Hyde Housing Association Limited (201913411)

REPORT

COMPLAINT 201913411

Hyde Housing Association Limited

4 May 2021

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 resident’s Right to Buy (RTB) application.
2. The landlord’s associated complaint handling.

Background and summary of events

Background

The resident is a secure tenant of the landlord. The property is a semi-detached house.

Scope of Investigation

It is noted that the resident has contended that he was sent the incorrect application by the landlord in 2017 when he initially made the RTA application. He informed this Service that he was unaware that there were two schemes in which he could purchase his property. Similarly, the resident had raised a previous complaint in October 2018 about the handling of his RTB application, which he also reiterated in his subsequent complaint in November 2019. However, this Service will not consider complaints that were not brought to the attention of the landlord as a formal complaint within a reasonable period, which would normally be within six months of the matters arising. Therefore, whilst the historical incidents provide contextual background to the current complaint, this assessment focuses on events from February 2019 onward.

Policies and Procedures

The landlord’s Right to Buy and Right to Acquire Procedure states that a tenant is eligible for the Preserved Right to Buy (PRTB) if a resident is a current assured or secure tenant whose property was transferred to the landlord as part of a stock transfer from a local authority.
The landlord will send out a RTB application (RTB1) within seven days of any request (in accordance with s176 of 1985 Housing Act). The landlord will admit or deny an application by serving an RTB2 within four weeks of a fully completed application or within eight weeks if it needs to contact another authority to confirm the tenancy details/claim.
The landlord will issue an Offer Notice (s125 Notice) within eight weeks of serving an RTB2 Notice for a house or 12 weeks for a flat. The Landlord will request a valuation to be completed by a Royal Institute of Chartered Surveyors (RICS) qualified surveyor and an EPC certificate to be included with the s125 Notice.
Included with the s125 Offer Notice is a S125D Tenants Notice of Intention form providing the tenant with 12 weeks to accept or withdraw from the landlord’s offer or request a redetermination of the valuation from the District Valuer.
Tenants are required to complete the purchase of their property in three months of returning the S125D Notice accepting the landlord’s offer of purchase. On receipt of the completed S125D confirming acceptance of the Offer Notice, the landlord will instruct for a plan to be drawn and pass to its acting solicitors and confirm these details to the tenant’s solicitors.
If a tenant returns the S125D confirming they wish to have the value of the property redetermined by the District Valuer, the landlord will respond to tenants confirming receipt and request a plan to be completed for the District Valuer.
Once the Plan has been received, the landlord forwards the request to the District Valuer. Confirmation of the request for Redetermination is also forwarded to the Valuer who completed the initial assessment. On receipt of the valuation from the District Valuer, the landlord will issue a Redetermination Offer Notice (s128 Notice) to the tenant. The District Valuers valuation decision is final even if the valuation is higher than that on the s125 Notice. Included with the s128 Offer Notice is the Redetermination Tenants Notice of Intention (S128D Notice) providing the tenants 12 weeks to accept or withdraw from its offer.
A tenant may serve an Initial Notice of Delay (RTB6) on the Landlord where there has been a delay caused by the landlord. The notice will include a date (which must be at least one month) to rectify the delay. Qualifying delays under this section include:
1. Replying to an application form.
2. Issuing Offer Notice (S125).
3. Progressing the sale towards completion.
The landlord’s complaints and compensation policy statement provides for a two-stage complaints procedure. At stage one, the landlord aims to provide a response as soon as is reasonably possible and not later than 20 working days (four weeks). At stage two, the landlord will also aim to provide a response within 20 working days. If the landlord is unable to provide a full response within the target timescale, it will advise the customer that additional time is required and ask how frequently they would like it to provide updates.
Compensation payments may be made by the landlord at its discretion where it has failed to deliver a service, in recognition of the time and trouble taken by the customer to make their complaint, in recognition of distress and inconvenience experienced by the customer, and to reflect where a customer has suffered a loss because of a service failure. The landlord does not pay compensation for the loss of earnings.

