Home Group Limited (202203099)

REPORT

COMPLAINT 202203099

Home Group Limited

7 September 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:
1. The landlord’s handling of the sale process of the resident’s property.
2. The resident’s claim that the landlord’s handling of the sale process resulted her suffering a financial loss.
3. The landlord’s handling of the resident’s complaint.

Jurisdiction

What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. 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, in accordance with paragraph 42(g) of the Housing Ombudsman Scheme, the resident’s claim that the landlord’s handling of the sale process resulted her suffering a financial loss is outside of the Ombudsman’s jurisdiction.
Paragraph 42(g) of the Scheme states that the Ombudsman will not investigate complaints which in the Ombudsman’s opinion: “concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure”.
The resident contacted this Service on 1 September 2022, and asked the Ombudsman to investigate her complaint. The resident stated that she had suffered financial losses due the landlord’s handling of the sale of the property and the resulting delays, and said she:
1. Had potentially lost between £30,000 and £50,000 in “resale equity”;
2. Had lost out on a lower interest rate for a new mortgage product, as a result of the delays;
3. Was going to incur additional legal fees;
4. Had to continue paying rent, service charge and management fees totalling £3,311.91 during the period, and would not have been liable for this amount, but for the delays.
Resolving such a complaint requires a binding decision about whether the landlord’s actions resulted in any liability for the financial loss the resident claims to have suffered. An assessment to quantify the financial loss suffered would also be needed. The Ombudsman does not have the power to issue binding decisions about liability, nor does this Service have the necessary expertise to quantify loss. It has therefore been determined that this aspect of the resident’s complaint is best suited for consideration by a court, and is not one that the Ombudsman can consider. The resident may wish to seek independent legal advice about making a claim in the courts for the financial loss she claims to have suffered.
However, this investigation has considered the landlord’s overall handling of the sale and whether the landlord’s actions were reasonable in the circumstances of the case.

Background

At the time of the resident’s complaint she was a shared owner of her property, the landlord owned 50% of the property and the freehold. The resident’s complaint centres around the landlord’s handling of the resident’s request to purchase the remaining 50% of the property, and the freehold. The landlord does not have any recorded vulnerabilities for the resident.

