Property Ombudsman Compensation

mc2705

Hi,

Apologies if this has been posted on the wrong broad, but I figure this will be the place where people will have knowledge on property issues.

I have a very long running dispute with the Property Management Company (PMC) that the landlord of my leasehold flat appointed.  Basically there were a number of service charges that I disputed, along with some major works that they failed to follow the proper procedures on.

This rumbled on for years, until we came to a settlemet agreement.  I agreed to pay 50% of the total as a full and final settlement, they agreed and I paid.  They then claimed that the 50% was only agreed on the major works (a clear lie as my payment was higher than the total of the major works!).  They also then added on over £1,000 in interest.

After seeking legal advice, my solicitor told me the best course of action would be to complain to the Property Ombudsman (PO) as going to court would be very costly.

I did this and the PO has now ruled in my favour.  They were very clear that the communication from the PMC was poor, that it was obvious the settlement was for the full "debt" etc.  The PO has awarded me £250 compensation.  But they are clear that they are unable to give a legal judgement.

That's all good, but there are elements of the PO decision that make me think it is unwise for me to accept it.  They have stated the following in the decision:

 “The Complainant may, therefore, if he wishes, accept my decision and award, but continue to dispute his service charge liability”.

 Which sounds good, take the money and continue to fight. But they also say:

“I will clarify, though, that acceptance of my decision and award will bring the Complainant’s complaint to an end in full and final settlement”.

That sounds worrying, to me that reads as if I accept the £250, I will be accepting the matter is at an end.  But it isn't, the main dispute (over the full and final settlement) is still there.  I do not want to accept £250 and the matter be closed and leave me unable to go to a tribunal/court.

I queried this with the PO and they replied with:

"You asked whether accepting the award would affect the service charge dispute. In the review I have explained that your complaint against the Landlord and the service charge dispute are two entirely separate matters. Your service charge dispute is between you and the landlord (with PMC acting as the landlord's agent), but your complaint is directly against PMC. Therefore, if you accept the decision it will bring an end to your complaint, but it will have no bearing on the service charge dispute with the landlord. It would, though, prevent you from seeking any further compensation directly from PMC."

That still wasn't clear to me.  Would accepting their review and compensation mean that I would then be unable to go to court?  The PO replied:

"I can confirm that if you accept the decision/award you would not be able to seek any further compensation from PMC for misleading you. You would therefore not be able to seek compensation from them equal to the amount of reduction you thought had been agreed (i.e around £5,000). However, it would not affect your ability to argue that the landlord (via PMC) had actually agreed to reduce your service charge by this amount, nor would it affect your ability to argue that you are not liable for the service charge/major works on the basis that notices were not served correctly and so on. I do not know whether these arguments hold water, legally, and in any event they are not matters that we can consider. You would therefore need to seek independent legal advice on this.  You have raised concerns that PMC may try to argue that the service charge issue is settled if you accept the decision and award on the complaint. Please note that I tried to make it absolutely clear in the review decision that the two issues are completely separate, to avoid any confusion."

I am still very unsure what accepting the PO decision would mean.  I do not want to accept this if it is going to have any impact on my ability to take legal action against the landlord or PMC.Would anybody here know what accepting the PO decision will actually mean for me?Thank you in advance for any help or advice anybody can give me.

saajan_12

Basically sounds like the PO and £250 just covers any complaints about how everyone behaved / messed you around etc. You can still dispute the actual service charge and go to court to recover any service charge monies you end up paying over the 'full & final settlement'.

Best case: the court agree with you and award money for the service charges so you end up paying just the settlement figure as expected. You can't claim for further compensation for the debate / misleading info that led this to court rather than just being over earlier, because you already have the £250 for that. 
Worst case: the court disagree it was a full & final settlement, so you have to pay some extra service charges. You still can't claim further compensation for the misleading 'full & final' statement because you already have the £250 for that. 

mc2705

saajan_12 said:

Basically sounds like the PO and £250 just covers any complaints about how everyone behaved / messed you around etc. You can still dispute the actual service charge and go to court to recover any service charge monies you end up paying over the 'full & final settlement'.

Best case: the court agree with you and award money for the service charges so you end up paying just the settlement figure as expected. You can't claim for further compensation for the debate / misleading info that led this to court rather than just being over earlier, because you already have the £250 for that. 
Worst case: the court disagree it was a full & final settlement, so you have to pay some extra service charges. You still can't claim further compensation for the misleading 'full & final' statement because you already have the £250 for that. 

