Notting Hill Home Ownership Limited (202001071)

REPORT

COMPLAINT 202001071

Notting Hill Home Ownership Limited

1 April 2021

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 resident’s request for a leasehold management pack.
The landlord’s communication with leaseholders following Advice Note 14.
The landlord’s handling of the resident’s request for an EWS1 form.

Background and summary of events

Background

In December 2018, the Government issued Advice Note 14. This guidance concerned the steps building owners were expected to consider to ensure external wall coverings were safe. This was in addition to the legal requirement to have an up-to-date fire risk assessment for each building.

In December 2019, the Royal Institute of Chartered Surveyors, in conjunction with two major banking and finance trade associations, developed an External Wall Fire Review (EWS1) form, simplifying the Government’s original wall safety guidance. EWS1 forms are not a statutory requirement for landlords to provide. The form is not a certification of fire safety, that function is provided by the annual fire risk assessments. Lenders started to request EWS1 forms from December 2019 onwards.

The EWS1 form is designed to “deliver assurance for lenders, valuers, residents, buyers and sellers.” Not all lenders require EWS1 forms, the decision is at the discretion of each individual lender. The completion of an EWS1 form can potentially involve significant costs and time, depending on the nature of each property or building, and the construction materials. Uncertainties with professional indemnity insurance has also impacted on the availability of engineers and other fire safety professionals for the inspections and assessments, meaning that in some cases potentially faster desktop based EWS1 assessments are not suitable, and instead require more complicated on-site and/or invasive inspections of the properties.

In January 2020, the Ministry of Housing, Communities and Local Government issued ‘Advice for Building Owners of Multistorey, Multi-occupied Residential Buildings’ which amalgamated its earlier advice notes, including Advice Note 14. In this advice the government set out its intention to introduce a Fire Safety Bill to clarify that building owners must fully address the safety of any external wall systems. The guidance stated: “We strongly advise building owners to consider the risks of any external wall system and fire doors in their fire risk assessments, irrespective of the height of the building, ahead of the planned clarification.”

The resident is a leaseholder of the landlord, which is a housing association. The property is a flat, situated within a communal block. At the time of the complaint the resident and her husband had owned the lease for 6 years. The family now comprised of two small children under the age of 3. Throughout the complaint the resident makes reference to her general dissatisfaction with the landlord and its management of the block and emphasizes the family’s desire to draw a line under the relationship and move on with their life.

Summary of events

The landlord has explained that in August 2019 it published on its website a briefing note about fire safety and cladding, and the impact on mortgage lenders’ willingness to lend for some types of properties “until they have a better understanding of the fire safety of the external wall.” The note explained in detail the background to Advice Note 14, how it affected residents who were looking to sell or buy one of the landlord’s properties, and what the landlord’s plans and priorities were following the advice note. It explained that:

“Depending on the confirmation the lender is seeking and the construction type, it may not be possible for us to issue a satisfactory statement immediately; we may need to review records, make enquiries with the parties who designed and constructed the building, seek input of expert advisers, or even carry out intrusive survey work before we can [issue a statement].”

The landlord updated the briefing note in November 2019. It provided more detail about the impact on property sales, and the landlord’s actions to both respond to mortgage lenders requests for information, and to assess and inspect its properties. It said it had approximately 150 buildings over 18 metres tall, which it was focusing on, but was also including some properties under that height which had balconies (which the advice note had given additional guidance on). The briefing note’s focus was on properties over 18 metres (or with balconies) as “In most cases compliance certificates are only required for buildings above 18m in accordance with the government Advice Notes.” The briefing note explained that the landlord would not compensate for any financial loss as “this is a sector wide problem and we believe Notting Hill Genesis have taken reasonable actions to address what we can.” It urged any leaseholder thinking of selling, staircasing, or remortgaging a property in a building over 18 metres tall to contact the landlord before committing to any action.

The resident has explained that she accepted an offer from a prospective buyer on 11 November 2019, and expected the sale to be completed by 31 December 2019. It is not known when the property was put up for sale or what information was available to the resident at that time.

On 20 November 2019 the resident’s solicitor wrote to the landlord and enquired about the cost of a leasehold management pack (a pack of information about the property, to be given to interested buyers). The landlord replied on 25 November. It explained that the pack cost £150 and that it would be sent out 15-20 days after receipt of payment.

The solicitor sent a cheque for £150 to the landlord on 25 November 2019.

