City of London Corporation (202119697)

REPORT

COMPLAINT 202119697

City of London Corporation

24 August 2023

Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman Scheme. The Ombudsman must determine whether a complaint comes within their jurisdiction. The Ombudsman seeks to resolve disputes wherever possible but cannot investigate complaints that fall outside of this.

In deciding whether a complaint falls within their jurisdiction, the Ombudsman will carefully consider all the evidence provided by the parties and the circumstances of the case.

The complaint

The complaint is about the landlord’s:
1. Handling of the resident’s request to purchase the remaining share of the property.
2. Response to the resident’s concerns regarding a valuation of the property.

Determination (jurisdictional decision)

When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.

After carefully considering all the evidence, I have determined that the complaint, as set out above, is not within the Ombudsman’s jurisdiction.

Summary of events

Background

The lease for the property (the property) subject of the complaint, dated March 2004, sets out that the lease “is executed in pursuance of part 5 of the Housing Act 1985 (the Act) and more particularly pursuant to the right to acquire on rent to mortgage terms contained in section 143 of the Act”.
Part 5 of the Act deals with the Right to Buy (RTB).
Section 143 of the Act deals with a resident’s right to acquire on rent to mortgage terms.
At the time of the complaint the resident was the shared owner of the property.
The landlord is the freeholder of the property. The landlord is a local authority.

