Optivo (202101632)

REPORT

COMPLAINT 202101632

Optivo

9 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 regarding how the landlord responded to the resident’s reports of a leak at his property.

Scope of Investigation

Within his complaint, the resident refers to a previous leak that affected his property in 2014. While this investigation notes his concern that the two leaks in 2014 and 2020 (the latter one the subject of this complaint) indicate a recurring issue, the evidence seen by the Ombudsman does not suggest evidence of a link. The Ombudsman understands both incidents will have caused disruption and inconvenience to the resident. However, based on the evidence available and taking into consideration the length of time between the two incidents, the Ombudsman considers that it is appropriate to treat them as separate issues.
As there is no evidence the resident submitted a formal complaint to the landlord regarding the 2014 leak, while the matter may be referred to for context, this report will not investigate how it responded to the earlier leak. This is in accordance with Paragraph 39(e) of the Housing Ombudsman Scheme, which states that the Ombudsman will not investigate complaints which were not brought to the landlord’s attention as a formal complaint within a reasonable period (normally within 6 months of the matters arising). This investigation will focus on the landlord’s response following the resident’s report of a leak in 2020.

Background and summary of events

Background

The resident is the leaseholder of a one bedroom, ground floor flat and has held a lease at the property since 1990. The freeholder (the landlord) is a Housing Association.
The flat above the resident’s, from where the leak in question originated, is also leased from the landlord. It is noted that the flat above the resident’s is sublet and the leaseholder does not live at the address. However, for clarity, in this report the leaseholder of the flat above the resident will be referred to as ‘the neighbour’.
The landlord’s Repair Responsibilities guide states ‘leaseholders and shared owners are responsible for all internal repairs to their home…you’re responsible for all repairs to the inside of your property. This includes repairs to….baths, sinks, toilets and cisterns; drains and waste pipes’.
The landlord operates a two-stage complaints policy with a Stage One and a Review Stage, although escalation for a full response at the Review Stage is at the landlord’s discretion. The policy also advises that, when the landlord initially receives a complaint, it will first aim to resolve the issues outside of its complaint process.
The landlord has a Compensation Policy which notes that compensation will not be offered regarding claims which are related to ‘insurance claims with (our) insurers’.
Section 8.1 of the landlord’s Home Ownership Policy (‘Subletting’) notes that permission to sublet is ‘dependent on the terms of the relevant lease’ and indicates that ‘generally, leases do not permit Shared Owners to sublet before staircasing to 100% ownership of the property’.
The landlord’s building insurance policy (‘Housing: Leasehold or Shared Ownership’) notes under the ‘Limitations’ section that ‘the first £250 excess applies each and every loss applies in respect of all insured perils’. Although the insurance policy provided to this investigation dates from April 2021, it has not been submitted that the terms regarding excess charges are different from those in the previous year’s policy, which covered the leak and subsequent claim subject to this complaint.

