Notting Hill Genesis (202112545)
REPORT
COMPLAINT 202112545
Notting Hill Genesis
28 July 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 sale of the resident’s property.
Background and summary of events
- The resident has a lease since 21 July 2010 owning a quarter share of the property.
- The property is described as a one-bedroom flat situated on the 6th floor. The building is considered for fire safety regulation purposes to be six storeys tall and measures at 16.5 metres. It has an external cladding system.
- The landlord is a housing association. It is not the freehold owner of the building but has individual leases with the building. It does not have a responsibility for the structure of the building or the communal areas of the building.
- The Managing Agent is undertaking the certification of the building on behalf of the Freeholder.
- The lease outlines that the leaseholder must obtain consent from the landlord before the lease is assigned or transferred and the leaseholder cannot sub-let or part with possession of the property until he has staircased to 100% ownership of the property.
Furthermore, once the leaseholder informs the landlord that he wishes to sell his interest in the lease, the landlord can request that the resident return the lease to the landlord or assign the lease to a person nominated by the landlord. In both instances, the lease stipulates that the price paid will be no more than the market value of the leaseholder’s share of the property.
- The landlord’s website has a page about the resale of shared ownership homes. It advises that:
- In the first instance it will offer the property to others who want to purchase a shared ownership property.
- For the first eight weeks, it will try and find a buyer for the property.
- The resident needs to obtain a valuation of the property and use the link available on the website to start the resale process
- It will arrange for its photographer to take pictures to market the property.
- The landlord’s website has a step-by-step resale guide which provides further information on the sale process. It advises that:
- If the property is outside London, it may use it third party estate agent to assist with the marketing of the property.
- If it is unable to find a buyer for the property, the resident can continue with the landlord marketing the property or it will give permission for the resident to sell the property on the open market.
- Once it has received the instruction regarding the sale of the property, it will make contact to agree a date for the viewing and recommends that within three weeks, it will create the advert, liaise with the local authority, and advertise the property.
- The landlord’s buy back policy outlines the circumstances in which it will buy back a property. These are:
- Where there are immediate building health and safety concerns that cannot be mitigated through on-site measures and requires permanent long-term decanting.
- It is undertaking regeneration or redevelopment.
It advised that the properties that meet these criteria will be identified by the landlord.
- In December 2018, the government issued ‘Advice Note 14’ as part of its Building Safety Programme. The advice note provided guidance for owners of high-rise leaseholder buildings where the external wall system of the building did not incorporate Aluminium Composite Material (ACM) and set out checks which owners could carry out to satisfy themselves, and their leaseholders, that their building was safe.
- The Royal Institution of Chartered Surveyors (RICS), the Building Societies Association (BSA) and UK Finance agreed in December 2019, a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 metres (six storeys). It introduced Form External Wall Fire Safety Assessment (EWS1) to prove to lenders that external cladding had been assessed by an expert.
- The government consolidated its advice in January 2020 and issued ‘Advice Note 14’ ‘Building Safety Advice for Building Owners’ (BSA). Paragraph 1.4 of this guidance stated that “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” and paragraph 1.5 stated that “the need to assess and manage the risk of external fire spread applies to buildings of any height”.
- In response to the guidance issued by the Government, 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 zero valuation.
- The landlord operates a two-stage complaint procedure with complaints at the first stage answered within ten working days and within 20 working days at the final stage.
- The landlord’s compensation and good will gestures policy explains that it undertakes a transparent and consistent approach to its assessment of compensation. It sets out the different awards payable.
Summary of events
- The resident decided to sell his share of the property and emailed the landlord, on 20 September 2019 a copy of the valuation for the property. He sent a further email on 28 September 2019 informing the landlord of his intention to sell his share of the property, with the email, he provided pictures he had taken of the interior of the property.
- The resident chased the landlord on 10 October 2019 regarding his instruction to sell the property. The landlord spoke to the resident on the same day, regarding his resale instruction and during the conversation it transpired that he had not followed the guidance outlined on the website. Later that day, the resident submitted his resale instruction through the website and the landlord acknowledged receipt of the resale instructions and advised that it would be in touch.
- The resident emailed the landlord on 15 October 2019 advising that the photographer had not contacted him to arrange a convenient appointment to take pictures of his property. The resident gave the landlord consent for it to use the photographs of his flat that he had provided.
- The landlord internal records show that on 16 October 2019 it discussed the marketing of the resident’s property. The notes record that as he was situated outside London, the resident could be given the option of selling his property direct to the open market.
