Barking and Dagenham Council (202112565)

REPORT

COMPLAINT 202112565

Barking and Dagenham Council

16 September 2022

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

This complaint is about the landlord’s:
1. Handling of the resident’s application for a landlord licence;
2. Response to the resident’s concerns about its administration of a major works notification and service charges;
3. complaint handling.

Jurisdiction

What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. 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, in accordance with paragraph 39(m) of the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.
1. The landlord’s handling of the resident’s application for a landlord licence.
In August 2021 the resident told the Ombudsman a decision on her landlord licence application was outstanding after six months. Further, she had already paid the landlord its £900 fee over two instalments. The resident also said the decision should be straightforward given her circumstances were unchanged since her last licence was issued. She subsequently told the Ombudsman the landlord failed to respond to a formal complaint about her application.
Paragraph 39(m) of the Scheme says the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion, “fall properly within the jurisdiction of another Ombudsman, regulator or complaint handling body.”
This Service can consider complaints about Scheme members acting in their capacity as landlords. Since the landlord does not issue licences in this capacity, the resident’s concerns are outside of the Ombudsman’s jurisdiction. The Local Government and Social Care Ombudsman (LGSCO) can consider complaints about a local authority’s handling of selective licences. The resident should therefore approach the LGSO for an independent assessment of her concerns.

Background and summary of events

Background

The resident is a leaseholder of the property and the lease began in September 2016. The information seen shows she purchased the property through a Right to Buy scheme and rents it to private tenants. The property is a ground floor flat in a block. The landlord is a local authority.
If a landlord agrees there is a right to buy, it must send an offer notice (known as a section 125 notice) containing information that includes an estimate of service charges and any improvement costs.
The landlord operates a two-stage formal complaints procedure. Details of the procedure can be found on the landlord’s website. The information shows the landlord aims to respond to complaints within ten working days at stage one. At stage two, it aims to respond within 30 working days.

Summary of events

On 14 September 2020 the landlord wrote to the resident as part of a leaseholder consultation process. It said it intended to carry out major works to the block based on a recent survey. Further, in line with the lease agreement, the resident was liable for a share of its costs and her individual contribution was estimated to be around £11K. The letter included a number of contractor quotes for the works. The resident was invited to make written observations on the proposal.
On 26 October 2020 the resident completed the landlord’s online complaint form. She asked whether the landlord was entitled to seek the above contribution given she was previously unaware that any major works were needed. Her main points were:
1. The property was purchased less than five years ago and the resident was still within the initial reference period.
2. The resident decided to buy the property based on the information provided during the sales process. She may have made a different decision around its affordability had she known about any major works.
3. The landlord previously requested payment for service charges that were not disclosed on the section 125 notice. They included service charges for police patrols of the estate. Again, the landlord should advise whether it was entitled to request payment for these charges.
The landlord acknowledged the resident’s complaint the following day. It said it aimed to provide a written response by 9 November 2020.
On 29 October 2020 the landlord issued a stage one response. It said:
1. Within the five year reference period, the landlord would not seek to recover costs for any major works that were not included within its section 125 offer notice. However, the property had been included in the consultation process because the resident was entitled to make observations about the proposed works.
2. Based on a review of the resident’s service charges from the beginning of the lease, the landlord agreed she was previously charged incorrectly for costs associated with the police patrols. It had therefore refunded a total of £91.75 for the relevant four year period.
3. The landlord was sorry for any confusion or inconvenience the resident was caused. A credit had been applied to her service charge account and a revised service charge estimate for 2020-21 was attached with the patrol charge removed.
On 12 November 2020 the resident asked to escalate her complaint. She said the landlord’s revised estimate included further incorrect charges for fire safety equipment maintenance. Her main points were:
1. Despite paying an annual management fee of around £100 per year, the resident had to contact the landlord annually about service charge mistakes. For example, the property’s location in the block meant it did not share communal areas, entry or caretaking with other flats. Nevertheless, the landlord incorrectly applied associated charges every year.
2. Though it was aware she did not live at the property, the landlord incorrectly sent the resident’s correspondence to the property. As a result, she frequently failed to receive its communications.
3. Around six service charge errors had occurred since December 2015. During this time the resident had to repeatedly raise issues relating to communal electricity charges amongst other issues. Overall, the resident wanted “someone senior” to check her service charge and communal repair history from 2016 to ensure the correct amounts had been charged.
4. She also wanted compensation for every year she had to contact the landlord about the same issues. She said this compensation should be paid to her directly rather than being applied as an account credit.
On 13 November 2020 the landlord acknowledged the resident’s escalation request. It said it would respond to her complaint by 30 December 2020.
On 23 November 2020 the landlord advised the resident that its leasehold department was unaware she did not live at the property. It said she should email her correct details to an address provided. This was to allow the landlord’s records to be updated accordingly. The landlord’s correspondence was prompted by the resident’s enquiries about the major works proposal.
The landlord issued a stage two response on 6 January 2021. It failed to acknowledge the response was issued seven days after the landlord’s given deadline. Its email included referral rights to the Local Government and Social Care Ombudsman (LGSCO). However, no information was seen to show this information prompted the resident to contact the wrong ombudsman service. The landlord said:
1. The resident’s full service charge history was reviewed as requested. Details of the adjustments made were included in an attached spreadsheet. The landlord’s charges should not have exceeded the amounts detailed in its Section 125 notice for the first five years after the property was purchased.
2. Since repair costs for 2018-19 were not capped accordingly, the resident was due an additional refund of £4.92. As a result, the landlord had arranged to pay the resident a total of £121.67, comprising £91.75 for patrol charges, £4.92 for overcharged repairs and £25 compensation for any distress and inconvenience caused by the service charge errors, within ten working days.
The resident updated the Ombudsman on 27 August 2021. She also completed the Ombudsman’s complaint form around the same time. Her main points were:
1. Since purchasing the property the landlord’s leasehold management had been poor because there were “always mistakes” in the resident’s service charges, and correspondence was incorrectly sent to the property. Additionally, the resident was incorrectly notified that she was liable for major works costs of around £11K.
2. The landlord’s stage one response overlooked additional service charge errors. Its stage two response was late and did not include an advised attachment. Further, a letter was recently sent to the property contrary to the resident’s previous instructions. The landlord had her correct address details since she paid it “an additional £900 for a private rented licence”.
3. The letter concerned works to a communal area that the resident, or her tenant, was unable to access. The resident had told the landlord she was unable to access the rest of the block on a number of occasions. Further, she had not received a service charge statement in years. Given the overall situation, the resident said the lost trust in the landlord.
4. The landlord should: update the resident’s records with the correct information, ensure the relevant details were correct before corresponding with her and compensate her for the amount of mistakes, along with the associated stress and anxiety she was caused.
The resident raised additional concerns with the Ombudsman on 12 October 2021 and 30 May 2022. Her initial email was sent around nine months after the landlord issued its stage two response. Her main points were:
1. The resident previously submitted observations in response to a major works proposal. The landlord subsequently advised she would be given commencement dates prior to any works. Scaffolding was erected around the block in August 2021, but no works had been carried out. The scaffolding was blocking the property’s natural light and her tenant had to keep the lights on all day.
2. The resident received correspondence from the landlord’s contractor about a replacement front door. However, the landlord’s 2020 survey said the door was in good condition. Given the above, the resident was concerned about the landlord’s management of the works and felt she would have to pay for prematurely erected scaffolding.
3. The resident felt the landlord’s contractor should have painted the external “front side and rear” of the block. This was on the basis a neighbour’s ivy had been removed and the exterior was left marked.

