Peabody South East Limited (202119617)

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REPORT

COMPLAINT 202119617

Peabody South East Limited

16 March 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 complaint is about the landlord’s handling of:
    1. The valuation of the resident’s property.
    2. The associated complaint.

Background

  1. The resident held a shared ownership lease with the landlord. The resident owned a 25% share of the property.
  2. The resident sought to sell the property in 2020. It was valued by a chartered surveyor on 30 November 2020, at £610,000. A buyer was found by the landlord and the completion date was expected to be 13 May 2021. On 9 April 2021, the buyer’s mortgage broker told the landlord that the property had been given a lower valuation of £565,000 by two different lenders.
  3. On 19 May 2021, the landlord informed the resident of the lower valuation. The landlord asked the resident to confirm whether he agreed to the new valuation, so that it could inform the chartered surveyor and up-date the memorandum of sale.
  4. The resident contacted the landlord on 20 May 2021, to ask how long it had known about the new valuation of the property,and what his options were if he did not agree to the new valuation.
  5. On 21 May 2021, the landlord responded to the resident. It said it had been informed of the mortgage valuation of the property on 9 April 2021. On 13 April 2021, the landlord contacted the chartered surveyor, who requested information about similar properties so that they could decide on the new valuation. The landlord sent the requested information on 15 April 2021. The chartered surveyor replied on 14 May 2021, to confirm £565,000 was a reasonable figure in the current market. The landlord apologised to the resident for not informing him of the new valuation sooner. It advised that the buyer might be willing to try a third mortgage lender, however, it said that if the buyer did not secure a mortgage for the higher amount, the resident’s options were to sell to the current buyer for the lower value, or to put the property on the open market for the initial value of £610,000.
  6. On 25 May 2021, the resident submitted a complaint about the landlord’s delay in telling him about the lower valuation. He said he accepted the new valuation, as he didn’t have time to have the property revalued or to put it back on the market. The resident said that the landlord’s delay in informing him, meant that he would have to pay more service charge, rent, and mortgage than planned. The resident proposed to pay 0.25% of the final value sales fee in view of this.
  7. The landlord sent its stage one response to the resident on 26 May 2021. It said it had to ensure the property was sold for the amount stated by the chartered surveyor. The landlord apologised for not informing the resident of the lower valuation on 9 April 2021, and said that it should have done so. It offered to deduct £250 from the administration fee.
  8. The resident escalated the complaint to stage two of the landlord’s process on 7 June 2021. He said that the way the landlord had informed him of the lower valuation was shocking. The resident said that the landlord had failed in its responsibility to manage the sale and reiterated his request for the final value sales fee to be reduced to 0.25%.
  9. On 30 June 2021, the landlord wrote to the resident to say that there would be a delay in responding to his stage two complaint due to the number of reviews it was dealing with. The landlord sent its stage two response to the resident on 21 July 2021. It explained that as the landlord owned part of the property, it needed to ensure the value was fair for the landlord and the new owner. It accepted it could have been more empathetic when informing the resident about the mortgage valuation. However, it stood by its offer to reduce the administration fee by £250. On 28 July 2021, the landlord offered to reduce the administration fee by £400.
  10. The resident referred his complaint to the Ombudsman on 24 November 2021, because he was not happy with the landlord’s final response and the compensation it had offered.

Assessment

Policies and procedures

  1. The lease states that the price of the property must be assessed by an independent qualified valuer, agreed upon by the landlord and the leaseholder.
  2. The landlord’s shared ownership policy states the landlord will not accept any offers for a property that is less than, or above the approved valuation figure, unless the property is being sold on the open market.
  3. The landlord provided the resident with guidance on selling his shared ownership property. The guidance states that residents should select a surveyor to value their home and the landlord sent the resident information about choosing a surveyor certified by the Royal Institution of Chartered Surveyors.
  4. The landlord’s compensation policy states that the maximum compensation the landlord can award for time, trouble and inconvenience, is £400.
  5. The landlord’s complaints process has two stages. At stage one, a response will be provided within 10 working days. At stage two, a response will be provided within 20 working days. If an extension of time is needed at either stage, this will be communicated to, and agreed with, the resident.

Assessment

  1. The landlord acted appropriately by contacting the chartered surveyor as soon as it became aware of the lower valuation. The landlord informed the chartered surveyor of the new valuation, and provided the evidence requested, in a timely manner. In this respect, the landlord acted in accordance with its shared ownership policy. Without the chartered surveyor’s agreement to the lower valuation of the property, the sale could not proceed. Therefore, there is not enough evidence to show that the landlord was directly responsible for any delay to the sale.
  2. The buyer had the option to seek another lender, however, it is not possible to determine whether another lender would have agreed to a higher valuation. Nor is it possible to know whether the buyer would have been willing to proceed with another lender, as two lenders had already advised that the property was worth less than the chartered surveyor’s initial valuation.
  3. The landlord has apologised for not informing the resident of the mortgage valuation of the property as soon as it was informed of this. It also acknowledged that it could have been more empathetic when first contacting the resident to discuss this issue. The landlord has acted reasonably by acknowledging these errors and offering the maximum compensation for distress and inconvenience allowable under its policy. The compensation it has offered is in line with the Ombudsman’s guidance of £100-£600 where there has been failure which has adversely affected the resident. Therefore, this compensation was proportionate to the landlord’s failures and it does not need to do anything further in this regard.
  4. The landlord has acted in accordance with its complaints handling policy. It responded to the stage one complaint, within the timescales set out. It contacted the resident to let him know there would be a delay in its stage two response and explained the reasons for this. Although the delayed response would have caused some inconvenience for the resident, it was not an excessive delay overall and the landlord managed the resident’s expectations as to when a response would be issued.
  5. The landlord has told this Service that going forward it is committed to notifying leaseholders as soon as it is informed of any change to the valuation of a property. Therefore, the landlord has shown that it is willing to learn from this complaint and that it will take reasonable steps to avoid similar issues from occurring in the future.

Determination (decision)

  1. 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 about its handling of the valuation of the resident’s property satisfactorily.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in respect of its complaint handling.