Affordable Housing Communities Limited (202334805)

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REPORT

COMPLAINT 202334805

Affordable Housing Communities Limited

20 August 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 resident 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

  1. The complaint is about the way the landlord handled the residents:
    1. Request for it to buy back shares in their property.
    2. Complaint.

Background and summary of events

  1. On 24 February 2021, the residents purchased a 50% share of a retirement flat in a new build block. They are joint owners and pay rent for the remaining 50%, which is owned by the landlord.
  2. Prior to the purchase, the resident raised some queries regarding the payment of the service charge, ground rent and parking. The landlord sent them a rent letter on 6 February 2021, which outlined the payments they would have to make. It stated that the letter also included “provision” for the residents to “staircase down” if they needed to, and details of an “incentive voucher” they would be able to use towards their service charge, ground rent and parking. The landlord added that, as their financial partner, it was always open to providing assistance should their circumstances change.
  3. The residents contacted the landlord on 27 September 2023 to ask for a hardship meeting. They chased this up on 9 October 2023 and said they were getting “increasingly anxious” about their finances. The landlord confirmed, on 10 October 2023, that it would visit the residents on 24 October 2023 and, on 20 October 2023, it asked them to ensure they had 3 months’ worth of bank statements in readiness for its visit. The landlord has not provided any meeting minutes or notes; however, it advised the residents on 24 October 2023 that it would update them once it had completed the action points from the meeting.
  4. On 8 November 2023 the residents contacted the landlord to say it had been 2 weeks since the meeting and they urgently needed some answers. They said that their anxiety levels were “through the roof”. The landlord responded on 17 November 2023 to state that downward staircasing would always have been discretionary. It stated that, at that time, it was not in a position to buy back a share of their property.
  5. On 4 December 2023 the residents wrote to the landlord and stated that:
    1. When they bought their property, they had received “an assurance” in writing that they would be able to staircase down.
    2. On 17 November 2023 the landlord told them it was reneging on its promise by not allowing them to staircase down at all.
    3. They did not qualify for pension credit and only qualified for a “very small amount” of housing benefit and council tax reduction.
    4. It made sense for them to staircase down to release equity because the higher rent would be covered by increased housing benefit.
    5. Because the landlord was “refusing to honour” its promise, there was “virtually no chance of selling at anything like market value”.
    6. The negative effect of stress on their physical and mental health was increasingly taking its toll.
  6. The residents wrote to the landlord again on the same day to say they wanted to make a formal complaint about the landlord’s “refusal to honour” its “written assurance” that they would be able to staircase down. The landlord acknowledged this on 5 December 2023 and sent its stage 1 response on 19 December 2023. It stated that:
    1. The option to decrease percentage ownership via staircasing was always something that would have been at the landlord’s discretion.
    2. Staircasing down would rely on several factors including a buoyant property market and a period of economic certainty.
    3. The ability to offer flexible financial solutions to its residents remained one of its aspirations and anything it may offer in future needed to be financially viable for all.
    4. Its letter to the residents, dated 6 February 2021, stated that, as their financial partner, it could discuss staircasing down with them. It believed it had done this following their request in November 2023.
  7. The landlord has not provided the Service with a copy of the residents’ escalation request or its acknowledgement. It is therefore not clear when the residents made their request. However, the residents wrote to the landlord on 3 January 2024 to chase up their stage 2 response. The landlord sent its response on 4 January 2024. Within this it reiterated the explanation that had been provided within its stage 1 response. It confirmed that it could not support the residents’ request to reduce their percentage of property ownership.
  8. On 7 January 2024, the residents contacted the Ombudsman for assistance. They stated that, in February 2021, the landlord had given them a “written assurance” that they would be able to staircase down when they needed to. Their housing costs were 55% of their income and they were no longer able to afford this without releasing some of their capital.

Assessment and findings

Scope of investigation

  1. The residents stated in their complaint that the landlord’s handling of their request to staircase down has had a detrimental impact on their physical and mental health. The Ombudsman does not doubt the residents’ comments regarding their wellbeing. However, the Service is unable to draw conclusions on the causation of, or liability for, impacts on health and wellbeing. Matters of personal injury or damage to health, their investigation and compensation, are not part of the complaints process, and are more appropriately addressed by way of the courts or the landlord’s liability insurer (if it has one) as a personal injury claim and/or claim for damages. We have, however, considered whether any failings by the landlord have been the cause of distress and inconvenience to the resident.

The residents’ request for the landlord to buy back shares in their property.

