Cheshire Peaks & Plains Housing Trust (202204920)

REPORT

COMPLAINT 202204920

Cheshire Peaks & Plains Housing Trust

02 May 2023

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

The complaint is about the landlord’s handling of the resident’s right to buy application.

Background

The resident was the secure tenant of a three bedroomed mid terrace house which she applied to purchase from her landlord in August 2020 under the Right to Buy Scheme. The sale was completed on 29 April 2022.
On 6 December 2021 the resident complained to the landlord about the length of time the transaction was taking as she considered the delay was its fault. On 31 January 2022 the resident then served an Initial Notice of Delay (RTB6) on the landlord.
The landlord accepted that there were two areas of delay. The first was in its S125 Terms of Offer Notice being issued. It stated that this was due to staff absence. The second delay came as a result of queries about the boundary to the property and a shared access. It accepted it had caused a 23 week delay in that point.
In terms of remedy, the landlord asserted that the resident’s financing of the transaction would not have been in place had the Section 125 notice been on time and so the first delay had no impact and could be disregarded. With regard to the second delay, it offered compensation of £250 for the resident’s distress and inconvenience (increased from £175 in its initial complaint response). With regard to the Notice of Delay, the landlord contended that it had been served after the process was complete and it did not have to offer any discount to reflect the ongoing payment of rent. It also denied it had any responsibility for advising the resident to serve the notice in the first place when she suggested, during the complaints procedure, that it should have prompted her to do so.
Further, by way of resolution, the landlord stated that as a result of this case it had changed its staffing structure “so that a single person dependency no longer exists”. It had also reviewed its communication processes and put in place additional guidance to staff.
The resident remained dissatisfied with this response and referred the matter to this Service. She considers that the landlord has not properly explained the delays and that the offer of compensation is inadequate. She wants any award to reflect the rent payments she had to make during the delay. Further to this, at completion the resident discovered that a garage she thought was included in the purchase was not actually covered. She has also suggested the landlord gift this to her by way of remedy.

Assessment and findings

Scope of Investigation

The remit of this Service is set out in the Housing Ombudsman Scheme. Paragraph 42a states that: –
1. The Ombudsman may not consider complaints which, in the Ombudsman’s opinion are made prior to having exhausted a member’s complaints procedure, unless there is evidence of a complaint-handling failure and the Ombudsman is satisfied that the member has not taken action within a reasonable timescale.
The resident now raises the question of whether the garage was formally included in the sale to her and if not, why not. She wants this issue to be considered by this Service when setting a remedy.
However, the question of the garage was raised after the landlord’s internal complaints procedure was concluded and it was not included in the original complaint. Accordingly the landlord has not had the opportunity to consider it as part of its complaint process, and it is not appropriate for this Service to examine it now. The resident is, of course, able to raise a further complaint but no indication can/will be given in this report as to the possible/correct outcome of that process.

The landlord’s handling of the resident’s right to buy application.