Thanks for the reply.

I've already paid the agreed settlement (that was October last year!). The dispute since then has been the property management company going back on that settlement and claiming part of it is unsettled (plus adding interest!). I've not paid that.

All I want is my balance to be £0.00 as I agreed with them last year. The Ombudsman seems to agree completely with me, but simultaneously seems to suggest accepting their decision and the £250 compensation will end the matter. 

Accepting £250 but then having to pay £6k doesn't seem a good result to me!

That's my question really, can I still take legal action against the PMC (for them failing to honour the settlement) if I accept the ombudsman's decision/compensation. I'm thinking it's not worth the risk as I think the PMC will claim things are settled.

eddddy

Based on you're post, the situation seems to be:

PMC is the agent of your landlord. So anything PMC says, is essentially the same as your landlord saying it.

1. Your landlord agreed to a 50% reduction in a service charge bill
2. You seem to have an ongoing dispute with your landlord over service charges
3. PMC treated you unfairly (poor communication etc)

You have been awarded £250 compensation because of point 3 above. The Property Ombudsman only has power over PMC, they don't have power over your landlord. So the Property Ombudsman won't get involved in points 1 and 2 above.

In general, you would dispute your landlord's service charge (point 2) at a tribunal.

Was the agreement to accept a 50% reduction (point 1) because they agreed that you had been overcharged, or was it being treated as a 'goodwill gesture'. TBH, I'm not sure at what point an agreement to a 'goodwill gesture' reduction becomes legally binding - perhaps when they accept your payment. (And I'm not sure if a tribunal would make rulings on 'goodwill gestures', as it's not related to landlord and tenant law.)

In law, I don't think PMC are liable to pay you any compensation at all - not even £250, let alone £5,000.  The Property Ombudsman is making them pay because they've "messed you about", a court wouldn't do that.

So I'd suggest that you can accept the £250 compensation from PMC, and continue with your disputes with the landlord on other matters - but I'm not a lawyer!

saajan_12

mc2705 said:

saajan_12 said:

Basically sounds like the PO and £250 just covers any complaints about how everyone behaved / messed you around etc. You can still dispute the actual service charge and go to court to recover any service charge monies you end up paying over the 'full & final settlement'.

Best case: the court agree with you and award money for the service charges so you end up paying just the settlement figure as expected. You can't claim for further compensation for the debate / misleading info that led this to court rather than just being over earlier, because you already have the £250 for that. 
Worst case: the court disagree it was a full & final settlement, so you have to pay some extra service charges. You still can't claim further compensation for the misleading 'full & final' statement because you already have the £250 for that. 

Thanks for the reply.

I've already paid the agreed settlement (that was October last year!). The dispute since then has been the property management company going back on that settlement and claiming part of it is unsettled (plus adding interest!). I've not paid that. - so if their demands keep coming / threatening your lease, you could 'pay under protest' and then sue for the £ overpaid back. 

All I want is my balance to be £0.00 as I agreed with them last year. - so you could go to tribunal to establish what the correct service charges should be. The Ombudsman seems to agree completely with me, but simultaneously seems to suggest accepting their decision and the £250 compensation will end the matter. - PO agrees but they can't do anything about the £6k as thats really between you and the freeholder, the PBC is just a middleman. So PO have just ruled on the "wasted my time" compensation between you and PBC. 

Accepting £250 but then having to pay £6k doesn't seem a good result to me!

That's my question really, can I still take legal action against the PMC (for them failing to honour the settlement) if I accept the ombudsman's decision/compensation. - No. That doesn't mean you pay the £6k though. I'm thinking it's not worth the risk as I think the PMC will claim things are settled. 

You can either
a) ignore it and refuse to pay the service charge. Risk: the LL moves to revoke your lease due to unpaid charges
b) pay under protest to avoid the risk in (a), then sue for the £ back in court. 
c) go to tribunal to get the balance established at £0. 

You can still accept the £250 in addition to any of the above. You just can't complain about them going back on their word or wasting your time etc. 

mc2705

Thanks Saajan.

I have thought before about paying it and then claiming back through the "small claims court" but am not sure if that would work. Would paying it not be seen as agreeing it was due? 