On 10 January 2020 the resident’s solicitor wrote to the landlord asking for an update, as it had not yet received the information pack. The landlord replied on 13 January saying it had no record of the request. The solicitor wrote to the landlord the next day explaining that they had sent a cheque on 25 November 2019, which had been banked by the landlord on 2 December.

On 16 January 2020 the landlord wrote to the solicitor apologising for the breakdown in communication. It confirmed that the pack would be sent before close of business the following day.

The Government issued ‘Advice for Building Owners of Multistorey, Multi-occupied Residential Buildings’ on 20 January 2020. This clarified Advice Note 14, insofar as it specified that all buildings should be considered, not just those over 18 metres.

The resident wrote to the landlord on 29 January 2020. She complained that she and her family “now find ourselves unable to sell [the flat] due to no cladding report. We were due to exchange contracts this week but the buyer’s mortgage providers have requested a cladding report.” She explained that she had already moved out and was therefore now paying the costs for two properties. She had recently asked the landlord’s officers for a cladding report, and confirmation of whether the property was under 18 metres, but had not had a response.

The landlord spoke with the resident the same day about her concerns, and logged her complaint. It followed up with an email confirming it had asked its building consultants to confirm the height of the property. It said that could take up to four days.

On 30 January 2020 the landlord confirmed that the building was less than 18 metres tall. There is no indication that the landlord was aware of the change in Government guidance or advised the resident that a cladding inspection may be necessary irrespective of building height.

The resident wrote to the landlord on 4 February 2020. She explained that her buyer’s solicitor had explained saying that the information she had provided about the height of the building was no longer sufficient:

“While this confirms that the building is below 18 metres in height, latest government guidance, advice for building owners of multi-storey, multi-occupied residential buildings, makes it clear that the external wall of such buildings should be assessed in relation this guidance regardless of height. As this is a 7 storey block with various materials present on the external wall, we would ask that the building owner provides a EWS1 from completed by an appropriately qualified person to confirm the external wall of the building has been reviewed in terms of fire spread, and the outcome of that review. The EWS1 form should be accompanied by a covering letter stating the area of businesses the firm that has completed the EWS1 form undertakes.”

The resident said that her buyer was still keen to proceed if the requested documents could be provided by the landlord.

The landlord replied the same day. It acknowledged that more information was needed due to the recent change in government advice, and empathised with the resident’s situation. It explained what was involved in an EWS1 survey and said it would need to “clarify NHG’s current position in regards to providing this information.” It promised to update the resident by 6 February.

The landlord wrote to the resident again on 6 February 2020. It explained that its surveyors’ professional insurers would not allow them to sign an EWS1 without further inspection due to the personal liability it would create for them. A desk-based assessment was not therefore possible, and the landlord needed to proceed down the lengthier path of invasive surveys with independent surveyors. It explained that “conducting invasive surveys on all the buildings in the programme is going to take several months or longer when we are in a position to start. If remedial work is required it is going to take much longer than that. Basically we are not going to be in a position to issue certificates of compliance any time soon”.

The resident responded to the landlord on 6 February 2020. She said that:

The EWS1 form was a “key safety document” with health and safety implications for all residents, the landlord’s timescale was “unacceptable”, and put “hundreds of lives at danger.”
The delay and lack of the EWS1 would cause her home sale to fail, and leave her unable to sell it.
If the landlord had provided the information pack within its published timeframe the sale would have been concluded, prior to the change in government legislation on 20 January 2020.
The landlord’s actions had caused her to lose money, and continued to do so as she was paying a mortgage, service charges, ground rent, utility bills and council tax for a now vacant property. She planned to obtain legal advice, and would “seek compensation for the loss of money we have and are incurring.”

The landlord wrote back the resident on the same day, explaining in detail the background to the Government advice and the landlord’s intentions in light of it, across all of its properties. That included how it intended to prioritise properties for inspections and desk-based assessments. It concluded by acknowledging it could not say for certainty what the situation would be at the resident’s property, but said it was working to provide clarity “as soon as possible.”

The resident emailed the landlord on 11 February 2020 explained that the stress and worry of the situation was having a detrimental impact on her mental wellbeing and she had had to take time off work as a result.

