Southern Housing (202333665)

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REPORT

COMPLAINT 202333665

Southern Housing

22 July 2025

 

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 the sale of the property.

Background

  1. The resident, along with another individual, submitted a joint application to the landlord in 2022 for a shared ownership leasehold flat.
  2. The property was in a new build development in the process of construction. The landlord expected the handover of the development from the contractor in November 2022. However, delays in the completion of the construction caused a delay in the completion of the sale of the flat.
  3. On 2 September 2023 the resident complained to the landlord. She said the landlord provided unrealistic dates for when the building would be completed. To resolve the complaint the resident wanted the landlord to be held accountable, to be paid compensation, and for reimbursement of her solicitor fees if she chose to withdraw from the sale.
  4. On 9 October 2023 the landlord provided its stage 1 response. It said throughout its correspondence, it made the resident aware the handover date was subject to change. The landlord confirmed the contractor it instructed to complete the development went into administration, which delayed completion of the property. The landlord said it had since appointed a new contractor to finalise the work and provided a new estimated handover date. The landlord stated the resident’s contract with it had a clause which allowed her to withdraw from the sale. It said if the resident chose to withdraw, her deposit and reservation fee would be refunded.
  5. On 6 November 2023 the resident escalated her complaint. She felt the tone of the landlord’s stage 1 response failed to acknowledge her stress and anxiety. She said there had been a delay of almost 2 years in the completion of the development and considered the landlord should have had appropriate contingencies in place to minimise disruption to her as a buyer.
  6. On 6 December 2023 the landlord provided the resident with its stage 2 response. It apologised for the tone of its stage 1 response and the delay in the completion of the development. The landlord confirmed contingencies had been put in place and reiterated the resident’s right to withdraw from the sale. The landlord confirmed as a gesture of goodwill, it had frozen the property value at the value it was when she reserved it in 2022. It said subject to various factors, it anticipated the completion of the development to be around 22 December 2024.
  7. On 25 January 2024 the resident referred her complaint to us. She said she was still not in the property, had lost her mortgage rate offer and was at risk of homelessness. As an outcome to the complaint, the resident wanted the landlord to be held accountable and compensation for her time, distress and inconvenience.

Assessment and findings

  1. On 28 April 2022 the resident completed the reservation form to purchase the flat.
  2. On 12 August 2022 the landlord notified the resident it expected the handover of the development from the contractor on 10 November 2022. On 24 October 2022 the landlord confirmed to the resident the exchange of contracts had taken place with completion of the sale on notice. It agreed to keep the resident updated on any changes to the build schedule and handover date.
  3. On 2 November 2022 the landlord informed the resident there had been a delay due to issues with material delivery. The landlord provided a revised handover date of 16 December 2022. It said this was an estimated date and subject to further delays.
  4. On 2 March 2023 the landlord informed the resident the contractor had paused construction on the development. It said it was working with the contractor with the objective of resuming the work. If this was not possible, the landlord said it would appoint a new contractor to finish the development. The landlord informed the resident its contract date with her had passed its ‘long stop date’. As a result she could withdraw from the sale. If the resident chose to proceed with the sale, the landlord offered to provide fortnightly updates but could not guarantee a completion date.
  5. The terms and conditions of the reservation agreement state completion on the property was subject to build progress and contract. The agreement states the landlord cannot guarantee the build completion date, and completion of the development is dependent upon the property being signed off by building control as ready for occupation.
  6. The evidence shows the landlord’s communication with the resident was consistent with the reservation agreement. It provided estimated handover dates, along with a caveat about potential delays, and kept the resident informed when delays occurred. The landlord’s communication in March 2023 clarified the uncertainty surrounding the completion given the contractor’s decision to stop construction. The landlord made the resident aware of her right to withdraw from the sale and offered regular updates if she chose to proceed with the sale. This approach demonstrated transparency, managed expectations, and ensured the resident was fully informed about her options in the situation.
  7. On 2 September 2023 the resident complained and said the landlord had provided unrealistic handover dates for the development. She said there had been almost a 2 year delay in the completion of the development.
  8. On 11 September 2023 the landlord responded at stage 1. The landlord said the resident was aware she was purchasing the property off plan and handover dates were subject to change. It said it could only provide estimated handover dates its contractor provided. It confirmed the contractor it originally instructed to complete the development had gone into administration which delayed the completion of the development. The landlord confirmed it was in the process of acquiring a new contractor to complete the development and had provided a new estimated handover date in the new year. It reiterated the resident’s right to withdraw from the sale with the assurance she would receive her deposit and reservation fee. The landlord said under the terms of its contract with the resident, compensation was not eligible.
  9. The landlord’s stage 1 response explained the situation with the original contractor and the resulting delays. It confirmed the steps it had taken to resume construction by appointing a new contractor and was able to provide assurance it had made progress. The landlord also reiterated the resident’s right to withdraw from the sale and assured her that her deposit and reservation fee would be refunded. This response demonstrated the landlord’s transparency and proactive approach, addressing the complaint and informing the resident of the new estimated handover date, in case she chose to proceed with the sale.
  10. On 6 November 2023 the resident escalated her complaint. She said the landlord should have had insurances and contingencies in place to minimise the disruption. She said regardless of the contract, the landlord had a duty of care to ensure she did not suffer adversely for the failings. The resident was also unhappy with the tone of the stage 1 response as it did not acknowledge the impact the situation had on her.
  11. On 6 December 2023 the landlord replied at stage 2. It apologised for the tone of its stage 1 response. It confirmed the stage 1 investigator had subsequently received feedback and training. It acknowledged the delays in completing the development and explained it paid over £300,000 to settle the original contractor’s debt, though this did not resolve the contractor’s issues. The landlord also clarified if the resident had selected a panel solicitor, her fees would have been refunded had she chosen to withdraw. It confirmed it offered the resident a viewing of the development on 1 December 2023 to assess progress and stated the development was expected to be completed around 22 December 2024. As a goodwill gesture the landlord froze the property value at the reserved price. The landlord committed to providing fortnightly updates and arranging a final viewing before the sale completion, with a deadline of 31 January 2024 for these actions.
  12. The landlord’s response showed an effort to address the issues raised by the resident. The landlord’s decision to freeze the property value was a reasonable step to protect the resident from potential price fluctuations due to the delay. The landlord outlined the actions it had taken to resolve the contractor’s issues, directly responding to the resident’s complaint about the lack of contingency plans. The landlord’s agreement to provide updates throughout the process and arrange a final viewing further demonstrated the landlord’s commitment to keeping the resident informed.
  13. In summary there is evidence the landlord communicated with the resident, keeping her updated on the delays and managing expectations by clearly stating the anticipated completion date was subject to change. The majority of the delay in construction was due to the original contractor going into administration, an unforeseen event outside the landlord’s control. The landlord explained the situation as it developed, taking steps to ensure work resumed by appointing a new contractor. It also appropriately communicated the resident’s options to either withdraw from the sale or proceed, ensuring she was fully informed about what to expect.
  14. The delay in the completion of the property had a clear impact on the resident, who reported losing her mortgage offer and experiencing distress and inconvenience. While we acknowledge this impact, we have not identified any service failure by the landlord. Its communication was timely, transparent, and in line with the reservation terms, which stated completion dates were not guaranteed and were dependent on external factors.
  15. We have found no maladministration in the landlord’s handling of the sale of the property. We have not identified any failure in the landlord’s service which would warrant redress being provided.

Determination

  1. In accordance with paragraph 52 of the Scheme there was no maladministration in the landlord’s handling of the sale of the property.