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Notting Hill Genesis (NHG) (202017019)

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REPORT

COMPLAINT 202017019

Notting Hill Genesis (NHG)

7 November 2023


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 landlord’s handling of the resident’s request to sell her property, and;
  2. Its subsequent complaint handling.

Background and summary of events

  1. The resident is the shared owner of a 45% share of a 2-bedroom flat on the second floor of a purpose build development owned by the landlord.  The resident left the country to visit a sick relative and found that she could not return due to Covid restrictions. She sought to sell her property and has complained to this Service that the landlord delayed in responding to queries, that she spent hours on the telephone at international rates, and both she and her solicitor sent numerous emails trying to get it to act.  As a result of these delays, the prospective purchaser pulled out.  The resident had to start the sales process again and found that the property had decreased in value by £10,000. She is seeking compensation for the additional costs she has incurred as a result of the sale falling through, including mortgage and council tax obligations. She has also requested that the landlord buy back the property.
  2. The resident contacted the landlord 23 June 2020 advising that she wished to sell the property. She confirmed that arrangements were in place for a valuation to take place and asked for a guide as to how to proceed, and how soon the property could be advertised. Her subsequent complaint makes it clear that this was not her original approach to the landlord but that she had previously had difficulties in getting any response from it.
  3. A valuation of £430,000 was provided to the landlord, along with photographs of the property on 30 July 2020. 
  4. The landlord has confirmed that it received the relevant completed resale application form on 3 August 2020. This was assigned to an officer and duly actioned.  
  5. As the landlord was unable to secure a buyer for the property it gave permission for the resident to market the property on the open market on 22 September 2020. An email of 24 September 2020 shows that the resident was chasing the landlord for details of the ground rent and service charge so that the flat could be listed with estate agents.
  6. A new valuation was done on 12 November 2020 which valued the property at £440,000. A buyer accepted the property at this price.
  7. On 3 December 2020 the resident paid the landlord for the management pack which was to be supplied to her solicitor as it was needed as part of the conveyancing process. The resident chased the landlord for provision of this information on 14 December 2020.
  8. On 22 December 2020 the resident’s solicitor contacted the landlord forwarding a query from the Buyer regarding an EWS1 for the property. The resident raised her concerns regarding the length of time it had taken.  She noted that she had been trying to sell the property for 6 months and that the landlord had delayed responding at every step and that it would only respond once she managed to escalate the matter to a manager. She queried whether she could withhold her rent due to the poor level of service. The solicitor advised against this and confirmed that she too had chased for the information and would do so again if not received in the New Year.
  9. The resident chased again for the management pack and a response to the buyers query regarding the EWS1 on 5 January 2021. The solicitor also chased on 12 and 14 January 2021, pointing out that the resident paid for this on 3 December 2020 and that the length of time it was taking was not acceptable. She asked that the pack was sent urgently.
  10. The resident chased again on 20 January 2020 following concerns expressed by the estate agents. Her email to the landlord stated that she was ‘desperate’.  She also chased the landlord for a response to the buyers’ questions on 8 February 2021.
  11. Further questions were asked by the buyer and the resident again chased the landlord for a response on 19 March 2021. She stated that she was emotionally and financially drained by the experience.
  12. On 23 March 2021 the resident emailed both the solicitor and the landlord and confirmed the estate agent would be reaching out to the buyer as it believed she now had everything she needed to complete the purchase. The email noted that delays had occurred as the buyer wished to purchase additional shares in the property.
  13. On 25 March 2021 the estate agent forwarded an email from the buyer withdrawing from the sale. This stated “It has been nearly 6 months since I put in my offer, and I am still awaiting enquiries which I have chased multiple times. I have lost confidence with (the landlord) and cannot go into a partnership with them. On top of this, not having an EWS1 form and the recent news that MPs have rejected measures to protect leaseholders and tenants from payment for fire safety work further cemented my decision. Even if (the landlord) were to give me answers to the enquiries I have been chasing tomorrow, I have lost faith and would have serious concerns about being in a partnership if I had any further problems with the property, cladding or when it comes to selling.
