Freebridge Community Housing Limited (202223513)

REPORT

COMPLAINT 202223513 and 202223511

Freebridge Community Housing Limited

31 January 2024

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example, whether the landlord has failed to keep to the law, followed proper procedure, followed good practice, or behaved in a reasonable and competent manner.

Both the leaseholder and the landlord have submitted information to the Ombudsman, and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

This complaint is about:
1. The landlord’s handling of major regeneration works involving two of the leaseholder’s properties, including repairs to the windows of one of them.
2. The landlord’s handling of the leaseholder’s claim for lost rental income and subsequent complaint.
3. The landlord’s handling of the leaseholder’s complaint about its decision not to compensate her for lost rental income.
4. The leaseholder’s dispute with the landlord about the level of lost rental income she should be paid.
5. The leaseholder’s concern that the landlord withheld information from her during her acquisition of one of the two properties.
6. The leaseholder’s concerns about a possible data breach by the landlord.

Jurisdiction

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Scheme. When a complaint is brought to this service, the Ombudsman must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.

The landlord’s handling of major regeneration works involving two of the leaseholder’s properties, including repairs to the windows of one of them.

The building regeneration at the heart of the leaseholder’s complaint was an extensive project to regenerate, rebuild, or replace multiple blocks of flats and other types of homes owned by the landlord (as freeholder for some of them). The leaseholder holds the leases for several properties, of which two are the focus of this complaint. The landlord has explained that the project started in 2012 and is ongoing, proceeding in multiple phases. At various stages the leaseholder has not been able to let out the properties because of the project work and its impact on them.
The leaseholder has explained that during the project she has experienced significant inconvenience, frustration, expense, and lost income by some of the landlord’s actions and decisions and their resulting impact on her properties. One of the issues that affected her ability to let out one of the properties (referred to in this report as property A) related to the condition of the windows, which was the landlord’s responsibility to resolve. She has explained that the windows were to have been replaced by 2019.
In 2021 the leaseholder made a claim to the landlord for lost income relating to the two properties, in light of their un-lettable state (she had already been receiving reimbursement for the second property, property B, but believed the current level was below a fair rate). The landlord declined her claim, and in August 2022 she made a formal complaint about its decision. In support of her complaint she included her dissatisfaction with the landlord’s overall handling and management of the project, since the early stages. Her complaint was lengthy and detailed, giving many examples as evidence. Most of the examples related to the period 2013 to 2019, with additional reference to related issues in 2021.
The landlord responded to the leaseholder’s complaint by changing its decision about her claim, agreeing to provide a level of rental compensation. It centred is response on the claim issue, and did not specifically address the other issues the leaseholder had raised about its management of the project. The basis for the leaseholder’s follow up complaint included her dissatisfaction that her comments about the landlord’s management had not been addressed. She gave as a further example an issue from 2018 to 2019.
The evidence shows that the leaseholder made a previous formal complaint to the landlord in 2019, in relation to a cancelled appointment and communication problems. The landlord apologised, rearranged the appointment, and asked if she wanted to continue her complaint. There was apparently no further action in relation to that complaint. There is no other evidence of a formal complaint to the landlord about its overall management of the project until August 2022.
Paragraph 42(c) of the Scheme states that the Ombudsman may not consider complaints which (in the Ombudsman’s opinion) were not brought to the attention of the landlord as a formal complaint within a reasonable period which would normally be within 6 months of the matters arising. In this case the specific issues of concern which the leaseholder complained about to the landlord in August 2022 were historic ones, dated several years or more before her complaint.
This paragraph exists because with the passage of time the opportunity to resolve a problem or issue and provide meaningful and proportionate remedies is diminished. This can sometimes be because evidence naturally becomes harder to locate, memories fade, and staff move or leave. Importantly, making a complaint as soon as possible after becoming aware of an issue usually means it can be resolved quickly, and minimise or eliminate any effect on the complainant.
Most of the specific issues raised in the 2022 complaint give every indication of being valid concerns, which, if raised at the time, could have possibly led to meaningful changes in the landlord’s handling and decreased any ongoing impact on the leaseholder. By 2022 that opportunity had passed. Because of that, in line with paragraph 42(c), this investigation will centre on issues of complaint that arose in late 2021 and in 2022. It will not consider the landlord’s historic decisions and management of the regeneration project, or its handling of window repairs in 2019. Reference to these issues in this report are for context and background only.

