Clarion Housing Association Limited (202115802)

REPORT

COMPLAINT 202115802

Clarion Housing Association Limited

16 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 errors in the resident’s lease, the landlord’s response to the resident’s reports of domestic violence and of the landlord’s administration and level of communication.
The Ombudsman has considered the landlord’s complaint handling.

Background and summary of events

The resident owned a shared ownership lease. He purchased a 30% share on 20 January 2017. The prescribed clauses of the lease recited that the term of the lease began on 25 December 2006 and expired on 19 December 2011. The particulars stated that the commencement date was 25 December 2006. A further paragraph of the lease stated it was for a term of 125 years less 3 days.
The initial percentage was 30%. The resident was entitled to increase his share by a “portioned percentage” which was defined as a portion of the market value up to a maximum of 80%. This would apply to any mortgagee. The provisions would apply on the basis that where the mortgagee acquired 100% share, the landlord and mortgagee would have to complete a specific memorandum. On acquiring 100%, the mortgagee would also have the right to acquire the freehold at no charge.
The landlord’s domestic abuse policy set out a range of objectives and actions it would take including:
1. Its staff were trained to recognise domestic abuse, to understand that it was a crime, and were able to provide an appropriate and sensitive response.
2. Victims of domestic abuse and their family would be referred to the appropriate agencies as early as possible.
3. All frontline staff members were trained to understand safeguarding and where appropriate make immediate referrals.
4. It would record all reports of domestic abuse, subsequent actions and contacts on its IT system.

