English Rural Housing Association Limited (202121006)

REPORT

COMPLAINT 202121006

English Rural Housing Association Limited

17 July 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:
1. The applicant’s application to purchase a shared ownership property.
2. The applicant’s complaint.

Background

In April 1998 a planning application was made in this case for the development of 36 dwellings in a rural setting, with five earmarked for social housing. Three of these properties were to be set up as shared equity arrangements (the other two as secure tenancies). On 27 April 1999 the then landowner signed a “Unilateral Obligation” setting out a hierarchy of preferred candidates for the social housing given its rural location. Primary preference would be given to applicants who had lived in the parish for at least two years or who had a “strong local connection” to it. In the absence of an allocation on this basis, secondary preference could be given to applicants from adjoining parishes.
On 18 October 2021 the applicant applied to the landlord to be allocated one of the shared equity properties as its current owner wished to sell their interest. The applicant did not live in the parish but asserted he had a strong connection to it making him a primary candidate for allocation. The landlord assessed that the connection was not sufficiently strong and that the applicant could only be considered on a secondary basis. As no primary applications had been made in the landlord’s view, it concluded it should extend its deadline for applications to ascertain whether there were any further secondary applicants in addition to this one. As a result of this process the property was allocated to another applicant who the landlord determined had a more pressing housing need.
The applicant complained to the landlord that it was wrong to assess his application as being secondary only – that it had ignored/failed to properly assess his connection to the area. Accordingly, he said the landlord had incorrectly allocated the property to somebody with less entitlement than himself. He questioned whether the extension of the deadline was appropriate and whether a staff member, who he considered to have been involved in the process throughout, had looked at the applications impartially. The applicant strongly urged the landlord to delay the sale to the successful applicant until his complaint had been investigated.
During the complaint process, the landlord refused to delay the sale to the allocated applicant and maintained that its interpretation of the Unilateral Obligation was accurate and that it had applied it correctly to the applicant’s situation. Nevertheless, it then obtained and paid for a legal opinion to check that its decision was sustainable and received positive advice in this regard. The landlord denied any bias or unethical behaviour on the part of its staff and cautioned that it would act should “unfounded allegations continue”.
The landlord did, however, accept that it needed to make “some modest adjustments” to the information it provided to applicants. It resolved to make it clearer in its guidance that the length of time a deadline could be extended by was in the landlord’s discretion and was up to four weeks (rather than simply being set at four weeks). It also explained that the purpose of attendance at a Stage Two complaint panel was for a complainant to set out their concerns, the Panel then discussing them separately afterwards and provided a written outcome – the applicant had understood a discussion would take place at the meeting. The landlord proposed to make this clearer to complainants moving forward.
The applicant remained dissatisfied and referred the matter to this Service. He stated that he wanted to be allowed to purchase the property and/or to be compensated for his losses. He stated he had sold his previous property assuming he would be purchasing this one. He has previously asserted to the landlord that its actions rendered him homeless.

Assessment and findings

Scope of Investigation

It will be apparent from the Background section above that the applicant did not enter into a landlord/tenant relationship with the landlord. As a result, the landlord has questioned whether this Service has jurisdiction to consider this complaint. Paragraph 25 of the Housing Ombudsman Scheme sets out a list of the “People who can use the Scheme”. It states, “The following people can make complaints to the Ombudsman about members: (b) an applicant for a property owned or managed by a member”. The Ombudsman is satisfied that it can consider this complaint.
It is not within the Ombudsman’s remit to assess whether the applicant did have a strong local connection to the parish in which the property is situated. That is the key point of this case. The Ombudsman cannot make such a decision and substitute its conclusion for that of the landlord. The role of this Service is to consider how the landlord handled the situation and the subsequent complaint – whether it followed its own policies and procedures, behaved fairly and reasonably and/or offered a reasonable level of service.
Further, this Service is not a court of law. It cannot give a binding opinion on the correct application and/or interpretation of the Unilateral Obligation, which is a legal document.
The resident has stated that his desired outcome from his complaint is to either be given the opportunity to purchase the property, or else that the landlord offer him suitable compensation for his inability to purchase the property. Whilst the Ombudsman has the authority to order a landlord to pay compensation in cases where maladministration has been identified, it should be noted here that it is not within this Service’s remit to order a landlord to sell a property to a specific individual.

