London & Quadrant H T
11 February 2021
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 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 is about the landlord’s response to the resident’s request for information to enable her to complete the sale of her shared-ownership home, including information about the cladding on the building she resides in.
Background and summary of events
- The resident holds a shared-ownership lease of the property which the complaint concerns. The property is a one-bedroom flat situated on the second floor of a purpose-built building with six floors. The freehold of the building is owned by the landlord.
- The Government initiated its Building Safety Programme after the fire at Grenfell Tower. As part of this, Advice Note 14 was issued in December 2018. This was for owners of high-rise residential buildings (18m or above to the height of the top occupied storey) where the external wall system of the building did not incorporate aluminium composite material (ACM). The advice sets out checks which owners can carry out to satisfy themselves, and their residents, that their building is safe. The process to obtain certification can be complicated and require input from experts, which there is currently a shortage of within the industry.
- Government guidance on building safety was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. This confirms that the guidance applies to all multi-occupied residential buildings under 18m. Paragraph 1.4 of this guidance states: “For the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act”.
- In response to the guidance some lenders took the view that, if certification could not be provided to demonstrate compliance with the Government’s guidance on fire safety, they would be unwilling to offer a mortgage on properties within these buildings as they would have a value of £0.
- In January 2020 The Royal Institution of Chartered Surveyors (RICS), The Building Societies Association, and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18m. Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert.
Summary of events
- The resident started the process for selling the property in early 2019. On 26 September 2019 the resident told the landlord that the potential buyer had withdrawn from the purchase due to a number of fire safety issues highlighted in the fire risk assessment. She said she was now unable to sell the property, was prohibited from renting it out and was not able to afford it any longer after the recent rise in service charges, a substantial proportion of which was to pay for fire safety upgrades.
- On 30 September 2019 the landlord confirmed to the resident that it was not able to buy the property back and it had contacted its cladding review team for an update, who would respond within 10 working days. It confirmed that if there were still issues then it could agree to subletting whilst the works were being finalised.
- The landlord subsequently updated the resident. It confirmed that no cladding works were being undertaken to the building and a sample of the cladding had been taken, which had been identified as non-ACM. It said that as the building was below 18m, there should not be any reason why the resident could not sell the property. Further, that it was not able to grant a subletting application as the reason for the property not selling was not related to any cladding issues.
- On 3 December 2019 the new prospective buyer’s financial consultant contacted the landlord in relation to the mortgage application. They said that the lender required the landlord as the ‘responsible person’ under the Regulatory Reform (Fire Safety) Order 2005, to confirm that a review of the building had taken place in accordance with the latest Government guidance.
- On 5 December 2019 the landlord wrote to the resident setting out that:
- It was sorry it could not provide the information that the mortgage lender was requesting. It appreciated this was very frustrating for the resident.
- In recent months, mortgage lenders had begun requiring independent certification that buildings met the requirements of Advice Note 14. Unfortunately, in the short-term it was unable to provide this. The process for confirming compliance required a specialist fire engineer to carry out intrusive testing of the building structure which could be a complex and lengthy process. Buildings had to be prioritised based on risk and it expected the programme to take several years to deliver. It would be in touch when it had more information.
- It was not a legal requirement for a building to meet the conditions of Advice Note 14 however some lenders had taken the view that they would not offer a mortgage without confirmation of compliance. It would be calling on the new Government to step in and would ask for clear guidance on the proportionate implementation of the building safety advice notes.
- Although it could not obtain confirmation of compliance this did not mean that the building was unsafe. The building had received building control sign-off, licenced approval from a warranty provider and it had an up to date fire risk assessment.
- On 8 December 2020 the resident informed the landlord that there were still a couple of matters she needed to clarify. She needed to know how high the building was as the lender’s survey stated it was a high-rise building and the lender had requested further information. She also wanted to know what steps the landlord was taking in case mortgage lenders did not relax their requirements, whether it would carry out testing to provide certification and within what timeframe.