- On 30 October 2019, the advert for the resident’s property was available on its website. On the same day, it contacted the photographer to find out why it had not attended the resident’s address to take pictures of the property.
- In November 2019, the landlord issued a fire safety briefing note giving a summary of the impact of the Government advice to all its leaseholders. It stated that it had organised a programme to inspect and assess compliance of its buildings including those below 18 meters if they had balconies in accordance with the advice note. It advised that it expected to receive the results of the surveys by December 2019 and that in most cases, compliance certificates were required for buildings above 18 meters.
- The landlord’s records show that on 11 February 2020, it referred the resident’s property to its third-party agent to assist with the marketing of the property for sale.
- On 19 February 2020, the Managing Agent for the property sent to the leaseholder a briefing note titled – EWS1 External Wall Fire Safety Assessment, – timber panels on balconies This advised of the introduction of the EWS1 form by the Government, that the timber panelling on the balconies did not meet the Government guidance issued in January 2020. It advised that it was assessing the options available and would provide a further update to leaseholders regarding any remediation work required to the building.
- The landlord’s records show that the contractor attended the resident’s property on 20 February 2020 to take pictures of the property.
- The resident contacted the landlord on 28 February 2020 to request that it buy back the property as he was experiencing financial difficulty.
- The landlord sent a briefing note to its leaseholders in March 2020 advising that:
- the Government’s consolidated advice note issued in January 2020 had included those buildings under 18 meters in height
- it was aware that lenders were not prepared to lend without a certificate of compliance and that residents were having trouble completing on sales
- it was working with other landlords to try and obtain a resolution and was in dialogue with the Government about this.
- The resident was given permission on 24 April 2020 to sell the property on the open market. He was advised that the permission was valid for one year and that it would not continue to market the property unless he wanted it to do so.
- It is noted in the landlord’s records that the resident found a buyer for his property on 4 May 2020.
- On 29 May 2020, the Managing Agent for the property provided leaseholders with a further update. It confirmed that the timber decking along with the cladding required replacement under the changes to the fire safety standards. It had been impacted by the Covid 19 pandemic, however it expected to start work within six to eight weeks and the works should take around 9 to 12 weeks to complete.
- The landlord issued a briefing note in July 2020 advising that observational surveys were continuing on buildings of six storeys and above. It recognised that people who wanted to sell their properties were experiencing difficulties and agreed that in these circumstances it would give permission for the properties to be sublet.
It further advised that buildings more than 6 storeys tall, were unlikely to obtain lending without the appropriate certification in place and informed the leaseholders that EWS1 form could be obtained from the Managing Agent. However, it could assist with queries.
- The resident emailed the landlord on 9 July 2020, to advise that the sale of the property had fallen through as the buyer had been unable to obtain a mortgage for the property.
- The Managing Agent issued an update on the cladding and decking fire remediation works on 3 September 2020. It advised that the Covid 19 pandemic had caused delays to the project and that once it received approval, it planned to go out to tender for the remediation works on 7 September 2020.
- The resident wrote to the landlord to complain on 10 March 2021 about the poor communication he had received. He complained that he had a leaking roof since 2012, that inadequate repairs were carried out between 2015 to 2020, which had led to the decision to sell his flat. In addition, he expressed that:
- When he contacted the landlord advising he wanted to sell his flat, the landlord did not respond for a month, then it said that he had not followed the correct procedure.
- On 10 October 2019, he was advised that a photographer would make contact to arrange to visit his flat – the photographer did not visit until February 2020.
- Had the sale of the flat being properly managed, he would not have been affected by the Government’s guidance introduced in January 2020.
- As he could no longer sell his flat, requested that the landlord purchase his quarter share of the property
- His preferred outcome of the complaint was to receive compensation for the poor handling of the leak to his property and the sale of the property.
- His life and well-being have been affected by the leak into his property and the inability to sell the property.
- The landlord responded to the complaint on 26 March 2021. The complaint response accepted that there were service failures and poor communication experienced by the resident. The key findings were:
- It apologised for the inconvenience and distress experienced by the resident and recognised his financial situation.
- Accepted that there was an initial delay in the marketing of his home – however it had referred the resident to its third-party estate agent to assist with the selling of the property.
- Recognised that the buyer of the property had fallen through – however, it did could not agree that that a buyer would have been definitely found for the property and completion taken place before January 2020 when the Government introduced its consolidated advice.
