Newlon Housing Trust (202113337)

REPORT

COMPLAINT 202113337

Newlon Housing Trust

13 October 2022

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

This complaint is about the landlord’s handling of the prospective sale of the resident’s property.
This complaint is also about the landlord’s handling of the associated complaint.

Background and summary of events

Background

The resident has been a shared owner of the landlord since December 2006. The property is a two bedroom sixth floor flat.
Advice Note 14 was issued by the Government in December 2018 as part of its Building Safety Programme. In summary the advice was for owners of high-rise buildings where the external wall system of the building did not incorporate Aluminium Composite Material (ACM). The advice set out checks which owners could carry out to satisfy themselves, and their leaseholders, that their building was safe. This guidance was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. 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 (BSA), and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 meters (six storeys). Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert.
Option B2 on the EWS1 form states that an adequate standard of safety is not achieved and that the remedial and interim measures required had been identified to the client organisation (in this case the landlord).
The landlord’s Resale policy states that:
1. Under a shared owner’s lease, the leaseholder must first provide the landlord the opportunity to find a suitable buyer.
2. Once a completed and signed form has been received from the shared owner confirming to proceed with the resale, the nomination period begins. This period is often 6 or 8 weeks but may vary depending on the individual lease.
3. Should a buyer not be found within the nomination period, the leaseholder is able to sale through the open market.
4. The valuation will be carried out by a qualified valuer, who is independent and member of the Royal Institution of Chartered Surveyors (RICS) as per the terms of the lease.
5. Any dispute with the valuation should first be referred to the surveyor who carried out the valuation and if no agreement, shared owner can request a redetermination of value by the District Valuers (DV) (Government Valuers) whose decision will be final. It is the responsibility of the shared owner to pay for all valuation requests including any request for updated and DV valuations.
The landlord has a two stage complaints process which states that the landlord will aim to provide its stage one response 10 working days from the date of receipt and at stage two 20 working days from request to escalate.

Summary of events.

