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MHS Homes Ltd (202313074)

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REPORT

COMPLAINT 202313074

MHS Homes Ltd

21 February 2025

 

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

  1. The complaint is about the resident’s concerns regarding information she was provided about the need for an external wall system inspection (EWS1) form.

Background and summary of events

  1. The resident has been the shared ownership leaseholder of the property since 7 June 2016. The property is a 2-bedroom, fourth floor flat.
  2. The resident contacted the landlord in July 2022 and asked when it would carry out an EWS1 and share the findings with her. The landlord responded and said its fire safety consultant had confirmed that the resident’s building did not need an EWS1 as it was below 18m tall.
  3. The resident raised a formal complaint on 9 May 2023. She said that after the landlord’s advice that an EWS1 was not needed, she had started the process of ‘staircasing’ her property to 100% ownership in March 2023. She said that during the remortgage process her broker confirmed that her property did need an EWS1 because the building had stacked balconies. She said she contacted the landlord about this and it confirmed an EWS1 was needed, however it did not confirm when one would be provided. She said that as a result, she was trapped in a property she could not ‘staircase’ or sell and her mortgage payments had increased. The resident asked the landlord for several things to resolve the complaint, including confirmation of when the EWS1 would be provided, a refund of the £210 she had paid for her property valuation and compensation for the distress and inconvenience caused by the issues.
  4. The landlord emailed the resident on 24 May 2023. It confirmed it would provide an EWS1 by the end of July 2023. Following this email the resident contacted the landlord and said she had recently entered into a fixed rate mortgage. She said she had entered into this as she could not afford the variable rate mortgage she had been on. She said that had the landlord told her when it would provide an EWS1 earlier, she would not have done this. She asked the landlord to confirm if it would pay the cost of exiting the fixed rate mortgage, which she said was around £1,600.
  5. The landlord issued its stage 1 response on 2 June 2023. It acknowledged it had given the resident wrong information about the EWS1 in July 2022 but said it could not explain why. It confirmed it had instructed an EWS1 and it would provide the results by the end of July 2023. It said that since raising the complaint the resident had contacted it to say that she had had to pay £150 for an extension to her property valuation. The landlord agreed to compensate the resident for this expense but not the cost of the original valuation. It offered the resident £250 compensation in recognition of the distress and inconvenience caused by it giving her wrong information in the first instance. It also confirmed that it would not pay the resident the cost of exiting her fixed rate mortgage. It said this was because it told her on 9 May 2023 that, while it could not give a precise date, it would provide the EWS1 in around 8 weeks.
  6. The resident escalated her complaint on 2 June 2023. She raised several reasons for her disagreement with the landlord’s stage 1 response, including that:
    1. The £250 compensation was insufficient as the landlord had allowed her to live in a building she could not move out of, sell, remortgage or staircase.
    2. The landlord told her, on 9 May 2023, that once it instructed a company it would take 8 weeks for an EWS1. However, it had not indicated if or when the landlord would instruct a company.
  7. The landlord issued its stage 2 response on 30 June 2023. It said that not all of the points raised by the resident in her escalation request related to her stage 1 complaint. It said it had asked its officers to respond to the resident directly about these unrelated points. It confirmed the £250 compensation was for the distress and trouble caused by it giving wrong information and its lack of clarity about when an EWS1 would be available. It also confirmed that it felt it had given the resident the best information it could about when to expect the EWS1 on 9 May 2023.
  8. On 21 September 2023 the landlord issued a letter to the resident following a review of her complaint. It said it had decided to offer the resident more compensation, increasing the total amount offered from £400 to £710.
  9. The resident contacted this Service in October 2023 and confirmed that she wanted us to investigate this complaint. She confirmed in an email to this Service dated 10 January 2025 that she wants compensation for the fees paid to exit the fixed rate mortgage. She also said she wants compensation for the delays caused to her ability to ‘staircase’ the property.

