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West Kent Housing Association (202222048)

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REPORT

COMPLAINT 202222048

West Kent Housing Association

22 February 2024


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 handling of the resident’s concerns regarding notice of cyclical works to her building, and related charges.

Background

  1. The resident is a shared-ownership leaseholder of the property. The property is a 2 bedroom flat within a block of 4 flats. The landlord, which is a housing association, purchased the block in 2017, with residents moving in between 2017 and 2018. The resident signed her lease and moved in in February 2018.
  2. The landlord sent its annual rent and service charge review for 2022/2023 to the resident on 28 February 2022. It provided a breakdown of the service charge which included a provisional charge for major works and cyclical works.
  3. The landlord issued a Section 20 Notice of Intention to carry out works under an existing Qualifying Long Term Agreement (QLTA) in a letter to the resident dated 29 September 2022. The letter gave the notice date as 3 October 2022, and said the landlord planned to carry out maintenance work to internal and external communal parts. Its maintenance contractor would carry out the work in line with the existing QLTA from August 2014. However, before work started, the landlord had to consult with the residents and gave them 30 days to provide any comments relating to the works. 
  4. The resident emailed the landlord on 7 October 2022 saying that: the maintenance contractor agreement was dated 4 years before the block was built; she did not know about the QLTA when she bought the property; and she disagreed with the estimated cost. She also said the interior communal paintwork was immaculate and her service charge covering cyclical work was in credit, so the landlord should use that to pay for the work.
  5. The landlord replied the same day saying any agreements relating to the lease should have been explained and discussed by her legal representative at point of purchase. It said: cyclical work is generally completed on a 5 to 7 year cycle; it would not defer work as it would put the block out of sync with other properties in the area which could lead to higher costs in future; and any credit on the resident’s account collected as part of the service charge would be used in the first instance, but once it received the final invoice from its contractor, any shortfall would be payable by her and other residents in the block.
  6. The resident replied to say that the letter had caused her stress. She said the block was finished in 2018, so if the landlord completed cyclical work on a 5 year cycle, 2022 would be too soon. She said paying the shortfall could cause her financial difficulty and unnecessary painting was not a luxury she could afford.
  7. On 12 October 2022 the landlord emailed the resident and said new properties get added to the QLTA and solicitor documentation should contain relevant information. It said it purchased the block in 2017 so it was acting in accordance with the 5 year cycle, the costs were estimated at this stage, and the resident had the option to speak to the finance department once work had been completed if she had difficulty paying any shortfall.
  8. The resident sent a letter signed by herself and 2 other leaseholders from the block on 23 October 2022. The letter said they had reviewed documentation and Section 20 notices had not been mentioned anywhere and a copy of the QLTA had not been provided. The letter also said communal redecoration was covered in the service charge and they objected to work being carried out.
  9. A landlord internal email dated 31 October 2022 said the leaseholders pay into a provision/sinking fund through their service charge, and the charges for major and cyclical work had been set by its surveyor in 2017.
  10. The landlord emailed all residents on 31 October 2022 saying that documentation relating to cyclical works should have been provided by the sales team and solicitors at point of purchase. It reiterated that the costs were currently an estimate, the service charge covered cyclical decoration, and any account credit would be offset against the final charge once the work had been completed. It sent a follow-up email providing a breakdown of the intended work on 3 November 2022.
  11. The resident complained on 9 November 2022. She said the email did not have estimated costs for each aspect of the work and had been sent after the consultation period had ended. She said the proposed charge for work to the bin store was not fair as residents in other blocks used it and the landlord had still not provided a copy of the QLTA. Finally, she submitted that the landlord had not given time for the residents to obtain their own quotes for the work.
  12. The landlord replied on 10 November 2022 and said it would not provide a breakdown of the cost for each aspect of work, and the contract had been agreed in 2014, so residents need not obtain their own quotes. 
  13. The landlord acknowledged the complaint on 11 November 2022 and called the resident to discuss it on 16 November 2022. During the call she said she was not advised of cyclical work when she purchased the property.
  14. An internal landlord email of 1 December 2022 said some leaseholder properties have a provisions charge included in the service charge for major works and cyclical decoration of the block, and if there is not enough in the fund when work is completed, the remaining cost is split between leaseholders.
  15. The landlord sent its stage 1 response on 2 December 2022. It said a breakdown of the work had been provided and it was not obliged to provide its contract with the contractor or other quotes from the tender process. It said residents did not need to source their own quotes as the work was the responsibility of its contractor. It explained that the cost of the bin store was recalculated so that the resident had less to pay, the service charge covered cyclical work, and the cost was an estimate. Finally, it confirmed that its surveyor had attended the block and determined cyclical work was required.
  16. On 15 December 2022 the resident sent an email to say a (48 hour notice) letter had been handed to her by a contractor giving notice of external work to be carried out to the block. She said she had not been given notice of internal work, but a decorator had attended to paint internally. A copy of the letter has been provided to this Service and was titled external/internal redecorations and communal repairs 48 hour notification letter. It said ‘please accept this as our intention to start the external repairs and redecoration work to your property’.
  17. The landlord emailed the resident on 20 December 2022 and said the Section 20 notice stated external and communal works were scheduled, which was also mentioned in the 48 hour notice letter provided by its contractors. The resident escalated the complaint to stage 2 the following day and contacted this Service. She said she was not given notice of how often cyclical works would be completed when she signed her lease.
  18. An internal landlord note dated 11 January 2023 said its finance department would look at what was affordable for the resident and make an arrangement with her if the balance due was not affordable for her once work had been completed. It said it had reviewed the lease and the resident was responsible for the cost, but acknowledged the lease did not specify precisely how often cyclical work would be completed.
  19. The landlord issued its stage 2 response on 25 January 2023. It reiterated that it did not need to provide its contractor contract, but sent a copy of the front page instead. It advised that cyclical work takes place in line with the landlord’s reasonable opinion, and this would be every 5 years to avoid the block falling into disrepair to prevent further major work. It confirmed that the cost for the bin store had been recalculated. Finally, it said that, if there was not enough in the provision/sinking fund collected as part of the service charge, the remaining balance would be calculated and split between residents which they have to pay, and if the resident was in financial difficulty it had options to help.
  20. The landlord has since confirmed the cyclical work has been completed. It said the estimated cost was £1,685.62, but the actual cost was £819.63. After using the accrued provision/sinking fund collected as part of the resident’s service charge, the amount owed by her is £491.16, which is due in April 2024.

