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Clarion Housing Association Limited (202123998)

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REPORT

COMPLAINT 202123998

Clarion Housing Association Limited

17 April 2023

 

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. This complaint is about:
    1. The landlord’s response to a request for a breakdown of the service charge account.
    2. The associated complaint handling.

Background

  1. The resident is a shared-ownership leaseholder of the property, a one-bedroomed flat, with a 30% proportion of equity acquired on 5 December 2019.
  2. The landlord is not the freeholder of the building. The freeholder in this situation is the superior landlord as per the Landlord and Tenant Act (1985). This freeholder manages the building through a third-party managing agent and charges these services to the landlord as part of the service charge.
  3. On 24 February 2021, the landlord sent the resident a letter detailing the estimated service charge for the period from 1 April 2021 until 31 March 2022. Having reviewed this, the resident believed this did not correctly tally up and contacted the landlord with questions. The resident first raised this issue on 8 March 2021 and sought this information on at least eight occasions. The landlord advised the resident they requested this information from the managing agent, but they had not provided it.
  4. The resident raised a formal complaint with the landlord on 11 July 2021. He was unhappy with the increase of his service charge, and the fact the landlord had been unable to provide him with an accurate breakdown. Additionally, he raised issues regarding outstanding repairs and asked questions about individual costs within the service charge. The landlord logged this on 6 August 2021 and provided its stage one response on 4 October 2021. In its response, the landlord provided the resident with £150 compensation for two separate failures to respond within its service level agreement. The landlord gave a brief explanation of the rising costs and broke down the resident’s service charge into estimated individual costings and the estimated charge for the entire block. The landlord divided individual costings into two sections: an administration fee and managing agent services. The landlord also confirmed they had completed the reported repairs.
  5. The resident rejected this response on 9 October 2021. He remained unhappy with the breakdown provided, feeling this did not detail what the individual costs were. The resident had also received the actual service charge for 2020/2021 by this date. Due to this, he requested to ‘inspect audited accounts and receipts’ showing the associated costs of the service charge. He also reiterated questions regarding individual items. The landlord sent its stage two complaint response on 26 November 2021 rejecting this complaint. It also attached an invoice paid to the managing agent for the 2020/2021 service charge.
  6. The resident then asked this Service to consider his complaint. He was unhappy he had not received the full financial accounts for his service charge. He was unhappy with the rise of certain costs and told us he feels the landlord does not have adequate systems to track the service charge. He was also unhappy that the landlord had contacted him pursuing payment for the service charge. As a resolution, he would like at least £500 compensation and for the landlord to provide him with full audited accounts.

Assessment and findings

Scope of the investigation

  1. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber) and the resident may wish to seek free and independent legal advice from the Leasehold Advisory Service (LEASE) (https://www.lease-advice.org) in relation to how to proceed with a case. However, this Service can review complaints that relate to how the landlord communicated information about service charges.

The landlord’s response to a request for a breakdown of the service charge account