Summary of events

On 22 December 2021, the resident instructed a surveyor to complete a valuation of her property. The value of the 50% share the resident intended to purchase was £100,000 “including improvements”, and £90,000 “excluding improvements”.
On 14 January 2022, the resident emailed the landlord and provided the valuation. She said that she had instructed a solicitor, and intended to purchase the remaining 50% of the property.
On 20 January 2022 the resident asked the landlord to clarify why it had put the purchase price of £100,000 on the purchase form. The resident said she was of the view that the price would be £90,000, because of the improvements she had made to the property. The landlord responded on the same day and said that it had checked its records and found that it had not given consent for the works she had done. The landlord had therefore not factored the works into the valuation, and the price of £100,000 was correct.
The resident sent the landlord a further email on 20 January 2022 and said that she was unhappy with the landlord’s decision. The resident was of the view that she did not need consent for the works she had done, apart from fitting a new bathroom, for which she was given consent. The resident emailed the landlord on 28 January 2022 and asked it to respond to her previous email, as she had not received one. The landlord responded on the same say and said that it had no record of giving permission for works the resident had done to the kitchen, or bathroom. It asked the resident to provide proof of works and invoices, and it would consider granting retrospective consent.
The resident emailed the landlord on 31 January 2022 and said that her solicitor had advised that the landlord’s interpretation of the valuation was incorrect, and the price should be £90,000. The resident expressed a concern that the valuation deadline was approaching, and she wanted to progress with the purchase. The landlord responded on 2 February 2022, and said that it was seeking advice from its legal department, due to the disputed purchase price. It advised the resident “not to worry” as the delay was at its end. The landlord emailed the resident on 9 February 2022 and said it was still discussing the matter with its legal department, and would provide an update soon.
The resident’s solicitor sent the landlord emails on 2 and 18 March 2022, asking it to provide a response to the resident’s queries about the valuation. It does not appear that the landlord responded to the emails.
The resident emailed the landlord on 24 March 2022 to make a complaint, and said:
1. She and her solicitor had been chasing the landlord for a response to her queries about the purchase price, and valuation;
2. It hadn’t responded to the resident’s interpretation of its policy, and the valuation was clear that she only needed to pay £90,000 for the remaining 50% of the property;
3. She was unhappy with its lack of communication, and that it had not yet made a decision about the purchase price.
The landlord responded on 24 March 2022 and said it would call her the next day when it had more in depth answers from its legal department. The resident responded on the same day and said she was unavailable for a call, due to work commitments, and needed a formal answer from the landlord, so she could seek legal advice. It appears that the landlord did not respond to the email.
The resident emailed the landlord on 5 April 2022 and said that she was disappointed not have received a response to her previous email. The resident said that she felt that her complaint was “not being looked into”. The resident emailed again on 14 April 2022 and said that she had just been told by its call centre that her that the complaint had either not been received, or not logged properly. She asked the landlord to look into her complaint.
The landlord emailed the resident on 13 April 2022 and said:
1. It had no record of it giving the resident consent to do any works at her property;
2. It acknowledged that the resident believed she had obtained verbal consent, but this did not satisfy its legal requirements . As such, it was unable to honour the lower price of £90,000 from the valuation;
3. It was willing to consider giving retrospective consent for the works done, if the resident was able to provide the appropriate evidence. If this was approved it could proceed at the lower price.
The resident responded on 22 April 2022 and said that she disagreed with the landlord’s position, and she did not need permission for the works she had done, save the bathroom which she had. The resident referenced the landlord’s policy and said the works she had done did not fall under those listed in its policy.