- The resident subsequently received another letter from the landlord dated 5 December 2019. In this the landlord said that:
a. Unfortunately some mortgage lenders had begun denying mortgages to people who lived in purpose-built blocks of flats. This was in response to Advice Note 14. However, this advice note applied to buildings 18m and higher, roughly six storeys high or more.
b. As the resident’s building was below this height, the advice note should not apply to it and this should be raised with the mortgage lender. It carried out fire risk assessments on the building every year and this reassurance may satisfy the mortgage lender.
c. It was sorry if this left the resident in an unfortunate position in the meantime. It would be in touch again when it had more information.
- On 23 January 2020 the resident asked the landlord to provide the NHBC policy number for the building warranty. She also said she was aware that a new external wall review process was in place and asked the landlord to confirm when the EWS1 certificate would be available, as the buyer was not able to obtain a mortgage without this.
- The following day the landlord confirmed that it did not know the NHBC policy number and it would forward the request for the EWS1 form to the cladding and review team.
- On 28 January 2020 the landlord wrote to the resident setting out that:
- Unfortunately, the new EWS1 process still required fire safety experts to assess the materials used on the external walls of buildings. In most cases, this was likely to require an intrusive survey to be carried out, which was no different to the approach required before. It was highly likely that the expert would recommend that remedial work be carried out.
- For owners of multiple buildings this work would take several years to deliver. It was also likely to be complicated by an industry-wide shortage of appropriately qualified fire experts available to assess buildings, carry out inspections and confirm whether remediation work was required.
- Therefore, the new valuation process was not a solution that would help everyone and residents would still find it difficult to staircase, sell or remortgage their home. It would continue to call on the Government to step in and work with valuers and surveyors to find a more practical solution.
- It would be in touch when it had more information and the resident was able to stay up to date by visiting the homeowner section of its website.
- On 12 February 2020 the resident wrote to the landlord’s Chief Executive. She said the landlord had failed to provide her with the documents she had requested and her buyer’s mortgage offer was due to expire on 18 February. She said she had already requested a cladding report, confirmation of the building’s height and the NHBC policy number. In addition, she was also requesting a copy of the up to date fire risk assessment for the building. There is no evidence the landlord responded to resident.
- The resident subsequently submitted a complaint form to the landlord on 3 March 2020. In this she said that she had asked the landlord several times since November 2019 to provide information in order for her buyer to obtain a mortgage but she had not received any of the requested information. She said she had received a couple of generic letters from the cladding review team advising that the fire safety report and EWS1 form would not be available for the foreseeable future. She said that if the height of the building had been confirmed in a timely manner then this would have aided the sale as initially Advice Note 14 did not apply to the building.
- On 4 March 2020 the landlord acknowledged the complaint and confirmed it would take up to four weeks to respond. Following this the resident asked the landlord to provide the EWS1 form in a timely manner so she could complete the sale or to offer reverse staircasing as she was no longer able to afford the property and was in financial difficulties. She said the amended sub-letting policy would not provide a solution in her case.
- On 3 April 2020 the landlord updated the resident. It said that due to the complexity of the case it was taking longer than anticipated to collect all the information required and it would aim to provide a response the week commencing 13 April. The landlord provided a further update following this and confirmed its response was delayed due to the coronavirus pandemic and it was aiming to issue a response by the end of April.
- On 7 May 2020 the resident chased the landlord for a response. The landlord responded later that day attaching its final response. In this it said that:
a. It would like to apologise for the time it had taken to respond. It had reviewed the case and believed it had missed opportunities to provide the resident with exemplary service. As a result it had reviewed some of its internal processes to improve its service delivery.
b. Regarding the issuing of an EWS1 form, it would be releasing a strategy regarding this soon to enable its residents to understand timescales and priorities for inspections. It was sorry it could not give more detailed information regarding timings but the planning exercise was comprehensive and needed to be robust, which unfortunately took time. Additionally with currently social distancing measures in place it was unable to progress inspections.
c. It recommended the resident consider subletting as a resolution. It was unable to offer reverse staircasing as it did not have a policy for this. The resident was able to contact a dedicated member of staff in order for it to understand if it was possible to offer additional support with the resident’s financial issues.
d. The resident was able to refer her complaint to the Ombudsman if she was dissatisfied with the outcome of the investigation.