The applicant’s application to purchase a shared ownership property.

The applicant registered an interest in the property via the landlord’s website and it replied with an application form to be completed by 10 November 2021. Its email stated, “To be eligible for this property you must have a local connection to the Parish” and “If we are unable to find suitable applicants from the Parish we will consider applicants with a local connection to the adjoining parishes”.
The applicant completed the application form for the property on 18 October 2021. It was made in the name of himself and his partner. Under the heading “Local Connection” the form stated: –
1. “The majority of our homes are only available to people with a local connection to the parish in which they are built. If we are unable to find a suitable applicant from the parish, we will widen our search to surrounding villages”.
The Ombudsman is satisfied that these criteria were therefore spelt out to the applicant at the outset when the form was completed.
Within the form the applicant answered the question “do you live in the village now” with a “no” and “adjoining village for 7 years”. In response to questions aimed at establishing a local connection the applicant stated, “I am the secretary for the local fishing club which is situated in the Close and I am on site every day”. The form confirmed the applicant was selling his current house due to financial constraints, set out his financial position, and showed that neither himself nor his partner worked in the parish. The form was therefore aimed at gathering the information the landlord needed to apply the Unilateral Obligation and in accordance with its policy, as set out below.
The landlord operates a “Housing Allocation Policy and Procedure”. It states that once the application deadline has passed “an initial assessment of applications will be carried out by an Allocations Panel consisting of two members of staff”. The Panel is required to examine applications to check for a “genuine housing need”; that applicants have “appropriate financial resources” and that there is a “local connection”.
Further, with regard to these criteria, the policy states: –
1. The landlord will use any legally binding Section 106 agreement (the Unilateral Obligation) to ensure homes are allocated on a local needs basis.
2. “Should no appropriate applicants be identified then the (landlord) will work with appropriate partners and use agreements to continue seeking a suitable applicant”.
Based on this policy, once the deadline had arrived the Ombudsman would reasonably have expected to see the landlord assess the applicant’s application having regard to the above provisions. Whilst the landlord has not provided a written record of its allocations panel meeting, it asserted in its complaint responses that it did consider whether the applicant’s connection to the fishing club represented a “strong local connection”.
Its conclusion was that the applicant’s association with the club did not provide an important service to the parish generally – only to members of the club. The landlord also concluded that the applicant had been able to carry out the role without living locally and such residence was not required for this purpose. The connection was not considered to be strong enough to render the applicant a primary candidate.
As set out earlier in this Report, it is not for the Ombudsman to apply its own definition of what might satisfy the term “strong local connection”. The policy shows the landlord was entitled to have regard to the Unilateral Obligation which set this requirement out, and in the Ombudsman’s opinion the landlord’s view was reasoned and logical, both of which this Service looks for as part of any reasonable decision making process.
An internal email shows that once the landlord had concluded the applicant was not a primary one, it went on to look at the applicant’s finances and housing needs – which was appropriate to its policy. It then decided to advertise in adjoining parishes – that is for any further secondary applicants. By 13 November 2021 the applicant was aware of what was happening – he emailed the landlord stating he had spoken to its staff member the day after the closing date.
The Ombudsman is satisfied that the applicant was made aware of the outcome of this initial stage and in a reasonable period of time. The landlord was entitled to make its initial assessment based on the information available to it at the time. It is noted that whilst the applicant did provide further evidence, this was after this point. There was an offer of work for the applicant in the parish but this was dated 16 November 2021 and had not commenced in any event. The landlord did agree to receive further information which showed it was open to revisiting its initial conclusion which was a reasonable stance to take.
As stated above, the landlord chose to readvertise the property and it extended the deadline by nine days. Its policy does not specify a duration for extensions but does provide for the possibility of them; it is agreed between the parties that the landlord’s website suggests four weeks but the landlord states this was not pursuant to any regulatory requirement and was not immoveable. It has offered to make the fact the delay may be shorter clearer on its website which was a reasonable response to the applicant’s concerns on this point.
In the Ombudsman’s view, given the landlord’s initial assessment of the applicant’s status as a secondary applicant it was entitled to readvertise the property in accordance with its policy, as set out above. Further the application form warned of this possibility as did the landlord’s email sending it out to the resident for completion (as both set out above too). The landlord therefore acted reasonably in this regard.