The landlord responded on 25 April 2022 and detailed the aspect of the resident’s lease which detailed the need for the resident to obtain consent before completing works. The landlord listed the works the resident had done that she should have obtained consent for, which were:
1. Installing a new boiler, and altering the position of the boiler in the property;
2. Installation of a new bathroom. It had checked its records against the resident’s claim it had given permission, and did not have a record of such. It asked the resident to provide evidence of written consent, and it would deduct the cost of the bathroom from the valuation;
3. Putting in a new toilet and sink;
4. Alterations to the lighting;
5. Installing underfloor heating;
6. Fitting a new kitchen;
7. Converting the downstairs toilet into a utility room;
8. Works to the loft;
9. Works to the garden.
The landlord emailed the resident on 6 May 2022 and said that it had now set out the options open to the resident. It said it was happy to proceed with the sale once the resident confirmed how she wanted to go ahead. It apologised for the “delayed response” to the resident’s enquiries, and said it would cover the cost of a new valuation. It asked if the resident wanted to pursue her complaint, and if so “which aspects” it needed to investigate. The landlord wrote to the resident on 9 May 2022 with a stage 1 complaint acknowledgement.
The resident responded on 16 May 2022 and asked if the landlord’s email of 6 May 2022 was a formal complaint response. If it was, she asked the complaint to be taken to stage 2. The resident asked that if its email was not a complaint response, to explain why it had not yet provided one within the timescales set out in its policy.
The landlord sent the resident a formal complaint response on 17 May 2022 and said:
1. Upon receiving the resident’s query about the valuation and works she had completed, it sought advice from its legal team that was “not forthcoming”;
2. It had not provided updates as it should have, and did not progress with the complaint as it should have. It apologised and said it should not have appeared to “ignore” the resident’s dissatisfaction;
3. Since April 2022 it had been in constant contact with the resident about the sale, and had set out all options available to the resident in order to progress;
4. As a goodwill gesture it would cover the cost of another valuation.
The resident emailed the landlord on 25 May 2022 and asked for her complaint to be taken to stage 2, as she felt her complaint was unresolved. The resident said the handling of her complaint at stage 1 was “misleading”, and believed its goodwill gesture did not put things right. The landlord responded on 27 May 2022 and said the complaint would be passed on to the relevant team to respond.
The resident contact this Service on 6 July 2022 and said the landlord had not responded to her stage 2 complaint. This Service wrote to the landlord on 5 August 2022 and asked the landlord to issue a stage 2 complaint response. The landlord sent its stage 2 complaint response on 19 August 2022, and said:
1. It had not communicated its position in relation to the sale of properly, or its position in relation to the valuation, clearly. It apologised for this failing;
2. It found that if it had set out its position earlier, the matter could have progressed more quickly;
3. It restated its offer to pay for a further valuation;
4. It was unable to progress with the sale at £90,000 and said the resident could either request retrospective consent for the works, or proceed with a new valuation and purchase the property at that price;
5. It apologised for the delay in escalating her complaint to stage 2, and had reminded staff of the correct process to follow;
6. It offered the resident £75 in compensation for its handling of the sale of the property, and £75 for its complaint handling.
The resident emailed the landlord on 30 August 2022, with a new valuation report, which detailed the same figures as the previous report. The resident said that she did not want to apply for retrospective consent for the works, and wanted to progress with the purchase of the property at £100,000.
The resident contacted this Service on 1 September 2022 and asked the Ombudsman to investigate her complaint. The resident said she was unhappy with how the landlord had handled the sale process, and her complaint. The resident stated that the compensation offered by the landlord did not fully put things right, and its handling of the matter had caused her a lot of stress. The resident completed the purchase of the remaining share of her property, and the freehold, on 1 February 2023.