Summary of Events

In June 2016 the resident enquired about buying the property via the RTB scheme, for which he was eligible for because he was a former local authority tenant. He also asked if the valuation of the property would be increased as disability adaptations had been made.
The resident did not initially proceed with a RTB; instead, the resident proceeded with a Right to Acquire (RTA) application and, on 18 September 2017, asked the landlord to clarify how it had calculated the discount, as he contested the landlord’s calculations following receipt of the offer notice which set out the valuation of the property and the corresponding discount. He reiterated that he had been a local authority tenant from 2000.
In the landlord’s response of 26 September 2017, it clarified the difference between how it would calculate a RTA application in comparison to a RTB application: the RTA being calculated on the area in which a tenant lived, whereas a RTB was calculated on a tenant’s tenancy. The landlord advised the resident, if he believed he was eligible for a RTB, to cancel his RTA application and to apply via the RTB.
The resident subsequently cancelled his RTA application and requested an application for the RTB on 2 October 2017. The date of the resident’s RTB application was on 7 November 2017.
On 16 November 2017 the resident asked the landlord whether his RTB application would be approved. The landlord’s response of 30 November 2017 concluded that the resident was not eligible for the RTB because it said that the resident had not been a local authority tenant in the property that he intended to purchase. Later on that the same day, the landlord acknowledged it had made a mistake and confirmed that the resident was indeed eligible for the RTB.
The landlord sent the resident the RTB2 acceptance letter on 1 December 2017. It received the valuation of the property on 2 January 2018.
On 30 January 2018 the landlord confirmed its receipt of the valuation report and, because the resident had indicated that he had built an extension to the property, asked the resident to confirm:
1. The date the extension was built.
2. Whether the extension was financed.
3. The reason for the extension.
The resident confirmed, on 31 January 2018, that the completion date was March 2011, it was financed via a local government grant, and the reason for the extension was because of ‘alterations’. The resident asked the landlord to send the S125 Notice, which he said he should have received in early January.
On 2 February 2018 the landlord confirmed that it was still reviewing the resident’s application following the receipt of the valuation report. The reason for review was because there were discrepancies with the details the resident had provided in relation to the property’s extension. The resident asked, later that same day, why it was under review when the landlord had previously confirmed the extension would not be taken into account and would be excluded from the valuation.
The resident informed the landlord that he would be seeking legal advice as he felt the landlord had handled his application poorly and it had kept changing the terms and conditions of his application.
The resident completed a RTB6 Initial Notice of Delay form, which is used by tenants who have claimed to exercise the RTB but are being held up by the landlord. The resident stipulated that the delay had been caused by the landlord because ‘the incorrect value [of the property had] been sent and copied to [his]solicitor’. The landlord received this on 23 February 2018.
In the landlord’s response, dated incorrectly as 7 March 2017 rather than 7 March 2018, it rejected the resident’s RTB6 form because:
1. It came to light that the resident did not finance the extension himself contrary to what was stated in his RTB application.
2. Having sought legal advice, the landlord then instructed its own valuer to provide a new valuation of the property; the landlord therefore contended that the delay could have been avoided had the resident completed the RTB application correctly.
The landlord confirmed that it had kept the resident updated with its course of action via email and telephone and it was now in receipt of the new valuation; as such, it attached the new S125 Offer Notice letter which included the new valuation. The S125 Offer Notice letter states the resident was required to let the landlord know within 12 weeks whether he wished to accept the offer.
Subsequently, there was a dispute between the landlord and the resident about the valuation of the property based on whether or not the valuation should include the extension or not. The case was therefore referred to the District Valuer in March 2018.
The resident received a letter from the landlord on 20 April 2018 confirming that the valuation was to be reviewed and it had received contact from the resident’s solicitor.
