Summary: We will not investigate this complaint about the Council’s procurement of insurance for the building in which Miss X holds a lease with it. It is reasonable for her to seek a remedy with the First Tier Tribunal (Property Chamber) which is the body appointed to deal with lease and service charge disputes.

The complaint

1. Miss X complained about the Council’s tendering procedure for obtaining insurance for the building where she lives. She is a leaseholder and pays a service charge to the Council for services including insurance. She says the tendering process only attracted a single company and the terms agreed are too onerous and expensive.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service but must use public money carefully. We do not start or continue an investigation if we decide there is another body better placed to consider this complaint.

(Local Government Act 1974, section 24A(6), as amended, section 34(B))

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How I considered this complaint

3. I considered the information provided by the complainant.
4. I considered the Ombudsman’s Assessment Code.

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My assessment

5. Miss X has a leasehold agreement with the Council for her flat which involves a service charge. The charge includes insurance cover for the building which is owned by the Council.
6. The insurance contract was due for renewal recently and the Council advertised the contract inviting companies to tender. The Council sys there was only one company who submitted a bid due to the lack of interest in the insurance market for public-owned buildings. Miss X says she was unaware of the process until the contract was accepted. She says the premiums are higher than previously and that the Council should have made a grater effort to seek competitive bids.
7. The Council says it is aware of the higher premiums and although these cannot be reduced as part of the service charge it agreed with a forum of leaseholders to extend the payments over 12 months. Miss X remains dissatisfied with the procurement of the insurance.
8. We will not investigate a complaint where there is another body better suited to deal with the subject of the complaint. For leaseholders who have a disagreement with their landlords over service charges and leasehold terms the First Tier Tribunal (Property Chamber) is a body which deals specifically with these subjects.

It is reasonable for Miss X to apply to the Tribunal if she disputes the charges for insurance made by the Council.

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Final decision

9. We will not investigate about the Council’s procurement of insurance for the building in which Miss X holds a lease with it. It is reasonable for her to seek a remedy with the First Tier Tribunal (Property Chamber) which is the body appointed to deal with lease and service charge disputes.

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Investigator's decision on behalf of the Ombudsman