On 30 July 2020, the landlord wrote to all residents of the resident’s block to say that it had received form EWS1 and a supporting statement from its appointed fire safety experts. The landlord said that the EWS1 form was often required by lenders if residents were selling, staircasing or re-mortgaging their homes and that copies of the EWS1 and supporting statement would be forwarded to all residents who had been in touch with its sales team. The landlord noted that the building was undergoing remediation work and that it was difficult to know what impact this would have on potential buyers or lenders.
On 3 August 2020, the resident emailed the landlord’ sales team requesting list of valuers for resales and fee payable. The sales team emailed the resident the sales procedure and a link to its update on fire safety advising that the mortgage market was not in its control, although it would provide as much assistance to potential buyers lenders and surveyors as it feasibly could.
On 5 August 2020, the landlord advised the resident that the EWS1 form had been completed and an update would be sent to residents shortly.
On 10 August 2020, the landlord’ sales team acknowledged receipt of the resident’s resale instruction form and cheque, and asked if she would like to proceed with the valuation on a desktop basis or inspection, due to the current Covid19 outbreak. The resident confirmed that she would like an inspection. On 11 August 2020, the valuation was instructed and confirmation sent to resident.
On 18 August 2020, the landlord’ sales team received the valuation from the surveyors, which it emailed to the resident on 19 August 2020. On 26 August 2020 the sales team proceeded with marketing the property.
On 25 September 2020, the resident emailed the landlord’ sales team advising that she only had 3 viewings and asked how interest could be improved. On 29 September 2020, sales team emailed the resident advising that there was an interested applicant and that it would follow up and email the potential applicant. On 1 October 2020, the potential applicant advised the landlord that it did not wish to pursue further. The sales team spoke with resident the following day and advised of this.
On 6 October 2020, the resident confirmed that she would like to sell on the open market and the landlord confirmed its approval the following day.
The resident requested the EWS1 form on 14 October 2020, which the landlord forwarded the following day.
The resident logged a formal complaint with the landlord on 29 November 2020. The resident said that:
1. Her property had been advertised by the landlord on 28 August 2020 but when she was sent the EWS1 form she found that mortgage lenders and solicitors would not lend or advise perspective buyers to buy her property as the B2 part of the EWS1 form had been ticked.
2. The landlord had failed to advise her that her flat was unsaleable and delayed in providing her with the EWS1 form.
3. Shefelt she had been misled as she would not have proceeded with the sale if she had known it was unsaleable, and that she had incurred costs of £500 because of the landlord’s failure to advise her that the B2 part of the ESW1 form would stop the property being sold.
On 14 December 2020, the landlord emailed the resident regarding her complaint. The landlord apologised for the delay in providing its response, which it said was due to the complaint being complex, and that it would aim to provide a full response on or before 22 December 2020.
The landlord issued its stage one complaint response on 23 December 2020. The landlord firstly apologised to the resident for the dissatisfaction she had felt with regards to the process of trying to sell her property. The landlord said that:
1. In January 2020 it had sent a detailed fire safety update to all resident which made it clear that fire safety issues could impact sales. This was sent by email and a hard copy also posted to all residents.
2. It had also included detailed articles on its spring, summer, autumn and winter newsletters which all leaseholders receive, setting out issues with fire safety, the EWS1 form and selling homes.
3. The letter residents were sent to let them know it had received form EWS1 also made it clear that there could be issues selling and to contact its Resident Sales teams before progressing.
4. With regards to the B2 part of the ESW1 form and the costs the resident paid for a survey and energy report, its Sales team had stated that they did make it clear when corresponding with the resident as early as 4 August 2020 that the mortgage market was difficult and that it had no direct control over the decisions of lenders or valuers.
The resident emailed the landlord to escalate her complaint on 2 January 2021. The resident said that the reason for her wanting to escalate the complaint was that:
1. In its role as her agent in the initial marketing, the landlord should have been aware, as other estate agents were, that no solicitor, mortgage lender or anyone else in the housing business would touch a property with the B2 part of the EWS1 form ticked.
2. When she asked for the EWS1 form she was told it was not available, when it was available on 20 August 2020. The resident said that she was not informed of this. Whilst she acknowledged that she was informed it could be difficult to sell her property, this was before she had a copy of the EWS1 form.
3. The landlord advising her that it could be difficult was an understatement and very misleading, as her property was unsaleable at the present time. At no point in any letters or correspondence was she informed which part of the EWS1 form was ticked.
4. At the time the valuation was carried out her property was worth £0 which was still the case due to the cladding issues, a fact the landlord had not acknowledged in its response. This was not accurately reflected in the valuation provided as it should have stated the valuation was for the property in a repaired condition.
5. As she was required to allow the landlord to act as her agent, it and the Chartered Surveyor should have been aware of the situation and demonstrated a duty of care which she said they did not. The landlord should never have allowed her to attempt to sell her properties and should have admitted that the her property was unsellable.
On 7 January 2021, the landlord emailed the resident to explain the process for its residents’ complaints panel. By 3 February 2021, the landlord had given the resident the option of having the final stage considered under its new complaints process which the resident opted to do. The landlord said it would provide its response within 20 working days.
On 4 March 2021, the landlord sent the resident an email to say that it was awaiting more detailed information before providing its final response.
The landlord issued its final response on 17 June 2021, in which it apologised for delay in following up its email of 4 March 2021. The landlord also referred to emails from the resident of 30 April and 18 May 2021, which have not been seen by this service.
1. With regards to the resident’s complaint about it acting as agent, the landlord said that the nomination period began in August 2020, the valuation was carried out in mid-August and the marketing of the property confirmation on 28 August 2020. By 25 September the resident had only received 3 viewings and an interested party advised that they did not want to proceed on 1 October 2020. As the nomination period had ended, the resident advised she wanted to continue marketing the sale in the open market. The decision not to proceed with a firm offer was out of its control.
2. With regards to the availability of the EWS1 form, the landlord said that the EWS1 form was issued on 30 July 2020 and was mentioned in the landlord’s letter to the residents of the same date. The EWS1 form was not then available to send out to residents as it was being considered by the Special Projects Team before being made available to residents on request. The resident requested the EWS1 form on 14 October 2020, when the nomination period had ended, and its sales team sent the resident the EWS1 form the next day
3. With regards to the surveyor’s valuation, the landlord said that the survey valuation was carried out by the approved independent chartered surveyors. It had no input into how the valuation was carried out and, like the resident, relied on the expertise of the surveyors to make an accurate valuation. It was not correct to think that without a clear EWS1 form the flat had no value. The value was professionally assessed and whether a buyer had private means to continue or the support of a lender for a mortgage, would again be out of both its and the resident’s control.
4. With regards to the cost of the survey, the landlord said that the resident was advised that remedial works were to be carried out to her building and this could impact on potential buyers or lenders. The resident had said she had not received its letter of 30 July 2020 but it was hand delivered and emailed, and the landlord had the resident’s email record on file. Its Spring Edition 2020 newsletter contained an Fire safety update article for shared owners and leaseholders. The landlord said that it was satisfied that it had taken steps to advise and inform residents and that it believed it was reasonable to view the £500 costs to have arisen out of the resident’s decision to sell the flat and therefore it did not think a refund of the costs should be made.
5. With regards to its complaint handling the landlord apologised for the delays in handling the resident’s complaint over both stages, particularly at appeal. The landlord offered the resident £75 compensation for these acknowledged failings.
6. The landlord also offered the resident a further £75 for its communication shortcomings, including delays, content and handling.