The landlord sent its complaint response on 13 February 2020. It apologised for the poor level of service the resident had received, and recognised the general difficulties faced by leaseholders living in cladded buildings. It explained that:

It accepted that the information pack was not provided in time. It said it should have been provided by 24 December 2019, and apologised for the failure. However, it explained that “that even if the pack had been produced on time, it is not necessarily reasonable to assume that the sale would have reached legal completion prior to the new Government advice being issued on the 20th January. Further, we were not aware of the lenders query on the building until the 27th…after the new guidance had been introduced.”
A meeting would be held on 17 February 2020 with stakeholders to review the landlord’s response to the advice changes.
It explained again the situation with the Government advice and the EWS1 form, and why it was not straight forward or simple to provide the relevant information or assurance.
It suggested sub-letting as an option for the resident.
It offered the resident £450 compensation: £250 for distress and inconvenience, £150 as a refund for the information pack, and £50 for poor communication.

The resident responded on 14 February 2020 and disputed the landlord’s timeline for the pack, which she said should have been provided sooner than it was. She explained that her buyer was now at risk of losing money she had spent on legal fees if the sale failed. She also explained that sub-letting was not practical in her circumstances; this would require adjustments to her mortgage, with subsequent fees; that as she wanted to sell as soon as possible she did not think it viable to have a tenant and she needed the capital from the sale to transfer this into the family’s new home.

The Landlord informed the complaint that it hoped to provide a potential timeline by 20 February 2020, following the 17 February 2020 meeting with all stakeholders and discussions with its consultants.

On 20 February 2020 the landlord wrote to the resident confirming that fire safety operatives would attend the property on 11 March to undertake the survey and provide a report within 7-10 working days. It explained that the survey would be the first stage of the process, and it would then need to carry out any remedial work recommended in the report. It said it could not give further timeframes until it received the report. The landlord provided the resident with a detailed timeline of how the leasehold management pack had been sent, and acknowledged that it was provided 11 days outside of its service level agreement. It said it was willing to discuss the sub-letting option further if the resident wanted to.

The resident acknowledged the landlord’s email and said she would inform the buyer of the expected timeframe. She asked why there was a several week delay before the fire safety operatives undertook their survey, despite the fire risk urgency of the issue. In a follow up email the same day she asked:

“I should also add that these regulations relating to the cladding came into effect in December 2018, albeit to buildings of 18m and above. You only confirmed it was below 18m though in January after I pushed you. Last year we received documentation from NHG that you were ‘looking at the fire safety of the buildings’ (I will obtain the date of these letters sent by yourself but I believe it was last summer). Yet it is only now in February 2020, when people are in uproar as you are preventing them from selling, staircasing or re–mortgaging that you are actually doing anything about it. This should have been dealt with last year, not 14 months later.”

The landlord explained, on 21 February 2020, that the survey had been scheduled for the earliest date possible with its consultants with 11 March being the earliest available date. It wrote again on 17 March to confirm the survey was complete, and that it would update the resident on the findings and next steps after it received the report.

On 25 March 2020 the landlord wrote to the resident explaining that the survey had found the need for some remedial work. It said that due to the COVID-19 pandemic at the time, its contractors had said there would be delays completing the work. It said it would contact the resident when a timescale was available. The resident acknowledged the landlord’s email, and accepted that due to the pandemic there would be some additional delay. She asked for an updated timeframe for the work.

The landlord wrote to the resident on 31 March 2020. It said the full report would be provided to her by 12 April. Before work could commence it then needed to discuss responsibility with the original building contractor. It apologised for the ongoing delays, and said it would provide updates as it received information from its building safety team and contractors.

On 16 April 2020 the resident wrote to the landlord and requested an escalation of her complaint on the grounds that:

The leasehold pack was originally requested by her solicitor on 26 November 2019, however delays in providing this pack led into difficulties obtaining an EWS1 form and subsequent delays due to the COVID-19 pandemic.
She was told she would receive the full fire safety report by 12 April 2020; however, she had not yet received it.
She had not received the updates she was promised.
The delays have caused “huge financial complications, stress and anxiety”.

The landlord confirmed to the resident on 17 April 2020 that the complaint had been escalated. It called the resident to discuss her concerns on 24 April. During the conversation the resident said that the delays in completing the sale of the property had caused her to have costs of approximately £5000. The landlord sent an email following the conversation saying it would send its complaint response by 8 May.

The landlord sent its final complaint response on 7 May 2020. It explained that it had reviewed its first complaint responses and was satisfied that it had fairly considered the residents complaint, acknowledged where its service had failed, and offered an appropriate amount of compensation.

The landlord reiterated broadly the current situation nationally with sales of properties with wall cladding, and the delays caused by the Government advice and the manner in which mortgage lenders had reacted. It acknowledged and apologised again for its delay with the information pack, but concluded that

“It is reasonably likely that this [the cladding] would have been an issue even if we had been able to provide the pack within our stated timeframes. It is also not guaranteed that the sale would have been able to complete within your desired timeframes anyway.”

