Metropolitan Housing Trust Limited (202015534)

REPORT

COMPLAINT 202015534

Metropolitan Housing Trust Limited

22 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 about the landlord’s handling of the resident’s Right to Buy application.

Background and summary of events

Background

The resident had an assured tenancy agreement with the landlord from the start of 2000. The property is a two-bedroomed semi-detached house. The resident had a representative (the representative) who dealt with her complaint at stage two and brought the complaint to the Ombudsman.
The Right to Buy was introduced in 1980 by the government. It gives secure tenants of local authorities and assured tenants of registered social landlords, who previously held a secure tenancy with a local authority, the Right to Buy their home at a discounted value. This is called the preserved Right to Buy.
The landlord’s Right to Buy policy says it has four weeks from the date of the application to provide the resident with its decision as to whether they are eligible to purchase the property (the section 124 notice); and, where it agrees the tenant has the Right to Buy their home, it has a further eight weeks (for a house) or twelve weeks (for a flat) to serve the offer letter (known as the section 125 notice).
The landlord’s website provides a link to the Government’s website about Right to Buy. This gives details what action the resident can take where there has been delay in the Right to Buy process.
This sets out that there is statutory provision for tenants to seek redress for certain delays in the Right to Buy procedure: delays in producing the section 124 and 125 notices. Where a resident has lived in the property for more than three years, as in this case, the landlord should issue the section 124 notice within four weeks, and a section 25 notice within eight weeks for a house (twelve weeks for a flat). These timescales are reflected in the landlord’s own policy.
The resident may submit an ‘Initial Notice of Delay’ (RTB6) form to the landlord. The landlord must then either move the sale along within one month or send a “counter notice”. The counter notice will detail that the landlord has already responded, or why it is unable to speed things up. If the landlord does not respond to the RTB6 within one month, the tenant may submit an “Operative Notice of Delay” (RTB8) form. The effect of submitting this form means that any rent the tenant pays whilst they are waiting for the landlord to respond can be deducted from the sale price of the property. The delay forms must be completed at the time of the delay and can be completed every time there is a delay.
The Right to Buy does not apply any further timescales to the rest of the conveyancing procedure and the time taken for a purchase to complete (after the Notice of Intention has been returned by the resident) will be dependent on the individual circumstances of each property purchase, and the parties involved including their legal representatives. It follows that there is no requirement on the landlord under the Right to Buy to ensure that it completes the sale of a property within a specified time. However, the tenant can serve notices on the landlord and apply to the county court for an injunction to enforce the landlord to comply with its duties.
At the time of the resident’s complaint, the landlord had a two stage complaints procedure. It aimed to respond to the complaint within 28 days at both stages.
The landlord’s compensation procedures say that it will consider compensation when, among other things, there has been a service failure that warrants consideration of a compensation payment; the resident has suffered financial loss as a result of its actions; the resident has spent an unreasonable amount of time and trouble pursuing it because of its service failure; and/or the resident has experienced distress or inconvenience because of its service failure.
On 23 March 2020 the UK government announced a national lockdown due to covid-19. This was eased from June 2020 when schools and non-essential retail outlets re-opened. The government introduced new restrictions from 22 September 2020 and a second full national lockdown was announced on 31 October 2020 that came into effect from 5 November 2020. While restrictions were lifted slightly over Christmas, there was a new national lockdown from 6 January 2021.