Assessment and findings

Scope of investigation

  1. The resident submits that she was not given notice of the cyclical work that would be carried out to the block when she signed her lease. The wording of the lease does not give a specific timeframe as to how often cyclical work is carried out, but says it will be carried out when deemed necessary in the landlord’s “reasonable opinion”.
  2. While this Service has considered the lease terms as part of its assessment of the resident’s complaint, it is not within the Ombudsman’s remit to make a legally binding decision on the correct interpretation of those terms. This can only be done via the courts, in the form of the First Tier Tribunal. This also applies to any concerns the resident may have around whether: the lease terms are fair; the landlord followed the correct process regarding the Section 20 Notice; she is liable to pay for major works or other service charge items under the lease; and the level of service charge is reasonable.
  3. If the resident wishes to pursue these matters further, she should obtain independent legal advice (either from a solicitor or advice agency such as the Leasehold Advisory Service) and consider making a claim through the courts. The Ombudsman’s investigation is focused on whether the landlord’s more general handling of the resident’s concerns regarding the cyclical work was fair and reasonable in all the circumstances of the case, with particular reference to its service delivery, communication, and adherence to relevant policies and agreements. 

Assessment

  1. Section 7 of the lease confirms the service charge shall consist of a sum for the estimated expenditure by the landlord for the following account year to cover all expenditure reasonably incurred by it in connection with the repair, management, maintenance and provision of services for the building and communal facilities. It says if the charge collected falls short of the actual expenditure, the leaseholder shall pay the excess.
  2. Section 5.3 of the lease says subject to the payment of rent and service charge, the landlord shall maintain repair, redecorate, renew and (in the event in the landlord’s reasonable opinion such works are required) improve structural parts of the block including cisterns, tanks, gas, electrical, drainage, ventilation and water apparatus, common parts and communal facilities.
  3. The landlord’s service charge policy says leaseholders have a provision clause enabling it to collect money in advance to create a provision/sinking fund. The policy says the fund covers renewal of major cost items or cyclical decoration. The annual amount collected is based on estimated life cycle and costings over a 30 year period, and is reviewed every 5 years following a stock condition survey. Where a provision/sinking fund is in place, any cost of major works or cyclical works is deducted from this fund.
  4. As confirmed by the lease, the landlord was responsible for keeping the block in decorative repair. It provided appropriate notice to the resident of the work it intended to carry out and confirmed its surveyor had inspected the building. Although no evidence has been provided of the surveyor notes to confirm the condition of the building, it was reasonable for the landlord to rely on the opinions of its suitably qualified staff. It is also reasonable to say that, approximately 5 years after the landlord purchased the block, cyclical work may be required in order to maintain its asset and avoid it falling into disrepair.
  5. The resident’s annual rent and service charge review makes clear some of the service charge goes towards cyclical work. By the time the Section 20 notice was issued, the resident had lived in the property for approximately 4 years and 7 months. The evidence shows the landlord acted in line with its policy. It was entitled to use the cyclical work provision fund and for the remaining balance to be split between leaseholders.
  6. The lease does not specify an express timeframe for how often cyclical work will be undertaken, but it does say work will be carried out when deemed necessary in the landlord’s reasonable opinion. When the resident questioned the landlord’s decision to undertake works at that time, and the frequency with which it planned to do so in the future, the landlord’s responses were considered, thorough and reasonable. It responded within an appropriate timeframe and explained on several occasions that the service charge contributed towards cyclical work, and that the costs were an estimate initially. It also offered assistance if she had difficulty paying the remaining balance. This demonstrated that the landlord took the resident’s concerns seriously, sought to allay her worries by providing full and frank explanations, and considered practical steps it could take to resolve her complaint.
  7. The Ombudsman acknowledges that receiving the letter caused the resident stress, particularly as the estimated work costs were higher than it ultimately cost, and sympathises with her position. However, given the observations above, the Ombudsman considers that the landlord acted in a reasonable manner when dealing with her concerns, and has therefore made a finding of no maladministration.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was no maladministration by the landlord in its handling of the resident’s concerns regarding notice of cyclical works to her building, and related charges.