Summary of Events

On 22 October 2020, the resident reported a leak coming into his property from the flat above. This Service has not seen a copy of the email the resident sent to the landlord and the leaseholder of the flat above, but it is not disputed that the resident reported the leak to both parties on this date. In his complaint submission, and his submissions to this Service, the resident has advised that the neighbour replied to him the same day to inform him that he was already aware of the leak and the matter had been resolved but this Service has not seen the original email correspondence.
Landlord records provided to this investigation include an invoice provided to it by the neighbour which indicates that a plumber attended his property on 22 October 2020. The plumber carried out a repair to the ‘shower pumps, hose and filter’ and noted that following the repair they were ‘checked and tested’ and ‘OK’.
On 29 October 2020, the landlord replied to the resident’s email of 22 October 2020. The landlord advised that, as the neighbour’s flat was also a leasehold property ‘this repair would be between yourselves to resolve’. Two days later, the resident emailed the landlord again to advise that ‘water damage has now extended to the passageway ceiling and the main bedroom ceiling’. He asked if the landlord would comply with its ‘responsibility under the lease’ and queried whether it was ‘taking full responsibility for (the issue) and if so when?’ and advised that there was a fire and health and safety risk posed by the leak.
Landlord records show it responded to the resident on 16 November 2020 to state that it was sorry to hear that the resident had been affected by a leak from the flat above and it provided a copy of the building insurance. It further advised that there was an excess charge of £250 for any claims made and this would ‘need to be paid by the resident’.
The resident replied to the landlord on 23 November 2020, also copying in his neighbour, regarding ‘the damage done to my flat by the flat renting business of (the neighbour)’. He requested that the landlord consider his email as ‘the initial stage of a complaint and a demand for compensation’. He also raised the following points:
1. He contended that the leak had not been repaired by the neighbour on 22 October 2020, alleging the neighbour had ‘held back’ on repairs as his walls ‘were totally waterlogged’ on 11 November 2020 and did not begin drying out until 15 November 2020.
2. He stated that the situation was a ‘repeat’ of a previous leak from the neighbour’s flat in 2014.
3. He considered that the insurance excess was high and that he should not have to pay this. He added that he expected the neighbour and landlord to cover ‘all and any costs’ that were not covered by an insurance claim.
On 15 December 2020, the landlord emailed the resident and apologised for the delay in responding. It advised it would investigate his allegation that the neighbour was running a business and, regarding the leak, noted the following:
1. It acknowledged that the leak was likely to have been ‘distressing and stressful’ but reiterated that the resident would need to claim via the landlord’s building insurance if any damage had been caused to his property. It reattached information regarding the policy and claims process.
2. That it would be happy to contact the neighbour on his behalf if the resident was unable to get hold of him, or if the leak was recurring. It could also help to ‘ensure that the necessary repairs are carried out’.
3. It acknowledged that the resident advised he had previously been affected by a leak from the neighbour’s property in 2014 and that this was ‘not nice’ but clarified it did not consider this to be evidence of a ‘constant re-occuring leak’.
4. It clarified that residents contribute towards the building insurance via their service charges, but leaseholders had to pay the excess charge directly to the insurance provider following any claim.
5. It also advised him how to make a formal complaint if he remained unhappy.
The resident replied the following day and requested that his complaint be escalated as it had not been addressed. He made further statements relating to the neighbour running a ‘flat renting business’ and that he believed the landlord’s insurance had been ‘structured…in such a way that the victim of the damage has to pay’ and that instead the ‘perpetrators’ should be punished ‘as an incentive not to cause damage to (other) leaseholders’. He also contended that the neighbour, as a ‘flat renting business’ should have his own insurance, rather than being ‘pooled with the costs paid by other leaseholders’.
The landlord acknowledged the resident’s complaint on 31 December 2020 and noted that it had discussed the nature of his complaint with him via email and that he had copied it into correspondence he had had with the neighbour in which he had requested the neighbour pay the insurance claim excess. It advised it would respond formally by 18 January 2021.
On 18 January 2021, the landlord issued its formal complaint response and noted that the resident had raised the following issues:
1. The October 2020 leak caused damage to his wall and while the building insurance covered the necessary repairs, he believed he should not have to pay the insurance excess of £250.
2. He believed that the landlord should ‘enforce immediate repair to the leak in the flat above’.
3. That, because a similar leak took place in 2014, this was evidence of a recurring problem and affected his quiet enjoyment of the property.
4. He requested that, to resolve the complaint, the landlord should pay the insurance excess cost.
The landlord advised that, having carried out an investigation, it made the following findings:
1. It reiterated that ‘the responsibility for leaks that originate within the demised premises are a responsibility of the individual leaseholders’.
2. The neighbour had ‘followed the correct procedures and repaired the leak’.
3. The damage caused by the leak was fully covered by the building insurance.
