Optivo (202100001)

REPORT

COMPLAINT 202100001

Optivo

22 December 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

The complaint is about the landlord’s handling of the resident’s request to sell her share in the property.

Background and summary of events

The resident is a leaseholder and owns a 25% share of the property, a two-bedroom flat within a block.

Summary of events

The available records are not clear, but the resident has said in her correspondence with the landlord that she lodged her request to sell her 25% share in the property on 27 September 2020. The landlord has not disputed this.
The landlord has not provided any clear evidence to demonstrate what steps it took in response to the resident’s request at this time. The limited correspondence made available to the Ombudsman shows that the landlord initially instructed a surveyor in October 2020 and following discussion between the landlord and the surveyor about whether or not professional photos were to be included within the valuation report, the landlord confirmed its instructions on 27 October 2020. However, the surveyor then confirmed that they could not proceed as they did not have anyone who could do the valuation for the resident’s postcode area.
The landlord has said that it was agreed on 4 November 2020 that the resident would arrange the valuation and photos herself.
The landlord’s ‘Resale Valuation & Marketing Approval’ form shows that the valuation was done on 23 November 2020.
There is no evidence to confirm when the valuation report was received by the landlord. The resident has said that it was sent to the landlord on 26 November 2020 and she received an acknowledgement of this on 30 November 2020. The landlord has said that it did not receive the valuation until 14 December 2020.
The records show that the resident complained on 16 December 2020. She was dissatisfied with the ongoing delay in getting her property ready to be marketed for sale; the lack of communication from the landlord, and a general mismanagement of her request. Given the delays and the communication issues, she asked if she could market the property privately through an estate agent.
The resident received an auto-acknowledgement of the complaint the same day. On 18 December 2020 the landlord told the resident that it would update her in a few days. The resident chased this on 21 December 2020 and was told that it had received her documents but due to staff leave it would update her further on 4 January 2021. The resident was unhappy with this and reiterated her complaint that she had started this process on 27 September 2020 and she was still no closer to marketing the property. She also said that she was due to move abroad on 7 January 2021 and she would now like to request approval to market the property privately.
The landlord’s internal correspondence at this time showed that it reviewed the complaint. It said that the resident had agreed to arrange her own surveyor on 4 November 2020. It said that it had checked ‘every folder in our inboxes and her file on the Z drive’ and it had not received the valuation until 14 December 2020 and it had a 10 working-day response time. With regards to the resident’s request to use an estate agent, the landlord said that it could not agree this until it had approved the valuation and marketed the property for 8 weeks.
On 22 December 2020 the landlord sent the resident a ‘Marketing Approval’ form for her to complete and return and asked her to also select the Solicitors she wanted to use. The internal correspondence shows that the landlord raised a query with its teams as it could not locate the photos for the property. The landlord emailed the resident on 3 January 2020 with a query about the photos and said that this needed to be resolved before the property could be listed for sale on its websites.
The resident has said that she moved abroad on 7 January 2021 due to work reasons.
On 19 January 2021 the resident emailed the landlord to ask for further help as she was still having problems with the sale of the property. She had paid out for a valuation and professional photos and she said that the landlord had lost the photos. She was not given clear advice about the process and was unable to speak to anyone about the process. This email referred to the landlord’s complaints team having ‘admitted liability for the delay in advertising’.
The records are not clear, but the resident has said that the sale of the property fell through around this time due to an issue about the building not having an EWS1 fire safety certificate.
The resident logged a formal complaint online on 12 February 2020. She was unhappy with the delays. She had started the process in September 2020 and the property was not marketed until early January 2021. A buyer had been found but the sale could not proceed until an EWS1 certificate had been issued. She was told that the sale was being put on hold until the certificate could be arranged. She was unhappy that this could take several years to arrange. In resolution to the complaint she asked that the landlord reduce her rent and maintenance fees to zero until the sale can recommence, or the landlord buy back her 25% share at the valuation price.
The landlord acknowledged the complaint on 12 February 2021 and emailed the resident on 15 February 2021 providing further information. With regards to the issue of the EWS1 certificate it referred the resident to its website for further information on this. As for when the certificate would be available for the resident’s block, it said it could not confirm this at the moment and any announcement in this regard would be published on its website. The landlord suggested that in the circumstances it would be prepared to consider an application for the sub-letting of the property on a temporary basis.