Chronology

On 15 March 2019, the landlord wrote to the resident that it had “come to its attention” that there were “some mistakes in the lease so that it did not say the same as had been intended by us and the original buyer”. While “the mistakes were made by both parties”, it would will pay the costs of rectification of the lease. The Particulars stated that the lease was 125 years less 3 days expiring 19 December 2131, with a start date 25 December 2006. In order for the lease to end 9 December 2131, the start date should have been 22 December 2006. Under a further clause, it stated that that the maximum share the resident was entitled to purchase was 80% but a later paragraph “incorrectly” referred to 100%. The landlord had prepared a “short agreement” correcting the errors. It offered to discuss the matter with the resident.
There was a gap in the evidence. In a subsequent email, the resident stated that on 30 May 2019, he had agreed to a simple deed of rectification. As at 10 March 2020, his solicitor had been wating to hear from the landlord’s solicitors. He wanted to deal with the issue quickly given he was getting divorced and he needed to sell the property.
According to a letter headed draft and dated “(17) July 2020”, the landlord wrote to the resident as follows:
1. It stated that the discrepancies in the lease could cause the resident issues on sale.
2. It had understood he had wanted to correct the mistakes and instructed solicitors to deal with this matter but his solicitors had not yet confirmed whether he had signed the agreement.
3. It offered £3,500 a goodwill payment to reflect the inconvenience caused if he abided by certain timescales, which would be reduced to £1,500 if the matter took longer.
It is assumed that, although the version of the letter provided to the Ombudsman was marked draft, the content of the final version was broadly the same.
On 19 July 2020, the resident wrote referring to the landlord’s letter of 17 July 2020. Communication issues, personnel changes, and difficulties making contact with people at the landlord and the fact that his solicitor was furloughed, had meant the matter had “dragged on” for too long. He was keen to get this resolved and would chase his solicitor. He found it indicative that the landlord had changed its initial position of the previous spring of “blaming (him) for the inconsistency, to offering £3,500 to get it resolved. He asked whether the writer of the 17 July 2020 letter would be a regular point of contact.
The landlord replied on 20 July 2020 that the writer would be his point of contact.
The resident wrote to the landlord on 6 August 2020 notifying it of his intention to sell his interest in the lease.
On 2 October 2020, the resident wrote that there was a “sticking point” between his solicitors and (his or the buyer’s) mortgage company. He had secured a buyer for his flat. He suggested that the lease amendment be made on the transfer of the lease.
The landlord replied on 5 October 2020 that it would ask its solicitors whether it was possible and would contact him later that week.
The resident chased his request on 13 October 2020. The landlord replied on 14 October 2020 that it would chase its solicitors.
The resident wrote on 15 October 2020 that his buyer was not aware of the discrepancies in the lease. His solicitor did not agree that the lease required amending. The landlord’s solicitors had not responded “for many months”. His solicitor advised him that the rectification of the lease could cause difficulties with his mortgage lender and that the lender might not accept the change. His mortgage lender “had been slow dealing with the request”. He was concerned that agreeing to the change could result in his needing to change mortgage provider and paying an early repayment charge of several thousand pounds. He would not agree to the amendment prior to the sale. He said he had been “threatened, chased, hounded, bribed and routinely ignored” by the landlord through the process.
The resident chased again on 23 October 2020. The landlord replied on 29 October 2020 that it was still awaiting a response from its solicitors. It had “escalated the delay” with its solicitors. The resident replied on the same day asking for a call that day. The repeated failure to respond was causing him stress. He chased again on 3 November 2020 asking to escalate the matter to a manager.
The landlord wrote on 4 November 2020. It was considering options on the resale. It would follow the matter up.
The resident replied on the same day. When he considered agreeing to the changes, his mortgage lender “(had) been unable to approve them”. He had been “unable to proceed without redeeming his mortgage”. He stated again the situation was very stressful.
The landlord wrote to the resident on 30 November 2020, stating that the resident’s buyer was in agreement with the landlord’s proposal (surrender and regrant of the lease). The documents were being prepared.
There was a further gap in the correspondence. According to later correspondence, completion of the sale took place on 27 January 2021.
The landlord wrote to the resident on 15 March 2021. The landlord had been discussing the issue with its former solicitors who dealt with the drafting of his lease and their insurers. The insurers had confirmed that they were prepared to fund a substantial goodwill payment to compensate him for any difficulty. If he confirmed by 30 March 2021 that he would enter into a written agreement to correct the mistakes, and along with the mortgage provider (if any), within six weeks of that confirmation, then the insurers would fund a payment of £25,000 It would pay for his legal costs for the resident’s advice.
The resident replied on 19 March 2021 that he had completed the sale of his share on 27 January 2021 and the lease was to have been rectified at the time of that sale.
The landlord replied on 23 March 2021 that it would check whether the variation was made at the point of sale and if not, take the rectification forward with the new owner. It would let him know. It apologised.