Assessment and findings

Relevant policies and procedures

Section 3.5 of the resident’s lease agreement states that the resident is not to make any alterations, or additions to the interior of the property without obtaining written consent from the landlord.
The landlord’s ‘guide to staircasing’ (staircasing is the term used to describe the purchase of an increased stake in a shared ownership arrangement) says that for improvements to be included in a valuation, the resident must have been granted permission for them. The resident must be able to evidence the landlord granted permission.
The landlord’s complaint policy provided for this investigation does not set out the timeframes within which it will respond to complaints. The complaints guidance on the landlord’s website states that it will acknowledge stage 1 complaints within 5 working days, and will issue a response within 10 working days. It says it will respond to stage 2 complaints within 20 working days. It is noted that the landlord has since updated its complaints policy to include an appendix with response timeframes.
The landlord’s complaint policy states that, when it identifies failings, it is sometimes appropriate to offer a good will gesture, or to award compensation. The amounts it is able to award are not detailed in the policy.

The landlord’s handling of the sale process

When the requested to purchase the remainder of the property, and provided a valuation, in January 2022, the landlord made its position clear. Its email of 20 January 2022 explained to the resident that she had not got permission for the works to her property. As such, the improvement works could not be factored in to the valuation. Internal emails, seen as part of this investigation, show that the landlord checked its records for evidence of consent, and found none. This Service has seen no evidence that the resident obtained permission for the works she completed to her property, and the landlord position throughout the process was consistent in its view of the matter. It is evident that the resident, and her solicitor, disagreed with the landlord’s position and approach, and when challenged, the landlord’s communication around this was poor. The landlord’s complaint responses accepted that its communication in relation to the matter was not good.
Where there are admitted failings by a landlord, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was proportionate and reasonable. The Ombudsman’s dispute resolution principles are to be fair (follow fair processes and recognise what went wrong), put things right, and learn from outcomes.
The resident challenged the landlord’s position that it could not approve the valuation, that included the resident’s improvements. The landlord told the resident that it was seeking clarification from its legal team, but failed to provide the resident with a final decision on the matter. The resident was cost time and trouble through her, and her solicitor, chasing responses from the landlord in March 2022. It is noted that the landlord sought to manage the resident’s expectations in February 2022, by stating it was still awaiting information from its legal team. The landlord failed to follow up on this email, and did not respond to the resident’s request for a decision on 24 March 2022.
In April 2022, the landlord started to communicate more clearly with the resident about its final position in relation to the matter. Its email of 25 April 2022, explained, with clarity, the reasons for its decision, and outlined its position in relation to each individual improvement the resident had done. Against each improvement the landlord stated whether she should have asked for permission. This was appropriate, as it sought to put right its previous failings in communication by leaving the resident in no doubt of its position in relation to each improvement she had made. That it did this 3 months after the resident initially requested to purchase the property, amounts to an unreasonable delay. The resident experienced an inconvenience of a delayed process, in addition to time and trouble of chasing the landlord for a final decision on the matter.
The landlord’s stage 1 complaint response of May 2022 appropriately acknowledged and apologised for its poor communication in relation to the matter. The landlord sought to put things right by offering to cover the cost of a new valuation as a “goodwill gesture”. This offer was appropriate, as it is reasonable to conclude that its handling of the matter contributed to the delay, and as such the previous valuation had expired. However, the landlord failed to acknowledge the time and trouble the resident experienced in chasing the matter, or the evident distress she had told it she experienced. The landlord’s stage 1 response did not identify any learning it had done about its handling of the matter, which would have been in line with the Ombudsman’s dispute resolution principles. It is unclear, given its admitted failings, why the landlord did not offer the resident compensation in its stage 1 complaint response.
The landlord’s stage 2 complaint response acknowledged that its handling of the matter contributed to the delay in progressing the sale, which was appropriate. It appropriately apologised for this failing, but failed to evidence what learning it had done about its handling of the substantive issue. The landlord maintained its goodwill gesture of paying for the new valuation and offered £75 for its handling of the sale, which did not fully put things right for the resident. The resident experienced distress and inconvenience of not receiving responses to questions she had asked the landlord, for which the landlord to not appropriately offer redress. As such, relevant orders have been made below.