- It did not normally buy back properties from its leaseholders and did so in exceptional circumstances. The national scale of the challenge meant that it had other leaseholders in similar situations. Therefore, to be fair to all of its residents, it could not agree to his request to buy back the property.
- As a resolution to the complaint, it offered to reimburse the payment for the RICS valuation obtained through the resale process and that he could sublet his property while he waited to receive the EWS1 form. With regard to his financial situation it agreed to review his payment arrangement for his rent/service charge.
- The resident remained dissatisfied and escalated his complaint on 13 April 2021. He complained that the landlord’s complaint response did not address his concerns, that the compensation offer did not reflect the expenses he had incurred or the distress he had experienced. He reiterated that his preferred outcome was for the landlord to buy back his quarter share of the property and pay him £12,000 to cover his financial costs that he had incurred since 2019.
- The landlord provided its final complaint response on 30 June 2021. It apologised for the delay in providing its complaint response and stated that historic matters had not formed part of the review of the complaint. The key findings were:
- It did not have a service level agreement for the initial sale process but expected this to take around 10 working days.
- It recognised that the resident had to chase the landlord regarding his instruction to sell the property.
- The property was listed for sale within 14 days from his instruction, which was just outside the 10 working days timescale
- It apologised that it did not respond to the resident’s communication on 28 September 2019 and for not following up with the photographer to take pictures of the resident’s home.
- Whilst registered through its on-line portal and referred to its third-party estate agent, it had been unable to find a buyer for the resident’s property.
- The resident was able to use the open market to sell the property and had found a buyer for the property on 27 April 2020; however, the sale did not progress because of the lenders response to guidance issued by the Government in January 2020.
- The Managing Agent was handling certification of the works which would commence in September 2021.
- It had agreed as an interim measure to allow those affected to sublet their properties or to continue to market the property on the open market to find a cash buyer.
- It had no evidence that it would have found a buyer for the property and completed the transaction before the change in Government guidance in January 2020.
- It reviewed the redress offered at Stage one of the complaint procedure. It offered a compensation award of
- £250 for its failure to respond to his email communication on 28 September 2019 regarding the sale of the property
- £100 for the four days delay in listing the property for sale
- £250 for the delay in providing its complaint response
- Reimbursement of the RICS valuation
- Reimbursement of the non-refundable legal fees paid to the resident’s solicitor incurred in the abortive sale of 27 April 2020, once invoices received
- Reiterated its offer in its Stage one complaint response for the resident to explore the option to sublet the property.
- The resident remained dissatisfied with the landlord’s complaint response and escalated his complaint to this service on 30 September 2021. He expressed that the compensation award did not reflect the stress and the impact on his health and that the delays meant he lost a potential buyer for the property. The resident advised that his preferred outcome was for the landlord to buy back the quarter share of the property that he owned and offer compensation for the delays that he had experienced.
- After the complaint process was exhausted the Managing Agent provided a further update on the cladding and decking fire and safety remediation works to the leaseholder on 5 November 2021. It advised that it had registered with the Building Safety Fund for over a year and that it was waiting for the Government to reach a decision on the cladding and decking works and that once it had more information regarding the funding for the external wall system it would provide a further update.
- As part of the landlord’s submission to this Service, it advised that it had carried out a review of the information provided to its leaseholders when they make contact regarding the sale of their property. Guidance had been given to its officers handling sales of leaseholder properties, who had been advised of the web page to check regarding the process to be followed. Staff has also been advised to inform residents of the cladding position of each block when they receive a sale instruction. This was to ensure that residents are advised on the status of their block and of the risks of proceeding with a sale without a positive EWS1 certificate.
In addition, it had updated its website with information about cladding and the potential delays that residents may experience when trying to sell their property.
Assessment and findings
- Looking at the available information, there was an initial delay in the landlord receiving the instruction from the resident to sell his property in September 2019. This resulted from the resident not uploading the relevant documents to the website but sending the information by email. The landlord has accepted that it did not respond to the email sent by the resident on 28 September 2019, which meant it missed the opportunity to inform the resident earlier of this error.
- The landlord’s resale policy states that on receiving an instruction to sell a property, it will instruct its photographer to take photos of the property to market the property. Whilst the landlord did instruct its photographer in October 2019, he did not attend until February 2020 which constituted a four-month delay. Whilst this was an unreasonable delay it did not impact on the marketing of the property as the landlord was able to use the pictures provided by the resident to market the resident’s property on its portal.