The landlord issued its first complaint response on 26 February 2021:
1. It accepted that ‘you experienced delays with the resales process for which we apologise’.
2. It said that it could not reduce the rent and service charge payments as they remain due and payable in accordance with the terms of the lease; and it could not consider a ‘buy back’ unless the resident was at risk of losing her home for financial reasons.
The resident remained unhappy with this complaint response and requested that the matter be escalated. She was particularly unhappy that at no stage during the three months she spent trying to get the property to market did the landlord tell her that the building needed fire safety certification. She said that it knew that the sale would not be possible without this and it allowed her to incur costs.
The resident then contacted her local MP for assistance in March 2021. She was unhappy that the landlord would not tell her when the EWS1 certificate would be issued so that she can move on with the sale of the property.
The landlord’s internal email on 9 March 2021 shows that it considered escalating the complaint to its review panel but concluded that it would not do so as it could not provide the resident’s requested resolution. It also noted that it should have informed the resident earlier that she may be able to sub-let the property. The landlord also acknowledged that it had not handled the matter as well as it could have, and it would offer compensation in recognition of this.
On 11 March 2021 the landlord reminded the resident that it could look at sub-letting the property whilst the issues with the EWS1 certificate were resolved.
The landlord issued its final complaint response on 16 March 2021:
1. It recapped the complaint issues and the resident’s requested resolution.
2. It explained why it could not reduce the rent to zero and that it could only consider a ‘buy back’ if there was an imminent risk of losing the home. It suggested that the resident contact its Income Officer for further advice.
3. It apologised for the delay in processing the sales instructions in October 2020 and it said that this was due to the team having a backlog at the time. It also said that some of the delay was due to the resident choosing to get her own valuation done which was not sent to the landlord until December 2020.
4. It apologised for not carrying out a cladding check when it received the resident’s sales instructions in October 2020. It said that, going forward, this would be done in all cases before it proceeded with new sales instructions.
5. It agreed to allow the resident to temporarily sub-let the property.
6. It said that it was not going to escalate the complaint to a review panel because the resident’s requested resolutions were not possible and were outside of its policy.
7. However in recognition of inconvenience caused, and that it hadn’t ‘handled this as well as we should have’ it offered discretionary compensation of £250.
8. The landlord confirmed that this was its final response.
The resident responded and said that that she had no option but to arrange the valuation herself due to the delays and lack of communication from the resales team. She had been chasing the landlord for answers to her queries about the EWS1 certificate and she had not received any response.
The landlord responded on 24 March 2021. It reiterated its acknowledgement that there had been failures in its handling of the matter, and that there had been a delay in processing her original sales instructions by the resales team which caused the resident to instruct a valuer directly. It reiterated its £250 compensation offer.
It said that its Fire Safety Team had confirmed that at present they had no accurate timeframe as to when the remediation works to the external wall system of the block would start, and that all residents would be informed as soon as this information was available.
It reiterated its offer of its Income Officer to contact the resident to provide financial advice regarding the rent and service charges, but it noted that there was currently a credit on the rent and service charge account.
It apologised that it did not inform the resident about the situation with the external wall system of the block when it received the resident’s sale request in September. However, it could consider an application to temporarily sub-let the property whilst these issues were resolved. It said that it was actively working with its Fire Safety Team about the EWS1 certificate and as soon as there were developments with this all residents would be notified.
The resident then referred the complaint to this Service on 1 April 2021.
The landlord provided this Service with a letter from its fire safety engineers dated 18 June 2021, which confirmed that the exterior of the property now complied with the consolidated guidance ‘Advice for Building Owners of Multistorey, Multi-occupied Residential Buildings’ issued by the Government, and in their view, it met all current legislative requirements.
The landlord also informed this Service in August 2021 that it had now received a satisfactory EWS1 Safety Certificate for the building. As such, the resident could proceed with the sale of her property. It said it would be writing to everyone in the block to let them know.
The resident also updated this Service in August 2021 to say that the property had now been sub-let and this covered her rent and service charges. However, she still wanted the landlord to buy back her share.