The landlord operates a Right to Buy and Right to Acquire Policy which sets out its approach to these schemes and how it will handle applications. It commits the landlord to administering “the scheme within the timescales set down by legislation”.
The timetable, set out by legislation, and which should have been adhered to was as follows.
1. 25 August 2020 – Application Made.
2. By 22 September 2020 – Landlord to serve a Notice in Reply confirming whether it considered the resident eligible for the scheme.
3. By 17 November 2020 – Landlord to carry out a valuation of the property (that is within eight weeks).
4. By 12 January 2021 – Landlord to issue S125 Terms of Offer Notice (that is within eight weeks of valuation).
5. The resident to confirm acceptance/rejection of the S125 Notice within 12 weeks of it being served.
The landlord acknowledged the resident’s application in two days and served its Notice in Reply confirming eligibility within the requisite four weeks. This was appropriate to its policy/the relevant legislation.
A valuation was then arranged but was marginally late by two days in that the inspection visit at the property did not take place until 19 November 2020. The S125 Notice was not then served until 19 February 2021, which was over five weeks late. These delays were inappropriate.
The resident is dissatisfied with the landlord’s explanation for this, namely that its staff member went on sickness absence and that it did not automatically have cover in place for that person’s workload to be overseen. The Ombudsman would not expect a landlord to have sufficient human resources for every position to be fully duplicated such that a replacement would already be in place in such a situation. The workload may not require two staff members and as a Charitable Trust, the landlord has limited resources. However, the Ombudsman would expect a landlord to make contingency plans and it is noted a replacement was sought/arranged.
Nevertheless, this does not necessarily explain the delay in any event because the landlord’s records note that the staff member “goes sick January 2021”, that is towards the end of the eight week period for the S125 Notice to be served, or possibly even after expiry of that time (depending on when in January it happened).
Whatever the cause of the delay, the landlord has accepted it failed to keep to the timetable at this point and it was reasonable that this admission was made. This represented a failing in the service it offered to the resident and it was important that it acknowledged that fact.
A second delay then occurred once solicitors had been instructed and the conveyancing procedure had commenced. The property is terraced and therefore attached to its neighbour. On the ground floor, there is an external passageway between the two properties leading from front to back (referred to in the papers as a “ginnel”). However, upstairs the properties meet – bedroom space being located over the top of that passageway such that it is essentially ‘a tunnel’.
A query arose about ownership of the passageway and how the internal layout of the property was configured above it – thus confirming the boundary. For example, was the space above the passageway divided between the two houses evenly down its length or was the front half included in this property and the back in the neighbouring one (or vice versa).
The landlord’s solicitors first raised the issue in July 2021 and whilst the landlord advised there was a 50/50 split this did not adequately set out the position as it appeared to relate to the passageway only. Ultimately, on 7 January 2022, the landlord visited the property to confirm the layout. The evidence demonstrates confusion in what information was required and it is unclear as to why the resident was not simply asked to confirm the internal layout given she was living in the property. Further, she contends that the valuer who visited in November 2020 was already in receipt of the correct information on this point anyway.
The landlord has accepted that there was a 23 week delay in sorting this issue out. It was reasonable that it make this admission given the timescale involved. It has explained the delay was caused by poor communication and this is reflected in the records it has produced. This delay represented a further failing on its part.
By way of remedy for the impact on the resident of these failings the landlord has offered compensation of £250. The resident wants the question of her payment of rent during the delays to be considered. She served an Initial Notice of Delay but not until after the Right to Buy process was completed and solicitors were instructed to handle the sale. The landlord argues it was too late and it does not have to offer any compensation award based on the question of a reduction in purchase price/ongoing rent payments.
In the Ombudsman’s view, the notice was served after completion of the process. It was dated 31 January 2022 whereas the S125 Notice was served almost a year before that (19 February 2021). The resident is at liberty to take legal advice on this point but the Ombudsman will not base an award on the notice.
Further, for the sake of completeness, the Ombudsman would not reasonably expect the landlord to take responsibility for prompting the resident to serve a delay notice against itself. It does, however, bring residents’ attention to the question of delays, notices and rent payments in its Compensation Policy, which is appropriate. The relevant sections state: –
1. 3.4.1. Tenants who exercise a Right to Buy application are entitled to claim compensation for any delay in completing the sale to required timescales, in line with Section 124 of the Housing Act 1988, Sections 153A and 153B and Part V of the Housing Act 1985 (the Right to Buy).
2. 3.4.2. To claim compensation, tenants must first issue a “Delay Notice” to the Trust giving one month period in which to resolve the delay. If the tenant then issues a further “Operative Notice”, due to the failure of the Trust to comply with the original Notice, rent free weeks will be taken from the final purchase price for each week that is outside of the deadline.
The landlord then asserts that if the delay in issuing the S125 Notice had not occurred (and it had been issued by 12 January 2021), the resident would not have had the money to complete the purchase at that point anyway. In other words, it had no impact on her. The evidence demonstrates that the resident had the finance to purchase the property in May 2021 and it is reasonable to conclude the purchase might have been held up anyway whilst this was received. However, it is incorrect to state the delay was irrelevant because the resident still needed to chase the position and was left unclear as to what was going on. It is reasonable to conclude this would have caused her some distress and inconvenience, as would the second and more extended delay.
Whilst the landlord’s Compensation Policy sets out its approach towards monetary awards it does not state how they will be calculated. The landlord has based its offer on its reading of this Service’s decision in a similar case that also involved significant delay in a right to buy application. The award was said to be moderate to take account of the landlord’s charitable status, because it was not intended to be punitive and because there was no permanent impact on the resident in that case. The award was £250 – the same amount as offered here.
As part of its internal assessment of the case, the landlord noted that “had notices been served, 37 weeks’ rent would be credited to her on purchase”, “the tenant really should have served us notice” and “she didn’t serve a delay notice and so that’s her loss”.
This Service’s Remedies Guidance sets out what can be expected from landlords in terms of offering redress. It states that remedies should be proportionate to the severity of the maladministration and should aim to put things right. Financial compensation should aim to reflect any quantifiable loss where possible and the resident’s actions can be taken into account – for example if they have contributed to any adverse impact.
In this case, the landlord has calculated that the resident would have qualified for a significant reduction in her purchase price had she served the correct notices. A statutory procedure existed which the resident failed to take advantage of. In the Ombudsman’s view the level of the resident’s loss should still have been a factor in the landlord’s assessment of impact because, irrespective of her default, the fact remains that the landlord delayed and the resident continued to pay rent due to its failings. Had the purchase been completed efficiently the resident would not have had that expense and offering some financial acknowledgment of that should be involved in the landlord’s aim of putting things right.
Our Remedies Guidance suggests a sum of between £100 and £600 is appropriate where there is maladministration which adversely affects the resident but where there is no permanent impact. An award in the sum of £500 is considered appropriate, given the timescale involved and the level of distress and inconvenience caused to the resident. An order has been made below to this effect.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration by the landlord in respect of its handling of the resident’s right to buy application.

Orders and recommendations

Orders

The landlord should pay the resident compensation of £500.
It should confirm with this Service that it has complied with the Order within four weeks of receiving this determination.