Assessment and findings

The landlord’s handling of the prospective sale of the resident’s property.

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. The Ombudsman’s guidance further advises that when investigating a complaint relating to the Government’s guidance on fire safety and cladding the Ombudsman will consider the following points:
1. What are the landlord’s long-term plans for compliance with the guidance and are these fair and reasonable?
2. How has it communicated with shared owners/leaseholders regarding the situation and was this communication appropriate?
3. How has it responded to the individual circumstances of the leaseholder?
These points will be considered when assessing whether the landlord’s actions and response to the complaint were fair in all the circumstances.
It is clear from the landlord’s correspondence with the resident, in addition to information published on its website, that the landlord is taking steps to comply with the government’s guidance in respect of the block.
The landlord has also evidenced that it has communicated to residents that remedial works would be required to the resident’s block and provided approximate timescales as to when it expected the works to be completed. This evidence includes:
1. A letter from the landlord to all residents on 9 January 2020 regarding remedial works to the resident’s block, which it said were identified ahead of the government advice notices and raised the issue of potential difficulties selling, staircasing or re-mortgaging properties. The letter also notes that the works were due to start by June 2020 and would take between 15 and 18 months to fully complete.
2. The landlord’s newsletter of Spring 2020 which has an article about Fire safety, which states that the landlord realises that some leaseholders and Shared Owners are finding it difficult to sell, staircase or re-mortgage their home because of the approach lenders are taking to the Government’s advice notes.
3. A letter from the landlord to all residents in July 2020 that confirmed that it had received the EWS1 form, that remedial works would be required and that it was difficult to know what impact the need for remedial works would have on potential buyers or lender. The letter also said that a copy of the EWS1 form be forwarded to all resident who had been in touch with its sales team.
The resident has said that she did not receive a copy of the landlord’s letter of July 2020. This is disputed by the landlord who said that it had evidence of the letter being emailed to her. Nevertheless, it is evident from the other information available to the resident both before and at the time she approached the landlord with regards to selling the property, that the landlord had informed her that remedial works were required at her block and that this may impact on potential buyers or lenders.
The landlord became aware of the resident’s intention to sell her property when she contacted its sales team on 3 August 2020. The landlord’ sales team did not provide the resident with a copy of the EWS1 form when the resident first contacted them, as the landlord had agreed to do in its letter of July 2020.
In accordance with the lease and the landlord’s Resale policy, the resident first provided the landlord with the opportunity to sell the property. The landlord provided the resident with the relevant forms needed to proceed with the sales process which she completed and paid the required fees. The landlord then proceeded with marketing the property on 26 August 2020.
By 3 September 2020, the resident reported that she had had three viewings and by 1 October 2020, the only potentially applicant had informed the landlord that they did not wish to proceed. On 6 October 2020, the resident confirmed that she would like to sell on the open market and the landlord confirmed its approval the following day.
The resident requested the EWS1 form on 14 October 2020, which the landlord forwarded the following day.
The resident proceeded with trying to sell her property on the open market. When it became clear that it was not going to be possible to sell the property, the resident complained to the landlord saying that it had failed to properly inform her about the potential impact of the remedial works required and had it done so she would not have progressed with the sale.
The resident also complained about the delay in the landlord providing her with a copy of the EWS1 form, and that had she known that the B2 option had been ticked she would not have proceeded with the sale, and that the landlord had put her at risk by allowing her to go ahead viewings during a time of Covid 19.
Having reviewed the evidence I am satisfied that the landlord had communicated with the resident regarding the situation and the need for remedial works having been identified. Whilst it had not specifically stated that option B2 had been ticked on the EWS1 form, the wording of B2 on the EWS1 form confirms the same.
However, having said that it would provide resident’s with a copy of the EWS1 when they contacted the sales team, the landlord failed to do so and there was then a two month delay between the resident contacting the landlord on 3 August 2020 to when it sent her the EWS1 form in October 2020. In its final response the landlord acknowledged that the EWS1 form was not available to send out when the resident made contact in August 2020 as it was being considered by its Special Projects team.
Whilst there is no evidence that the landlord’s failure to provide the EWS1 form in a timely manner impacted the overall outcome, nor that it would have provided the resident with any information that the landlord had already provided about the need for remedial works, it would have been helpful if the resident had had sight of it at the earliest opportunity and the delay in its provision clearly added to the resident’s upset and inconvenience.
It was therefore appropriate for the landlord to acknowledge this delay in its complaint response and to offer the resident compensation for its communication shortcomings including delays, content and handling. However, I am not satisfied that £75 provides the resident with reasonable redress for the two months delay and therefore the landlord has been ordered to pay the resident an additional £75, bringing the total payable to £150. This figure falls within the range of compensation suggested in the Ombudsman’s Remedies Guidance where the failure by the landlord had an impact on the resident but this was of short duration and did not significantly affected the overall outcome for the resident.
Ultimately, it was for the resident to make the decision as to whether to sell the property or not. Given that the landlord had already made it known that remedial works were required prior to the resident initially seeking to sell her property, and despite the delay in it providing a copy of the EWS1 form, it was reasonable for the landlord to refuse the resident’s request that it refund her the £500 costs she incurred as the result of her decision to do so.
With regards to the resident’s complaint about the valuation, whilst the landlord had a list of approved independent chartered surveyors which it had recommended to the resident, the landlord was not accountable for the actions of the chartered surveyor that carried out the valuation of the resident’s property. However, as the resident was clearly dissatisfied with the valuation, it would have been reasonable to expect the landlord to advise the resident in its complaint response that, in accordance with its Resale policy, she could have requested a redetermination of value by the District Valuers (DV) (Government Valuers), which it did not.
With regards to the resident’s complaint that the landlord put at her at unnecessary risk by allowing visits to her property at a time of Covid 19, the decision as to who was and who was not allowed to enter the resident’s property was that of the resident. Had she had concerns about doing so she could have refused access and could have raised those concerns with the landlord at the time. However, there is no evidence of the resident doing so until the time of her formal complaint.

