Clarion Housing Association Limited (202011935)

REPORT

COMPLAINT 202011935

Clarion Housing Association Limited

19 October 2021

Our approach

1. 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.
2. 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

3. The complaint concerns:
   1. The landlord’s response to reports of a chip in the bath.
   2. The landlord’s assertion that the resident is not permitted access to communal areas.
   3. The landlord’s failure to tell the resident of the sinking fund she would need to contribute to when the property was sold to her.
   4. The landlord’s complaints handling.

Background and summary of events

Background and policies

4. The resident has been a leaseholder of the landlord, at the property from 24 August 2020.
5. The landlord’s website advertising the properties at the block states that “Every apartment has a private outdoor space and comes with a parking space, while each resident has access to a private landscaped communal garden situated in the centre of the block”.
6. Schedule 3, paragraph 1, of the lease agreement states “The right, subject to payment referred to in Clause 3, for the Leaseholder and all persons authorised by the Leaseholder …. at all times, to use the Common Parts of the Building and the Common Parts of the Estate …… for all purposes incidental to the occupation and enjoyment of the Premises (but not further or otherwise)”.
7. The landlord has a two stage complaints procedure whereby it aims to investigate and respond to a complaint within 10 working days at stage one.  Where a complainant is dissatisfied with the response, they may request escalation of the matter to the landlord’s stage two review process.  The landlord aims to respond within 20 working days at stage two.
8. The landlord’s compensation policy states that the landlord may offer compensation of between £50-£250 where there have been “instances of service failure resulting in some impact on the complainant”. Compensation offers in the region of between £250-£700 are for where “considerable failure” has been found but there is no “permanent impact” on the complainant.

Summary of events

9. On 24 November 2020, following a report of a chip in the bath, the landlord advised the resident that it would not accept that this was a defect, as there was no damage to the bath when the property was handed over to her.
10. On an unknown date in December 2020, the resident made a complaint to the landlord about its decision not to repair the chip in the bath, the fact that she did not have access to the communal area for which a key fob was required and her dissatisfaction that she had not been advised of her requirement to pay into a sinking fund. 
11. The resident was particularly dissatisfied with the sinking fund issue, insofar as she was declined a one-bedroom flat on the basis of affordability, yet her payment to the sinking fund was additional monetary commitment that had not been factored in and brought her outgoings for the property the same as, or almost the same as, the property for which she had been declined.  The resident felt she had been mis-sold the flat on this basis.
12. Following the resident approaching this Service and advising that the landlord had not issued a response to her complaint, on 25 January 2021, the Ombudsman contacted the landlord.
13. Three days later, on 28 January 2021, the landlord telephoned the resident to discuss her complaint.
14. On 9 February 2021, the landlord issued its stage one response to the complaint. In respect of the bath, the landlord noted that the resident had reported a crack in the bath in November and was advised then that it would not be accepting this as a defect as it was potentially accidental damage on the part of the resident.
15. In terms of the communal space, the landlord advised that the resident’s lease did not grant access to this and asked her to provide any evidence she had to prove otherwise.
16. The landlord offered the resident £125 compensation in recognition of service failures; £50 for not responding to the complaint within articulated timescales, £25 for failing to respond to other contact from the resident (evidence of this contact has not been provided to this Service but it is accepted that this was the case) and £50 in recognition of the impact of this on the resident.
17. On 10 February 2021, the resident requested escalation of her complaint though the landlord’s complaints procedure. She did not accept the compensation offered.  The resident disputed that there was no chip in the bath at handover and requested photographic evidence that this was the case.
18. In terms of access to the communal areas, the resident pointed out point 1 of schedule 3 of the lease, under “Easements, Rights and Privileges”, which she believed granted her communal access.
19. Additionally, she was requesting escalation of her complaint because the matter of the sinking fund had not been responded to, despite this being discussed in the telephone call of 28 January 2021. 
20. The documentation provided to this Service evidences:

2. The landlord discussing access to the communal areas “not being a problem” but that it would mean contributing to the maintenance for the podium area to which she wanted access (if this was not already factored into her service charges). 
3. That the lease was checked but there is no information as to the outcome of this check.  There is also reference to checks being awaited with “conveyancing” but again, no further information or outcome as to this.

21. On 25 March 2021, the landlord responded to the complaint at stage two of its complaints procedure.  In terms of the chip in the bath, it reiterated that it did not accept that there was a chip in the bath at the point that the tenancy commenced, stating that the resident had accepted that this was the case in prior communications. This Service has not been provided evidence of the resident accepting this.
22. Regarding the communal area, the landlord reiterated its position that the lease did not grant the resident access to the communal area.
23. In terms of the sinking fund, the landlord accepted that this had not been included in the estimate at the point of sale and apologised for this.  It said that is would therefore waive the charge for 2020-2021 and apologised that it had not responded to this aspect of the complaint at stage one.
24. As resolution to the complaint, the landlord increased its offer of compensation from £125 to £175, broken down as follows:

–          £50 for its delay in responding at stage one.

–          £25 for repeated failures to respond to letters and phone calls.