Assessment and findings

  1. An EWS1 certificate is not a statutory requirement. Lenders use the information within it for valuation purposes and they may take a commercial decision to refuse a mortgage application where one is not available.
  2. Following the resident’s initial enquiries regarding the need for an EWS1 the landlord consulted with its fire safety consultant. It was reasonable for the landlord to ask the consultant to confirm whether or not the resident’s building required an EWS1. Landlords are entitled to rely on information provided to them by their contractors and representatives in the absence of independent third party evidence to the contrary.
  3. That said, the landlord acknowledged in its stage 1 response that it was unsure why it gave the resident this information. It said that at the time it already had internal reports and emails with other residents which identified that the property would need an EWS1. The landlord gave the example of it having contacted the resident in March 2022 following a meeting which confirmed an EWS1 would be arranged after all fire remedial works had been completed.
  4. The Ombudsman appreciates that there has been industry-wide confusion regarding the EWS1 requirements as these have changed several times since their implementation. However, in this instance, the landlord was aware that the resident’s building met the criteria for an EWS1 due to the type of cladding on it. The landlord’s failure to provide the resident with the correct information, which it already had on file, also indicates poor record keeping and information management by the landlord. It was unreasonable for the landlord to have told her that an EWS1 would not be needed due to the height of the building. This information caused the resident avoidable distress and inconvenience as it led her to start the remortgage process which she could not complete without an EWS1.
  5. Additionally, in its complaint responses the landlord acknowledged that once the EWS1 had been commissioned in May 2023 it was not clear regarding exactly when it would be completed. However, it said that it felt it had given the resident the best information it could have at that time about when to expect the EWS1.
  6. The Ombudsman has noted that the resident believes the landlord should refund her the cost of exiting the fixed rate mortgage she entered into around June 2022. She has said that during the conversation with the landlord in May 2023 it did not confirm that it had instructed a company for the EWS1. Therefore, she felt she could not rely on it having said that it would take about 8 weeks to get the EWS1. She said for that reason she believed she had to enter into a fixed rate mortgage because she could not afford the rising mortgage payments on the variable rate.
  7. The Ombudsman appreciates this would have been a difficult period for the resident and understands why she entered into a fixed rate mortgage. However, it does not consider that the landlord needs to compensate her for the cost of exiting the fixed rate mortgage. Based on the evidence seen, the landlord tried to manage the resident’s expectations during the call on 9 May 2023 by saying it could take up to 8 weeks for the EWS1 to be provided. The landlord then provided a more accurate date once this was available. It was reasonable and appropriate for the landlord to have done this. As such, the landlord is not responsible for compensating the resident the cost of exiting the fixed rate mortgage she chose to enter into.
  8. Overall the landlord’s failures, as set out above, can be summarised as failing to provide the resident with accurate information and inadequate record keeping. These failings led to the resident starting a valuation and mortgage application she could not complete. This in turn caused the resident unnecessary distress and inconvenience as it delayed her ability to remortgage/staircase the property.
  9. In identifying whether there has been maladministration the Ombudsman considers both the events which initially prompted a complaint and the landlord’s response to those events through the operation of its complaints procedure. The extent to which a landlord has recognised and addressed any shortcomings and the appropriateness of any steps taken to offer redress are therefore as relevant as the original mistake or service failure. The Ombudsman will not make a finding of maladministration where the landlord has fully acknowledged any failings and taken reasonable steps to resolve them.
  10. In its complaint responses the landlord acknowledged that it had provided the resident incorrect information about the need for an EWS1 and it had not been clear about when an EWS1 would be available. In recognition of these failings the landlord offered to refund £150 cost of extending the valuation and pay £250 compensation in acknowledgement of the distress and trouble caused.
  11. However, on 21 September 2023 the landlord wrote to the resident and said that after having reviewed her complaint it had decided to increase its initial offer of compensation. The landlord offered to pay the £210 cost of the original valuation and to increase the offer of compensation from £250 to £350. This increased the total compensation offered in resolution of the complaint from £400 to £710.
  12. In terms of remedy, in cases like this, compensation of around £710 would be considered appropriate. Therefore, the total amount the landlord offered was appropriate. However, it only offered the majority of this after its complaints process had been completed. This indicates that the landlord did not take the opportunity of the complaint process to properly investigate the circumstances of the complaint and make a suitable offer of redress as soon as it could. Therefore, a finding of reasonable redress would not be appropriate.
  13. In view of this, the Ombudsman finds that there was maladministration and orders the landlord to apologise for the failings identified in this report and pay the £710 compensation offered if it has not already done so. This sum is in line with the Ombudsman’s published remedies guidance for failings which adversely affect a resident, but which have no permanent impact.

Determination (decision)

  1. In accordance with paragraph 52 of the Scheme, there was maladministration by the landlord in relation to its handling of the resident’s concerns regarding information she was provided about the need for an EWS1 form.

Orders

  1. Within 4 weeks of the date of this report the landlord must:
    1. Apologise to the resident for its failures. This written apology must be from a member of the landlord’s management team and should follow the Ombudsman’s apologies guidance on our website.
    2. If it has not already done so, the landlord must directly pay the resident the £710 compensation offered in its letter of 21 September 2023.
  2. The landlord must reply to this Service to provide evidence of compliance with the orders within the timescales set out above.