4. Each insurance provider policy includes an excess charge, ‘payable by people covered by their insurance when the claim is made’. it noted that this enabled it to keep the insurance premium ‘much lower’ for leaseholders than it would otherwise be if there was no excess charge.
5. It acknowledged that the resident believed the landlord should have ‘intervened immediately’ when he reported the leak but it advised that it followed the correct procedures, which was to advise the neighbour that there was a leak in his property and he had an obligation to repair it. It clarified that it could take enforcement action if the neighbour had not taken steps to rectify the problem, but that was not the case on this occasion.
6. It recognised that the leaks in 2014 and 2020 had ‘caused (him) a degree of distress’ but that it did not consider the two instances to represent a recurring issue. It also clarified that the reference to ‘quiet enjoyment of your property’ within his lease agreement referred to the resident being able to ‘enjoy sole possession of your flat without unnecessary interference from your Landlord’, rather than regarding any repair issues.
The resident responded on 22 January 2021 and advised that he believed the landlord had ‘re-written’ his complaint and ‘taken things out of context’ and that the points he had raised had not been answered. He requested that his complaint be put forward for ‘arbitration’ if the landlord did not agree to his request to pay the insurance excess cost, although he also stated that this itself would only be a ‘transient solution’ due to the problems he had previously raised regarding how the insurance policy works.
The landlord responded on 26 January 2021 and provided the resident with a Review Panel request form. The resident returned the completed form the same day, providing a lengthy response which this Service will not exhaustively reiterate here. However, within his Review Panel request, the resident:
1. Alleged that the neighbour had waited three weeks to repair the leak, causing ‘a lot more water damage to the building’.
2. Stated that he believed the landlord was ‘negligent’ for not protecting the building and was instead ‘protecting the party doing the damage’ (the neighbour). He noted that other properties on the development had not had similar issues and that the leaks to his property were as a result of ‘defective maintenance of the water installation’ in the neighbour’s flat. He also considered that the landlord should use its ‘powers of inspection’ to verify the repair to the flooring the neighbour had carried out and that he ‘had grounds to understand’ that the neighbour had not followed good practice when carrying out previous repairs, although he did not specify what those grounds were.
3. Stated that the landlord’s insurance policy arrangements were not adequate and that the neighbour, as he was running ‘a flat renting business’, should have a separate kind of insurance as the current arrangements were ‘deliberately designed to injure the victim’.
4. Accused the landlord of taking sides with the neighbour and showing ‘favouritism’ towards him. He also stated that the landlord’s assertion the neighbour had ‘done the right thing’ by carrying out the repair was misleading ‘after documented lies’ and that he had endured ‘three weeks of constant damage and constant requests for (the neighbour) to halt the damage’.
The landlord held a Review Panel case conference on 12 February 2021 and wrote to the resident on 19 February 2021 to advise him of the outcome of his review request. Having considered his review request form and a phone conversation it had with him to further discuss his complaint (notes of which this Service has not seen), the landlord stated it understood his complaint to be that his complaint had not been properly addressed, that he had concerns around the condition of the neighbour’s flat and the building in general, and the impact that the landlord’s insurance arrangements had on him. It also noted that the resident desired the following outcomes:
1. For the landlord to contact the neighbour and ‘confirm his responsibilities in the event of a leak’.
2. For the landlord to inspect the neighbour’s property for defects.
3. For the landlord to ‘speak to (the neighbour) about him lying…that the leak was fixed on 22 October 2020 – it was actually fixed in November’.
4. That the landlord provide a UK address for the neighbour so that the resident could serve court papers on him.
The landlord advised the resident that, following its case conference, it had decided not to escalate his complaint. It raised the following points in response:
1. It was satisfied the neighbour had ‘addressed the leak in the property within our process and acted appropriately in resolving…the leak from his property’.
2. It recognised the impact of the damage caused by the leak but contended that ‘the number of leaks that have affected your property is not unusual’. It advised it did not ‘feel that it is necessary to inspect (the neighbour’s) property as we are confident that the leak was addressed in a timely manner’.
3. It would not be taking any action against the neighbour as there was ‘no reason’ to think that they had lied about carrying out the repair. The landlord also clarified that any further legal action between the resident and the neighbour would be a matter for them and it would not be involved.
4. Regarding the resident’s concerns about the landlord’s insurance policy, it reiterated that it felt that it had ‘secured effective insurance in line with (our) responsibilities in a way that delivers value for money for leaseholders’.
5. In relation to the resident’s concerns about the neighbour running a ‘flat renting business’ the landlord confirmed that ‘the relevant lease allows the leaseholder to sublet’ and they were satisfied that the ‘leak(s) to your property have not been a result of subletting’. They clarified that they would be able to ‘hold leaseholders who sublet to account’ if any breaches occurred.
On 22 April 2021, the resident referred his complaint to this Service.