Assessment and findings
- The Ombudsman’s guidance note on fire safety and cladding sets out that as the Government’s expectations about this matter are only currently detailed in guidance, there is an element of discretion for a landlord as to how and when it chooses to comply with it. The Ombudsman’s guidance further sets out that when investigating a complaint relating to fire safety and cladding the Ombudsman will consider the following points:
- What are the landlord’s long-term plans for compliance with the guidance and are these fair and reasonable?
- How has it communicated with residents regarding the situation and was this communication appropriate?
- How has it responded to the individual circumstances of the resident?
- During December 2019 the resident asked the landlord to clarify the height of the building as the buyer’s lender had classified it as high-rise (therefore potentially bringing it within the scope of Advice Note 14). However, the landlord failed to provide this information when it responded and there was a further failure to provide this information during the complaints process. This is of concern as there is nothing to suggest that the landlord was unable to provide this information to the resident, and it has been able to provide records to the Ombudsman confirming that the building is 16.07m high.
- It cannot be known whether the property sale would have completed successfully had the landlord provided this information promptly (and therefore prior to the consolidated guidance in January 2020 being brought it). This is because it is not possible to determine whether the lender would have approved the mortgage had they been provided with the requested information and a number of factors are involved in property sales progressing to completion. However, there was a missed opportunity to provide information that the lender had requested and this was a service failure.
- In relation to the fire risk assessment, the resident first requested an up to date assessment in February 2020 and requested it again in her formal complaint of March 2020. The landlord has not provided any evidence to show that this was provided to the resident. Given that the fire risk assessment of December 2018 confirms that such assessments are carried out on an annual basis, it was reasonable for the resident to expect that an up to date assessment would be available and to request this from the landlord.
- In relation to the NHBC policy, the landlord initially told the resident that it did not have this information available. It then failed to address the resident’s complaint about not being provided with this information. The landlord has told the Ombudsman that it should have informed the resident that she would have received a copy of the policy when she purchased the property and she would be able to request a new copy from the NHBC at no cost to her. Whilst this might be the case, it is reasonable to expect the landlord to retain a copy of the policy given that it is a part-owner of the property. The landlord has also been able to provide the Ombudsman with a copy, suggesting that it does hold this information.
- In relation to the cladding report/EWS1 form, the landlord has explained that it is taking a risk-based approach to prioritising its buildings for inspection and that this process is likely to take several years to deliver. The Ombudsman recognises that the process to achieve compliance with the Government guidance is complicated and requires input from experts, which there is currently a shortage of within the industry. Given this and the number of buildings owned by the landlord that require assessment, the Ombudsman is satisfied that the landlord’s approach to prioritising the inspections is fair and rational.
- In its complaint response the landlord clarified that it would be releasing a strategy in regard to prioritising inspections and it was unable to confirm likely dates for further inspections due to the Coronavirus pandemic. It is understandable that the lack of clarity around this matter would have been extremely frustrating for the resident. However, given the restrictions in place at the time and that the landlord was still focusing on certifying its buildings above 18m (which would be higher risk), it was reasonable for the landlord to advise that it could not give any further information regarding the likely timescales involved. It is noted that the landlord’s website currently confirms that buildings below 18m will receive notification of their inspection window date from April 2021.
- The Ombudsman acknowledges the difficult situation the resident is in with regards to progressing the property sale and that this is through no fault of her own. The resident has explained that she needs to sell the property as she is experiencing financial hardship and has requested that the landlord either progresses the cladding inspection or offers reverse staircasing. The landlord has said that it does not have a policy on reverse staircasing and has offered subletting as a resolution.
