Read our new Spotlight report on repairs and maintenance – repairing trust.

Sovereign Network Homes (Former Network Homes) (202313652)

Back to Top

 

REPORT

COMPLAINT 202313652

Sovereign Network Homes (Former Network Homes)

30 January 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:
    1. A valuation following a Right to Acquire application.
    2. The information it provided on its fees.
    3. The associated complaint.

Background

  1. The resident has an assured tenancy of a first floor 1 bedroom flat where she lives at with her husband.
  2. The resident made a Right to Acquire application on 16 December 2020. The landlord accepted this on 18 February 2021, and it made two offers to sell in 2021. The landlord made a third offer with a revised purchase price on 12 April 2022 after the resident successfully challenged the landlord’s valuation. The district valuer reduced the valuation of the property arrived at by the landlord.
  3. On 16 January 2023 the resident’s husband raised a complaint. He expressed dissatisfaction that the landlord did not explain before they incurred surveyor and solicitor costs that there would be fees associated with obtaining its consent for improvements or alterations. The resident’s husband also complained that the landlord signposted him to its valuer to make a complaint about the valuation. The resident’s husband made a specific allegation that the valuation was overinflated, and this amounted to fraud, and claimed the reviews the landlord received were evidence of wrongdoing.
  4. The landlord provided its stage 1 response on 6 February 2023 and said:
    1. it accepted that it did not follow its complaints procedure in October 2022 by not refusing the complaint formally, on the basis that as the resident alleged fraud this was not something it could investigate under its complaint procedure
    2. it formally investigated the resident’s complaint when the resident contacted it again on 11 January 2023
    3. it denied there had been any fraud and or the reviews were evidence of wrongdoing but said the police were responsible for investigating alleged offences
    4. there were always fees incurred relating to property purchases and it was the resident’s responsibility to understand these before entering the process to buy their property
    5. the difference between the district valuer’s valuation and its valuer’s valuation was within the “accepted variation standards”
    6. it offered £100 for its poor communication in not formally refusing the complaint and explaining its reasons.
  5. The resident’s husband escalated the complaint on 9 March 2023 and expressed dissatisfaction at incurring legal and surveyor’s costs which were non-refundable. The landlord provided its stage 2 response on 18 April 2023 and said:
    1. although it instructed and paid the valuer they were not employed by the landlord
    2. it provided information on their fees for subletting, alterations, deeds of variation and extending the lease when it received an enquiry, but it disagreed that not providing the information earlier was a “serious omission in the process”
    3. it would not refuse permission to alter unreasonably, and the resident needed to raise his allegation of fraud with their bank, or the police and he could raise his concerns about the legal aspects of the application with the First Tier Tribunal
    4. it offered to waive its £100 administration fee as a gesture of good will and said the resident’s husband had told it initially that the resident was withdrawing from the purchase because the lease was too restrictive but then changed this to because of costs involved in obtaining consent
    5. it had already offered £100 for the service failure in not raising a complaint when it ought to have.
  6. The resident told this service that they would like reimbursement of their surveyor’s and legal fees (amounting to £1,500). The landlord offered the resident £100 which the resident refused. The resident told this service the landlord said on 12 June 2024 that it should have provided information on its fees at the start of the Right to Acquire application.

Assessment and findings

Jurisdiction

  1. We are not free to investigate every complaint referred to us. What we can and cannot consider is set out in the rules by which we operate.
  2. The resident’s complaint about the valuation is not one we will investigate. The Ombudsman does not investigate complaints where it is quicker, fairer, more reasonable or more effective to seek a remedy through another procedure. In this case, the other procedure was the district valuer’s procedure. The resident had the right to challenge the valuation via the district valuer and they did so. Therefore, the Ombudsman will not investigate this. This is in accordance with 42.f of the Scheme. If there was a delay in the district valuer dealing with the dispute – that is not a matter the Ombudsman can consider against the landlord.

Scope of investigation

  1. The resident has made allegations of fraud by the valuer. The police, Serious Fraud Office and the National Crime Agency are the agencies tasked with criminal investigations. The Ombudsman cannot decide if there was fraud. Our remit is to decide if there has been maladministration. As above, as a valuation can be contested following the statutory dispute resolution procedure – we will not investigate this. We can only investigate the complaints about the information around fees and the complaint handling.