The landlord explained that the resident’s complaint had exhausted its complaints process, and explained how she could bring her complaint to this Service.

On 15 May 2020 the resident asked the landlord for an updated timeframe, as her buyer was now intending to withdraw from the sale.

The landlord replied on 18 May 2020. It said that it still could not provide a timeframe, or the ESW1 form, as it was still in a “review and investigation stage” with the property developer. It said it would continue to provide updates to the resident on its progress.

Assessment and findings

Delayed leasehold management pack

There is no dispute that the landlord sent the information pack outside its aim of a 15-20 workday turnaround. The delay was approximately two weeks, and was due to problems with the landlord’s handling of the request and payment. That was a service failure.

The landlord acknowledged its poor service. It refunded the £150 fee, apologised, and offered the resident a relatively significant amount of compensation (£300) for the inconvenience and frustration she had been put to.

The resident did not believe that the compensation offered by the landlord was proportionate, because she felt that if the pack had been received within the landlord’s published timeframes the sale of her property would have been completed before the government advice changed on 20 January 2020. She argued that the delay meant the buyer’s lender required more information about the property construction than it otherwise might have, and that she had subsequently incurred major costs and expenses.

It cannot be known whether the property sale would have completed successfully had the landlord provided this information promptly (and therefore prior to the consolidated guidance in January 2020 being brought in). This is because it is not possible to determine whether the lender would have approved the mortgage had they been provided with the requested information, and a number of factors are involved in property sales progressing to completion. However, there was a missed opportunity to provide information within the set timescales and this was a service failure as acknowledged by the landlord.

With that in mind, the landlord’s decision not to compensate the resident for the amount she had sought for her costs and expenses was reasonable. The remedies it did offer were broadly in line with what this Service would expect to see for service failure of a short duration, and with an unclear but potentially significant effect on the overall outcome.

Landlords’ communication with leaseholders following Advice Note 14

The landlord has explained to this Service that it started to slowly receive requests from mortgage lenders requiring information about external wall safety around the middle of 2019.

The landlord prepared and published on its website, in August 2019, briefing notes for leaseholders about the implications and challenges raised by Advice Note 14. It continued to update the briefings as the year progressed and matters developed or became better understood. The landlord has said that links to the briefing were placed on website pages relevant to any residents seeking to sell, remortgage, or staircase, and that it created a briefing note intended to be supplied to any such residents.

The briefings were comprehensive and thorough in the issues they covered. They provided a clear picture of the situation, and the problems any sellers, or owners planning to remortgage, could potentially face. Importantly, the briefings explained what action the landlord had been taking or was planning, in order to address and resolve its buildings’ compliance with the advice note. In 2019 its focus was mainly on properties over 18 metres, of which the landlord had a large number. That prioritisation accurately reflected social landlords’ understanding of Advice Note 14 at the time.

The landlord’s current website reflects what the landlord has said about how it published the briefing notes. This investigation has no means to assess whether this was also the case in late 2019, when the resident was presumably making her enquires about selling her property. However, the resident confirmed, in her email to the landlord on 20 February 2020, that she had received information from the landlord in summer 2019 about building fire safety, and she linked it to her current situation. It is apparent therefore that even though the resident may not have seen the website, at least some information was being sent out to residents.

Overall, in the broad period considered in this investigation, the landlord took reasonable steps to raise with and inform residents of the potential issues raised by Advice Note 14.

Handling of the request for an EWS1 form

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 with it. The Ombudsman’s guidance further sets out that when investigating a complaint relating to fire safety and cladding the Ombudsman will consider the following points:

What are the landlord’s long-term plans for compliance with the guidance and are these fair and reasonable?
How has it communicated with residents regarding the situation and was this communication appropriate?
How has it responded to the individual circumstances of the resident?

The landlord has confirmed that it has categorised all its blocks over 18m based on factors such as height, construction materials, cladding types and has started undertaking surveys with the intention of surveying all priority blocks within the next two years. Intrusive surveys are not due to commence on buildings under 18 meters until 2022/23. However, it appears that a survey has been undertaken on the resident’s block, with remediation works identified. By the time the matter completed the complaints procedure, no date was known as to when these works would commence.

