The Guinness Partnership Limited (202503495)

Background

1. The landlord sent the 2023/24 service charge actuals on 27 November 2024. The resident raised a complaint on 19 December 2024 as the landlord had not addressed his concerns regarding a £1,944.88 adjustment charge. He asked for a detailed explanation of the charge, removal of the charge, and improved communication. He referred the complaint to the Service as he remained dissatisfied with the landlord’s handling of his concerns. To resolve the complaint, he wanted improved scrutiny, transparency, and oversight of managing agent costs, and compensation for the distress and inconvenience caused.

What the complaint is about

2. The complaint is about the landlord’s handling of:
   1. The resident’s concerns about the managing agent charge.
   2. The complaint.

Our decision (determination)

3. There was reasonable redress in the landlord’s handling of:
   1. The resident’s concerns about the managing agent charge.
   2. The complaint.

Reasons

4. 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 handling of the resident’s concerns about the managing agent charge

5. The landlord sent the resident the 2023/24 service charge actuals on 27 November 2024. It previously estimated the management agent costs would be £1084.40 and the actual costs incurred were £2875.47. The resident initially queried the charge on 4 December 2024. The landlord did not recognise until 3 February 2025 that it had incorrectly included an invoice where a brought forward balance of £982.74 had not been removed. It is of concern that this was not identified in the stage 1 response, indicating it had not thoroughly investigated the matter. This caused him additional time and trouble pursuing the issue to get an effective resolution and impacted his trust in the landlord.
6. The resident was dissatisfied with the landlord’s process to scrutinise or independently verify the charges before applying them to his account. The landlord explained for managing agent schemes it assesses each invoice individually, as charges usually relate to a specific property. It said a training issue resulted in the mistake. It was reasonable that the landlord transparently explained the reason for the error, apologised, and said it would provide additional training to prevent a recurrence.
7. The landlord also advised it previously only included 6 months of managing agent costs so there would be a large increase in the 2024/25 and 2025/26 accounts. The freeholder employs the managing agent to complete day-to-day management of the resident’s scheme and operates on a different accounting cycle to the landlord. The landlord said it set estimated service charges before it received the managing agent’s final accounts, which resulted in the error.
8. It is understandable that this oversight caused the resident concern, due to the unexpected increased costs. However, in line with the lease agreement, the landlord is entitled to recover the full costs payable under the head lease. It can therefore recover the managing agent costs for future years, provided it issues the accounts correctly. Nonetheless, it would have been reasonable for the landlord to provide clearer advance communication about the expected increase to help the resident understand and plan for the change.
9. Following completion of the complaint, on 11 July 2025 the landlord sent the resident a review of its service charges process. It explained why it had previously undercharged the resident and apologised for the errors. It said it set up a dedicated managing agent team to review all invoices and reduce the risk of incorrect charges, and it added the resident’s property to a key review list, so a senior finance officer would review all charges. It planned to review estimates and actuals with residents before issuing formal notices to improve trust and transparency. These changes were reasonable to prevent recurrence of the issue, demonstrate that it was taking the resident’s concerns seriously, and to rebuild trust. Given the resident’s ongoing concerns about oversight procedures, it is recommended that the landlord updates him on how it has embedded these changes and the effectiveness.
10. The resident also raised concerns that the managing agent charge was unexplained and requested a detailed breakdown of the charge. Under section 22 of the Landlord and Tenant Act 1985 (LTA 1985), variable service charge payers may, within 6 months of receiving the service charge account summary, request in writing for the landlord to provide facilities for the inspection of the accounts, invoices, records, and any other documents supporting that summary. The landlord must provide the facilities within 1 month of the request. The resident requested the breakdown in his complaint on 19 December 2024, and the landlord provided the invoices from the managing agent on 23 December 2024. This was within the appropriate timeframe.
11. On 5 February 2025, the resident raised concerns that the managing agent invoices provided did not show a breakdown of charges. The managing agent is employed by the freeholder, not the landlord. Under section 23 of the LTA 1985, if the immediate landlord does not have the necessary information to provide a summary of relevant costs because they were incurred by a superior landlord, the immediate landlord must make a written request for that information from their own landlord. The landlord confirmed in the stage 2 response on 14 March 2025 that it had provided the breakdown of the 2023/24 managing agent charge. It said there were delays caused by the managing agent’s response timeframe and it chased the information several times. It therefore demonstrated reasonable action to obtain the requested information.
12. Section 23 of the LTA 1985 also states if the resident’s section 22 request for facilities to inspect supporting accounts relates to costs from a superior landlord, the immediate landlord must inform the resident of this and provide the name and address of the superior landlord. The landlord therefore should have provided the contact details so the resident could pursue the matter directly with the superior landlord. However, as it promptly requested the information from the managing agent and provided it to the resident without delay, the omission did not cause a detrimental impact or delay access to the information.
13. The landlord offered £75 for its poor communication and £50 compensation for the time, trouble, and inconvenience caused. This is in line with the Service’s remedies guidance for cases where the landlord’s failing has adversely impacted the resident and caused distress, inconvenience, and loss of confidence. As such, the landlord has reasonably redressed the complaint.

Complaint handling

14. The Ombudsman’s complaint handling code (“the Code”) sets out when and how a landlord should respond to complaints. The Code states that the landlord must acknowledge complaints within 5 working days of being received. Once it acknowledges the complaint, it then must respond to stage 1 complaints within 10 working days and stage 2 within 20 working days.
15. The resident raised his complaint on 19 December 2024. It was appropriate that the landlord apologised for failing to acknowledge the complaint. It sent its stage 1 response on 14 January 2025. It responded within the overall timeframe required by the Code.
16. The resident then escalated the complaint on 5 February 2025. The landlord acknowledged it on 17 February 2025, which exceeded the Code timeframe by 3 working days. It then sent its stage 2 response on 14 March 2025, which was within 20 working days as required.
17. The Code states that landlords should address all points raised and consider all relevant information and evidence carefully at each complaint stage. The landlord’s stage 1 response did not sufficiently address the complaint raised by the resident or demonstrate that it had thoroughly investigated. This caused the resident additional time and effort in further pursuing the matter. However, there was no lasting impact as the landlord properly identified and redressed its failings at stage 2.
18. The landlord offered £25 compensation for the inaccurate information provided at stage 1 and £25 for the complaint handling delays. This was proportionate to the failings and was in line with the Service’s remedies guidance.

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.

Recommendations

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