Southwark Council (202422298)

REPORT

COMPLAINT 202422298

Southwark Council

18 September 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

1. The complaint is about the landlord’s response to the resident’s concerns about service charges for major works.

Background

2. The resident is a leaseholder of a flat in a building with several other properties. The landlord, a local authority, is the freeholder.
3. In February 2022, the landlord issued the resident the estimated service charge statement for 2022/23. This included a major works charge of £14,507.54 to cover upcoming works to the building. The proposed works included roof, drainage and brickwork repairs, renewal of front doors and communal lighting. The project began in May 2022 and was completed in July 2023.
4. The resident raised a complaint with the landlord on 29 July 2024. He said:
   1. He had been overcharged for the major works and attached evidence to show that other leaseholders, in flats of the same size as his, had only been charged £8,000
   2. As he had already paid £8,817, he believed he was due a refund of £817
   3. Other leaseholders had been quoted an overall cost for major works of £112,000, which was divided between the 14 properties in the building, but he was told the overall cost was 148,660.49
   4. The landlord used a ‘unit’ system, where each property was given a number of units based on size. He said his contribution was calculated as 4 out of 48 units, while leaseholders with the same size property had been charged using 4 out of 64 units, meaning his share was higher
   5. Replacement of front doors and concrete works had not been completed, so he believed the overall cost for major works should have been lower 
5. On 30 July 2024, the landlord issued its stage 1 complaint response to the resident. It said:
   1. The resident’s service charge bill was correct and that the apportionment method used was also correct
   2. There were 64 units in total across the 14 properties in the building. However, 2 of the properties were freehold and not the landlord’s responsibility to maintain. Those 2 freehold properties accounted for 16 of the total units, leaving 48 units for the landlord to split the major works bill across
   3. If any of the proposed works were cancelled or not completed, this would be reflected in the final service charge accounts, which would be issued once the landlord received actual costs
   4. It could not discuss other leaseholders’ accounts, but explained that the resident’s comparison came from the Section 125 Offer Notice (sent to tenants at the point of exercising the right to buy). That document limits a leaseholders liability for repairs during the first 5 years of ownership. The landlord said this meant the situations were not comparable, as the resident was not within the first 5 years of his lease under the Right to Buy scheme
6. On 5 August 2024, the resident asked the landlord to escalate his complaint to stage 2 of the complaints process. He disputed the landlord’s apportionment method because he had official leaseholder documents which, he said, showed the building should be treated as 14 properties, which included the 2 freehold homes. He argued that as those 2 freehold properties shared the same roof, guttering and pipeline as the other flats, the major works would have to include them. He added that while other leaseholders may have different liabilities, this did not explain why they had been quoted a different overall cost or why their contributions had been split across 64 units, while his was split across 48. He also said the project had ended over a year earlier, but he had still not received the final accounts.
7. The landlord issued its stage 2 complaint response to the resident on 3 September 2024. It said the final accounts had not yet been agreed but that the resident was required to pay estimated service charges in line with the terms of his lease. The landlord repeated that the information the resident relied on was not a direct comparison and that differences in costs between leaseholders may arise depending on the terms of their lease.
8. In September 2024, the resident brought his complaint to this service. He said he still disagreed with the landlord’s method of apportioning his service charge for major works. He also said several elements of the works had not been completed, which meant he should not have been required to pay them.

Assessment and findings

Scope of the investigation

9. The resident was dissatisfied with landlord’s method of apportioning his service charge. This part of the complaint concerns the reasonableness of the charge. We generally do not investigate whether a service charge is reasonable or payable. This is a matter for the First-tier Tribunal (FTT) (Property Chamber), which is better placed to consider disputes about the amount charged. The resident may wish to contact the FTT if he wishes to pursue this aspect further, and he can also seek free, independent advice from the Leasehold Advisory Service.
10. This investigation has therefore focused on the landlord’s communication with the resident in response to his queries and complaint, including whether this was timely, clear and reasonable in the circumstances.

The landlord’s handling of the resident’s concerns about service charges for major works

11. When the resident raised his concerns as a stage 1 complaint, the landlord responded the following day. This was prompt and within its complaints policy, which allows up to 10 working days for a formal response. The response also gave a clear and detailed breakdown of how the charge had been apportioned. This demonstrated that the landlord acted without delay and took the complaint seriously.
12. The resident said some works had not been completed and, as the project had ended a year earlier, wanted his service charge adjusted. The landlord explained that any incomplete works would be reflected in the final accounts. This was a reasonable response and consistent with the resident’s lease, which allows the landlord to issue reasonable estimated charges in advance and then revise them once the final accounts are known.
13. While the resident believed the overall cost for major works should have been lower and adjusted sooner, the evidence shows that practical completion of the works was in July 2023. According to the landlord’s service charge policy, estimated costs can only be revised once a contract has ended and the defects liability period has passed. This meant the landlord had to wait until the end of July 2024, before it could produce the final accounts.
14. As the landlord could not issue final accounts until the defects liability period ended, it was required to take steps to protect its ability to recover costs in the meantime. The evidence shows that on 1 August 2023 and again on 1 August 2024 it issued Section 20B notices to leaseholders. Section 20B of the Landlord and Tenant Act 1985 requires landlords to notify leaseholders within 18 months of costs being incurred if they intend to recharge them, otherwise the costs cannot be recovered. By serving these notices, the landlord ensured leaseholders were formally notified of the incurred costs while it waited to finalise the accounts. This was an appropriate and necessary step.
15. In September 2025, the resident told our service that he was in the process of selling his flat and had settled his service charges in full. This means there is no ongoing detriment to the resident that would require further action from the landlord. The landlord is already obliged under the lease to issue final accounts once available, and any adjustments will be reflected in those accounts. As the charges have been paid and the property is being sold, there is no further practical outcome that this investigation could achieve.
16. Overall, we find no maladministration in the landlord’s handling of the resident’s concerns about service charges for major works. The evidence does not show any significant failings or detriment to the resident that would amount to maladministration.

Determination

17. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of the resident’s concerns about service charges for major works.