Policies, procedures, and agreements

Shared Ownership Resales Policy:

This sets out that if the shared ownership leaseholder wishes to sell their share, the landlord will arrange this and it has a 8-week nomination period to do so.
The leaseholder will need to pay for the valuation by a surveyor it agrees upon. You can choose one of the valuers from our approved list. We’ll instruct them, and you’ll pay them directly for their services. An alternative surveyor can be used but the landlord would need to check this first.
The landlord will draw up the sales particulars for the property when it has received the ‘Request to Sell’ form; signed agreement to its Terms & Conditions; a valuation report (including photographs) and the EPC.
The nomination period begins when all the documents have been received and the particulars of sale have been agreed. If the landlord does not find a buyer within the nomination period, the leaseholder can then sell their share on the open market.

Shared Ownership Resales Procedure:

This sets out in more detail the process to be followed by the landlord:
1. When a shared owner asks us about selling, this sets up a task to the ‘Resales & Staircasing (Home Ownership)’ team.
2. The Leasehold Coordinator (LC) sends the seller a Resale pack, containing the documents the seller needs to sign and return which includes the ‘Request to Sell Agreement’.
3. Once this is returned, the Officer can now instruct the open market valuation.
4. The valuer sends the valuation and photographs to the Officer.
5. The Officer completes the ‘Resale Valuation and Marketing Approval’ form and sends it to the seller.
6. The seller completes and returns the rest of the form.
7. When the Officer receives the completed form the nomination period begins.
8. Within five working days, the Officer uploads the property details to the online portals. The Officer sends the links to the seller to make sure they’re happy with the adverts.

Compensation policy:

This sets out that the landlord can consider discretionary compensation payments (up to £250 in exceptional cases) to recognise distress, time, trouble or inconvenience.