Assessment and findings

It is recognised the situation is frustrating for the resident. The information seen suggests she raised similar service charge issues on a number of occasions between 2015 and 2017. It is also acknowledged that further concerns have arisen since the landlord issued its final response in January 2021. However, the scope of this assessment is limited to the landlord’s response to the resident’s formal complaint, which is reflected in the timeline above.
This is because, given the time that has passed since the events referenced, the Ombudsman is unable to consider the historic aspects of the resident’s complaint. Similarly, the Ombudsman cannot usually consider complaints that have not completed a landlord’s internal complaints procedure. The resident should therefore raise a new formal complaint with the landlord about any more recent issues, such as the landlord’s handling of works to the block.

The landlord’s response to the resident’s concerns about its administration of a major works notification and service charges

In its stage two response, the landlord reviewed the resident’s full service charge history in line with her escalation request. No information was seen to suggest there were any unresolved charging errors at the time of this assessment. It also accepted responsibility for errors that resulted in distress and inconvenience for the resident. It therefore awarded her £25 in compensation to recognise what went wrong. This assessment will consider the landlord’s response to the resident’s concerns, including its offer of compensation.
In relation to the failures identified the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the complainant’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: Be Fair, Put Things Right and Learn from Outcomes as well as our own guidance on remedies.
It is reasonable to conclude receiving the landlord’s September 2020 letter was distressing for the resident given it said she was liable for a personal contribution of around £11K. That said, the resident should have been included in the leaseholder consultation process given the extent of the proposed works to the block. Ideally, the landlord’s correspondence would have therefore made clear, if applicable, that any leaseholders within their five year notification period would not be liable for a share of the costs. Given the above, the situation was avoidable with better communication on the landlord’s part.
The information seen shows the landlord failed to recognise the above identified error or redress the resident accordingly. This amounted to service failure given the circumstances of the case. It is reasonable to conclude that improved wording could have also prevented some unnecessary follow up enquiries from the resident. The below assessment of the landlord’s complaint handling points to additional failures of this type.
The landlord’s decision to review the resident’s service charge history was a reasonable approach to her formal complaint. This approach was undermined when the landlord failed to proactively identify and resolve additional service charge errors in its review. This failure prompted the resident to spend additional time and effort escalating the complaint. The evidence therefore suggests the landlord’s offer of £25 compensation was disproportionate given the overall impact to the resident. No information was seen to show the landlord’s explanatory spreadsheet was attached to its stage two response.
Overall, the evidence points to service failure by the landlord in respect of the above complaint point.