In an email to the resident on 10 October 2018, the landlord acknowledged receipt of a complaint letter (this Service has not had sight of this letter and is unaware of its specific contents). In a further email from the landlord, later that same day, it confirmed the resident’s main concerns as:
1. That his RTB application would be closed because of the ‘redetermination issues with the district valuer.’
The landlord clarified that his application would remain open and the valuation date would be the date that the application was received on 7 November 2017. The landlord explained that it was waiting on legal advice and confirmed the next steps as:
1. To contact the district valuer and ask them to complete their redetermination with two valuations of the property, one with the extension included and the other with it disregarded. This, it said, would mean that once it had resolved the status of the extension, it would be in a position to issue the applicable revised offer.
In an email to the resident on 22 October 2018, the landlord confirmed that its solicitors had advised it that the extension should be deemed as a tenant improvement, on the basis that the landlord did not contribute financially towards its installation. It asked whether the resident was in agreement to instruct the district valuer to carry out the redetermination with the extension disregarded. The resident’s solicitor responded the same day, confirming that he was happy to proceed.
In the landlord’s letter, dated 25 February 2019, it confirmed that, further to the district valuer’s redetermination of the valuation of the property, which had been amended to reflect the new valuation figure and sale price of the property, the new offer notice had been approved. As before, the letter stipulated that the resident had 12 weeks to decide how he wished to proceed.
The resident completed the S128D form which the landlord received on 10 May 2019. The landlord subsequently wrote to the resident on 22 May 2019 confirming the receipt of his acceptance of the offer. The landlord instructed its solicitors to complete the sale on 3 June 2019.
The landlord received a second RTB6 Notice of Delay on 5 November 2019 on the basis that the incorrect valuation had been used by the landlord’s solicitors.
In the landlord’s letter of 19 November 2019, it rejected the resident’s RTB6 on the basis that the resident had accepted the revised valuation and discount when completing the S128D form in May 2019, which was later reconfirmed to its solicitors when instructing its solicitors to proceed with the sale in June 2019.
The resident made a formal complaint on 20 November 2019 about the poor customer service he had received from the landlord since he began his RTB application and for the inconsistent evidence of the property’s market value relating to his application. He explained that:
1. He had no choice but to seek legal advice at his own expense and asked why he had to endure this process when he declared the extension to the property on his application.
2. He did not accept the rejection of both his RTB6 delay form letters from February 2018 and November 2019 and the reasons provided for their refusal.
3. The disagreement over the valuation had caused further delay, yet further distress was caused upon receipt of the Transfer Plan in October 2019, in which the valuation was still incorrect and there were also many other errors with the paperwork.
The resident concluded by requesting the following:
1. What led to the resident having to prove he had the RTB?
2. What were the reasons for rejecting both of his RTB6 forms?
3. Why did the Valuation Office Agency need to get involved when the landlord agreed that the extension should be excluded from the valuation?
4. Why had the landlord and its solicitor sent contradicting information regarding the market value of the property?
5. Could the landlord review the expense he incurred for instructing a solicitor during the dispute about the extension?
The resident ended by stating that if the RTB application were to start at this point, his discount be greater. He therefore contended that he had suffered a large financial loss, which included the rent he had paid during the period of his application.
Following a discussion with the landlord later that day on 25 November 2019, the resident added the following to his complaint:
1. In his RTA application of July 2017, the improvements that he had disclosed to the property had been disregarded and as such the valuation of his property was lower than the RTB application states.
Due to not receiving a response from the landlord, the resident emailed the landlord on 6 January 2020. Having not received a response by 21 January 2020, he contacted this Service for assistance. On 27 January 2020, the resident informed this Service that his solicitors had said that he would not be able to proceed with the purchase of the property because the landlord’s solicitors had not clarified a number of points that he had raised.