- Subletting is not normally permitted under the terms of shared-ownership leases and the landlord’s website confirms that the landlord has amended its subletting policy to allow this in properties where leaseholders have not been able to sell. Therefore, the landlord has taken steps to assist leaseholders in this regard. However, the resident has explained that this is not a solution for her as she needs to access the equity in the property.
- The landlord is under no obligation to offer reverse staircasing and therefore it was reasonable for it to decline this request. However, the Ombudsman cannot see that the landlord took into account the resident’s individual circumstances in making its decision, and notes that some social housing providers offer reverse staircasing where leaseholders are in financial difficulty. Therefore, the Ombudsman considers it appropriate that the landlord explores whether there are any other actions it can take to assist the resident including that it reconsiders its position on reverse staircasing.
- Whilst the landlord’s complaints policy in place at the time of the complaint does not specify a timescale to respond at the final stage of the complaints process, it does confirm that the person complaining will be kept updated on when they can expect to receive a response. The landlord initially kept the resident adequately updated in this regard however the resident had to chase it for a response in May 2020 after it failed to respond by the revised target. Given the nature of the issues being pursued by the resident, this was unsatisfactory and would have increased the resident’s frustration.
- Furthermore, as outlined above, the complaint response was not satisfactory. This is because it failed to address several aspects of the resident’s complaint. The resident was clearly dissatisfied with how her requests for information had been handled and yet the complaint response failed to address how these requests had been handled (aside from the issue of the cladding inspection) and provide the information that was available in this regard. Whilst the landlord explained that there had been “missed opportunities to provide an exemplary service”, it did not detail what these service failures were or offer any redress to put them right.
- In accordance with paragraph 54 of the Housing Ombudsman Scheme there was:
a. maladministration by the landlord in relation to its handling of the resident’s request for information to enable her to complete the sale of her home
b. maladministration by the landlord in relation to its complaint handling
- The Ombudsman acknowledges the difficult situation the resident is in with regards to progressing the property sale and that this is through no fault of her own. This is because until the landlord is able to provide certification in line with the Government’s guidance, the resident is effectively in limbo as she is unable to sell the property as lenders will not lend on it because of the potential cladding issue.
- The Ombudsman is satisfied that the landlord is taking appropriate steps in response to the Government’s guidance, as it has committed to inspecting the building and providing confirmation of compliance. The Ombudsman is also satisfied that the landlord’s approach to prioritising the inspections is fair and rational and that it has adequately explained why it will not be arranging the inspection immediately.
- However, the landlord failed to provide information to the resident that it could reasonably have been expected to provide, namely: confirmation of the height of the building; the current fire risk assessment; and a copy of the NHBC policy. Given the difficult situation the resident was in, the landlord should have ensured that it did all it reasonably could to assist the resident in regard to her requests for information during the sales process.
- There were failures in the landlord’s complaint handling. It failed to keep the resident adequately updated on when she could expect to receive a response to her complaint and it failed to address several aspects of the complaint.
Orders and recommendations
- The landlord is ordered to do the following within four weeks of the date of this report:
a. apologise to the resident in writing for the service failures identified by this investigation
b. pay the resident £400 compensation broken down as follows:
- £300 for the distress and inconvenience caused by its failure to respond adequately to the resident’s requests for information
- £100 for its poor complaint handling
c. provide the resident with the information that is still outstanding (confirmation of building height, the current fire risk assessment and a copy of the NHBC policy)
d. consider whether there are any other actions it can take to assist the resident; this should include reconsideration of its position on reverse staircasing in exceptional circumstances. The landlord should provide confirmation of the outcome in writing to the resident and the Ombudsman
- It is recommended that the landlord updates the resident on the building’s inspection window date. This should be done as soon as possible and no later than the end of April 2021.