The tribunal route seems the best option to me. It's less expensive than a big court case! 

I think I'll reject the Property Ombudsman's decision and compensation as a big part of my complaint is them going back on their word and the time wasting. I'd want to use that at a tribunal.

eddddy

mc2705 said:

I have thought before about paying it and then claiming back through the "small claims court" but am not sure if that would work. Would paying it not be seen as agreeing it was due? 

 Not quite. The recommended approach would be to pay it under protest, then dispute it at a tribunal. (If you make a court claim, it's likely to be refereed to a tribunal anyway.)

That approach is recommended because late fees etc can be continued to be added.

• If you don't pay and lots of late fees are added, and you then lose. you have to pay the disputed amount and pay all the late fees.
• If you pay now, and eventually lose. at least no late fees will be added on top.

mc2705 said:

I think I'll reject the Property Ombudsman's decision and compensation as a big part of my complaint is them going back on their word and the time wasting. I'd want to use that at a tribunal.

You're muddling up PMC and your landlord.

• Your landlord has gone back on their word
• PMC has wasted your time

£250 is for PMC wasting your time.
The dispute over £6k is with your landlord


Edit to add...
You need to get this clear in your mind. For example, if you issue a court claim against PMC for £6k it would fail. Your dispute over the £6k is with your landlord.

mc2705

Thanks eddddy, that makes a lot of sense.

I have a few weeks to decide whether to accept the Ombudsman's decision and so will take the weekend to think things over. The advice here has been really useful though so thank you to everyone!

princeofpounds

I don't think it is necessarily a good idea to reject the award.

I am not a specialist lawyer or ombudsman, but the situation isn't that complex. The complaint to the PO is entirely about the PMC breaching their professional standards, in the context of the PO scheme. Nothing else.

Yes, it means that you cannot pursue the PMC for compensation, but your service charge dispute is not and never has been with the PMC. It is with the landlord, where the PMC are acting merely as his agent. Your landlord (through the PMC) made the demands. Your landlord (through the PMC) offered a settlement. Your landlord (through the PMC) attempted to renege on this agreement. Your landlord (through the PMC) was the one wasting your time and going back on his word. You would take your landlord (not the PMC, although they may act on his behalf to manage the case, but often they don't) to the tribunal. The tribunal would never consider any complaint from you about the PMC itself. So if the PO complaint is by definition about the PMC, it's almost entirely tangential to anything that goes on at the tribunal.

The key is to be very clear about what complaint the PO actually HAS reviewed. They should state it in their decision - it is partly included in your quotes above, explicitly and implicitly, but there is probably an introductory definition that you have not included. That is the only thing that is settled.

Perhaps the tribunal may take some account of the compensation you already received when they are making their award. The LL might argue that all the disputes were down to the improper actions of the PMC and that you have already received an award for that directly from them, which reduces his liability for punitive damages for the specific issues of delay and dishonesty. I don't know what their practice is, but they would probably take their award decision and deduct £250 - but that's about all the implications I think it could have. And I'm not even sure that line of reasoning would be accepted - because why would the LL still be disputing at tribunal rather than implementing the settlement, if the PMC was the only bad faith actor?

greatcrested

I think others have clarified, and I concur:

* complaint against PMC has been ruled on and compensation offered. Accept it. Complaint closed

*dispute with landlord over service charges has not been ruled on or resolved so is outstanding. Pay it to avoid escalating fees. Decide whether to contest it via tribunal, and if so make clear your payment now is 'under protest'.

mc2705

Apologies for bumping this, but I have another query on the issues I've been having.

I accepted the compensation the Ombudsman awarded, the property management company has yet to pay it. Standard nonsense from them, I'll be reporting them if they don't pay before the deadline.

However, they have responded to my final letter. It's a pretty nasty and threatening letter, but at the end they have offered to knock £2k off of the total if I pay within 14 days.

I'm fully committed to paying under protest and then heading to the tribunal. I reject that anything is payable and so am not settling for their offer.

However, their offer does not mention "full and final settlement", they have worded it as being a goodwill gesture from them.

Should I pay £6k under protest and start the tribunal proceedings.

Or should I pay £4k under protest and start the tribunal proceedings.

I don't want to risk jeopardising my case at all, but at the same time, going to the tribunal for £4k is less risk than £6k (if I did lose!).

Thanks