate this issue.

What we have considered

9. The lease requires the resident to pay the service charge, which includes costs incurred by the landlord in relation to the repair, management, or maintenance of the estate and provision of services. This includes amounts payable to the head landlord for any outgoings under the head lease. The landlord’s service charge policy states that unless specified in the lease, it will “split costs equally across each home in the block/estate unless there is good reason to adopt a different split”.
10. The 2024/25 service charge estimates outlined that the resident would pay 5.45% of estate charges and 7.14% of block charges, which included the external management agent costs. The resident queried why he was paying a greater proportion of the external management agent costs, as he previously paid 5.45% of costs. The landlord failed to address his concerns until the stage 2 response, which was 7 months after the resident initially raised the issue. This was an unreasonable delay, and the resident incurred significant time and effort chasing a response. The resident also said that the delayed response caused anxiety, frustration, and concern about the landlord’s competence to manage finances and customer accounts.
11. The landlord apologised for the lack of contact and inconvenience caused. It said it changed its ways of working to aim to respond to queries within its response timeframes. It would have been helpful for the landlord to advise the specific steps it had taken to improve its service, to assure the resident it was taking his concerns seriously and repair the resident’s trust.
12. In its complaint response, the landlord said the managing agent altered the billing structure and now charged based on the properties it owns within the block, rather than the whole estate. The landlord said it owns 14 properties within the block, which it apportioned the costs between. However, it later internally noted on 2 July 2025 that the managing agent had not changed its billing method. It is of concern that it did not take any steps to further investigate or resolve the issue at the time. This was a missed opportunity to put things right at an earlier date.
13. We asked the landlord to confirm the correct apportionment. It said that the external management agent charge should be shared between 22 properties, not 14, and the correct monthly charge was £80.56. It was unreasonable that it did not identify the error when the resident initially raised the issue in March 2024. The landlord has also not provided a clear reason for the error. An order has been made for the landlord to review its handling of the issue and take any appropriate steps to prevent a recurrence.
14. The landlord offered £25 compensation for its failure to respond within timescales. This was not proportionate to the delays incurred and the landlord’s failings to provide an accurate response to the resident’s concerns about apportionment. This required the resident to repeatedly chase the matter and caused ongoing uncertainty about the accuracy of his service charges. The landlord must pay the resident an additional £150 compensation to recognise the impact on the resident. This is in line with the Service’s remedies guidance in circumstances the landlord’s offer did not acknowledge and redress all the failings identified in this investigation.

Complaint handling

15. The Ombudsman’s complaint handling code (“the Code”) states that the landlord must acknowledge complaints within 5 working days of being received, respond to stage 1 complaints within 10 working days, and stage 2 within 20 working days.The landlord can extend the response timeframes, but it must explain why, inform the resident of the updated response timeframe, and not exceed a further 20 working days unless there is good reason.
16. The resident raised a complaint on 26 April 2024. The landlord failed to acknowledge the complaint, which caused the resident to subsequently chase the matter 3 times. On 7 June 2024, the landlord apologised for the delay and requested an extension. However, there is no evidence that it gave a clear revised timeframe to manage the resident’s expectations. The landlord sent its stage 1 response on 21 August 2024. This was 81 working days after the resident’s complaint, which significantly exceeded the timeframes.
17. The resident raised additional concerns on 28 August 2024, in which he clearly expressed he was dissatisfied with the stage 1 response. The landlord did not acknowledge his concerns or confirm whether he wanted to escalate the complaint. The resident then explicitly requested to escalate the complaint on 19 September 2024. The landlord issued its stage 2 response on 3 October 2024. Although this was within a reasonable time of the resident’s formal escalation request, it was 26 working days after his expression of dissatisfaction, so there was a slight delay.
18. The landlord failed to address the resident’s concerns about the change in apportionment in its stage 1 response. The Code states that landlords must address all points raised in the complaint and provide clear reasons for any decisions. As it failed to do so, the resident did not have the opportunity to raise additional concerns and benefit from a 2-stage complaint process.
19. Following the stage 2 response, the resident raised follow-on questions and subsequently asked the landlord to issue a separate response to address the unresolved issues. It would have been appropriate for the landlord to open a new complaint to respond to the issues that had not been formally considered within the complaint process. There is no evidence it did, which is unreasonable.
20. The landlord offered £100 compensation in its stage 1 response for its unsatisfactory complaint handling. Although this reasonably redressed the delays in the complaint responses, it did not recognise its failings to respond to all elements of the complaint at stage 1 or address the resident’s request to raise a further complaint. As such, an additional £100 compensation is warranted.

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.

Orders

Landlords must comply with our orders in the manner and timescales we specify. The landlord must provide documentary evidence of compliance with our orders by the due date set.

Recommendations

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