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Notting Hill Genesis (NHG) (202124961)

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REPORT

COMPLAINT 202124961

Notting Hill Genesis

14 February 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 resident has complained about the landlord’s handling of his application to staircase.
  2. A further complaint was made regarding the landlord’s customer service.

Background and summary of events

  1. The resident is a shared owner of a third floor flat in a four storey block that is under 18 metres high.  The block is owned by the landlord. His complaint concerns the landlord’s handling of his request to staircase to 100% ownership. As no EWS1 was in place at the time of his application he had to change lenders to one who would proceed without the EWS1. This resulted in the resident having to pay an early repayment charge for his two existing mortgages. Due to the length of time it took to find and process his mortgage with the new lender he missed the stamp duty exemption period resulting in further financial loss. He believes the landlord was responsible for this loss and should compensate him accordingly.
  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’s FAQs dated 6 April 2021 stated that the block did not require an EWS1 form:  EWS1 are for buildings over 18m tall. Not every building in scope above 18m will require an EWS1 form – only those with some form of combustible cladding or combustible material on balconies. Your block is under 18 meters in height and therefore should not require an EWS1 form, so we would request that you speak to your lender and ask for the reasoning behind this request.’  The FAQs went on to give details about the construction of the block and the actions that had been taken by the landlord to assess the block to date.  It requested that where lenders were asking for an ESW1 certificate that residents asked the lenders for their reasoning and that they let the landlord know the outcome.
  5. On 16 April 2021, the resident raised a query with the landlord regarding this. He stated that he understood that an EWS1 certificate should not be needed but questioned whether it was available should the lender require one.
  6. The landlord responded on 19 April 2021 and confirmed that the updated advice note now stated that an EWS1 was applicable to all buildings with cladding, irrespective of their height. It recommended that the resident did not start the staircasing process without an EWS1 in place. The query was forwarded to the property management team for an update on the situation with the cladding and the EWS1.
  7. The resident went ahead with his request to staircase and obtained a valuation on 12 May 2021. The landlord instructed its solicitors and issued a memorandum of sale on 19 May 2021.
  8. The residents mortgage company requested an EWS1 certificate. The resident complained to the mortgage company on 3 July 2021. The date of the lender’s response is not known, but in its response it referred to the government guidance issued in January 2020 stating that fire safety needs to be considered holistically on any multi-storey/multi occupied building i.e. it is not just restricted to buildings of eighteen meters or above.  It confirmed that it had adopted an EWS1 approach and therefore one was therefore needed before the mortgage could proceed. It refused to waive its early repayment fees to allow the resident to transfer his mortgage to a lender that did not require an EWS1.
  9. On 21 July 2021, the Government announced that EWS1 forms should not be needed for buildings below eighteen metres. It advocated a more risk-proportionate approach should be taken to fire safety in blocks of flats. The government withdrew the January 2020 advice note altogether on 22 January 2022.
  10. An EWS1 was issued for the block on 12 August 2021, however this stated an incorrect address.  The EWS1 was reissued with the correct address in September 2021.
  11. The resident made a formal complaint on 13 September 2021. He sought compensation for loss of funds totalling £4832.64 which he believed were a result of the landlord’s failure to issue an EWS1 certificate for the block. He sought compensation for the following:
    1. Missing the stamp duty holiday deadline £2708.
    2. Early repayment fees to first lender £171.69 + £752.95.
    3. Solicitors’ fees for early repayment £200.
    4. For failure to meet acceptable standard of customer service since 2009 and to cover interest rates £1000.
  12. The resident explained that he had to switch lenders and pay early repayments fees so that he could switch his mortgage to a lender that did not require the EWS1. He explained that he had timed his purchase so that he would benefit from the Stamp Duty holiday but having to find another lender resulted in him missing the deadline of 30 June 2021.
  13. The complaint went on to state that he held the landlord responsible for not having provided the EWS1 whereas it was needed from a legal perspective and the information in the FAQ was incorrect and misleading.
  14. The letter explained that the customer service issues related to numerous breaks in hot water provision, unacceptable level of customer service over the telephone, emails not being answered and repairs not dealt with.  It indicated that details could be provided upon request.
  15. The landlord responded on 23 September 2021 and confirmed that given the block was under eighteen meters the landlord had not originally planned to issue an EWS1 based on the government guidance that this was not necessary. However, as several lenders were insisting on an EWS1 it arranged for an assessment to be carried out and an EWS1 was issued.  It explained that it would not be offering compensation as the building was sold with all available information provided.
  16.  In relation to the customer service the landlord apologised for the frustration caused by the hot water outages and other issues. It was aware of previous service issues before the landlord merger and had been striving to improve the customer service and repair time across the site. It asked that further details were provided so that it could look at the matter and provide a full response.
  17. The resident requested that the complaint be escalated on 27 September 2021 and a final response was issued on 26 October 2021.  The landlord maintained its position. It pointed out that the resident had been advised not to proceed until the EWS1 was in place. This was issued on 12 August and then reissued on 21 September due to an error with the address. The landlord noted that the resident chose to go against the recommendation given and therefore it did not accept that it was liable for any of the costs incurred.
  18. The landlord acknowledged that it had been a confusing time and that there had been a great deal of ambiguity as emerging guidance and legislation was interpreted in different ways.  It apologised to the resident for the confusion and the changes of approach but explained that this was a national issue that was finally addressed by the Government statement of 21 July 2021 to correct the overreaction of lenders.
  19. In relation to the customer service complaint the landlord had spoken to the resident and obtained further details. It had reviewed the outstanding cases logged on ‘My Account’ and found that there were cases that remained outstanding. It was working through these and offered £50 compensation in recognition that its service fell short of the expected standards. It also acknowledged that it had had taken too long to arrange an inspection of a yellow substance reported on the exterior of the bedroom and offered a further £50 for this delay.