Summary of events

On 24 May 2021 the resident wrote to the landlord confirming that she was the shared owner of the property, owning 50%, and would like to purchase the remaining 50%. The resident asked the landlord to therefore arrange a valuation and “provide some information on the process”. The landlord acknowledged the resident’s correspondence on the following day, setting out that it would revert back to her in due course with further information on the process.
On 9 June 2021 the resident chased the landlord for an update on her request. The landlord responded on 24 June 2021 confirming that the resident’s details had been forwarded to its internal surveyor (surveyor A) to carry out a valuation of the property and would be in touch with her directly.
On 12 July 2021 the resident contacted the landlord to report that she had not heard from surveyor A to arrange a valuation. Within her correspondence the resident set out that she was disappointed that the landlord had failed to keep her updated regarding the process. On the same day the landlord apologised that surveyor A had not been in touch, confirming that it would seek an update.
On 14 July 2021 the resident contacted the landlord to advise that she had still not had any communication regarding the valuation. The resident asked the landlord to provide her with surveyor A’s contact details so that she may get in touch with them directly. The landlord responded on the same day confirming that it was required to instruct an external surveyor (surveyor B) to complete the valuation, rather than its internal surveyor. The landlord confirmed that surveyor B would be in touch with the resident “before the end of the week”.
On 21 July 2021 surveyor B attended the property to complete the valuation.
On 3 and 9 August 2021 the resident asked the landlord to provide an update following the valuation appointment as she had not heard from it. The resident noted that she was “very frustrated” by the landlord’s lack of updates.
On 9 August 2021 the landlord responded setting out that surveyor B was currently on leave and it would provide an update following their return.
On 16 August 2021, following a further chaser from the resident, the landlord wrote to the resident setting out that it had received the valuation and it was waiting for it to be approved.
On 27 August, 9 September and 21 September 2021 the resident chased the landlord for an update on the valuation.
On 22 September 2021 the resident wrote to the landlord to submit a complaint about the landlord’s response to and handling of her request to purchase the remaining shares in the property. In summary the resident said:
1. It was unsatisfactory that despite her request dated May 2021, to purchase the remaining shares in the property, she was yet to receive a response or clear guidance on the process.
2. The landlord had advised that an outcome to her request had been protracted as it was “an unusual case” which it had not dealt with before. She advised that the landlord had not taken ownership of her request.
3. The landlord’s officers had been unsympathetic in dealing with her request.
4. The landlord’s officers had not apologised for its poor handling of her request and the delays she had experienced and therefore the impact on her.
On 5 October 2021 the landlord wrote to the resident setting out that it was in the process of “calculating [her] sale price” for the remaining shares in the property. The landlord advised that as soon as the sale price was confirmed it would process the section 125 offer notice under the Act (the landlord’s notice of purchase price and other matters). Within its correspondence the landlord apologised for the delays in processing the resident’s request.
On 6 October 2021 the landlord provided its stage one response following a conversation with the resident, In summary the landlord said:
1. It “very rarely” dealt with requests from its residents to purchase a share in their home and there was “no defined internal procedure or timescales for handling applications of this type”. It further explained that the process required it to liaise with colleagues in multiple departments and an external surveyor which “took time to conclude”. It confirmed that despite this, it agreed that the resident’s request had not been progressed quickly enough. It therefore apologised for the inconvenience and frustration the resident will have experienced.
2. In the absence of any defined process and timescales in relation to the purchase of shares it expected staff to update residents and maintain contact “at reasonable intervals” even when there was no progress to report. It confirmed that its review of the case highlighted that it was “not as proactive in communication with [the resident] as [it] should have been”. It noted that the resident initiated contact on most occasions to seek an update. It therefore apologised.
3. It was sorry that the resident felt that its correspondence was unhelpful and impersonal. It confirmed that it had reviewed correspondence by its officers and agreed that they could have been “more informative and apologetic for the situation”.
4. The final purchase price for the outstanding shares in the property was being confirmed and a final valuation would then be provided to the resident. It set out that it would be “challenging to put a timescale on completing this task” but it would keep in contact with the resident.
5. It would use the resident’s complaint as learning to improve the service it provided in relation to processing requests to purchase shares in a property, including agreeing service standards.
On 12 October 2021 the resident requested to escalate the complaint as she was not satisfied with the landlord’s response. In summary the resident said:
1. It was unsatisfactory that the landlord did not have “any clear process and procedures in place to manage a case such as [hers]”.
2. The landlord’s response that it had not dealt with many requests to purchase shares in a property made her “feel vulnerable and worried as a customer” in addition to giving her the impression that the process was “being made up as the situation transpired”.
3. She was concerned that during the process the landlord had not requested information on the improvements she had made to the property and therefore that a true calculation could be determined.
4. She was still waiting for the final purchase price to be issued.
On 14 October 2021 the landlord wrote to the resident to advise that it hoped to provide the resident with the “offer notice” for the price of the remaining shares in the property by “middle of next week”. Within its correspondence the landlord noted the resident’s concerns regarding improvements. The landlord advised that during the valuation inspection the resident did not inform surveyor B of any improvements. The landlord explained that if the resident was unhappy with the final sale price she had the right to appeal the cost via the District Valuer Service (DVS).
On the same day the resident replied confirming that she had “a long conversation” with surveyor B regarding the improvements which she had made to the property. The resident stated that it did not make sense that the landlord had not checked with her regarding the improvements which she had made in order to calculate the final sale price.
In response, and also on 14 October 2021, the landlord acknowledged the resident’s escalation request. Within its acknowledgement the landlord noted:
1. It would like to arrange a time to speak with the resident regarding her escalation to understand the outcome she was seeking.
2. It was due to start the process of creating a service level agreement for the valuation process.
3. Valuations were carried out by an independent surveyor and it was for the surveyor to ask any questions that they considered relevant to the valuation.
4. The only way to challenge a final valuation was through the DVS.
5. Through the “normal RTB process” a resident could provide details of improvements that they had made to their home on the application form, however in the resident’s case there was no application form.
On 18 October 2021 the landlord wrote to the resident, following a telephone conversation with her earlier that day, that it would issue its stage two response by 15 November 2021.
On 22 October 2021 the landlord issued the resident with the section 125 offer notice.
On 15 November 2021 the landlord wrote to the resident to confirm that its stage two response would be delayed until 17 November 2021. The landlord apologised for the inconvenience this would cause.
On 17 November 2021 the landlord provided its stage two response. In summary the landlord said:
1. In respect of “lack of processes and procedures”:
  1. It rarely dealt with requests to purchase a share in a property and it currently had no defined procedure or timescale for dealing with applications of this kind. It acknowledged, however, that despite this the resident’s request was not “handled as quickly and efficiently as it should have been”.
  2. It would like to award £100 for “unreasonable delays”.
2. In respect of “staff conduct”:
  1. It did not dispute that it had failed to provide timely updates on the progress of the resident’s application and that its “communication with [the resident was] inadequate”.
  2. It was unsatisfactory that the resident was required to chase for updates.
  3. Its correspondence should have been “more informative and sympathetic”.
  4. It would like to award £100 for “staff conduct”.
1. In respect of the valuation:
  1. The report prepared by surveyor B included photographs of the property’s kitchen, bathroom, living room and two bedrooms “that [gave] some indication” of the works the resident had completed to the property.
  2. A comment by surveyor B within the report set out “the fixtures and fittings in the kitchen and the bathroom [would] not need updating… the flooring and decorations to the walls and ceilings throughout [would] not require redecorating”. It confirmed that this suggested that surveyor B did “note and acknowledge at least some of the improvement works” which the resident had completed to the property.
  3. The valuation of the property was based on “various attributes such as its size, location, condition and specification”. It confirmed that “due consideration [did] appear to have been given to the condition of the interior of [the property] in the preparation of the valuation… [it] did not believe that it should be necessary to seek an alternative valuation”.
  4. It noted from discussions with the resident that the valuation of the property was “consistent with what [she was] expecting”. It also noted that the report following the valuation included information on appropriate comparable properties.
  5. It had attached a copy of its instruction letter to surveyor B which showed that they were fully accredited to carry out residential valuations with two Royal Institution of Chartered Surveyors (RICS) registered valuers singing off the valuation. It noted that the valuation was also signed off by a registered valuer internally.
  6. If the resident remained unhappy with the valuation price she may refer the matter to the DVS.
The landlord concluded by confirming that the resident may request to escalate her complaint to stage three of the complaint procedure (as her complaint predated the introduction of its new procedure which was in line with the Ombudsman’s Complaint Handling Code).
On 18 November 2021 the resident responded to the landlord’s stage two response. In summary the resident said:
1. She accepted the landlord’s apology and £200 compensation for the customer service which she had received.
2. She did not agree with the landlord’s “narrative and conclusion in regards to the valuation”.
3. The comments made by surveyor B regarding the condition of the property did “not quantify nor include any [monetary] deductions” she had spent on the property.
4. Within the valuation report it stated “none” against “tenant’s improvements”.
5. The only conversation she had had with surveyor B during the valuation was regarding the works which she had completed to the property.
6. She was not disputing the valuation provided for the property, as these were similar to valuations she had received from independent estate agents, however she was concerned that the valuation did not include a deduction to compensate for the “works and repairs” she had undertaken in the property. She noted that as part of the “normal RTB” process the resident would be asked to provide details of what repairs had been undertaken which would then be taken into consideration in the final price. She believed that it was “unfair” that the same process had not applied in her case. She explained that she had spent “in excess of £25,000 on repairs to the property”.
On 23 November 2021 the landlord responded to the resident. In summary the landlord said:
1. It had discussed the resident’s case with surveyor B who confirmed that “the works [she] carried out in [the property] would not have made a difference to the valuation”.
2. The resident was able to take her complaint to the this Service, rather than progressing to stage three as stage three had recently been removed from its complaint procedure.
On the same day the resident confirmed that she would refer her complaint to this Service for consideration. The resident also asked the landlord to confirm if the purchase price would remain the same while the complaint was with this Service waiting for a decision.
On 24 November 2021 the landlord replied confirming that the section 125 offer letter was valid for 12 weeks from the date of the notice. It explained that it would not be able to extend the deadline and the offer would be withdrawn if the resident did not respond in time.
On 13 January 2022 the resident wrote to the landlord to confirm that she wished to purchase the remaining share in the property.