On 11 March 2020, this Service wrote to the landlord to advise of the difficulty the resident was having progressing his complaint and therefore requested an update be provided by 25 March 2020.
The landlord provided its stage one complaint response on 15 April 2020, in which the landlord confirmed that it had found multiple service failures. It acknowledged that the resident’s application had taken longer than it should have done and there had been errors that it would not have expected to happen. The landlord further detailed the following:
1. The landlord apologised that the resident had to inform it of his previous tenancy, which meant the resident had to withdraw his Right to Acquire application, submitted in May 2017, and instead proceed with his RTB application, which he would be eligible for.
2. The landlord confirmed that its response to both of the resident’s RTB6 Initial Notice of Delay letters were issued within the prescribed timeframe, within one calendar month. However, it confirmed that it did not check with its solicitors that they had used the correct valuation when preparing the draft documents. The landlord apologised and confirmed that the amended draft documents, showing the correct valuation/offer price, would be sent to the resident’s solicitor.
3. The landlord explained that it received a letter from the resident’s solicitor on 10 April 2018 disputing the valuation used in the S125 offer notice. The letter also requested a re-determination to the District Valuer on his behalf. The landlord said that it was in protracted correspondence with the District Valuer’s office seeking clarification as to whether the extension should be included or not in the valuation. It confirmed that on 22 October 2018 it was agreed that the re-determination should take place with the extension disregarded. The re-determination did not take place until 9 January 2019, a matter which it said was outside of its control; the revised offer was issued on 25 February 2019 and the resident’s Notice of Intention to accept the revised offer was received on 10 May 2019.
4. The landlord contended that there was no mention of a cost being incurred for the expense of the resident instructing a solicitor.
The landlord confirmed that the resident was correct in saying that if he made an application now, the attributable discount would be higher. However, it said that it should be noted that this higher discount only applied to applications received on or after 3 April 2019, and the valuation would be higher now than on 7 November 2017.
The landlord also confirmed that it would continue to work with its solicitors so that the completion of the property could take place as soon as possible. The landlord offered £150 compensation for the poor handling of his complaint and the delay in sending the resolution. The landlord confirmed that it would not compensate the resident for the transaction, as this was not something covered by its compensation policy and, as such, advised him to seek legal advice on this aspect.
In an email from the resident’s solicitor to the resident, dated 26 May 2020, it advised that they were unable to proceed with the purchase because:
1. They had not been provided with all the relevant title documentation.
2. They contended that the proposed Transfer Deed was ‘badly drafted.’
3. The landlord’s solicitor believed, incorrectly, that the resident was purchasing a leasehold rather than the freehold.
The above was forwarded to the landlord on 24 June 2020. On 30 June 2020 the landlord replied and confirmed that it had appointed new solicitors to attempt to resolve the matter. It had requested a new plan which would be forwarded to the resident’s solicitors for consideration.
On 10 July 2020 the resident contacted this Service to confirm he was dissatisfied with the stage one response and had therefore requested the complaint to be escalated; however, he was having difficulty receiving a response.
In the landlord’s stage two complaint response of 13 August 2020, the landlord proposed to increase the compensation from £150 to £250 to include the time and trouble the resident had spent communicating with the landlord about his concerns. The landlord acknowledged the resident’s request that he be compensated for eight months’ rent; however, it concluded that this was not something it could provide as part of its complaints policy. This concluded the landlord’s complaints procedure.
In an email to this Service from the resident, dated 14 August 2020, the resident confirmed receipt of the landlord’s response of 13 August 2020. He explained that he was dissatisfied with:
1. The time taken to provide a response to his complaint.
2. The time taken during the RTB application.
3. The compensation amount offered.

