One Manchester Limited (202009638)

REPORT

COMPLAINT 202009638

One Manchester Limited

4 January 2022

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 resident’s Right to Buy application.

Background and summary of events

Background

2. The resident is an assured tenant since 2016 following a mutual exchange.
3. Legislation relating to the Right to Buy notes eligibility for the Right to Buy is based upon tenancy type. Under section.118 and 119 of the Housing Act 1985, it specifies that a tenant under a secure tenancy has the right to buy the freehold of the property where they have been a tenant for at least three years. There are exceptions to the eligibility of the Right to Buy set out in section 121 and Schedule 5.
4. The Housing Act 1985 stipulates that a person has the Preserved Right to Buy of a relevant dwelling-house in England so long as he occupies the relevant dwelling-house as his only or principal home. The relevant ‘dwelling house’ being defined as the property that was the subject of the initial stock transfer. It states that the Preserved Right to Buy will only transfer with the outgoing tenant if the landlord of their new property is the same landlord or a connected company (as defined by the Act). Section .171B of the Housing Act 1985 provides a clear list of persons who are entitled to exercise the Preserved Right to Buy, being the former secure tenant, certain successors or persons who become the tenant as a result of particular family orders.

Summary of events

5. On 1 July 2020, following the resident seeking to exercise the Right to Buy, the landlord notified her that she did not have the Preserved Right to Buy and would need to complete a Right to Acquire form. The resident disputed this, and the landlord sought clarification on the Right to Buy and Deed of Variation, with its legal team, noting the resident stipulated that the former Housing Officer had advised her she would be eligible for the Right to Buy.
6. On 7 July 2020 internal correspondence from the landlord depicted that it was unsure about the Deed of Assignment and whether the resident was ineligible for the Right to Buy Scheme. It stated it would contact other departments for more information. The landlord contacted third party organisations, and was provided with the statutory rules for different tenancy types in relation to the Right to Buy, however as there was conflicting information, it sought further clarification from its legal team.
7. On 16 July 2020, the landlord’s legal team noted as follows:
   1. The Mechanic of exchange (mutual exchange) meant that the residents had swapped tenancies meaning the resident now held an assured tenancy as opposed to her former secure tenancy.
   2. The resident under the Housing Act 1985 was not eligible as she now held an assured tenancy rather than a secure tenancy.
   3. The resident was eligible for the Right to Acquire, but the discount would be significantly less than that under the Right to Buy.
   4. The resident was not eligible for the Right to Buy to be transferred as the resident was not a successor to the tenancy. As such the preserved Right to Buy was extinguished at mutual exchange.
   5. While the resident stated she was advised she would retain the Right to Buy, there was no evidence of this, and the landlord could not grant her the right as there were no provisions in the law to do so.
8. The landlord internally noted that it would seek further legal advice following providing the legal team with copies of the tenancy agreements subject to the mutual exchange, but that there were no records on file pertaining to any authorisation that the resident had the right to buy.
9. The landlord advised the resident to seek independent legal advice and that it would not be processing her application, but she could be eligible for the Right to Acquire and to apply.
10. On 23 July 2020, the landlord received further confirmation from its legal team that it was almost certain the resident did not have the Right to Buy, but it would consider any additional documentation the resident had in relation to the tenancy and advice that she would be eligible. The resident provided the Deed of Assignment to the landlord and stated that she was advised she had the right to buy because she had taken over the old tenancy and not a new tenancy agreement. She also requested information on making a complaint.
11. On 15 August 2020 the resident asked for an update from the landlord regarding her Right to Buy application. On 17 August, the landlord noted that it had provided all the information in its previous conversation that she did not have the preserved Right to Buy, but could consider the Right to Acquire or seek her own advice. It queried whether she had submitted a formal complaint as it had not yet received one. The resident noted she had, and the landlord requested further information so it could chase it.
12. On 14 September 2020 the resident requested an update on her formal complaint. The landlord advised it would contact its complaints team to locate the complaint, but provided a direct email so she could resubmit it. The resident did so the following day noting dissatisfaction with her Right to Buy application being rejected.
13. The landlord acknowledged the resident’s stage one complaint request and advised a response would be provided on 29 September 2020.
14. On 24 September 2020 the landlord issued its stage one response. It provided the information it had received from its legal team relating to the provisions in the Housing Act 1985 and the Right to Buy being extinguished following the mutual exchange. It also confirmed there were no provisions under which the resident could succeed the Right to Buy. The landlord provided the resident with the option to escalate her complaint should she remain dissatisfied. It noted the timeframe she would need to do so in.
15. In October 2020 the resident contacted her MP to assist with her complaint. The MP contacted the landlord, and it advised that it had correctly refused the application, providing a copy of its stage 1 response which explained the reasons behind its decision. It also noted that it had indicated that utilising the Right to Acquire was another option for the resident and it would be happy to assist her with the application.
16. On 21 December 2020 the resident requested that the landlord review its decision. It was noted the review was requested outside the timeframe stipulated in the landlord’s complaints policy (one month) and as noted on its stage 1 response. The landlord however accepted to review its decision.
17. During January 2021, the landlord took further steps to consider whether the resident was entitled to the Right to Buy. It considered the tenancy agreements, Deed of Assignment and legal advice again, before providing its final response.
18. On 27 January 2021 the landlord issued its final response to the complaint. It decided that it would not overturn its stage 1 decision. It noted there was no evidence, legal or otherwise that the resident was advised she would retain the Right to Buy. It clarified the legal position surrounding the Right to Buy and the Preserved Right to Buy, noting it was not within its power to provide or rescind this entitlement and given the circumstances the law stated the resident was not eligible for the Right to Buy. It confirmed the stage one response and signposted the resident to this Service.

Assessment and findings

19. The landlord has noted whilst the resident states she was advised she had the Right to Buy, there is no documentation noting this. Furthermore, under legislation, there is no eligibility for the Right to Buy for the resident. While the landlord may be able to make a policy decision, there is a risk to this as it may set a precedent that others would then be eligible for large discounts of public money ,even though they do not qualify for it. As such it was reasonable for the landlord to rely on legislation. Additionally, as the resident did not have supporting evidence that this assertion was provided on which she relied, the landlord was correct to base its decision on legislation. It was also reasonable that it advised the resident to seek independent legal advice.
20. The landlord has explained that by way of legislation an exchange does not exchange the rights attached to the tenancy, as such a person with the Right to Acquire exchanging with an individual with the Right to Buy, exchanges the tenancy but does not inherit the Right to Buy. Therefore, it was unable to authorise the resident’s application.
21. The landlord reasonably considered the Deed of Assignment and noted that the Right to Buy did not form part of this and therefore again the application could not be authorised.
22. Furthermore, the landlord considered whether there was the Preserved Right to Buy but correctly, as per legislation, noted that as the former resident no longer occupied the property as her only or principal home, and her current landlord was not a connected company for the purposes of the Housing Act 1985, the Preserved Right to Buy would not have transferred on completion of the mutual exchange and therefore the resident was not eligible. Again, this was in line with legislation and the landlord had no information on which it could deviate from this. As such the explanations provided were reasonable.

Determination (decision)

23. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was no maladministration in the landlord’s handling if the resident’s Right to Buy application.

Reasons

24. The landlord considered the resident’s request in line with legislation and sought to explore other avenues by which she may be eligible, however as she was not, it adequately explained why and provided further advice in relation to the Right to Acquire.