The resident wrote on 26 March 2021 regarding a service charge demand that the landlord had sent to hm. The landlord wrote back to state the records had been updated and it apologised.
On 26 March 2021, the resident made a complaint as follows: The “irresponsibility of the process” and the communications issues relating to the lease error was concerning. The sale of the share, reassignment of lease and change of responsibility for charges should have been registered on the day of completion. It was frustrating communicating with an organisation that only offered office hours phone lines with insufficient resources and that listed him as a debtor with potential serious impact on, for example, his credit rating. He asked the landlord to review its communications with him.
The landlord’s note of a conversation between the parties on 22 April 2021 stated as follows:
1. The resident had come out of a domestic violence relationship and had tried to contact the landlord for some help and support. He had emailed and made online enquiries but only ever received an automated response.
2. He then contacted the landlord in 2019, to confirm that he had moved out of the property due to domestic violence and provided a forwarding address. No-one had taken responsibility but instead passed him between teams.
3. He began to try and sell the property in summer 2020 and there were issues with the lease. After “months of toing and froing”, it was agreed that the issue with the lease could be resolved.
According to the landlord’s internal records, it had not located reports of domestic violence by the resident. The landlord would only offer signposting in response to a report by a shared owner experiencing suffering domestic violence.
The landlord wrote to the resident with its first-stage complaint response on 4 May 2021 as follows:
1. It apologised for the delay in responding. It had noted that the resident had informed the landlord that the complaint was mainly regarding the level of communication.
2. The resident had come out of a domestic violence situation in 2019 and felt that the landlord had failed to offer help and support when asked. He had only ever received an automated response. It had been unable to see his communications in relation to these reports.
3. It apologised that that he was not provided with support or signposting to other organisations.
4. He had tried to sell the property in the summer of 2020, only to discover that there were issues with the lease. The outcome was that it was agreed that a new lease would be granted at the completion of the sale.
5. Due to an oversight by solicitors, it had completed the sale without a new lease being granted. It would address the errors in the lease with the new owner. It apologised.
6. It also apologised for the delay in updating its records following the sale of the property and it had sent an arrears letter. It had required a copy of the legal Notice of Transfer and that had been delayed by the buyer’s solicitors.
7. It would be making some adjustments to the approach when updating accounts following a shared ownership resale. It confirmed the records had been updated.
8. It offered £100 compensation consisting of £50 for the delay in responding to the complaint and delay in updating the account following completion, and £50 in relation to the errors in the lease resulting in a delay in the sale process.
The resident replied on 8 May 2021. He did not feel, despite its acceptance of some failings and the offer of some compensation, the landlord had understood the full extent of the “atrocious communications” throughout a 20-month process. It had not apologised that it had taken two months to agree to the resident’s proposal. He asked the landlord to reinvestigate. He set out the chronology. A court had made an order for sale. It had transpired that he was able to sell the property without the lease changes, “contrary to the (landlord’s) threats of Spring 2019”. Its stewardship of funds was “really disappointing”, given that he had agreed to the amendment in 2019. The response did not address the emotional impact of “the atrocious mismanagement” at a very stressful time. It was not his fault.
The landlord wrote on 11 June 2021 with its second-stage response as follows:
1. It agreed that the communication and service it had provided was not at the level it would have expected.
2. It understood and appreciated that the selling of a property was particularly demanding and pressurised experience.
3. It was disappointed that it did not provide any signposting and support in relation to the domestic abuse.
4. A number of steps had been taken to improve on both its service and communication. Further training had also been provided to staff to better engage and support its customers.
5. The issues with the lease were not his fault, the failure was actually due to its solicitors not acting as directed.
6. It apologised for the inconvenience and distress. It increased its offer to £200, adding £100 for inconvenience and distress.
On 28 June 2021, the resident requested a copy of the parties’ correspondence in relation to the lease. He informed the landlord that he was referring his complaint to this Service. The resident chased at various times. According to his email of 8 October 2021, the resident eventually obtained copies from his solicitor, at a fee.
On 27 January 2023, the landlord wrote to the resident as follows:
1. Further to correspondence from the Housing Ombudsman Service regarding its handling of the sales process and communication, it acknowledged that the delays with communication and service was not at the level it would have expected.
2. It was sorry that he continued to feel its response had not addressed the emotional impact on him and offered £500 compensation for the inconvenience.
The landlord subsequently confirmed to this Service that the offer was for £700 and added that the resident had refused payment.
The resident has informed this Service that the landlord had initially offered £500 and this was increased to £700. He also informed this Service that the landlord took from January 2023 to April 2023 to make payment.