Assessment and findings

The landlord’s handling of the resident’s Right to Buy application.

In accordance with the landlord’s Right to Buy and Right to Acquire Procedure, above at paragraph 7, tenants are required to complete the purchase of their property in three months of returning the S125D Notice accepting the landlord’s offer of purchase. In this instance, following the redetermination of the value of the property by the District Valuer, the landlord instructed its solicitors to complete the sale on 3 June 2019. However, significant delays ensued with no indication that the purchase of the property had been completed when the complaint had exhausted the landlord’s complaint procedure on 13 August 2020.
It is not disputed that the landlord has clearly made significant errors in its handling of the RTB application and caused delays in progressing the sale towards completion, as detailed at paragraph 10. For example, despite the resident raising the issue with the valuation in the RTB6 Notice of Delay in November 2019, this was not acknowledged by the landlord until April 2020, when it confirmed that it did not check with its solicitors that they had used the correct valuation when preparing the draft documents.
Even though the landlord did adhere to its timescales when providing a response to the RTB6 Notice of Delay (within one month), as detailed in paragraph 10, the error with the valuation was not acknowledged until five months after the issue had been raised, with the resident having to raise a formal complaint in order for this to be recognised. This error caused a significant delay in the RTB application.
Similarly, further delays were identified subsequently in May 2020, with the resident’s solicitor highlighting issues with the information it had received, causing difficulty in completing the sale of the property. While it is unclear whether this specific delay was attributable to the landlord or its solicitors, the fact remained that the resident’s RTB application was again delayed due to no fault of his own and the sales completion process was being unnecessarily delayed.
In its stage one complaint response of April 2020, the landlord has acknowledged that the resident’s RTB application had taken longer than it should have done and there had been errors. When failings are identified, it is incumbent on a landlord to put matters right for the resident in line with our Dispute Resolution Principles (be fair, put things right, and learn from outcomes). In this case, the landlord apologised for the initial error and ensured the correct valuation was provided to its solicitors. Compensation was offered at this point, but it is important to note that the compensation offered at stage one of the landlord’s complaints procedure was in relation to the poor handling of the resident’s complaint and for the delay in sending the resolution (which will be addressed below); it was not offered for the delays identified in the RTB application process. That said, at stage two, the landlord did offer a further £100 compensation in recognition of the time and trouble communicating with the landlord regarding his concerns. In addition, the landlord also apologised for the subsequent delay in May 2020 and appointed new solicitors to help progress the application more efficiently.
However, while the landlord’s actions in offering an apology, rectifying its error, and appointing new solicitors were welcome and would likely facilitate the RTB application moving forward, the compensation amount offered was not sufficient to resolve the matter satisfactorily. In consideration of the delay from 3 June 2019, when the landlord instructed its solicitors to complete the sale of the property, to August 2020, when the resident had exhausted the landlord’s complaint procedure, the compensation offered did not provide sufficient redress for the delays identified, for the time and trouble spent communicating with the landlord, and the distress and inconvenience caused for that period. As such, the landlord should increase its offer of compensation for this aspect of the complaint from £100 to £250 in order to satisfactorily resolve the complaint.
It is noted that the resident has requested he be reimbursed eight months’ rent. However, the Ombudsman’s own awards of compensation are not intended to be punitive and do not offer damages in the way that a court might. In assessing an appropriate level of compensation, this Service takes account of a range of factors including any particular distress and inconvenience caused by the issues, the amount of time and effort expended on pursuing the matter with the landlord, and the level of detriment caused by the landlord’s actions. Furthermore, the Ombudsman’s awards are generally moderate, taking into account the landlord’s need to make the most effective use of its limited resources as a social landlord. Therefore, while it is acknowledged that the situation has been distressing for the resident, the compensation amount of £250 is in line with the Ombudsman’s own remedies guidance, where the Ombudsman has found considerable service failure or maladministration, but there may be no permanent impact on the complainant.
In addition to the redress, the Ombudsman’s role is also to ensure that when things have gone wrong, the landlord has recognised this and has learnt from its mistakes. In this case, the errors identified were deemed ‘human errors’ and were not considered errors caused by any urgent requirement to change a policy or procedure. The landlord did change its solicitors during the RTB process, which will hopefully facilitate a more expedient RTB process moving forward, and this Service believes this to be a reasonable response in the circumstances. Though there is no immediate requirement for a review of the landlord’s RTB policies and procedures, a recommendation will be made to review its practices and procedures below, to limit the potential recurrence of similar issues in the future.
In short, the landlord has acknowledged that its actions had caused delays in the RTB application process and offered compensation as a way of recognising its failures in accordance with its complaints and compensation policy above at paragraph 12, whereby compensation payments may be made by the landlord at its discretion where it has failed to deliver a service. However, where there are admitted failings by a landlord, the Ombudsman’s role is to consider whether the redress offered by the landlord (an acknowledgment of its error, an apology given, changing its solicitors, and a compensation payment of £100) put things right and resolved the resident’s complaint satisfactorily in the circumstances. In this instance, the landlord did not offer compensation that fully acknowledged the impact the failings had and therefore the offer should be increased to £250.