  1. It is beyond the remit of the Ombudsman to order a landlord to assist a resident in downward staircasing. We have, however, assessed how the landlord considered the residents’ request and whether its handling of the matter was fair and reasonable in all of the circumstances.
  2. While the resident’s financial difficulties are acknowledged and we recognise the concern their situation is causing them, it is important to state that there is no legal obligation under the occupancy agreement or otherwise placed on the landlord to buy back a share of the residents property. Any downward staircasing is agreed at the landlord’s discretion.
  3. The evidence shows that, following the residents’ request for advice and support in managing their financial difficulties, the landlord acted appropriately by arranging a hardship review. The records indicate that it did meet with the residents to consider their request to staircase down and that it had provided them with the reasons why it was unable to offer this option at that time. There is no evidence to show the landlord acted unreasonably when reaching its decision and there is no indication, either in the residents’ lease or the landlord’s policies, that it provides a right to appeal the outcome of a downward staircasing request.
  4. Before the residents purchased their 50% share of the property, the landlord informed them that there was provision for them to staircase down in the future. There is no evidence the landlord had given them an assurance it would agree to buy back any shares on request. However, there are no records to show it had taken reasonable steps to manage their expectations. It could reasonably have explained at the outset that downward staircasing was at the landlord’s discretion, that it was subject to current market conditions and that there was no guarantee the landlord would buy back any shares in their property. It is not possible for the Ombudsman to determine whether this information would have had any effect on the residents decision to progress with their purchase. However, it is clear from the evidence that the information which the residents were provided with at the point of purchase left them with the understanding that the landlord could assist them in staircasing down should the need arise. To learn that this was dependent on various factors and a decision to be made at the landlord’s discretion would have been confusing and disappointing for the residents. We have therefore concluded that the landlord’s communication about the downward staircasing was not sufficiently clear and that it failed to manage the residents’ expectations. We have found that there was service failure and have made a series of orders aimed at putting things right and ensuring that similar errors are not made in the future.

Complaint

  1. The landlord’s complaints policy states that it acknowledges stage 1 and 2 complaints within 5 working days, and that it will respond to them within 10 and 20 working days respectively. It also states that the landlord is committed to listening to residents complaints, making sure it understands their concerns and keeping them informed of progress.
  2. The evidence shows that the landlord responded to the complaint at both stages in a timely manner. However, it has not been able to demonstrate that it acknowledged the residents’ request to escalate their complaint about downward staircasing. When the residents prompted it on 3 January 2024 about their stage 2 complaint, the landlord sent its response the following day. The records show the landlord did respond to the stage 2 complaint within 20 working days. As the landlord did not acknowledge the escalation request in accordance with its policy, the residents had to chase it up for confirmation it had logged it, which caused unnecessary inconvenience and avoidable time and trouble. That it did not properly acknowledge the residents’ escalation request in line with its policy was a failing.
  3. The landlord’s stage 2 response reiterated what it had said at stage 1. While this was understandable in the circumstances, the landlord failed to acknowledge that more steps could reasonably have been taken to explain downward staircasing, and that any decision would be discretionary. It would have been reasonable for the landlord to have recognised this given the concerns that had been raised by the residents. The failure to acknowledge that it was not made clear that downward staircasing would be discretionary and not possible at every request would have been the cause of frustration for the residents. The landlord could also have used its stage 2 response as an opportunity to offer to continue exploring other options with them or signpost them to where they could obtain relevant advice and support. This would have demonstrated a more customer focussed approach, and a greater understanding of the difficulties the residents were facing. The Ombudsman will recommend that the landlord contacts the residents and provides details of where they can obtain advice and support to assist them with any ongoing difficulties in meeting their housing costs.    

Determination (decision)

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in the way the landlord handled the residents’ request for it to buy back shares in their property.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in the way the landlord handled the residents’ complaint.

Orders

  1. Within 4 weeks of the date of this report the landlord must:
    1. Pay the residents compensation of £350, calculated as follows:
      1. £200 for the distress and inconvenience caused by its failure to properly manage their expectations at the outset.
      2. £150 for the distress and inconvenience caused by the complaint handling failures identified by this investigation.
    2. Provide a written apology to the resident from a senior member of staff for the failures identified in this report.
  2. It is not clear what actions the landlord took following the hardship review. The landlord is therefore ordered to contact the residents within 8 weeks of receiving this determination to review their options with them again. It should also signpost them to any agencies and organisations that may be able to provide them with advice and support in managing their housing costs. It should then record that it has done this, and provide details of its review to the Ombudsman.
  3. Within 8 weeks of the date of this determination, the landlord should review its sales literature and correspondence to ensure that it clearly explains that downward staircasing is discretionary, and may not be possible depending on variables such as market conditions.