Summary of events

On 13 March 2020 the landlord received a Right to Buy application from the resident.
On 17 March 2020 the landlord acknowledged the application. It said it would write to confirm whether or not the resident was eligible to buy the property within four weeks from the date it received her application.
On 11 June 2020 the landlord issued the section 124 notice to the resident confirming she had the preserved Right to Buy to the property. It explained it would arrange to have the property valued and would then send her a section 125 notice which would detail the purchase price.
On 13 July 2020 the landlord instructed the district valuer to value the property. The valuation was completed and sent to the landlord on 11 August 2020.
On 7 October 2020 the resident made a formal complaint about how long the Right to Buy application was taking. She said she had not heard anything since the valuation.
On 20 October 2020 the landlord wrote to the resident with the section 125 offer notice (the RTB2) to purchase the property under the preserved Right to Buy scheme; she had twelve weeks to respond to confirm acceptance of this offer. The resident accepted this offer on 26 October 2020.
On 23 October 2020 the landlord had issued its stage one response under its formal complaint procedures. It upheld the complaint saying the section 125 offer (the RTB2) should have been sent on 11 August 2020 and an error meant that had not happened. It offered the resident compensation of £100 for the time and trouble caused by that delay. The landlord explained how the resident could escalate the complaint.
On 4 November 2020 the landlord wrote to the resident about various matters and said its solicitors would contact her solicitors shortly. On the same day, the landlord sent out confirmation of instruction to its solicitor (the solicitor).
On 5, 24 and 25 November 2020 the solicitor contacted the buyer’s solicitor. These emails were not received by the buyer’s solicitor as the landlord had used a different email address to the email provided in the buyer’s solicitor’s instruction.
On 27 November 2020 the landlord escalated the complaint to stage two of its complaints procedure.
On 8 January 2021 the landlord issued its final response to the resident under its formal complaint procedures. It upheld the review and made the following points:
1. It had realised that it had sent the conveyancing forms to a general email inbox, rather than the named solicitor whose details were provided.
2. It had seen that the resident had first discussed the Right to Buy with it on 2 March 2020; unfortunately, due to the first lockdown and the subsequent change in processes there were delays throughout the year through all of its services, which impacted on the original notice being sent.
3. It had found no justifiable reason why the section 125 notice was not sent to the solicitor on 11 August 2020.
4. It recognised that the stage one response did not fully address the resident’s concerns, as her application had been sent in March 2020 and she had not received an update when chasing, which it apologised for.
5. The stage one outcome had addressed the issue at hand and ensured the Right to Buy process was back on track, but it did not acknowledge the previous delays she had experienced. It said it had provided feedback on this case to the relevant team managers to prevent this situation from arising again.
6. It increased the compensation offered to £225 made up of service failure of £75, time and trouble of £125 and poor complaints handling of £25.
The landlord signposted the resident to the Ombudsman.
On 27 May 2021 the resident’s purchase of the property was completed.
When the resident’s representative approached the Ombudsman, he said that the offer of compensation did not reflect the fact that the resident had been paying monthly rent of about £450 and he considered the landlord should refund the rent paid for the period of the delay which he calculated to be at least six months.

Assessment and findings

The role of the Ombudsman is to investigate and assess how a landlord has responded to issues raised or notified to it and its subsequent handling of the complaint. The Ombudsman will determine whether the landlord acted in accordance with its policies and procedures and whether its actions were appropriate and reasonable in all the circumstances. The Ombudsman cannot assess the actions of legal representatives acting on behalf of the landlord, or the legal processes for the purchases of property. It follows that when considering this complaint, it has not been the role of the Ombudsman to assess the conveyancing procedure.
Although the court can consider the overall handling of the Right to Buy application, the Ombudsman can consider those aspects of the resident’s case that fell within the landlord’s control.
In this case, there was delay at the start of the Right to Buy process as the landlord took over twelve weeks to confirm the resident was eligible to buy the property (the section 124 notice), rather than four. There was further delay when the landlord took over eighteen weeks to issue the offer letter (the section 25 notice), rather than eight weeks. It was open to the resident to seek statutory redress for those delays by issuing a Notice of delay form (RTB6) and then an “Operative notice of delay” form (RTB8) if the landlord did not respond (paragraph 6). This would have meant that the rent the resident paid while waiting to hear from the landlord could be taken off the sale price (paragraph 7).
Given that this statutory route was available to the resident, it would have been reasonable for her to have taken such action to mitigate her loss. It is not clear why this was not pursued; whether the resident decided not to at the time, or whether her solicitor did not make her aware of this option.
The landlord recognised that there had been a service failure by its delay in issuing the section 125 notice and recognised the time and trouble spent by the resident in pursuing the matter. In its final complaint response, it increased the compensation offered to £225 (paragraph 22.f).
In relation to the failures identified, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the complainant’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles: Be Fair, Put Things Right and Learn from Outcomes as well as our own guidance on remedies.
There were three identifiable areas of service failure here: the initial delay in issuing the section 124 notice which the landlord explained was due to the first lockdown (paragraph 22.b); the delay in issuing the section 125 notice which the landlord has acknowledged was not justified (paragraph 22.c); and the emails meant for the buyer’s solicitor that were sent to the incorrect inbox (paragraph 22.a).
The compensation offered by the landlord does not reflect the cumulative impact of errors and delays in this case, some of which were avoidable. As set out above, there were three failings in service in this case which each contributed to the overall delay in progressing the Right to Buy application. Whilst the landlord made an offer of redress this did not fully recognise the full extent and cumulative impact of these failings or consider how these affected the resident’s position.
Therefore, and taking all the circumstances into consideration, the sum of £450 better reflects the inconvenience and frustration caused to the resident along with the time and trouble she spent in pursuing the matter and an order has been made for this, below. This sum is within the range of amounts that the Ombudsman can order when he has found instances of considerable service failure or maladministration, but there may be no permanent impact on the complainant.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the landlord in respect of its handling of the resident’s Right to Buy application.

Reasons

The appropriate route for requesting rent reimbursement for delays in the Right to Buy process was through submission of the Notice of Delay form. While the landlord offered compensation for the delay it had identified, it did not offer adequate redress for all the identifiable failings. Additional compensation has been ordered for the impact on the resident as a result of these service failures.

Orders and recommendations

The landlord shall, within four weeks of the date of this report, take the following action and provide evidence of such to the Ombudsman:
1. Pay the resident compensation of £450 (less any compensation previously paid).