The leaseholder’s concern that the landlord withheld information from her during her acquisition of one of the two properties.

Paragraph 42(f) of the Scheme states that the Ombudsman may not consider a complaint which concerns matters where the Ombudsman considers it quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, other tribunal or procedure.
In her complaint to the landlord the leaseholder explained that after inspecting property B in 2022 she had concluded that the landlord had withheld information from her about its intentions when she had acquired the property in 2017 (through a swap for a different property). She told the landlord that she felt it should “hold an enquiry into all the events that led to me buying [property B] when vital information (that [the landlord] had a legal obligation to disclose) was deliberately withheld.”
Purchasing a property (or acquiring it via a legal swap, as here) is a legal process, in which all parties must meet a wide range of formal and statutory obligations. Transparently sharing information is one of the key obligations, and an allegation that this was not done essentially amounts to a claim of misrepresentation. The legal nature of such a transaction, and such an allegation, means that it would almost always need to be resolved through the courts, rather than the complaints process. The courts are more appropriately placed to effectively consider such concerns because they have the specific knowledge, experience, and powers to robustly interpret and decide on the legal aspects and issues they are based on. In line with paragraph 42(f) this issue will not be considered here.

The leaseholder’s dispute with the landlord about the level of lost rental income she should be paid.

The leaseholder’s complaint in 2022 was triggered by the landlord’s initial refusal to compensate her for being unable to rent out property A. After it changed its mind, her complaint centred on the level of rent it planned to pay her for both properties. She supported her complaint with a range of data on rental values and the property market.
There are several reasons why the Ombudsman would not consider this issue, including that this Service does not adjudicate on levels of rent, or on complaints which centre on commercial or contractual relationships unconnected to a complainant’s occupation of a property for residential purposes (which this complaint, arguably, could at least partly be described as). It is partly because of those reasons that a different organisation is more appropriate to consider this aspect of the complaint.
The First-tier Tribunal (Property) deals with disputes in relation to leasehold properties, particularly in relation to rents and other charges. As with the courts, the Tribunal has the specialised knowledge, experience, and powers to robustly interpret and decide on issues such as rent calculations, or similarly complex and specialised leasehold matters. It is likely that the Tribunal is the more appropriate organisation to consider this aspect of the complaint, and enquiries should be directed there. If the Tribunal cannot assist, it should at least be able to better signpost the leaseholder. Accordingly, in line with paragraph 42(f) this investigation does not consider the leaseholder’s complaint about the level of rent the landlord has offered to pay her. Any reference to this issue in this report is for context and background only.

The leaseholder’s concerns about a possible data breach by the landlord.

The leaseholder complained to the landlord that by sharing information about her and her properties with its external solicitors it handled her private data inappropriately.
Paragraph 42(j) of the Scheme explains that the Ombudsman will not consider a complaint which falls properly within the jurisdiction of another Ombudsman, regulator, or complaint-handling body.
The Information Commissioner’s Office (ICO) is the organisation specifically created to protect information rights, including data protection and concerns that information may have been improperly shared by an organisation. Complaints about such issues can be made to the ICO. Because of that, in line with paragraph 42(j), the leaseholder should make enquiries of the ICO about her concerns if she has not done so already. The matter will not be considered in this report.

