Residents of One Stratford say they are trapped in a system of financial abuse by One Housing Group (OHG), a housing association which merged with Riverside Housing Group last year after falling into financial difficulties.
At least 40 residents at One Stratford are now withholding service charges or ‘balancing charges’ after receiving a series of unexplained demands from their landlord across several years. This practice has been accompanied by yearly increases of the regular service charges that residents are expected to pay.
In early November, OHG residents received balancing charges of more than £1,000 each, with their landlord claiming that it was needed to cover a shortfall for the 2022/23 service charge year. In the previous year, the balancing charge was £3,000.
The service charge strike by One Stratford residents hit the headlines in 2023
Residents say that the demands arrived with no costings, and OHG have failed to respond to requests for more detail. The financial turmoil residents are facing is compounded by the arrival of a formal notice warning them that the landlord had overspent on service delivery by £389,000 despite declining provision of services.
Following service charge complaints from residents in 2021, 2022 and 2023, the property managing agent (Haus Block Management) reduced services such as window cleaning, cut back on concierge staffing and grounds maintenance in 2023-24. Some communal areas and facilities are out of bounds, as they have become dangerous through lack of maintenance. These reductions in services have clearly not been reflected in service charges.
OHG Service Charges in Complete Chaos
Resident Alan Blackmore says service charges have become absurd and impossible to keep track of. He has systematically documented the chaotic pattern of charging by OHG for a two bedroom flat in John Wetherby Court. The chart shows ever increasing service charges well above inflation, balancing charges for past years and further adjustments including some credits for past financial years 2016, 2017, 2018 and 2020.
CHART
The situation with service charges is an absolute mess, it’s impossible to financially plan when you could receive yet another large, unexpected bill anytime. We are very concerned about this latest trend, it seems like One Housing has lost all control of its finances. These are huge miscalculations and should not be happening,”
Alan Blackmore, One Stratford resident
Earlier in the year, Haus residents reported that their balancing charges were in the hundreds of pounds, vastly different to those for their OHG neighbours. Slight differences can be explained by different but overlapping financial accounting periods. But the mismatch in charges is too great for this to provide adequate explanation. OHG residents have instead identified systematic overcharging by their landlord.
Other examples of their systematic overcharging were highlighted in SHAC’s report on the dispute in 2023 which showed massive discrepancies in service charges between flats managed by Haus and OHG. One example was a comparison of two identical two-bedroomed flats in the same section of Thomas Frye Court with exactly the same-sized floor area, layout, specification and use of services. The charges were £4,300 for Haus residents compared to £4,932 for OHG residents.
This is something that needs to be looked into by an independent third party, OHG are exploiting residents without any accountability or challenge from any official body”
Alan Blackmore, One Stratford resident
Demands for Investigation of OHG’s Financial Mismanagement
One resident has found evidence of staff manipulating surpluses from over payments of service charges to cover up their administrative failings, by sending out bills for services they missed in earlier years. Instead of issuing a bill for the new service, surplus funds were simply deducted from residents’ accounts without their knowledge.
As a further example of poor financial accounting, when rents and service charges increase in April, customers who pay by direct debit are not charged the correct amounts and their accounts immediately go into deficit through no fault of their own. It often takes many months for inaccuracies to be corrected. Even so, the inaccuracies reappear in subsequent years. One resident has recorded this malpractice over four separate years.
One Housing Group recently became a subsidiary of Riverside Housing Group
Other residents who do not have access to a computer, have now stopped receiving paper statements of their rent and service charge accounts. Residents also complain about a lack of clear and detailed documentation in the OHG service charge booklets. Instead, the information is often misleading and serves no purpose other than informing residents that for another year, the accounts cannot be reconciled properly, on time or to budget. This practice has now been occurring for over ten years and is part of the failing culture of OHG.
Residents have recorded their protracted battles featuring countless emails, phone calls and letters to request cost breakdowns, which are rapidly reaching unaffordable levels.
Lack of Transparency: Section 22 Requests Denied
Numerous One Stratford residents have repeatedly made requests under Section 22 of the Landlord and Tenant Act 1985 which entitles them to receive receipts, a statement of expenditure, and a set of accounts detailing service charge costs. These requests have however been denied by OHG each time. Without this information, it is impossible for residents to scrutinise their service charge bills.
Alan, has been denied Section 22 information annually between 2017 and 2023 and says “we can’t challenge these costs without the actual detail from OHG, which is totally wrong.” OHG simply denies that requests are valid, and is exploiting a legal loophole. Section 22 requests have to be submitted within six months of receiving service charge demands which relate to the previous financial year. Yet OHG claims that because the balancing charges pertain to historic accounts more than six months’ old, Section 22 rights do not therefore apply.
I am constantly locked in a losing battle with One Housing every time I receive a balancing charge and submit a Section 22 request. After chasing and chasing they are using the six-month loophole to refuse my request despite me pointing out the fault for the late request lies with them. It feels like gaslighting and is incredibly frustrating”.
Lisa, One Stratford resident
The Battle to End Service Charge Abuse
SHAC is lobbying government as part of an ongoing campaign to end service charge abuse. The campaign’s demands include legislation which would allow tenants and residents who are in dispute with their landlords to pay their service charge to a third party such as a court instead of their landlord.
The money would only be released to the landlord if they are able to show that the charges were legitimately and lawfully incurred. Otherwise, they would be returned to the tenant or resident.
Withholding payment of rent or service charge can represent a breach of the householder’s tenancy agreement in the majority of the UK, but a court case is underway in Wales which could afford tenants this right if their landlord fails to comply with electrical safety reporting duties. The Welsh court’s decision serves as a useful precedent for introducing the right to withhold rents and service charges across Britain as a meaningful sanction against failing landlords.
Such a right is essential to combat the requirement to pay up even when the charges are inaccurate, and then attempt to reclaim the funds from the landlord. The huge power imbalance between tenant and landlord currently means that those who have been overcharged often face an impossible battle to get refunds, as with the One Stratford residents. In other European countries but not yet in the UK, the right to withhold payment already exists.
11 November 2024
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