Reasons

The landlord’s handling of the resident’s request to purchase the remaining share of the property

Paragraph 42(k) of the Housing Ombudsman Scheme sets out that the Ombudsman will not consider complaints which, in the Ombudsman’s opinion, fall properly within the jurisdiction of another Ombudsman, regulator or complaint-handling body.
As part of her complaint the resident has raised concerns regarding the landlord’s handling of her request to purchase the remaining share of the property under the RTB process, including that there were significant delays and no procedures in place.
Where a landlord is a local authority the Ombudsman can consider complaints about the landlord in relation to its housing activities so far as they relate to the provision or management of social housing. This does not include the sale or disposal of a property. Complaints about the sale or disposal of a property owned by a local authority, including the RTB process, concern the landlord’s actions as a local authority which is a matter for the Local Government and Social Care Ombudsman (LGSCO) to consider. Therefore and in accordance with paragraph 42(k) of the Housing Ombudsman Scheme this part of the complaint is not one that the Ombudsman can consider.
The Ombudsman notes that within the landlord’s final response it referred the resident to this Service for a determination on her complaint. The Ombudsman will therefore make a recommendation to the landlord that it carefully considers the subject matter of a complaint to ensure that it signposts the resident to the correct Ombudsman.

The landlord’s response to the resident’s concerns regarding a valuation of the property

As already noted above, paragraph 42(k) of the Housing Ombudsman Scheme sets out that the Ombudsman will not consider complaints which, in the Ombudsman’s opinion, fall properly within the jurisdiction of another Ombudsman, regulator or complaint-handling body.
As part of her complaint the resident disputed the valuation of the property and whether the valuation included a deduction to compensate for the improvement works she had completed on it while she was the part-owner.
Under the RTB rules a resident can appeal to the DVS, who are a specialist property arm of the Government’s Valuation Office Agency, where they dispute a landlord’s valuation of their property. As part of its process the DVS will inspect the property to determine if the landlord’s valuation was correct, and if not it will make an adjustment to the valuation which is binding on the parties.
Therefore, the resident’s complaint concerning the valuation of the property is not for the Ombudsman as it would be more appropriately considered by the DVS who can make a binding and final decision on the valuation of the property for the purchase of a RTB application. This is in accordance with paragraph 42(k) of the Housing Ombudsman Scheme.

Recommendation

The landlord should ensure that it signposts a resident to the correct Ombudsman following the conclusion of its complaint procedure by carefully considering the subject matter of the complaint. The Housing Ombudsman’s website contains detailed information setting out which types of complaints are for each Ombudsman (this Service and the LGSCO) which a landlord can refer to when it is not clear. It can also seek advice from either Ombudsman if it is unsure.