Background and summary of events

As explained above, the leaseholder has explained that she sent a claim to the landlord in late 2021 asking it to compensate her for the rent she was losing by not being able to let out property A. The actual letter of claim has not been seen in this investigation.
In January 2022 the landlord told the leaseholder it was asking its external solicitors to consider the claim (it said it had explained this to her the previous month, but no evidence of that has been seen here). On 3 March the solicitor updated her, explaining what it was doing, and confirming it was acting for the landlord to “deal with the complaint raised by you”. The leaseholder responded saying she did not know why the landlord had instructed solicitors, or that her claim was being classified as a complaint. She asked for more details, and a time frame. The solicitor told her they hoped to send their response a week later.
Not having heard anything more the leaseholder chased for updates in early May 2022, especially as to why the solicitor had become involved and what the landlord was doing. The solicitor emailed her on 10 May. They explained that after considering the compensation claim the landlord had decided that there was “no legal justification for them to make any payment to you and that my client is not willing to make any payment for the loss of rental income to you.”
The leaseholder responded promptly on 10 May 2022 to the landlord’s decision, disputing it and asking whether the landlord had handled her claim correctly in line with its complaints procedure. The solicitor responded, explaining that the use of the term “complaint” in their original email had been a mistake on their part, and clarified that the landlord had not dealt with the claim as a complaint.
After further correspondence the leaseholder complained to the landlord on 24 May 2022. She said that she understood the landlord’s complaint policy and procedure to be a “legally binding contract every bit as binding as those that might appear in a lease or an employment contract”, and complained that the landlord had not adhered to it. The complaint was lengthy and detailed, but in essence, her concern was that her claim for compensation was an expression of dissatisfaction, and therefore the landlord should have treated it as a complaint, as its policy requires.
The landlord sent its complaint reply on 10 June 2022. It said that it should have contacted the leaseholder after receiving her claim to clarify the process and avoid any misunderstanding. It apologised for not dealing with the claim under its complaint process and offered £50 compensation for its failing.
The leaseholder asked to escalate her complaint because she felt the landlord had incorrectly combined her complaint process complaint with her complaint about its decision not to compensate her for lost income, and was offering her £50 in settlement of both of them. She refused that offer, said the landlord should not have used external parties to deal with her complaint, and complained that the landlord had not said what action it intended to take against the specific staff members who had not followed the correct complaints process.
The landlord sent its final complaint response on 6 July 2022. It set out its consideration of the original complaint, and the issues raised in the leaseholder’s escalation. It concluded that its original complaint findings were correct, but that it would not provide details about any specific members of staff. It acknowledged that the leaseholder intended to make a separate complaint about the rent claim decision.
The leaseholder sent her complaint about the rent claim decision on 1 August 2022. The landlord responded on 22 August. It acknowledged that her complaint contained “many elements”, but explained that it understood the overarching concern to be the lost rental income from property A. It explained that it had no formal obligation to provide such compensation, but said that “as the refurbishment gets closer, the prospect of securing a new tenant reduces.” Because of that it agreed to compensate her for loss of income for the property since July 2018 to August 2022.
The leaseholder accepted the landlord’s new decision, but disputed the rental rate it was offering to pay. She was also dissatisfied that the landlord had not addressed all the issues she had set out in support of her claim (and complaint), and asked for an apology from staff for “wasting my time with their highly irregular attempt to involve [the solicitors], that delayed me getting my lost rental issues resolved”. She escalated her complaint.
The landlord sent its final complaint response on 16 November 2022. It explained that it had reviewed its original complaint findings, and found them to be appropriate and fair. It explained why it would not consider the leaseholder’s historic project handling concerns (it did not consider the request for an enquiry to be proportionate, in light of its decision to compensate for at least some lost income). It also explained that it considered its use of solicitors was appropriate in light of the complexity of the compensation issue.
The leaseholder remained dissatisfied and brought her complaint to the Ombudsman.

Assessment and findings

Investigation scope

The leaseholder’s complaints to the landlord and to the Ombudsman were detailed and extensive, referencing and including a wide range of documents, articles, and correspondence. This investigation has considered all of the information and evidence provided by both the leaseholder and the landlord. However, the report will provide only a summary and snapshot of the key elements we consider necessary to explain our conclusions and determination.
The leaseholder complained that she felt the landlord had rewritten her complaint questions in order to give the answers it wanted to give. Given the wide ranging and detailed nature of the issues raised, it was inevitable that the landlord would need to condense its responses, for practicality and proportionality. The Ombudsman’s investigations are conducted in a similar manner, and for the same reasons the complaint definitions listed in this report are intended as a concise summary of the issues raised by the leaseholder in her complaint.