  1. After receiving the estimated service charge bill for 1 April 2021 to 31 March 2022 the resident raised questions with the landlord. The landlord did not fully answer these questions until the stage two complaint response, seven months later. In its internal correspondence the landlord recognised that it had not answered the questions raised by the resident. This is a failing on behalf of the landlord.
  2. For this failing, the landlord offered the resident £100 compensation. However, throughout this process the resident had requested additional information which has still not been provided by the landlord. The resident requested, when rejecting the stage one complaint response, to ‘inspect audited accounts and receipts’. Although the resident was not specific about the information he required, the intent of the resident’s request could be clearly identified at this point as a section 22 request under the Landlord and Tenant Act 1985 (LTA). The LTA gives the resident the right of ‘inspecting the accounts, receipts and other documents supporting the summary.’
  3. The landlord should have managed this request in line with Section 23 of the LTA due to the superior landlord being the party who incurred these costs. The provisions in section 23 of the LTA obliged the landlord to immediately confirm the request related to costs incurred, and information held, by a superior landlord. Further, it should also have provided him the name and address of the superior landlord. This would have allowed him to redirect the request to the superior landlord, and the provisions in section 22 of the LTA would have applied to it in the same way. No information was seen to show the relevant details were included in the landlord’s responses, or any documents preceding the resident’s section 22 request.
  4. Alternatively, the landlord should have submitted its own section 22 request to the superior landlord to obtain this information for the resident. This approach is in line with the provisions contained in section 23 of the LTA and represents a fair and reasonable course of action. This is because it avoids the possibility of the superior landlord rejecting any direct request from the resident in error.
  5. The landlord was responsible for significant delays throughout the complaints process, including failures to conform to statutory timescales. The information seen suggests this occurred because it failed to identify statutory requests promptly or manage them proactively leading to avoidable delays. Further, it adopted the wrong approach towards the resident’s section 22 requests, which should have been handled in accordance with section 23 of the LTA.
  6. This represents maladministration by the landlord in failing to meet its statutory obligations. For this failing, the landlord should pay the resident £300. This is in line with the distress and inconvenience awards mentioned in the landlord’s compensation award allowance.
  7. The landlord should contact the resident within four weeks to clarify exactly what supporting documents he is seeking. Once clarified, the landlord should submit its own section 22 request to the superior landlord to obtain the information on the resident’s behalf.
  8. The landlord should also consider providing details to the residents on their arrangement with the superior landlord such as their name and address when providing the service charge account. This will enable residents to be able to follow the correct procedure as laid out by the LTA.

The associated complaint handling

  1. The landlord’s complaint policy has two stages. At the first stage, called ‘Complaint’ if an “initial attempt to resolve the query is not achieved” the landlord will record and investigate a formal complaint. If the resident is unhappy with the complaint response, they can request an escalation to stage two of the complaints process called ‘Peer Review.’ In this, a different member of staff reviews the complaint. The landlord’s complaint policy at this time did not include timescales for these processes.
  2. The lack of timescales in the process is outside of the Housing Ombudsman’s Complaint Handling Code. The landlord should review its complaints policy and bring this in line with the Housing Ombudsman’s Complaint Handling Code.
  3. The resident raised a formal complaint on 11 July 2021. The landlord did not acknowledge this until 6 August 2021 following a chase from the resident. The landlord failed to provide a response until 4 October 2021. This meant there was just under a four-month delay in providing the resident with a stage one response.
  4. The landlord told the resident this delay at stage one was due to awaiting outstanding information from the managing agent. The landlord kept the resident updated monthly whilst this was ongoing.
  5. The resident then rejected the stage one complaint response on 9 October 2021, escalating this to stage two. He received his stage two response on 26 November 2021, 34 working days later.
  6. The landlord provided in its stage one complaint response with £50 for its failing. Considering the delays of the landlord, this Service considers this amount to be reasonable redress from the landlord.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in respect of the landlord’s response to a request for a breakdown of the service charge account.
  2. In accordance with paragraph 53 of the Housing Ombudsman Scheme, there was reasonable redress offered by the landlord in respect of its service failure for the associated complaint handling.

Orders and recommendations

Orders

  1. It is ordered that, within four weeks of this report, the landlord:
    1. Pay the resident £300 compensation. This is for distress and inconvenience the landlord caused the resident by its delays and failures while handling the requests for a breakdown of the service charge.
    2. Contact the resident within four weeks to clarify what documents he is seeking. Once clarified, the landlord should submit its own section 22 request to the superior landlord to obtain the information on the resident’s behalf.
    3. Provide this Service with evidence that it has done the above.

Recommendations

  1. It is recommended that the landlord if it has not already paid the resident the £50 in relation to its complaint handling failures, reoffer this.
  2. It is recommended that the landlord review its policies regarding the documentation provided to residents relating to service charges. In situations where there is a superior landlord, it should consider providing these details when the landlord sends the actual service charge to residents.
  3. It is recommended that the landlord to take steps to share this report’s key findings with its service charge teams within four weeks. This is to ensure staff are aware of the provisions where statutory information requests concern costs incurred by a managing agent on behalf of a superior landlord.