Complaint handling

The resident logged her initial formal complaint with the landlord on 29 November 2020. According the landlord’s complaints policy, the landlord should have responded to the resident by 11 December 2020, within 10 working days.
The landlord did not do so and on 14 December 2020 wrote to the resident to apologise for the delay and to provide a new response date of 22 December 2020. The response was sent on 23 December 2020, exceeding its 10 working day timescale by a further eight working days.
The resident emailed the landlord to escalate her complaint on 2 January 2021 at which point the resident was given the option of having her escalation request responded to under the landlord’s old or new complaints policy. The resident opted for the new process and by 3 February 2021, the landlord had said that it would provide its response within 20 working days, by 3 March 2021.
It is acknowledged that the landlord had contacted the resident on 4 March 2021 to advise that its response would be delayed. However, the landlord did not then issue its final response until 17 June 2021, some four months after it had originally agreed to escalate the complaint. This was not a reasonable time for the resident to have to wait and significantly exceeded the timescales given in the landlord’s complaints policy.
Given these failures it was appropriate for the landlord to both apologise to the resident and offer her compensation. However, the £75 compensation offered by the landlord does not go far enough given the extent of its complaint handling failures. The landlord has therefore been ordered to pay the resident an additional £75 bringing the total payable for its complaint handling failures to £150.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its handling of the prospective sale of the resident’s property.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its complaint handling failures.

Reasons

The landlord had explained to the resident and other shared owners, prior to her seeking to sell her property, that remedial works would be required to her block and this may have an impact on her ability to sell their property. However, having said in July 2020 that it would provide residents with a copy of the EWS1 when residents contacted its sales team, the landlord failed to do so when the resident contacted them in August 2020, and did not do so until October 2020. The landlord did acknowledge this delay, however, the level of compensation offered did not provide the resident with sufficient redress for the level of distress and inconvenience caused. In addition, having been advised by the resident that she dissatisfied with the valuation the landlord also failed to advise her that she could, in accordance with its Resale policy, request a redetermination of value by the District Valuers (DV) (Government Valuers).
The landlord recognised and acknowledged the delays in it providing responses to the resident’s complaints at both stage one and stage two. However, if failed to offer the resident a level of compensation that would provide her with reasonable redress for those multiple failures.

Orders

That within 28 calendar days of the date of this determination, the landlord is to pay the resident a total of £350 compensation, made up as follows.
1. £150 for the delay in it providing the resident with a copy of the EWS1 form, inclusive of the £75 if offered in its final response and if it has not done so already.
2. £50 for its failure to advise the resident during the complaints process that if she was not satisfied with the valuation she had received she could request a redetermination of value by the District Valuers (DV) (Government Valuers).
3. £150 for its complaint handling failures, inclusive of the £75 if offered in its final response and if it has not done so already.