The landlord’s handling of the leaseholder’s claim for lost rental income and subsequent complaint.

The landlord has separate complaint and compensation policies.
The complaints policy states that a complaint is defined as “An expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the organisation, its own staff, or those acting on its behalf, affecting an individual resident or group of residents.” This definition comes from the Ombudsman’s Complaint Handling Code (the Code).
It is very important to understand that while any expression of dissatisfaction could be considered a complaint (to be addressed through the complaint process), not every such expression should be treated that way. The Code sets out a range of circumstances in which there is a difference between a complaint and a service request, and why it is important to differentiate between them.
The compensation policy sets out that there may be times when the landlord decides it is appropriate to offer compensation to tenants and leaseholders. These can include a range of grounds, such as home loss, disturbance, or for financial loss. It sets out the process it should follow when it receives a compensation request. Nothing in the compensation policy states that a claim for compensation must be dealt with as a complaint.
In her eventual complaint to the landlord the leaseholder explained her understanding that the landlord’s procedures were “legally binding”, and from which there could be no exceptions. Because the complaints policy set out that a complaint equalled an expression of dissatisfaction, she believed the landlord had not followed its complaints policy, because her claim, and the grounds for it, were expressions of dissatisfaction.
That interpretation is not wholly correct. As stated above, dissatisfaction is often grounds for a complaint, but not always. A landlord has discretion in making such a differentiation, based on the circumstances and nature of the issues being raised. A landlord’s policies and procedures are not legally binding. A landlord can sometimes legitimately act differently to its policies and procedures if it has sufficient grounds to justify and defend such action. In some circumstances, it would be a failing for a landlord to blindly follow its policies when the circumstances legitimately called for it to exercise its discretion.
In her complaint to the landlord the leaseholder explained that at the time she made it she had “no notion that my claim for lost rents might be construed as a complaint.” It appears clear then, that the leaseholder herself did not consider she was making a complaint. Accordingly, it was reasonable for the landlord to treat the claim through its compensation policy rather than as a complaint, because it was a claim for lost income (one of the criteria addressed in the compensation policy). Having done so, the leaseholder then had the opportunity to challenge the compensation decision through the complaints process, which is what she did.
Part of the leaseholder’s complaint centred on the landlord’s use of external solicitors to consider her claim, which she told the landlord was “highly irregular”, wasted time, and was not in line with the complaints policy (this issue crossed over between the two separate complaints). It was for the landlord to decide how it considered the claim (or complaint), guided by its policies and procedures and the circumstances. Its compensation policy makes no suggestion that it should not seek such advice, and the nature of the claim meant that it is not surprising the landlord might decide to do so. The landlord explained this in its final complaint response, and nothing in the evidence suggests its action was unreasonable or irregular.
The leaseholder’s concern that her claim should have been treated as a complaint appears to have been initially raised by the landlord’s solicitor’s use of the term. The solicitor subsequently explained that was an error, and confirmed the landlord was not treating the claim as a complaint. The explanation was a clear and proportionate response to the mistake.
As it was appropriate for the landlord to treat the lost income claim as a compensation request rather than a complaint, it is perplexing why its response to the complaint on the matter concluded it had acted incorrectly. It apologised for not dealing with the claim as part of its complaints process. It did not explain why or how it had reached that conclusion. Given the leaseholder’s misunderstanding of the landlord’s policy and process obligations, it was important for it to clearly explain the situation and why it had handled matters the way it did. Its omission in its first complaint response was not identified or remedied in its final one, meaning the landlord left the leaseholder with an unclear and potentially unrealistic understanding of its actions and processes. That lack of explanation was a failing.
The landlord’s compensation policy calls for it to act within certain time frames, primarily to issue its decision within 10 working days. No evidence of the original claim has been provided for this investigation, or of any immediate response by the landlord. The earliest reference to the claim is an email from the leaseholder on 20 January 2022, in which she said she had not heard from the landlord since she sent the claim in October 2021. The landlord replied the next day, referring to having contacted her on 21 December 2021 and explaining that due to the complex nature of the request it had sought external legal assistance. It acknowledged the time its consideration of the request was taking, but assured the leaseholder it was working on it. The time taken by the landlord to issue its compensation decision was certainly an aspect of the leaseholder’s complaint to the landlord, and some of her correspondence makes clear she was dissatisfied with its update frequency. The landlord apologised broadly for its handling of the claim, and so, arguably, the issues of communication and timeliness were included in that apology, but good complaint handling would have been for it to specifically address the point.
Overall, it was reasonable for the landlord to deal with the claim in line with its compensation policy, and to seek external advice about it. Its handling of the leaseholder’s subsequent complaint was poor, because it did not explain its conclusions, or address the leaseholder’s misunderstanding of its complaints policies and procedures.