Assessment and findings

The landlord’s handling of errors in the resident’s lease, the landlord’s response to the resident’s reports of domestic violence and of the landlord’s administration and level of communication.

This investigation was hampered by gaps in the evidence as highlighted in this report. They indicated that the landlord did not have oversight on the communication between the parties’ solicitors (which would not have been confidential) and the evidence indicated the landlord had difficulty in collating its own records. It appeared it did not have access to records of staff that had left the organisation.
The landlord acknowledged its service failure as follows:
1. It apologised that the resident was not provided with help or signposted to organisations regarding the domestic violence he was facing at the time.
2. It apologised for the errors in the lease resulting in a delay in the sale process
3. It apologised for not updating its records after the completion of the resident’s sale.
4. It later acknowledged, in broad terms, its poor communication.
5. It acknowledged that the sales process was stressful.
6. It confirmed that the delay in the rectification of the lease was not the fault of the resident.
It was concerning that the landlord had not responded to the resident’s request for information or support about domestic violence. It is noted that the landlord did not identify any records of the resident’s reports, which is concerning, even when the resident moved out, given that its policy was to log reports and consider opening an ASB case on receipt of reports. It was further concerning that it stated that it would only offer signposting. Not only does this not comply with its policies, but there was also no proper rationale to treat shared owners differently in that regard. The Ombudsman would consider that an inadequate response in any event. Not only was it unreasonable not to have provided any information in such circumstances but the Ombudsman would expect the landlord to have been proactive in its response, including risk assessing the resident ensure as far as it was able that the resident was receiving the right support and, within reason, monitor the situation. While the thrust of the complaint was the lack of communication by the landlord of which this was illustrative, the Ombudsman will make a recommendation in that regard.
While the landlord acknowledged failings, the resident was of the view that the landlord had not fully appreciated the situation and impact on him. He had felt the communication was very poor and that he was pressurised unnecessarily. This leaves the Ombudsman to consider whether the landlord recognised and understood the issues and whether it provided reasonable redress to the resident.
The initial letter of 19 March 2019 was inappropriate. It did not suggest that the resident should seek legal advice or make an offer to pay his legal costs to do so at that stage. The letter was framed as if rectification of the lease was no more than an adjustment to the numbers. However, the resident’s lender was sufficiently concerned as to refuse the request, the resident’s solicitor had advised it may cause difficulties for the lender, indeed the change in the wording could have changed its rights, and the landlord sufficiently concerned so as to offer remuneration and raise the issues with its solicitors.
The letter refers to the errors in the lease having been made by both parties. This was inappropriate as the resident was not the original party to the lease.
While the landlord’s evidence appeared to be incomplete, it indicated a lack of progress that the landlord acknowledged was not the fault of the resident. In the circumstances, the benefit of any doubt is given to the resident and the Ombudsman accepts that the landlord’s solicitors did not respond to the resident’s solicitor in the period to July 2020. The Ombudsman notes that the delay was partly due to the resident’s solicitor being furloughed, which would have only applied to the period from March 2020 when lockdown began. However, it was unreasonable that the landlord failed to monitor the matter and subsequently attribute blame to the resident, if it did so.
The July 2020 letter was framed in terms that if the resident did not agree to rectification, this could cause him to have issues at sale. This would have given the resident concern. The Ombudsman has noted that the resident took his own legal advice so his solicitor would have advised the resident on the risk the discrepancies presented which could have reduced the impact. However, the correspondence gave the resident cause for concern, in particular as he was obliged by an order from the court to sell the property and he felt he may have to redeem the mortgage at considerable expense. The resident expressed considerable anxiety at the process and delays.
While the resident’s sale was successful even with the defective lease, this did not signify that the landlord misled him in stating that the discrepancies could have made any sale problematic. It is noted that the resident stated that his solicitor had advised that rectification was not necessary. However, the matter was not necessarily straightforward. The landlord was clearly motivated to rectify the lease. The resident’s lender had refused to agree to the change.
There was no evidence that the resident was waiting for the matter to be resolved before he marketed the sale, nor did the resident claim that to be the case, nor evidence that the issue delayed the conveyancing. Instead, the evidence indicated that the matter was not raised during the conveyancing. However, the landlord’s delay in responding to the resident between the beginning of October 2021 and 30 November 2021 caused the resident further anxiety and the time and trouble of chasing the landlord.
The landlord should have amended its records following the completion of the sale. However, it acted reasonably as it apologised and stated it had changed its processes which were clearly at fault. However, this added to the resident’s frustration.
The landlord effectively offered the resident £150 for the various delays, ranging from its failure to respond to the resident’s request for assistance as a victim of domestic violence, through to the delays in dealing with the rectification of the lease. In the view of the Ombudsman, this was insufficient redress, given the anxiety the resident experienced. He had been facing the combined stress of leaving a relationship of domestic violence, not living in his own property, and dealing with the sale of his property. This was in addition to the anxiety of the communications regarding the incorrect lease in the period of March 2019 to November 2020, being told he would have difficulties selling at the time he was about to put the property on the market, contemplating mortgaging at considerable expense, and culminating in receiving a letter chasing him for arrears.
While the anxiety was exacerbated by the resident’s life circumstances, there was no dispute that the delays were due to the landlord’s poor communication and poor administration, which was inappropriate. This was supported by the evidence, including the delays in the landlord’s substantive responses and on occasions, failing to respond at all. It is noted that the poor communication continued as the resident sought to obtain his copy documents. The resident made it very clear that his complaint had concerned the lack of communication and the landlord’s poor management.
The landlord has since offered and paid the resident £700. The Ombudsman considered this offer constituted reasonable redress without which the Ombudsman would have found maladministration in relation to this complaint. However, the offer came after a significant delay of 19 months after the conclusion of its internal complaints procedure. This delay will be addressed as part of this report’s investigation of the landlord’s complaint handling.