Assessment and findings

Although this Service has not seen a copy of the original email, it is not disputed that the resident contacted the landlord and the neighbour simultaneously to report a leak from the neighbour’s property on 22 October 2020. In his submissions to the landlord as part of his complaint, the resident confirmed that the neighbour responded the same day to advise him he was already aware of the leak and had arranged for a repair. As such, the resident did not appear to have any difficulties in contacting the neighbour directly.
The landlord responded on 29 October 2020 and advised the resident that, as the neighbour was a leaseholder, it was not responsible for any repairs and the resident and the neighbour would need to resolve the matter themselves. Section 3(3) of the resident’s lease advises that the ‘leaseholder covenants with the landlord to keep the interior of the Premises…which are in the Premises and enjoyed or used only for the Premises…in good and substantial repairs and condition’. The landlord’s Repair Responsibilities guide further confirms that ‘leaseholders and shared owners are responsible for all internal repairs to their home (including)….baths, sinks, toilets and cisterns; drains and waste pipes’.
While this Service has not seen a copy of the neighbour’s lease, the evidence available to this investigation indicates that the leak was confined to the neighbour’s property, and the damage confined to the resident’s property. In the Ombudsman’s opinion, this indicates that the landlord was not responsible for repairing the leak and it was therefore correct to advise the resident that the neighbour would be responsible for dealing with the repair as per the terms of the lease and its Repair Responsibilities guidance.
However, while the landlord’s position was not unreasonable and was issued in line with the terms of the lease agreement, in the Ombudsman’s opinion, its initial communication with the resident could have been improved. It could have responded more promptly, taking a week to acknowledge the resident’s initial report in October 2020, and over two weeks to reply to a follow–up email regarding his report of further water damage sent at the end of October 2020. Additionally, rather than simply advising the resident to contact his neighbour, it could have been more proactive in offering support with contacting the neighbour if required (as it did in a later email in December 2020). While the landlord’s actions do not, in the Ombudsman’s opinion, amount to a service failure and its position was not unreasonable, its communication with the resident could have been better, and it missed an early opportunity to provide the resident with reassurance that his report had been acknowledged and his concerns had been taken seriously.
Regarding the progress of the leak repair, while this Service notes that the resident contends it was not repaired on 22 October 2020 and that the neighbour had ‘lied’ to the landlord regarding this, based on the information available to this investigation, there is insufficient evidence that this was the case. Evidence seen by this investigation shows that a plumber attended the neighbour’s property on 22 October 2020 and there is no indication that the landlord acted unreasonably by taking this evidence at face value and later advising the resident in its complaint responses that the neighbour had acted appropriately by responding to the reported leak promptly. While it is also acknowledged that the resident believes the leak continued until mid-November 2020 and advised the landlord that further damage had been caused after 22 October 2020, this Service has not seen conclusive evidence that this was the case. In any case, as noted above, the repair was not the landlord’s responsibility and, from the information available, there is no indication that the resident was unable to contact the neighbour if he believed that the leak had not been resolved and was ongoing, or that he required the landlord’s assistance in contacting him or mediating.
There is also no evidence that the landlord treated the resident unfairly by favouring the neighbour over him as it appears to have based its responses on the evidence provided to it. While the resident has, in his submissions, cast doubt as to the neighbour’s honesty, this investigation has not seen evidence which directly contradicts the information that had been provided to the landlord.
Regardless of when the repair took place, it is not disputed by any party that the leak caused damage to the resident’s property. In his complaints to the landlord and submissions to this Service, the resident outlined the damage caused to some of his ceilings and walls, including tilework and, for the purposes of his insurance claim, provided three quotations for the repair work that was subsequently required. From the information available to this investigation, the landlord’s building insurer approved the quote that was ultimately submitted and agreed to pay the claim in full.
It is noted that the resident has stated he does not believe the landlord’s current insurance provisions are satisfactory. However, as per the terms of its lease – Section 5(2) of the lease states ‘the Landlord will at all times during the term…keep the Estate insured against any loss or damage by fire and other such risks’ and ‘whenever required will produce to the Leaseholder the insurance policy’ – the landlord appears to have acted appropriately and in accordance with its responsibilities. It ensured that it had relevant insurance in place, which covered the damage caused to the resident’s property in full, and it provided him with a copy of the policy on two occasions. There is no evidence that the landlord’s insurance arrangements were not adequate in this scenario.
It is acknowledged the resident also believes the landlord’s insurance arrangements are unfair as they effectively ‘punish’ him for making a claim through its requirement that he pays the excess. While this Service empathises with the resident as the leak was not his fault, the concept of an excess charge is a common one in insurance policies, regardless of whether the claimant is at fault or not and, from the Ombudsman’s knowledge of similar arrangements in place across the sector, a charge of £250 does not appear to be excessive.
Furthermore, the landlord’s explanation that it aims to provide value for money for leaseholders and residents, who pay for the insurance via their Service Charges, and that policies with no excess charges are more expensive, was reasonable. Its position that it would not pay the excess charge, an outcome requested by the resident in his complaint correspondence, was reasonable and in line with its policies. It is also noted that, while not a reflection on the landlord’s handling of the matter, from correspondence provided to this Service, the neighbour appears to have eventually covered the £250 excess cost following a request from the resident so ultimately, he has been reimbursed through other methods.
The landlord was also reasonable in advising it did not consider the leaks of 2014 and 2020 to be connected, or that there was evidence of a recurring issue. It acknowledged the distress the separate leaks would have caused the resident and that the situation was ‘not nice’ but it was reasonable for it to conclude that two events, six years apart, was not a reason for it to forcibly inspect the neighbour’s property or for it to suspect that the neighbour had been negligent in upholding his repair responsibilities.
The landlord also responded reasonably to the resident’s concerns about the neighbour operating a ‘flat renting business’ from his property. As noted above, the neighbour does not live in the flat above the resident and sublets the property. However, the landlord clarified that he was entitled to do so and that he was not in breach of his lease. This was a reasonable position for it to take and it advised the resident of this within its complaint response. It was also appropriate that it attempted to provide reassurance to the resident by advising him that it would be able to take enforcement action should any breaches be identified in future.
It is acknowledged the resident believes that because the neighbour is subletting the property, he should have different insurance arrangements in place as he is running a business. However, as above there is no evidence to suggest the landlord’s current insurance arrangements are inadequate or are inappropriate, nor that they have left the resident significantly disadvantaged, as the evidence available shows he was able to submit a claim which covered the costs of the water damage in full, bar the standard excess charge.