  14. The resident made a formal complaint on the same day regarding the landlord’s conduct and delays over the nine months. She explained the difficulties she had experienced whilst being stuck abroad, and despite her pleading for responses to no avail. She believed that the landlord had been negligent in its handling of her request to sell, that its delays had resulted in her having to obtain a further valuation and its lack of responses had lost her the buyer. To resolve her complaint, she asked for the following:
    1. That the landlord buy back her share.
    2. That it refund her rent payments from October 2020.
    3. That it paid 100% of her mortgage from November onwards.
    4. That it pay her £1000 per month compensation for the mental and emotional hardship, including reimbursement for therapy costs.
  15. The resident chased a response to her complaint on 9 and 12 April 2021. This resulted in the landlord contacting the resident on 13 April 2021 to advise its Resale team would be dealing with the matter. The resident reminded the landlord of its own policy commitments under the internal complaints procedure and again asked for a formal response. This Service also chased for a response on 19 April and 28 May 2021. The landlord sent its response at stage one of the complaints procedure on 11 June 2021.
  16. The response apologised for the delays and confirmed that the sale had not been handled effectively. It stated that ultimately the lack of an EWS1 certificate had been a significant barrier to the sale, (which had been obtained on 22 April 2021) and it accepted that its communication and efficiency was very poor.   It accepted that an offer of redress should be made but explained that as an organisation, it did not routinely buy back properties unless there were highly unusual circumstances, such as significant structural issues. It would not therefore be offering to buy back the resident’s share.  However, it would offer the following redress for the resident’s poor experience:
    1. To refund the solicitors costs incurred.
    2. To refund any management pack fee.
    3. To refund any fees paid for valuations to date and to cover the next updated valuation when a new buyer was found.
    4. To award £250 for distress and inconvenience throughout the sales process which it stated was, the maximum payable under the compensation policy for distress and inconvenience.
    5. To award £500 (x2 payments of £250) for the two months the complaint had been outstanding.
    6. To award a good will gesture of £1,922.88 (equivalent to three months’ rent and service charge) in recognition of the delays to the complaint response.
  17. The resident requested that the complaint be escalated to the next stage in the complaints process on 14 June 2021. She expressed her dissatisfaction with the offer made and confirmed that her council tax and mortgage liability continued. 
  18. No response was received from the landlord and the resident chased again on 12 October 2021 reiterating her desired outcomes. The landlord responded on 26 October 2021 and asked whether the resident wished to escalate the complaint to stage two. The resident confirmed that she did on the same day.
  19. A final response was sent on 26 November 2021, some five months after the original request to escalate the matter. The initial complaints were set out as:
    1. You maintain that the lack of information provided regarding the availability of a favourable EWS1 Certificate led to your property being unsaleable and the whole process caused you a lot of anxiety and stress.
    2. You were left frustrated by the lack of response from (the landlord) to your enquiries about the status of the EWS1 Certificate
  20. The complaint set out the outcomes sought by the resident and made the following findings. It acknowledged that the sale was handled poorly and the lack of communication regarding the EWS1 Certificate was clearly a service failing which contributed the residents stress and anxiety which was very much regretted. A further apology was given. The landlord noted that the situation regarding the EWS1 certificate was resolved in April 2021 and therefore the property was ready to be sold without restriction from that date.
  21. It reoffered the redress offer set out in its stage one response and added a further award of £50 contribution towards the resident’s telephone costs whilst stranded abroad due to the Covid restrictions. It also agreed that she could proceed straight to the open market with any new sale, thus dispensing with the usual contractual 8-week nomination period. 
  22. The resident remains unhappy with this offer, particularly as the property was valued on 13 August 2022 at £430,000.