In early December 2021 (once the extended deadline had passed) the landlord’s staff member met with the applicant and completed an Interview Assessment Form in which he was scored points based on his situation and housing needs. This action accords with the landlord’s policy. It is noted that the applicant was living with relatives by this point having sold his home, but his conditions were described as “not overcrowded”. On 9 December 2021 the landlord wrote to the applicant stating his application had been unsuccessful. It was appropriate for the landlord to confirm the outcome of the allocation process.
The landlord’s policy concludes with a section on “Appealing a Decision”. It states: –
1. “Should an unsuccessful applicant wish to appeal a decision not to allocate them they must submit an appeal in writing within 14 days of the date of the letter advising them that they have been unsuccessful. This written appeal should set out the grounds for appealing the decision.”
2. “All the paperwork in connection with the appeal will be submitted to the Allocations Panel to review their decision in consultation with the Resident Services Director. The Allocations Panel will endeavour to provide a response to the appellant within 14 days of receiving the appeal.”
On 14 December 2021 the applicant submitted a ‘complaint/appeal’ stating that the landlord had reached the wrong conclusion about his local connection and that it had been wrong to extend the deadline and the advertising process when it had a valid application from him. He also questioned who had made the decisions in the case and whether anyone had any family or other links to the successful applicant.
The landlord responded on 22 December 2021 setting out why the application had been unsuccessful – the applicant was connected to a neighbouring parish by living there; his link to the fishing club did not, in the landlord’s opinion, satisfy the definition of “strong local connection” referred to in the Universal Obligation; and the job he had secured at a local bar had not started at the time the application was made.
In the Ombudsman’s view, the landlord complied with its policy in its response to the Appeal (and within the 14 day time period) which was appropriate.
Five further issues remain on the application.
1. As set out, the applicant has raised concerns about the impartiality of the landlord’s staff. No specific allegations have been made other than to question whether the successful applicant was related to any of them (the landlord denied this); and to allege that one of the staff went to school with a person living in a neighbouring house to the property in question. This latter suggestion is tenuous in terms of proving bias even if the alleged connection were established. The Ombudsman is satisfied that there is no evidence of bias in the decision making process.
2. The applicant states the landlord failed to contact the parish council as had “always been the procedure, so that the (landlord) could confirm the applicant’s position with regard to their local connection”. He has produced evidence from the parish clerk confirming this. The landlord’s allocation policy states that “local connection information will also be shared with Parish Council members for verification at the permission of applicants”. This does not, in the Ombudsman’s view, place a positive requirement on the landlord to ask the parish council to verify the local connection information on every application it receives – it advises the applicant that their details may be shared with the council and is contained in the part of the landlord’s policy which deals with data protection. This does not evidence a failure to follow process.
3. The applicant states the successful applicant did not view the property and the existing owner was not told of their interest. These are details which relate to another person’s application and the landlord would not reasonably be expected to go into them with a third party (in this instance, the applicant) for data protection purposes.
4. The applicant states the refusal of the application left him homeless as he had sold his house in anticipation of it being agreed. In fact, the application form shows that the decision to sell his house had been made earlier and independently of the process to secure this property; he had secured temporary accommodation with relatives; and there was never any guarantee that his application would be successful. The landlord addressed this aspect of the complaint, clearly stating its position and confirming that this concern had been considered thoroughly.
5. The applicant reported that the landlord’s member of staff who interviewed him was very positive about his application at the time but it was still refused. He considers this implies something occurred within the decision making process that has not been disclosed and was untoward. Social Housing is in high demand. Landlords may receive numerous applications all of which have merit – and a decision then needs to be made. This may involve choosing the strongest of a strong selection. A refusal does not necessarily mean an application lacked any merit or that there was bias in the decision making process.
In conclusion, the landlord’s handling of the applicant’s application was fair and reasonable. It was in accordance with policy and was appropriate. Whilst the landlord has agreed to modify the information provided to applicants about the time period for extension of the advertising period, the applicant suffered no detriment in believing any extension would be for longer than the one that transpired. This Service does not consider that this admission/offer warrants a finding of service failure.
During the course of this investigation, the Ombudsman has identified that there is an outdated version of the landlord’s guidance document ‘Shared Ownership Explained’ available online. These guidelines do not appear on the landlord’s website and although the link remains live, it appear that it has not been updated since 2016. As such, it is likely that this policy is either defunct or requires updating. It is recommended that the landlord reviews this document and takes steps to remove or update it.