Assessment and findings

The resident’s application to staircase

  1. There was no statutory or automatic obligation for landlords to carry out an EWS1 assessment or provide copies of EWS1 certificates to leaseholders. The EWS1 was created as a way of informing owners and lenders about the safety of the building. It was a discretionary and not a statutory scheme. The requirement for an EWS1 was a decision for the lenders rather than a statutory requirement, although it was informed by government advice.
  2. Once the Government issued its January 2020 advice, it was not automatic, if perhaps likely, that lenders would immediately, or at all, introduce a requirement for an EWS1 in relation to buildings under 18 metres high. The requirement varied from lender to lender as indicated by the resident’s ability to switch his mortgage to a lender that did not require an EWS1.
  3. Whilst the provision of the EWS1 by a landlord was discretionary, the Ombudsman would expect a landlord to provide information to its residents about the need of an EWS1, especially given it would be relevant when a resident sought to increase their share in the property. The Ombudsman would expect the landlord to advertise it on its website and consider writing to its leaseholders on learning of the requirement. In this instance the landlord did provide information on its website regarding the EWS1.The FAQ sheet explicitly stated that EWS1 certificates were solely for buildings over 18 metres high.  As discussed, this was not strictly accurate and may have been misleading for leaseholders. It is however noted that this question was one of several and the overall content of the FAQ reflected the spirit of the January 2020 guidance (see below).
  4. However, upon asking for clarification the resident was provided with accurate and clear information; the landlord recommended that he did not proceed until the EWS1 was available. The resident was therefore in possession of accurate information before he decided to proceed with his staircasing request and was aware of the risk in doing so.
  5. The landlord’s FAQ sheet of April 2021 set out the actions that it had taken and confirmed that it’s qualified fire consultancy had deemed the facades to be compliant with the Building Regulations and that it was satisfied that the brick external wall met the required building standard.  It stated it was in process of assessing whether any works were needed to the timber cladding.  The FAQs indicated that the landlord had undertaken steps to assess the fire safety of the building as was appropriate.
  6. The landlord acknowledged that it erred when issuing the EWS1 form in August 2021. It confirmed that this had been issued for the wrong address and it put this issue right the following month. Whilst this evidences a clear service failure on the landlord’s part, it is relevant that the failure was not linked to the costs highlighted by the resident in his complaint.
  7.  In the circumstances, the Ombudsman cannot conclude that there was clear evidence of financial loss linked to any service failure or delay by the landlord. It was taking appropriate steps to assess the safety of its properties. This was compliant with the guidance issued in January 2020 which stated Although the Expert Panel’s advice does not explicitly cover all types of external wall systems for residential buildings below 18m, the risk of external fire spread should be considered as part of the fire risk assessment for these buildings. In any event, the issue involves matters of negligence which is a legal concept, and therefore outside the remit of this service as this a matter for the Court.

The landlord’s customer service

  1. The landlord dealt with the complaints about customer service appropriately in that it spoke to the resident to obtain better details.  Once aware of the areas of concern it took steps to investigate the areas identified as ongoing.  To put things right it put a plan in place to check any outstanding requests, it apologised to the resident and offered compensation as redress.
  2. The landlord offered £100 compensation in total for its acknowledged service failures relating to its customer service provision. In the circumstances, this amounted to reasonable and proportionate redress for the detriment experienced by the resident. The extent of the communication and hot water provision issues reported by the resident is not known, however, the amount offered is reasonable for cases involving a minimal to moderate amount of detriment to a household.
  3. As such, the landlord’s thorough investigation of these issues, its action plan to put the outstanding issues right and its offer of compensation satisfies the Ombudsman that it has responded to this aspect of the complaint fairly and reasonably.

Determination (decision)

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of the residents request to staircase.
  2. In accordance with paragraph 53 (b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily in relation to the complaint about customer service.

Orders and recommendations

  1. The Ombudsman makes the following recommendations:
    1. The landlord to pay the compensation it previously offered to the resident, if it has not already done so.