Assessment and findings

Scope of investigation

  1. Throughout the correspondence the resident refers to negligence and breach of contract by the landlord. These are not issues that the Ombudsman can consider as such conclusions could only be made by the court. The Ombudsman’s investigation is concerned with the actions taken by the landlord following receipt of the resident’s request to sell the property, and whether the landlord’s response was fair in the circumstances.

Sale process

  1. These findings are based upon the evidence provided by both parties.  No contemporaneous evidence has been provided by the landlord regarding the sale, neither has any policy documentation regarding the sales process been provided. The landlord’s response has focussed upon its complaint responses and the provision of details relating to its fire safety provisions, the information it provided to its leaseholders regarding cladding and inspections to obtain EWS1 certification.
  2. In December 2019, following the Grenfell fire and government advice regarding building safety, the EWS1 certificate was introduced for buildings over eighteen metres high. The Royal Institute of Chartered Surveyors (RICS) had devised the EWS1 form for the purpose of providing confirmation to valuers and lenders that an external wall system or attachments on buildings containing flats had been assessed by a suitable expert.
  3. In January 2020, the government issued guidance that 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”. It added that “The need to assess and manage the risk of external fire spread applies to buildings of any height.” Following this advice, mortgage lenders began to require an EWS1 for buildings under eighteen metres as well.
  4. The landlord has stated that given the complex nature of the issue, its extensive portfolio of buildings, the lack of consistency and breadth of its client base it was not practicable to write to customers about their individual blocks. Instead, it published a page on its website on 9 August 2019, (updated on 4 October 2019) to advise customers of the Government advice and outlining lenders positions. Links were also placed on the website pages relating to customers seeking to sell, staircase or re-mortgage. A detailed briefing dated 3 November 2019 was drafted to be sent to customers seeking to sell. It is not known whether this was provided to the resident or her solicitor. The landlord has confirmed that it has updated both its website and briefing notes as the situation has progressed and in relation to the resident’s block an EWS1 certificate was issued in April 2021.
  5. The resident first approached the landlord to sell the property in June 2020, but it was not until 22 December 2020 that there was any mention of the EWS1.  Delays between June – December 2020 cannot therefore be explained by any difficulties in obtaining the EWS1 certificate.  
  6. No copy of the management pack has been provided, nor any correspondence explaining the delay. The fee was paid for the pack on 3 December 2020, and it is not clear when this was provided. It is noted that the resident was still chasing for the pack on 20 January 2021, but by 8 February 2021 was only chasing for a response to the buyers’ queries relating to the EWS1 certificate.  Again, the delay in providing the management pack does not appear to be related to the EWS1 certification.
  7. The landlord has accepted that the service it provided to the resident was poor and unacceptable, but its explanation for this fails to properly identify where and why delays occurred. This will have implications for any learning and improvements for the landlord.
  8. The uncertainty around the EWS1 and the charges for any fire safety works clearly became an issue for the buyer. The landlord was taking appropriate action to keep its leaseholders informed through information provision, and it was working through its stock to ensure that certification was obtained. This issue was affecting all blocks and was not a localised issue that the landlord had control over. Whilst it should have provided detailed information in response to the buyers question, the work it was undertaking across its stock was appropriate.
  9. The landlord acknowledged the poor service and considered the residents request for recompense. The landlord’s policy on Buy Back stated that it would only consider buying back the equity in a property in the following limited circumstances:
    1. Where there are immediate building health and safety concerns that cannot be sufficiently mitigated through on-site measures and require permanent or long-term decanting.
    2. Where we are undertaking regeneration or redevelopment.
  10. The landlord’s decision that it would not buy back the resident’s share was therefore made in accordance with the landlord’s policy. The policy does allow for reverse staircasing to allow shared owners in financial difficulty to release equity in their property and reduce their mortgage payments. The policy acknowledged that, as there would be a corresponding increase in rent, this was not often a practicable or sustainable solution. This does not appear to have been discussed with the resident. However, there are no grounds to criticise the landlord for its decision that the property did not meet the relevant criteria for buy back.
  11. Having reached this decision, the landlord then considered the residents other requests for reimbursement and compensation. It sought to put things right through its offer by reimbursing the resident for all costs associated with the failed sale, including a contribution to her telephone calls. It recognised that the resident had lost confidence in the landlord and sought to assist with any future sale through its offer to cover the costs of the next valuation and to allow her to sell on the open market.
  12. The landlord also offered £1,922.88 to cover the costs of the rent and service charge at the property for a three-month period along with £250 for the distress and inconvenience caused by its handling of the sale process. This was a reasonable offer that recognised that its handling of the matter had caused significant hardship to the resident.

Complaint handling

  1. There were significant delays in the landlord’s response to the resident’s complaint at both stages of the complaint procedure. The initial complaint was made on 25 March 2021 and despite chasing reminders from both the resident and this Service on a number of occasions, no response was sent until 11 June 2021. Both the landlord’s policy and the Complaint Handling Code set a timescale of 10 working days for a response to be sent. The landlord’s response far exceeded this timescale. This will have added to the overall resident’s loss of confidence in the landlord, given the delays she experienced from the Resales team.
  2. The landlord offered £500 redress for the distress and inconvenience caused by its poor complaint handling. This was sufficient to remedy the failings up to the stage one response.
  3. There has been no recognition of the delays at stage two. The resident requested that the complaint be escalated on 14 June 2021, but a response was not provided until 26 November 2021. Again, this far exceeded the timescales detailed in the landlord’s policy and the Complaint Handling Code of 20 working days, with the possibility of an extension of a further 10 days. There has been no recognition of this delay by the landlord.
  4. In addition, the landlord’s focus on the EWS1 certification did not accurately reflect the substantive complaint. As a result, it gave explanations for the delay that did not fully address the concerns raised by the resident. Any identification of areas for improvement will therefore have been missed.  
  5. Overall, the landlord’s handling of the complaint was extremely poor, and it has not taken sufficient steps to put this right for the resident. The offer of redress at stage one was fair, and it is this recognition and offer of redress that prevents the Ombudsman from make a finding of severe maladministration.

Determination (decision)

  1. In accordance with paragraph 53b of the Housing Ombudsman Scheme the landlord has provided reasonable redress to the resident in relation to its handling of the resident’s request to sell her property.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration by the landlord in its handling of the resident’s subsequent complaint.

Reasons

  1. The landlord has recognised that there were significant delays in its responses to the resident’s request to sell. It has taken appropriate steps to put things right through its offer to reimburse the costs associated with the sale, to refund three months’ rent and service charge, its offer of compensation for the distress and inconvenience, along with the steps it has taken to support any future sale.
  2. The landlord’s explanation for the delays and its focus of its complaint responses failed to fully recognise the substance of the resident’s complaint.  Further, it has failed to acknowledge the delays in its stage two response. 

Orders and recommendations

  1. The landlord makes payment as set out in its offer at stage two of the complaint procedure including the compensation of £2722.88 previously offered to the resident (unless already paid) as this recognised genuine element of service failure and the reasonable redress finding is made on that basis. 
  2. The landlord pays additional compensation of £500 in compensation to the resident for the time and trouble caused to the resident by its poor complaint handling.
  3. That the landlord reimburses the resident for a cost of a further months’ rent and service charge for the delays in responding to the complaint at stage two.
  4. The landlord should confirm its compliance with the orders in this case to this Service within four weeks of the date of this report.