However, while the landlord’s strategy may make sense from a business point of view, there is limited indication that the consequences for each group of residents living within each priority has been fully considered. As an example, residents living in lower rise blocks will have their homes surveyed at a much later date, resulting in them being unable to sell or staircase for some considerable time, and for a longer period than those in higher rise blocks. There is no evidence that the landlord has considered this inequity.

The resident advised the landlord of the prospective sale and her solicitors requested the leaseholder pack in November 2019. By this point in time the landlord was aware of the difficulties for leaseholders when seeking to sell, as evidenced by its messaging on its website. There is, however, no evidence of any specific warning or guidance being provided to the resident.

The resident asked for the EWS1 form on 4 February 2020. The landlord responded promptly, explaining the background behind the form, the steps involved in completing it, and the significant time it could take. It took steps to ascertain whether the necessary assurances could be gained through inspection of the plans and drawing, but unfortunately this was not sufficient. It continued to respond promptly to her enquiries and to her complaints, and updated her when it said it would.

It was understandable that the landlord could not provide clear timeframes for completing the EWS1, because the work needed relied on several factors outside its control, such as discussions with the original builders about liability for any remedial work, the availability of the engineers and surveyors needed to conduct inspections, and the uncertainty about what those inspections would find. The information it gave to the resident repeated and reinforced the information in its website briefing notes, which had in many ways predicted the situation she found herself in.

The EWS1 form is not a document a landlord is legally required to hold for its properties. It is a tool by which lenders can obtain information they believe they require in order to provide a mortgage, and gives landlord’s consistency in the type of information they might be asked to provide to aid the lenders. The inability to provide the EWS1 quickly was not an indication of failure by the landlord, especially given that the resident’s property, because of its height, was initially not within the scope of the requirements. Rather, it was a reflection of the complicated nature and scale of the issue.

The EWS1 form is also not something landlords are legally required to obtain to certify the fire risk of their properties. That function has long been played by annual fire risk assessments, which landlords are still required to undertake, regardless of the EWS1. Nonetheless, it is easy to understand why the resident had concerns about what she perceived to be health and safety risks implied by the delayed EWS1. The matter featured in some of her enquiries, and in her complaint. The landlord did not specifically respond to the point, or clarify that the lack of an EWS1 did not mean that the property was at fire risk. Given the stress and anxiety the resident had explained the overall issue was causing her, it would have been good practice for the landlord to have at least attempted to provide some reassurance in that regard, even if it would not have changed the resident’s underlying problem.

The Ombudsman acknowledges the difficult situation the resident was and is in with regards to progressing the property sale, and that this is through no fault of her own. The resident has explained that she needs to sell the property as the family have purchased a new home and need to transfer the equity and reduce their costs. The landlord offered subletting as a resolution in the interim whilst its program of surveying and remediation is completed. The resident has told this Service that she is now subletting the property, but that this is only a temporary measure, and does not wholly relieve her financial pressure. That the landlord suggested such an option is an indication that it was open to possibilities of reducing the impact of the situation on the resident. However, there is no evidence of the landlord exploring with the resident whether there might be other options relevant and suitable for her, either at the time of the complaint, or subsequently. Going forward, how the landlord supports residents in similar situations to the resident is something it needs to give serious consideration to, especially in regard to its strategies and policies.

Overall, and in the circumstances of late 2019 and early 2020, while the landlord should have addressed the resident’s misunderstanding of the fire risk assessment, it is evident that it largely responded in good time to requests and enquiries, provided clear and accurate information, sought to realistically manage the resident’s expectations around the time the EWS1 could potentially take, and began to explore options to mitigate the impact. Nonetheless, there is more the landlord will need to do going forward, both for the resident, and in general, and we have made recommendations below to that end.

Determination (decision)

In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, the landlord made a reasonable offer of redress before this investigation in respect of its delays in providing the leasehold management pack.

In accordance with paragraph 54 of the Scheme, there was no maladministration in the landlord’s communication with leaseholders following Advice Note 14.

In accordance with paragraph 54 of the Scheme, there was no maladministration in the landlord’s handling of the resident’s request for an EWS1 form.

Recommendations

It is recommended that the landlord updates the resident on the building’s remediation window date. This should be done as soon as possible, and not more than six weeks from the date of this report.

That the landlord offers a further opportunity to the resident to discuss and consider options that may assist her in reducing the financial hardship and distress caused by the situation, pending completion of its remediation works. Unless the resident prefers otherwise, the landlord should initiate this discussion within four weeks of the date of this report. The landlord should update the Ombudsman with the outcome when it has considered this recommendation.