The landlord’s complaint handling

The evidence confirms there were a number of complaint handling failures during the timeline. The information seen shows the landlord missed opportunities to resolve matters at both stages of its complaints process because it failed to engage fully with the substance of the complaint. Further, the landlord ultimately failed to reassure the resident and its efforts to resolve her concerns through its internal complaints process were undermined.
Even without recognising that its September 2020 correspondence could have been worded much better, the landlord could have reasonably considered awarding compensation at stage one. This is based on the value of the service charge error it identified at this point. However, as mentioned, the evidence suggests the landlord should have acknowledged it was responsible for two errors at this stage, relating to both the consultation correspondence and incorrect service charges.
Had it done so, the landlord should have awarded compensation in addition to offering the resident an apology. Overall, it is reasonable to conclude that thorough complaint handling at this point could have resolved matters satisfactorily for the resident. The below information suggests the landlord’s lack of rigour was repeated in relation to other aspects of the complaint, and no evidence was seen to show it made any attempt to improve its service by learning from the resident’s experience.
At stage two, the landlord failed to acknowledge or a redress a seven day delay. It also overlooked the resident’s concerns about incorrectly addressed correspondence. This was contrary to the Housing Ombudsman’s Complaint Handling Code (the Code), published in July 2020, which says “ Landlords shall address all points raised in the complaint…”. If the landlord felt these concerns warranted investigation as a separate complaint, for example due to the amount of investigation work required, it should have explained this to the resident and opened a new complaint accordingly.
Instead, the landlord left both matters unresolved. The nature of the resident’s concerns about the incorrect address details meant she was highly likely to raise the matter again at a later date. This would naturally involve additional inconvenience for the resident. Again, if the landlord was unable to change the resident’s correspondence address, as part of its overall resolution, it should have at least explained how the resident could do this herself.
Given the above, there was maladministration in respect of the landlord’s complaint handling. This is because it failed to: address complaint a key complaint issue concerning the resident’s correspondence address, acknowledge and redress an obvious delay, or make any attempt to learn from the complaint. These were significant complaint handling failures regardless of the case circumstances.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was:
1. Service failure in respect of the landlord’s response to the resident’s concerns about its administration of a major works notification and service charges
2. Maladministration in respect of the landlord’s complaint handling.

Reasons

The landlord failed to recognise the wording of its September 2020 correspondence caused unnecessary distress to the resident. As a result, it also failed to redress the resident accordingly. It subsequently failed to identify and resolve additional errors during a review of the resident’s service charge history. Its compensation award was therefore disproportionate given the impact to the resident.
The landlord failed to acknowledge a seven day complaint handling delay. Contrary to the Code, it also failed to address a complaint point resulting in additional inconvenience for the resident. These errors were broadly consistent with the failures identified above. No evidence was seen to show the landlord attempted to improve its service based on the resident’s experience.

Orders and recommendations

Orders

The landlord to pay the resident a total of £175 in direct compensation (rather than an account credit) within four weeks comprising:
1. £50 to recognise any distress and inconvenience the resident was caused by the above identified failures in respect of the landlord’s administration.
2. £100 to recognise any distress and inconvenience the resident was caused by the above identified delays and failures in respect of the landlord’s complaint handling.
3. £25 which the landlord awarded in its stage two response from 6 January 2021. The landlord should deduct this figure from the above total if it has already paid the resident.
The landlord to share this report with its relevant staff for learning and improvement purposes. Complaint handlers should be familiar with the Code. They should also be encouraged to raise any service improvements highlighted during complaints and include details of these improvements in their complaint responses.
The landlord to check the correspondence address it holds for the resident. If the address held is the property’s address, it should have its relevant team contact the resident to update her details.

Recommendations

The landlord to review its processes around issuing major works consultation correspondence. This is with a view to ensuring any residents within a section 125 notification period are not incorrectly asked for contributions.
The landlord to review its processes around the application of service charges. This is with a view to ensuring any charges that are inconsistent with a valid section 125 notice cannot be added to resident accounts.
The landlord’s final response letters to include standard paragraphs with referral rights to both the Housing Ombudsman Service and the LGSCO. The paragraphs should contain a brief description of each service’s role. This is with a view to ensuring complainants are correctly signposted to the relevant ombudsman.
The landlord to update the resident on its progress with the resident’s complaint about her landlord licence application.
The landlord should provide evidence of compliance with the above orders and confirm its intentions in relation to the recommendations within four weeks of the date of this report.