Assessment and findings

The Ombudsman’s role is to consider the landlord’s handling of the resident’s request to sell her share of the property. This includes an assessment of whether the landlord has followed proper procedure, good practice, and behaved reasonably, taking account all the circumstances of the case and any relevant legislation. The Ombudsman will also take into account not only the landlord’s response to the substantive issue, but also the actions it took within its own complaints process to try and resolve matters.
The landlord has demonstrated in its complaint responses that it has formally acknowledged and accepted its service failures with regards to its handling of this matter, in particular with regards to the delay in getting the property ready to be marketed. It has acted appropriately by apologising for the service failures and it has offered compensation of £250 which the resident has rejected.
The issue that needs to be considered is whether or not the landlord’s offer is reasonable redress for the service failures. In considering this, the Ombudsman has taken into account the landlord’s own compensation policy, as well as the Ombudsman’s Dispute Resolution Principles (be fair, put things right and learn from outcomes) and our published Remedies Guidance. One of the factors that the Ombudsman considers is whether the redress offered is proportionate to the severity of the service failure by the landlord and the impact on the resident.
The Ombudsman notes that the resident’s situation at the time of the complaint would no doubt have been difficult for her, and that she was in this position through no apparent fault of her own. This is because until the landlord was able to provide the EWS1 certification in line with the Government’s guidance, the resident was effectively left in limbo as she was unable to sell the property as banks would not lend on it because of the potential fire safety issues.
In investigating this complaint the Ombudsman has noted that there is an overall lack of detail in the landlord’s submissions about the delays. In particular, the landlord has not provided detailed evidence of its actions during the period between when the sale request was initially received in September 2020 up until the sale fell through in January 2021. There are several gaps in the information on its file. The need for good record-keeping cannot be emphasised enough and it is important not only so that the landlord can provide an efficient and timely service to its tenants, but it also allows for an accurate audit trail of its decision–making after the event which can help in resolving complaints and learning from complaints to improve services. The landlord is therefore reminded of the need to ensure that its records are sufficiently detailed and thorough.
Looking at the facts of this case, the landlord acted appropriately by recognising that there was service failure and avoidable delays in getting the property ready to be marketed. It apologised for this service failure and offered the resident £250 compensation, which was the maximum that it could award under its policy.
While the landlord has offered compensation for the delays and inconvenience, the Ombudsman considers that it has failed to also consider the financial detriment to the resident. The landlord would have been aware (or ought reasonably to have been aware) that a cladding check was likely to have been needed to complete any sale. Despite this knowledge, the landlord did not notify the resident of this at any stage of the sales process. It allowed the resident to incur costs (such as the valuation and professional photos) even though the sale was unlikely to proceed without a cladding check having been done. It would also have been aware that the valuation was only valid for three months, and at that time it was very unlikely that any remedial works to the cladding would be completed within three months.
The landlord has therefore acted unfairly and unreasonably in knowingly allowing the resident to incur costs unnecessarily. Had the landlord given the correct advice about the cladding issues early on in the process, the resident could then have made an informed decision about how, and if/when to incur any such costs.
The landlord has rightly acknowledged in its complaint response that in future it will ensure that it carries out a cladding check prior to proceeding with a sale application. This demonstrates the landlord’s willingness to learn from the complaint, but the Ombudsman considers that the landlord ought to also compensate the resident for these unnecessarily incurred costs.
With regards to the sale of the property falling through, this was ultimately because of the lack of an EWS1 certificate. The complaint raised by the resident is not about the technicalities of the EWS1 certification as such, but about the landlord’s lack of communication about this process.
From what can be ascertained from the limited available evidence, the landlord did not provide the resident with information about the steps it was taking to obtain the EWS1 certificate. The resident’s correspondence shows that she requested updates and further information on when the landlord would be able to issue the certificate and there is little evidence of it having responded in any meaningful way to these requests aside from its complaint responses.
The landlord did refer the resident to its website for general information about this issue, but given the resident’s correspondence, it could have engaged with her better and taken steps to reassure her about what it was doing.
With regards to the resident’s request for her rent to be reduced to zero, the landlord has explained why this is not possible and that payment of the rent and service charges would still be payable by the resident. As for her request for the landlord to buy back her share, the landlord’s decision not to consider this was in line with its buy back policy, which stated that it needed evidence that the resident was at serious risk of losing her home due to financial reasons and that she had expended all other efforts to address the financial difficulties first.
Looking at this case overall, the landlord acted appropriately by recognising its service failures within its complaint responses and offering compensation and considering how it could do better. However, it is noted that it failed to offer any compensation within its initial complaint response despite having evidence of service failure. This was then rectified in its final complaint response.
In assessing the issue of compensation for the service failures, the Ombudsman takes account of a range of factors including any distress and inconvenience caused by the failure, the amount of time and effort expended on pursuing the matter with the landlord, and the level of detriment caused by the landlord’s actions/inactions. It also considers whether any redress is proportionate to the severity of the service failure by the landlord and the impact on the resident.
In this case the Ombudsman has considered the landlord’s offer in light of the facts of the case and the available evidence, and it takes the view that while the offer does factor in the distress and inconvenience caused by the delays, it does not fully take into account the financial detriment caused by the service failure. As such, additional compensation would be warranted in this case.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the landlord in respect of its handling of the resident’s request to sell her share in the property.

Reasons

Overall, the landlord responded appropriately by recognising its service failures, offering compensation and considering how it could do better. However, there were shortcomings in its communications with the resident and its compensation offer of £250 was not reasonable or proportionate and it did not fully take into account the financial impact on the resident.

Orders and recommendations

The landlord should, within four weeks of the date of this report:
1. If not already done so, pay the resident the compensation payment of £250 it originally offered.
2. Reimburse the resident the costs she incurred in obtaining the Valuation and the professional photos that were required as part of the Valuation report.
Evidence of the payment of compensation to be provided to this Service within four weeks.