- The landlord’s resale policy advises that it will market the property and that for properties situated outside London it can use its third-party agent. From the available evidence, the landlord acted in accordance with its resale policies as from October 2019, the landlord marketed the resident’s property via its own portal and from February 2020 it also requested that its third-party estate agent assist with finding a buyer. It was unable to find a buyer for the property. In its complaint response the landlord advised that from instruction to the completion of a sale, this would routinely take around 12 weeks. Therefore, it could not accept that the customer service failure to respond to the resident’s email when he requested that it register the property for sale in September 2019 had significantly impacted on the resident’s ability to sell his property. This was a reasonable assessment for the landlord to make as whilst it had the property listed for sale between October 2019 – April 2020, it was unable to attract a buyer for the property and the resident had only advised of one person who had shown interest in purchasing the property.
- The impact of the consolidated advice note introduced by the Government in January 2020 introduced fire safety checks for all buildings and the EWS1 form. This had a direct impact on the sale of the property as the previous Government guidance applied to buildings which were above 18 meters in height therefore, the new legislation included the resident’s property in those that required inspection. Though the responsibility for the certification of the building and the provision of the EWS1 form lay with the Managing Agent, the landlord took reasonable steps to keep the resident informed of the changes introduced by the Government guidance and the steps that were being taken to achieve compliance.
- The resident has said that his preferred outcome is for the landlord to purchase his property. The landlord has explained in its complaint response that it is unable to do this. As the substantive reason for the resident’s request related to the introduction of the EWS1 form and the scale of the situation meant that it would be unable to make the same offer to its other residents in a similar situation. The landlord’s approach is responsible as its buy back policies set out the circumstances in which it would consider the purchase of a resident’s property and the resident’s circumstances does not meet the threshold. However, it has agreed in light of the prevailing circumstances regarding the certification of the premises to allow the resident to sublet his property as an interim arrangement.
- In considering whether the landlord’s offer of compensation is reasonable, the Ombudsman has taken into account the landlord’s compensation policy and this Service own Dispute Resolution Principles which are: be fair, put things right and learn from outcomes and our own Remedies Guidance.
- The Remedies Guidance explains that where the landlord has recognised that there has been service failure and taken appropriate action to put things right including offering reasonable compensation, then the Ombudsman will not necessarily require that the landlord take further action. One of the factors that the Ombudsman considers is whether the redress is proportionate to the severity of the service failure by the landlord.
- Looking at this case, whilst there has been failure to respond to emails and to progress the taking of the pictures of the resident’s home by the photographer, there has been no evidence of significant service failure. Without wishing to diminish the resident’s experience, the Ombudsman is satisfied that the landlord’s overall handling of the matter was reasonable and its own assessment that in terms of its service provision that it could have responded sooner to the resident’s instruction to sell his property was appropriate.
- The landlord has acted appropriately by apologising for its failure to respond to the resident’s email and not monitoring the request to the photographer and offered an award of compensation of £350 for the inconvenience he experienced and the delay in listing the property and £250 for the delay in responding to the complaint at the final stage of the complaint procedure. The landlord has also offered to reimburse the resident on receipt of invoices for the costs that he incurred for the RICS valuation and the non-refundable legal fees that he paid to the solicitor regarding the abortive sale in April 2020.
- Whilst the lease says that the resident cannot sublet his property, the landlord agreed to explore this option recognising the difficulty that the resident had in selling the property. It has also reviewed its service provision and has updated the information available on its website for leaseholders wanting to sell their property.
- With regards to the resident’s request for additional compensation to take into account the impact on his health. It is not disputed that this is a challenging time for residents who are trying to sell their homes and impacted by the presence of cladding on the property. The Ombudsman cannot draw conclusion of the cause or, or liability for impacts on health and well-being. This would be more usually dealt with as a personal injury claim through the courts. Nevertheless, consideration has been given to the general distress and inconvenience which the situation may have caused the resident.
Determination (decision)
- In accordance with paragraph 55 (b) of the Housing Ombudsman Scheme, there was reasonable redress in the landlord’s handling of the sale of the resident’s property.
Reasons
- The landlord has acknowledged its customer service failure in not responding to the resident’s email and the consequent delay in instructing the sale. The landlord has apologised for its service failures and made an appropriate award of compensation for this.
Recommendations
- If it has not already done so, the landlord to pay the resident the £600 compensation award it offered in its final response and make contact with the resident regarding the proposal to sublet his property until the remediation works are completed.
- The landlord should confirm compliance with these orders to this Service within six weeks of the date of this report.