Complaint handling

The resident emailed the landlord on 24 March 2022, and asked it to raise a formal complaint. In line with its own policy, and the Ombudsman’s Complaint Handling Code (the Code), it is reasonable to expect the landlord to have acknowledged the complaint within 5 working days. That it did not was a failing in the landlord’s complaint handling. The resident was cost time and trouble by asking the landlord to respond to her complaint on 5 and 13 April 2022. The landlord did not acknowledge the complaint until 9 May 2022, which was an unreasonable delay and a failure to adhere to the timeframes in its policy and the Code. An internal email for the landlord, on 14 April 2022, acknowledged that the resident’s complaint was “never processed”. Why it did not formally acknowledge the complaint at that time is unclear, and was a further failing in its complaint handling.
It is noted that the landlord was communicating with the resident about the substantive issue of the complaint around this time, and was genuinely working to address the resident’s concerns. However, the tone of its email on 6 May 2022 is concerning as it appeared to suggest it had resolved the outstanding issue of the complaint. In the spirit of effective complaint handling, it would have been appropriate to still issue a formal response to identify learning it had done about its acknowledged failings. The suggestion that the resident would need to identify aspects of the complaint that were unresolved, if she wanted to progress with the complaint, was inappropriate. The tone of the email could reasonably be concluded to meant to have been taken as a formal response, but did not say it was. The result for the resident was confusion, as she did not understand at what stage in the process she was at. This is evident by her statement that she felt its approach was “misleading”. The resident evidently experienced frustration at this, and experienced further time and trouble of asking the landlord, again, for a response to her complaint.
The fact the landlord formally acknowledged the resident’s complaint 3 days after sending its email of 6 May 2022, which seemed to imply the complaint was resolved, must have created more confusion for the resident. Internal emails from 6 May 2022, indicate that the landlord felt the matter was resolved and hoped to close the complaint down. This approach was inappropriate and not in the spirit of effective complaint handling. The landlord did address the matter at hand, but it would still have been reasonable to expect it to issue a complaint response. It could then have reflected on the learning it had done, and sought to put things right for the resident. The landlord’s approach to the stage 1 complaint resulted in a hard to access complaints process, that was unfair for the resident.
The landlord’s stage 1 complaint response of, 19 May 2022, was sent 38 working days after it was made, which was well outside of the timeframes set out in the Code. The landlord admitted a failing in not progressing with the complaint when it should have, and appropriately apologised. The complaint response did not reflect on learning it had done from its complaint handling, or offer the resident any redress. Given it had admitted a failing, that resulted in a significant delay, it is unclear why the landlord did not offer compensation for its complaint handling. This was a further failing, as it did not try to put things right for the resident, at stage 1.
The landlord failed to progress with the resident’s stage 2 complaint, having responded to her request on 27 May 2022. This was a further failing in its complaint handling, and evidence that it had not learnt from the outcome of its handling of the stage 1 complaint. The resident was cost further time and trouble in seeking assistance form this Service to get the landlord to open and respond to her stage 2 complaint. The result was further inconvenience, in what had already been a protracted, and hard to access complaints process.
The landlord’s stage 2 complaint response appropriately acknowledged and apologised for the delay in progressing the stage 2 complaint. However, it failed to reflect on its delay in opening the stage 1 complaint, or comment on the lengthy delay the resident experienced overall. The landlord did not apologise for or acknowledge the amount of time the resident had spent chasing it for complaint response, which would have been reasonable. The landlord also failed to address the resident’s concern that its complaint handling had been “misleading”, which would have been appropriate. The landlord can reasonably be expected to address all of the concerns raised in the resident’s stage 2 escalation request, that it did not was a further failing.
The landlord’s stage 2 complaint response stated that it had reminded its staff of the correct complaints process. This did not demonstrate genuine learning. Its complaint response did not address all of the failings in its complaint handling, therefore the £75 it offered cannot be said to have fully put things right for the resident.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s handling of the sale process of the resident’s property.
In accordance with paragraph 42(g) of the Housing Ombudsman Scheme the resident’s claim that the landlord’s handling of the sale process resulted her suffering a financial loss is outside of the Ombudsman’s jurisdiction to investigate.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration in the landlord’s handling of the resident’s complaint.

Reasons

The landlord maintained a consistent position that it would not honour the lower valuation, as the resident did not gained consent prior to doing improvement works. However, when challenged on this, its communication was poor, and the resident did not receive a formal response to her challenge for 3 months, which was unreasonable. The landlord failed to identify genuine points of learning, and its offer of redress did not fully put things right for the resident.
The landlord failed to progress with complaints that were made at both stage 1 and 2. At stage 1 the landlord unreasonably sought to close the complaint without issuing a formal response. The landlord’s stage 1 and 2 complaint responses identified failings, but failed to show genuine learning, or offer appropriate redress to the resident.

Orders

Within 4 weeks, the landlord is ordered to:
1. Apologise for the failings identified in this report;
2. Pay the resident £750 in compensation, made up of:
  1. The £75 it offered for its handling of the sale process (if it has not already done so);
  2. A further £250 in recognition of the time, trouble, distress and inconvenience caused by its handling of the sale process;
  3. The £75 it offered for its complaint handling (if it has not already done so);
  4. A further £350 in recognition of the time, trouble and inconvenience caused by its complaint handling.
Within 8 weeks, the landlord is ordered to:
1. Complete a review of its handling of the sale process, with a particular focus on identifying points of learning in relation to:
  1. Communicating effectively across internal departments;
  2. Communicating decisions to residents by providing timely responses and updates;
2. The outcome of the above review should be shared with this Service, also within eight weeks;
3. Complete training with its complaint handling staff to assist them in progressing with a complaint within the timeframes set out in its policy, and the Code. It should also focus on the importance of a meaningful complaint investigation that seeks to learn from outcomes, and offers redress when appropriate. The dates of the training and content should also be provided to this Service.