Ombudsman sets key tests for improving fairness in shared ownership complaints in latest Insight report

26 September 2024

'Shared ownership' written on a post it note

The Housing Ombudsman has released its latest Insight report focusing on shared ownership, setting out 9 tests for how the Ombudsman may assess shared ownership complaints in future as it develops its approach.

It also highlights what the Ombudsman can and cannot do for shared owners, including on issues such as defects and the sales process. The Ombudsman has also updated its website to provide key information for both shared owners and landlords.

Investigations included in the report involve errors in the sales process leading to residents being unable to afford to purchase or incorrect charges that then come as a surprise on moving in. There are also cases where poor understanding of a lease agreement led to residents with months of delays to vital repairs.

The Ombudsman has spoken to landlords and shared owners throughout this report and the changes made to the publication and website reflect that engagement.

While the proportion of complaints the Ombudsman receives each year from shared owners is proportionate to the size of the tenure, the high level of dissatisfaction amongst shared owners suggests more complaints should be escalated to it. Therefore, the Ombudsman will undertake targeted awareness raising as well as making sure complaints procedures are accessible.

Miscommunication, confusion over maintenance responsibilities and the complexity of shared ownership have impaired landlords response to complaints, compounded by poor knowledge and information management.

The Ombudsman highlights key aspects relating to shared ownership cases:

Sales process – the Ombudsman found there were delays in instructing solicitors, the incorrect levels of charges or rents in the lead up to the sales process being incorrect so the resident did not know what they were supposed to pay, and residents not being told the correct levels of staircasing.

Defects – the Ombudsman found cases of landlords not chasing developers or following up with the residents following defects being raised, and how landlords should deal with defects after the liability period if the developers had not resolved them

Cladding – cases included findings that related to the Ombudsman’s Cladding guidance, including unreasonable delays in communication about documents residents may have needed or about the safety of the actual building itself

Repairs – the Ombudsman examined the importance of landlords understanding their obligations in regards to repairs and how landlords can communicate effectively with residents during complex works that need to take place

Charges – following on from its Insight report on charges, the Ombudsman found instances where landlords acted reasonably around charges and information surrounding them, as well as instances where this did not happen.

Managing agents and freeholders – the Ombudsman found that landlords did not often effectively manage their relationships with the freeholder or managing agent of the building, leading to difficulties in communicating effectively with residents.

These issues have informed 9 key tests the Ombudsman may consider during an investigation, alongside the prospect of using Paragraph 48 of its Scheme, which allows the Ombudsman to treat an individual case as a ‘test case’ where others could have been affected.

Insight report – insight on shared ownership (PDF)

Shared ownership learning resources

Insight report on shared ownership webinar

Richard Blakeway, Housing Ombudsman, said: “Criticisms of shared ownership stem from its inherent complexity, fundamental inequities in its design, and responsibility for residents without the same level of control.

“Whilst this report cannot fix these problems, it gives residents the opportunity to learn about complaints they can bring to us to make their housing situation better, whilst also giving landlords the opportunity to learn from the complaints we have had to provide a better service to shared owners.

“A simple concept has led to a complicated product and miscommunication has too often undermined the relationship between landlord and shared owner from outset. One of the most striking lessons from our review is the ability of landlords to successfully recover service failures in their complaints process for shared owners compared to other tenures. This must provide lessons for overall handling.

“We may be at an inflection point for shared ownership. Any future reform of shared ownership must address the recurring reasons for dissatisfaction and service failure that is so evident in our casework.”