Information on fees

  1. The resident told the landlord on 12 August 2022 that he was getting quotes for unspecified improvements to the property. The resident added on 31 August 2022 that he wanted to replace windows and a door. The resident knew this would require the landlord’s permission because the landlord’s offer of 12 April 2022 mentioned this.
  2. The landlord did not provide the resident with details of its fees associated with alterations until 1 September 2022. This was one working day after the resident made it aware of his intention to make specific and definite changes. The resident’s prior communication of 12 August 2022 only referred to them obtaining quotes which does not necessarily equate to proceeding with the work. Therefore, the landlord provided the resident with the information as soon as it was aware the resident wanted to make definite changes.
  3. The resident’s position was that he would not have incurred solicitor and surveyor costs had the landlord provided this information before he instructed them. The resident has told us that his landlord informed him, on 12 June 2024, that it ought to have sent the information on its fees when the application was made. There is no policy, rule or legal requirement that supports this and given the statement was not part of the landlord’s complaint response and relates to a meeting held 15 months after the landlord’s final complaint response, we cannot give weight to this statement by the landlord.
  4. It is standard practice across the property sector for landlords to charge fees for applications for alterations or adjustments. It was therefore foreseeable that there would be some fees associated with this. The process of buying a property has uncertainties and costs can arise unexpectedly. This is often why a solicitor is required. The lease or draft lease would have set out what happens with alterations.
  5. We also acknowledge that one survey estimated that 28.8% of all sales fell through in 2024 making the risk of abortive fees significant. It is open to residents to obtain home buyers protection insurance, instruct a solicitor on a ‘no move no fee’ basis or to delay the survey to mitigate against this risk. While sale failures cause financial losses to residents in this instance there was no evidence that these costs were the landlord’s responsibility or that the landlord’s actions or omissions caused them.
  6. The Ombudsman finds no maladministration.

Complaint handling

  1. The landlord had a two staged complaint process and needed to respond to complaints at stage 1 within 10 working days and to complaints at stage 2 within 20 working days. The resident’s husband complained to the landlord initially on 6 October 2022 although the landlord did not treat their expression of dissatisfaction as a complaint until they complained again on 16 January 2023. The landlord responded at stage 1 on 6 February 2023. This was 15 working days after the second complaint. The landlord acknowledged in its stage 1 response that it ought to have allowed the resident a right to refer the complaint to this service in October 2022. This was a failure.
  2. When the resident escalated the complaint on 9 March 2023 the landlord responded at stage 2 of the complaint process on 18 April 2023. It took the landlord 26 working days against a target of 20 working days to respond. Therefore, the landlord’s responses were not in line with its complaint policy. The Ombudsman considers that there was service failure against the backdrop of the landlord accepting at stage 1 that it failed to raise a complaint in October 2022 and not dealing with the resident’s concern about its choice of valuer until stage 2. The landlord ought to have considered the resident’s complaint about its valuer. The landlord offered the resident £100 and offered not to charge its administration fee for reviewing the resident’s plans. The Ombudsman considers, having regard to our Remedies Guidance, that this was a fair offer to acknowledge the service failure.

Determination

  1. Having carefully considered the evidence we have determined that:
    1. In accordance with paragraph 42.f of the Scheme the complaint about the valuation will not be investigated as it would be quicker, fairer, more reasonable or more effective for the resident to use the statutory procedure on this.
    2. In accordance with paragraph 52. of the Scheme, there was no maladministration in the landlord’s handling of the information about fees.
    3. In accordance with paragraph 53.b of the Scheme, in respect of the complaint handling, the landlord has made an offer of redress prior to investigation that in the Ombudsman’s opinion resolves the complaint satisfactorily.

Recommendations

  1. The Ombudsman recommends that the landlord pay the resident directly the £100 it offered to the resident during the complaint process if it has not done so already. The landlord should provide evidence of this within 28 days of the date of this determination.
  2. The Ombudsman recommends that the landlord provide information on fees associated with its giving consent for alterations at the start of Right to Acquire applications.