Complaint handling

While the landlord’s initial first stage response was late, the delay was minimal and was, in the view of the Ombudsman, sufficiently addressed by its apology and the offer of £50. However, while it apologised for the lack of support in response to the resident’s reports of domestic violence, the landlord misunderstood the complaint in a number of ways. Although the resident specifically asked the landlord to review its communications, the landlord failed to note the extent of the history of the complaint, including that the issues had begun in March 2019. This demonstrated that it did not investigate the full communication between the parties. It also failed to note its delay in responding to the resident’s proposal that the lease be rectified upon the sale to a third party.
The second stage review similarly failed to review the matter. While it indicated it would be making changes to its post-completion processes and acknowledged its delays, it again did not demonstrate that it had fully understood the issues. It made a number of assumptions about the nature of the complaint that were not supported by the evidence. It blamed the solicitors for not acting as it “directed”, namely referring to not rectifying the lease at the time of conveyancing. That missed the point of the resident’s complaint.
The landlord reviewed the complaint in January 2023, some 19 months after the conclusion of its final complaint response. Paragraph 53(b) of the Housing Ombudsman’s Scheme states that where the member has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily, this will result in a finding of ‘reasonable redress’.
However, it is not in the spirit of the Complaint Handling Code for a landlord to make an offer of redress so late after the conclusion of the internal complaints process and so soon prior to investigation. This Service did not suggest it be increased so the fresh offer was not made as a result of discussion with the landlord or mediation between the parties. The landlord increased the offer, according to its own evidence, because of correspondence with this Service, namely this Service’s document request. The Ombudsman would be concerned if compensation is only reviewed when complaints are referred to this Service and are to be investigated. This would not be fair to other residents or indeed the resident himself. In addition, the resident suffered considerable delay in the resolution in this matter.
Whilst it is positive that the landlord reconsidered its position and increased the offer of compensation, it is not clear why the landlord did not offer this amount when considering the complaint within its own complaint procedure but appears to have been prompted to reconsider its position following the complaint being referred to the Ombudsman. This was a missed opportunity to potentially resolve the complaint at an earlier point and it is of concern that the landlord did not use its complaints procedure to address these matters.
Given the landlord did not undertake a proper review of the complaint, appeared to misunderstand the resident’s reasons for complaining, and given that its offer of redress was made some 19 months after the date of the second stage complaint response, a significant delay, the Ombudsman finds maladministration in its complaint handling.

Determination (decision)

In accordance with Paragraph 53(b) of the Housing Ombudsman Scheme, in the Ombudsman’s view, there was reasonable redress in relation to the landlord’s handling of errors in the resident’s lease, the landlord’s response to the resident’s reports of domestic violence and of the landlord’s administration and level of communication.
In accordance with Paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in relation to the landlord’s complaint handling.

Reasons

There were significant delays in the landlord’s communication, from March 2019 to November 2020 which resulted in significant anxiety for the resident at a particularly stressful time of his life. The poor communication and record keeping included not providing the resident with any support in response to his report of domestic violence and sending him an arrears letter. However, the landlord eventually increased its compensation to a level that the Ombudsman deemed to constitute reasonable redress.
While the landlord acknowledged failings, the landlord failed to fully understand the resident’s complaint which indicated a lack of proper investigation and review. The landlord made the increased offer some 19 months after the conclusion of its internal process handling which gave the appearance of having been prompted by the prospect of this investigation.

Orders

The landlord is ordered to pay the resident compensation regarding its complaint handling in the amount of £300, to include the original amount of £50, within 4 weeks.
The landlord should confirm compliance with the above order to the Housing Ombudsman Service within 4 weeks of this report.

Recommendations

The Ombudsman makes the following recommendations:
1. In light of the findings in this report, the landlord should review its records management, ensuring that records are accessible even after a member of staff has left the organisation.
2. The landlord should ensure that it reviews complaints in a timely manner and that it undertakes a proper investigation, including a review of the entire history of a complaint where appropriate, in order to ensure a proper understanding of the complaint.
3. The landlord should review its response to reports of domestic violence and if there are any differences between its treatment of shared owners and tenants, and those differences are justified in law and good practice, it should review its policies accordingly.
The landlord should notify the Ombudsman of its intentions regarding these recommendations within 4 weeks of this report.