The landlord’s associated complaint handling.

In accordance with the landlord’s complaints and compensation policy above at paragraph 11, the landlord provides for a two-stage complaints procedure. At stage one, the landlord aims to provide a response as soon as is reasonably possible and not later than 20 working days (four weeks).
In this case, the resident raised his complaint on 20 November 2019, yet he did not receive his formal stage one complaint response until 15 April 2020, which is 101 working days in total and 81 working days after the expected complaint response was due; this was despite this Service’s involvement in facilitating a response for the resident.
The landlord did acknowledge this failing in its stage one complaint response, offering £150 compensation for the poor handling of the resident’s complaint and for the delay in sending the resolution. This was in line with the landlord’s complaints and compensation policy above at paragraph 12, whereby discretionary compensation payments may be made where it has failed to deliver a service, in recognition of the time and trouble taken by the customer to make their complaint, and in recognition of distress and inconvenience experienced by the customer. This too was broadly in line with this Service’s own Remedies Guidance, where there have been instances of service failure resulting in some impact on the resident but was of short duration and may not have significantly affected the overall outcome for the resident.
It is noted that the resident had said he had issues in receiving his stage two complaint response. However, the exact date when the complaint was escalated to stage two has not been provided and, therefore, we cannot make a determination as to whether the landlord acted in line with its obligations in this instance or not. Various correspondence has been provided between the landlord, the resident’s solicitor’s, and the resident’s MP, but none specifically show that an escalation of the complaint had been requested. The only evidence received of the resident raising his dissatisfaction with the stage one response with the landlord was on 13 August 2020, in which a telephone conversation between the landlord and the resident took place and a corresponding email was sent that same day to acknowledge the escalation and confirm this was the landlord’s final response.
In light of the above, the landlord has offered proportionate compensation for its failings identified at stage one of the complaint procedure that resolves the complaint satisfactorily. No further failings have been identified in the landlord’s complaint handling.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was maladministration by the landlord in its handling of the resident’s Right to Buy (RTB) application.
In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily in relation to its associated complaint handling.

Reasons

The landlord has acknowledged that its failings have caused the RTB application process to be significantly delayed. However, in this particular case, having considered the available evidence, the Ombudsman is of the view that the compensation offered by the landlord was not reasonable and proportionate. The compensation amount offered did not resolve the complaint satisfactorily and therefore the offer should be increased to an amount that acknowledges the length of the delay and the distress and inconvenience caused, in line with this Service’s own Remedies Guidance.
Likewise, the landlord has acknowledged its failings in its associated complaints handling, although, in this instance, the compensation offered was sufficient to resolve the complaint satisfactorily.

Orders

The landlord is ordered to pay the resident:
1. £250 compensation for the failings outlined above in relation to its handling of the resident’s RTB application.
2. £150 compensation for its acknowledged failings in its complaint handling at stage one of the complaints handling process if it has not already done so.
3. The total amount of compensation is £400. This should be paid within 28 days of the date of this letter.

Recommendations

It is recommended that the landlord update the resident on the sales application process if the sale of the property has yet to be completed.
It is also recommended the landlord carry out a review of this case, to see if there is any learning it can gather in order to limit the recurrence of similar issues in the future.