A residents management company asked The Property Ombudsman to investigate a complex case of poor property management.
4th Jan 20260 108 2 minutes read Lesley Horton, The Property Ombudsman
The complaint
This case investigated by The Property Ombudsman concerns a drawn-out dispute between a residents management company (the complainant) and the agent responsible for managing their apartment building during 2022 and 2023.
The business relationship ended in January 2023, but many of the issues raised by the complainant continued for over a year later due to delays, missing records and unresolved questions about how the management service had been carried out.
The concerns raised covered several core areas of property management performance. These included the handling of ground rent, the accuracy and authorisation of the reserve fund budget, the cost of mould removal, the handover of management information and accounts, payments for services that were not delivered and complaints handling.
In August 2023, the managing agent replied to only one of the complaints, acknowledging a delay in producing the 2022 Service Charge Accounts as part of the handover to the new agent, and offered £100 compensation. They stated that they were unable to provide information on the remaining issues because they no longer held any records.
The investigationThe Ombudsman investigation supported several significant concerns. A key issue involved ground rent. While the managing agent said their payment log showed payments had been made, this did not demonstrate that ground rent had actually been paid to the developer.
A letter from the developer confirmed that the rent for 2021 and 2022 remained outstanding. Although no penalty was applied, the complainant was left to resolve a matter that should have been completed during the management period.
The handling of the reserve fund also created considerable difficulty. In April 2022, the managing agent increased the reserve fund demand by 1300% without agreement from the directors. When the complainant challenged this, beginning in May 2022 and continuing throughout the year, the matter remained unresolved until the managing agent eventually stated nearly a year later that it would need to be dealt with by the new agent.
The managing agent accepted the error but described it as inconsequential, even though the budget should have been agreed before being issued to leaseholders.
Other disputes, including the insurance claim and the mould removal cost, could not be supported because there was not enough evidence to show that the managing agent’s actions caused financial loss. However, the handover of management information and accounts was found to be seriously delayed.
The 2021 accounts, which should have been completed in October 2021, were finalised in early 2023, and the 2022 accounts contained discrepancies that required six months of correspondence to resolve.
Further inconvenience resulted from payments made for gutter clearance, window cleaning and fire safety services that were not properly accounted for. Complaint handling also failed to meet required standards, with several formal complaints left unanswered.
The outcomeThe decision ultimately awarded £1,660 in compensation to the complainant, reflecting the financial losses and substantial inconvenience experienced over a two-year period.
Tagsombudsman redress The Property Ombudsman 4th Jan 20260 108 2 minutes read Lesley Horton, The Property Ombudsman Share Facebook X LinkedIn Share via Email
