Thirteen Housing Group Limited (202000580)

REPORT

COMPLAINT 202000580

Thirteen Housing Group Limited

8 February 2021

Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman Scheme (the Scheme). The Ombudsman must determine whether a complaint comes within their jurisdiction. The Ombudsman seeks to resolve disputes wherever possible but cannot investigate complaints that fall outside of this. 

In deciding whether a complaint falls within their jurisdiction, the Ombudsman will carefully consider all the evidence provided by the parties and the circumstances of the case.

The complaint

1. The complaint is about the landlord increasing the resident’s service charge.

Determination (jurisdictional decision)

2. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated. After carefully considering all the evidence, I have determined that the complaint, as set out above, is not within the Ombudsman’s jurisdiction.

Summary of events

3. On 6 April 2020 the resident contacted the landlord about the increase in his service charges as the service charge had increased from £3.99 per week to £9.60, which he did not understand and he did not believe was a reasonable increase.
4. Email and telephone contact about the issue between the landlord and resident followed throughout April 2020, with the landlord confirming that it had incorrectly charged £3.99 per week for service charges for the 2019-2020 financial year, resulting in a shortfall. The amenity concerned was hot water, which the resident stated he hardly used, and he said that he could not afford the increase at the time.
5. On 23 April 2020 the landlord wrote to the resident explaining the service charges in more detail, including its application of them and how the landlord calculates and resolves under and over spends at the end of each financial year. It stated that there had been an overspend in the 2017-2018 period but, due to an administration error, it had only charged £3.99 in weekly service charges rather than the £13.04 it should have done. However, it would not be seeking to recover this. In terms of the 2020-2021 financial year, it stated that this was £9.60 per week, which included an overspend from 2018-2019.
6. Continuing to be dissatisfied with the landlord’s explanation, the resident made a formal complaint, which the landlord responded to at stage one on 30 April 2020.  It did not uphold the complaint, stating that it had previously written to the resident explaining why the service charge had increased. It reiterated the error in 2017-2018, which it was not seeking to recover, and added that it had since put in place a system to prevent a future error. The landlord also found that it had communicated with the resident in an appropriate way by returning his emails and calls in a timely manner. 
7. On 6 May 2020, the resident asked the landlord to escalate his complaint, as he remained dissatisfied with its explanation. The following day, the landlord responded to the complaint at stage two, finding that it had responded fully and appropriately at stage one. It added that section 6 of the resident’s tenancy agreement detailed how service charges were calculated and confirmed that the charges had been calculated correctly.
8. It further explained that service charges were for the building as a whole and not applied to individual units, so they were not based on the resident’s usage alone (he felt the amount unreasonable, as he hardly used hot water and also referred to not having moved into the property until November 2018 and so felt he was paying for the previous tenant’s usage). The landlord said that if the resident should terminate his tenancy, then the charges for the part of the year up to him leaving would be included in the following year’s charge for the future resident(s).
9. On 11 May 2020, after the completion of the landlord’s complaints procedure, the landlord emailed the resident in response to his request to be provided with copies of the service charges for the financial years 2015-2016 and 2016-2017.  The resident felt this was pertinent to understanding the service charges applied in 2020-2021, saying that they had increased by 242%. The landlord attached this information and advised that hard copies would also be posted.

Reasons

10. Paragraph 39(g) of the Scheme states that “the Ombudsman will not investigate complaints which, in its opinion, concern the level of rent or service charge or the amount of the rent or service charge increase”.
11. The complaint raised by the resident relates directly to the level of service charge and its associated increase, which he does not feel is reasonable. The wording of the Scheme does not allow the Ombudsman discretion to consider such complaints.
12. The resident has questioned, in part, the methodology used by the landlord in calculating its service charges, and the landlord has explained and provided accounts for the various years. Whilst the Ombudsman can consider some elements of the administration of service charges (largely around whether the services charged for have been delivered) the scope of these investigations is limited and must not go beyond the remit of the Scheme. It is noted that the jurisdictional limitations on the investigation were brought to the resident’s attention in December 2020 but, at that stage, it was thought that there may be elements of the complaint which this Service could determine.
13. However, upon a detailed assessment of the documentary evidence, it is apparent that the crux of the resident’s complaint concerned the level and basis of the charges being levied, which falls within the scope of paragraph 39(g) and should properly be dealt with by the First Tier Tribunal (property chamber). In view of the outcomes being sought by the resident and the detailed assessment of the charges that is required to resolve his specific points of complaint, there is insufficient scope for the Ombudsman to conduct a meaningful investigation.
14. The First Tier Tribunal can make determinations on all aspects of the liability to pay a service charge and, in order to decide liability, the tribunal also assesses whether service charge costs have been reasonably incurred and whether the costs charged are reasonable. The First Tier Tribunal is also better placed than the Ombudsman to examine service charge accounts in detail.
15. The Ombudsman is aware that this is likely to be a disappointing outcome for the resident and that it has taken some time for this Service to reach this decision. Unfortunately, jurisdictional decisions can be complex and can only be fully identified once a detailed assessment of the evidence has been undertaken at the point of investigation.