Epping Forest District Council (202009199)

REPORT

COMPLAINT 202009199

Epping Forest District Council

7 June 2021

Our approach

What we can and cannot consider is called the Ombudsman’s jurisdiction and is governed by the Housing Ombudsman Scheme. The Ombudsman must determine whether a complaint comes within their jurisdiction. The Ombudsman seeks to resolve disputes wherever possible but cannot investigate complaints that fall outside of this. 

In deciding whether a complaint falls within their jurisdiction, the Ombudsman will carefully consider all the evidence provided by the parties and the circumstances of the case.

The complaint

1. The complaint is about the landlord’s demand for a charge prior to sale of the property, for the Renewable Heat Incentive Scheme (RHIS) payments it would not receive following the resident becoming legal owner.

Determination (jurisdictional decision)

2. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
3. After carefully considering all the evidence, the complaint, as set out above, is not within the Ombudsman’s jurisdiction in accordance with paragraph 39(i) of the Housing Ombudsman Scheme.

Summary of events

4. The resident became a joint tenant of the landlord, at the property, from 2010 and this was the case until 7 September 2020, when the sale of the property was completed under the statutory Right to Buy Scheme, where he became joint legal owner. 
5. Around August 2015, the landlord installed energy efficient systems into the resident’s property under OFGEMs Renewable Heat Incentive Scheme (RHIS).  The installation costs were £8,161.00 plus VAT and OFGEM would make quarterly incentive payments to the landlord until April 2023.
6. At the landlord’s Housing Assets and Finance meeting in 2015-16, the following was noted:
7. “Sundry Debtor to be set up on a property specific basis for the full RHI grant funding value. The 7-years of income under the RHI funding will be deducted from the Sundry Debtor value annually, until £0.00 balance.
8. Properties sold under the Right to Buy scheme will need to identify the value of the Sundry Debtor at the point of sale and be added to the property sale value to clear the charge”.
9. On 6 August 2019 the landlord received an application from the resident, to purchase the property under the statutory Right to Buy Scheme. The application was successful and the conveyancing process ensued.
10. On 7 October 2019 the landlord wrote to the resident to advise that upon sale of the property to him, he would be eligible for the RHI payment grants and would need to repay the landlord any outstanding grant payments before completion of the sale.  Thereafter he could apply to OFGEM to receive the incentive payments himself, as the legal owner.
11. Sometime later, as completion of sale of the property was nearing, on 17 August 2020, the landlord reminded the resident in a telephone discussion that he would need to pay the outstanding RHI payments before completion of sale of the property. The amount was in excess of £3000 although the landlord had not yet confirmed the amount to the resident at this time, as it was yet to do its calculations.
12. Documentation provided to this Service evidences the landlord discussing and calculating the payment amount and recognition of the process to be followed, whereby it would need to immediately email OFGEM the date of sale of the property and then provide the Microgeneration Certificate Scheme (MSC) certificate to the resident as the new legal owner.
13. The conveyancing process included discussions between solicitors for both the landlord and resident, regarding the terms of the sale, including reference to the need for the resident to pay the RHI charges.
14. On 2 September 2020 the resident paid the RHI charges to the landlord, which totalled £3529.20.
15. On 7 September 2020 the sale of the property was completed, with the resident becoming legal owner. 
16. The resident submitted a formal complaint to the landlord which it responded to at stage one of its complaints procedure on 1 October 2020.  The resident complained about the landlord demanding payment for future RHI incentive payments that it would not receive, due to the resident becoming legal owner.  The resident was dissatisfied too, that the landlord would not allow completion of the sale until the charges were paid and he felt under duress to do so.
17. The landlord did not uphold the complaint, explaining how the RHI incentive payments worked and that the resident would recoup the money, receiving the payments himself once registered with the Scheme.
18. The resident was dissatisfied with the landlord’s stage one response to the complaint and on 18 October 2020 requested escalation of the matter to stage two of the landlord’s complaints procedure.
19. On 27 October 2020, having been asked for an invoice in respect of the payment the resident made, the landlord sent it to him.  The invoice stated “payable after Right to Buy completion”.  The resident was dissatisfied that the invoice stated that payment was due purchase of the property whereas he had been told over the telephone and by letter that payment was required before.
20. On 12 November 2020 the landlord responded to the complaint at stage two of its complaints procedure. The complaint was not upheld, with the landlord explaining its investigation and findings into the resident’s areas of concern and stating that no fault on its part was found, reiterating what it had previously advised. 
21. It added that all details and costs were clearly set out and included in the terms of sale and agreed by the resident and his solicitor and that he had been advised of how to claim the remaining financial incentive payments.

Reasons

22. Paragraph 39(i) of the Housing Ombudsman Scheme states that “the Ombudsman will not investigate matters which, in its opinion, concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure”.
23. Property conveyancing and the Right to Buy are statutory and legal processes with solicitors for both parties facilitating the sale and transfer of ownership of a property through to completion.  As part of this process, negotiations take place and herein is the opportunity for both sides to discuss terms of the contract before reaching an agreement, at which point it becomes legally binding. 
24. The resident was made aware of the landlord’s request for the RHI incentive payments on 7 October 2019; one year prior to completion of the sale of the property.  The resident was reminded again during a telephone discussion in August 2020, following which the resident paid the monies the landlord said were due.  Consequently, the resident had ample opportunity to contest the fact that he owed this money and to utilise the expertise of his solicitor in this regard as part of the conveyancing process.
25. Irrespective of the resident later receiving the invoice that referred to the money being due after the sale of the property rather than before, he agreed to pay the amount before completion and did so on 2 September 2020. In any event, whether due before or after, the resident ultimately does not believe that he was liable for the payment but has said he felt under duress to pay at the time.
26. The Ombudsman as a dispute resolution service, is unable to make legal rulings as a Court would do and cannot determine whether the resident was indeed put under duress by the landlord, nor can this Service criticise what was agreed to as part of the conveyancing process by the solicitors.
27. While the landlord may or may not have handled matters better or whether it missed opportunities to communicate more clearly or provide the payment amount earlier than it did, for instance, the matter complained of relates to fundamentally legal matters arising as part of the conveyancing process and give rise to areas of contract law. 
28. It is for the reasons described above, that having carefully considered the evidence in this case, it is determined that the matter complained of is outside of the Ombudsman’s jurisdiction to consider in accordance with paragraph 39(i) of the Housing Ombudsman Scheme.  Should the resident want to take matters further, he may wish to seek independent legal advice. The Ombudsman would like to apologise for the length of time that it has taken to confirm our jurisdiction in respect of the complaint.  Jurisdiction is a complex matter and to come to a conclusion on the complaint a thorough assessment the facts had to be completed first.