The landlord’s handling of the leaseholder’s complaint about its decision not to compensate her for lost rental income.

The landlord’s original decision not to provide the claimed compensation was brief, and no meaningful details for it were given to the leaseholder.
Following its decision the leaseholder complained. She supported her complaint with a wealth of information and arguments. The landlord subsequently changed its mind, and agreed to provide compensation from 2018 to 2022.
The only explanation given for the new decision was that in the circumstances of the refurbishment the prospect of “securing a new tenant reduces.” There was no explanation as to how that explanation related to its decision to provide compensation back to 2018 (the relevance of the explanation is not at all clear). There was also no explanation as to why it had changed its decision. Given the seriousness of the claim and complaint, the amount of money involved, and the clear effort the leaseholder had gone to in justifying her claim, it was important for the landlord to explain what facts or circumstances had changed. The lack of explanation meant the complaint response was incomplete.
As there was no clear indication of why it changed its decision, it is not possible to assess whether the landlord reasonably acknowledged and remedied any failings, or whether it needed to look beyond the circumstances of the complaint and consider whether anything needed to be ‘put right’ in terms of process or systems to the benefit of all residents (as recommended by the Code).
The landlord’s final complaint response centred on the decision to offer the compensation, and did not identify that the change of heart had not been appropriately explained. That was a failing.
Part of the complaint to the landlord was that it had not addressed the full range of concerns the leaseholder had raised. In its response the landlord acknowledged that she had raised multiple issues, but explained that it was focusing on what it saw as the primary issue, the lost income claim decision. That explanation was reasonable, and reflects the Ombudsman’s own investigation approach.

Determination (decision)

In line with paragraph 52 of the Scheme, there was service failure in the landlord’s:
1. Handling of the leaseholder’s claim for lost rental income and subsequent complaint.
2. Handling of the leaseholder’s complaint about its decision not to compensate her claim lost rental income.
For the reasons set out in this report, the following issues are not in the Ombudsman’s jurisdiction to investigate::
1. The landlord’s handling of major regeneration works involving two of the leaseholder’s properties, including repairs to the windows of one of them.
2. The leaseholder’s dispute with the landlord about the level of lost rental income she should be paid.
3. The leaseholder’s concern that the landlord withheld information from her during her acquisition of one of the two properties.
4. The leaseholder’s concerns about a possible data breach by the landlord.

Reasons

It was reasonable for the landlord to deal with the leaseholder’s claim of lost rental income in line with its compensation policy, and to seek external advice about it. However, it did not explain its complaint conclusion or clarify the leaseholder’s misunderstanding of its policies and procedures.
The landlord did not explain why it had changed its mind in regard to the leaseholder’s claim for lost income.

Orders

In light of the failings found in this investigation the landlord must pay the leaseholder compensation of £250. This is comprised of:
1. £150 for the failings in its handling of the claim for lost rental income and complaint.
2. £100 for the failings in its handling of the complaint about its decision not to compensate for lost rental income.
These amounts are inclusive of the £50 previously offered by the landlord. The compensation must be paid within 4 weeks of this report, and evidence of payment provided to this Service.
Within 6 weeks the landlord must review the circumstances of this case and the findings in this report. It must explain what changes it has already made to avoid repeating the failings found here, or what changes it intends to make, and by when. This review must be provided to the leaseholder and to this Service.