Determination (decision)

In accordance with Paragraph 54 of the Housing Ombudsman Scheme, there was no maladministration regarding how the landlord responded to the resident’s reports of a leak at his property.

Reasons

Although the landlord could have been more slightly more proactive in its responses to the resident’s reports regarding the leak, it was appropriate in advising him that it was not responsible for the repair and directing him to contact the neighbour, as he had already done.
There is no evidence the landlord acted unreasonably by accepting the evidence provided to it by the neighbour regarding his undertaking of a repair and its position that there were no grounds to forcibly inspect the neighbour’s property was reasonable, as was its conclusion that leaks which occurred six years apart were not evidence of a recurring issue. It also appropriately responded to the resident’s query regarding the neighbour subletting his property, confirming for him that this was permitted under the terms of his lease and there was no evidence that the subletting of the flat was the cause of any leak or subsequent damage.
The landlord’s insurance arrangements appear appropriate. It has acted in accordance with its lease by providing adequate insurance to the resident as a leaseholder and it is noted that his claim regarding the damage unfortunately experienced was paid in full. While the resident may be aggrieved that he had to pay the insurance excess when the leak and subsequent damage was not his fault, excess charges are a standard part of insurance policies, and the landlord is entitled to secure a policy which it believes provides value for money for leaseholders. It was entitled to deny the resident’s request to pay the excess charge for him and was consistent when advising him of its position.