The applicant’s complaint.

After receiving the landlord’s decision, the applicant requested details of its appeal and complaints processes. The landlord responded that an appeal needed to be in writing. The applicant sent a detailed email giving reasons for his dissatisfaction but marked it as “Letter of Complaint”. This was dated 14 November 2021.
On 22 December 2021 the landlord emailed the applicant in response to his email “appealing against the allocation process”. On 29 December 2021 the applicant sent a detailed email explaining why he remained dissatisfied. On 6 January 2021 the applicant chased the landlord for confirmation that the complaint was now being escalated. The landlord responded the same day stating that in accordance with its Complaints Policy (which it attached) a Panel would now be convened and a date would be supplied in due course. The panel sat on 14 January 2021 and 24 January 2021 and a final response was provided to the Applicant in writing on 27 January 2021.
The landlord’s Complaints Policy sets out that it has a two stage approach. The first stage is for any complaint to be acknowledged within five working days with a written decision being given within ten working days. In the event the complainant remains dissatisfied they can request an escalation to the second stage of the procedure when the complaint will be reviewed and a decision given in 20 working days.
In the event the landlord wishes to seek legal advice and is unable to achieve the timetable then the policy envisages a later response with the complainant being kept informed of developments.
It can be seen from the evidence that there was some confusion here. The applicant marked his communication as “Letter of Complaint” although it is clear that he also wished to appeal the decision. The landlord treated his request as an appeal. When the applicant asked for the matter to be escalated, the appeal response was treated as a Stage One complaint response by both sides and a Stage Two panel meeting was convened. However, the allocations policy states that following an appeal a formal complaint can be made – suggesting a Stage One response was still required. It is reasonable to conclude, however, that that response would have merely echoed what was set out in the appeal response and the escalation request would have been made anyway.
Irrespective of whether the landlord was following its allocations policy or its complaints policy, an initial response was given to the applicant within the time limit set out in both policies. Further, both policies provided for the same manager to deal with the matter. On the face of it, the applicant was not disadvantaged by this merging of the two processes, and the adoption of the appeal response as a stage one complaint response moved the process along more quickly.
As set out above, once the escalation request was made, the landlord was obliged, under its policy, to provide a written response within 20 working days. It is noted the timetable went beyond this by a few days. However, legal advice was sought and the policy provides for a delay in those circumstances.
It is not the remit of this Service to substitute its opinion for the conclusions of the complaints panel. The evidence demonstrates that the Panel meeting and the subsequent written response were comprehensive and addressed the applicant’s concerns. The landlord’s actions were therefore appropriate to its policy in this regard.
From an early stage in this case the applicant has suggested decisions were not made impartially. The Ombudsman is satisfied that whilst certain staff members were asked to contribute to the complaints process, the final panel was made up of persons independent of the decision making process and this represented an impartial review.
Finally, whilst the landlord resolved to make a “modest” change to the information provided to complainants about the nature of their attendance at the panel meeting, the Ombudsman does not consider this change warrants a finding of service failing.

Determination

The applicant’s application to purchase a shared ownership property.

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its handling of the application.

The applicant’s complaint.

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its handling of the complaint.

Recommendation

The landlord is to review its shared ownership guidelines uploaded online and assess if this should be removed or updated.