–          £50 for time and trouble in bringing the complaint and associated distress and inconvenience, disappointment, loss of confidence and delays.

–          £25 for lack of contact with regards to the pigeon proofing (an issue which has since been resolved and not brought as an outstanding issue to the Ombudsman).

–          £25 for the sinking charge issue not being addressed at stage one of the complaint.

Post complaint

25. On 10 or 11 June 2021, the landlord wrote to residents at the block, apologising that they had not been informed of the necessity to contribute to a sinking fund when they had purchased the properties. In recognition of this failure to provide information pertaining to the sinking fund, the landlord explained that it would waive the charge for 2020 and 2021.

Assessment and findings

Bath

 

26. Once on notice, a landlord is required to carry out the repairs it is responsible for, within a reasonable period of time, in accordance with its obligations under the lease agreement and in law. As a leaseholder, the resident is responsible for repairs to the bath, rather than the landlord.  The property in this case, however, was a new-build property, which meant that the property itself and all fixtures and fittings were covered by the defect period.

 

27. The resident reported the chip in the bath in November 2020, three months after having moved into the property, stating that it was a defect.  The landlord determined that it would not be accepting that there was a defect, however. It did not believe the issue had been there from when the resident moved in and suggested that it had possibly been caused by accidental damage by the resident. The resident contests this. 

 

28. The landlord has not been able to evidence the absence of the defect with photographic evidence as the resident requested, however, it is also not common practise for a landlord to take detailed photographs of a bath in a property prior to it being leased. Conversely, the resident is unable to evidence that the chip was there at the outset, having reported it three months after having lived at the property. 

 

29. There was no obligation on the part of the landlord to accept that the chip in the bath was a defect, where it did not believe this to be the case and where there is no evidence as to the issue being there from the outset. In the absence of evidence in support of the position of both parties to the complaint, this Service is unable to reach a conclusion on the accurate situation.

 

30. In contested circumstances such as this, there is the option of the resident pursuing an action in court, who are able to consider the evidence and make a finding on this point. 

 

Use of communal areas

 

31. The landlord’s advertising of the properties as described above, gives rise to an expectation that there is access to communal areas. It is therefore understandable that the resident reasonably believed that she should be granted access. 

 

32. Notwithstanding this, the terms of the lease would ordinarily override any advertising (even if misleading) and provide certainty as to whether access to the communal areas is granted. The lease does not specifically refer to the communal area which the resident wishes to gain access to and so it is not clear either way.

 

33. In circumstances where the lease does not grant access to communal areas, amendments to the lease are possible – although the landlord is not obliged to agree to this – as is the granting of permission to communal areas on certain terms, for example, paying towards any relevant costs associated with repair and maintenance. 

 

34. The documentation provided by the landlord includes a statement that access to communal areas “shouldn’t be a problem”, although there is reference to the resident having to pay for access if this becomes the case (if she is not already). 

 

35. The documentation also confirms that the lease has been reviewed to clarify the situation, although no further information has been provided and there is reference to checks being made with “conveyancing” but again, no further information or outcome has been provided. 

 

36. Where there is no clarity as to the terms of the lease or dispute over the terms of the lease, this is not something that can be determined by the Ombudsman. The First Tier Tribunal (property chamber) is the appropriate route to seek to clarify this. This is also the case for any dispute over services charges (including any sinking fund, as addressed below). 

 

37. However, it is not clear that there is a dispute over the terms of the lease because the point raised by the resident – that the lease agreement provides her with access to the communal area – has not been addressed. In its response to the complaint, the landlord states that the resident does not have access but does not explain why or specifically address the terms of the lease, despite the fact that a review of the lease had taken place. 

 

38. Responding to a complaint requires not only investigation of the issue complained of, but an explanation of what the landlord has done to investigate and its subsequent findings and/or outcomes. In doing so, the landlord acts in a transparent manner and supports integrity in both the process and landlord-leaseholder relationship. The landlord did not do this.

 

39. Once the terms of the lease are clarified, this will enable a decision to be made by the resident as to whether to pursue matters further, should the decision be unfavourable to her. 

 

Sinking fund 

 

40. It is usual practise for a sinking fund to be in place for properties situated within a complex or block of flats, as this is used to carry out major works and replace structures such as the roof. The landlord accepts that it did not make clear to the resident that she was liable to pay into a sinking fund, for which it apologised. It also waived the 2020-2021 charge for this. 

 

41. This Service finds that the landlord’s actions were appropriate insofar as it recognised that it had got something wrong and attempted to put things right by way of apology and waiving the charge for a period of time. By its actions, it acknowledged that it should not have required the resident to make payment on a charge which she had no prior knowledge of.

 

42. It must, however, be clarified that the matter of whether the resident should be charged sinking funds for the property is not for this Service to determine. This is a matter of contract regarding which a definite outcome should be pursued through legal process. What is assessed in this investigation is the reasonableness of the landlord’s response to the resident’s complaint on the issue.
43. Similarly to the issue of interpretation of the lease, liability for service charges is also a matter for the First Tier Tribunal (Property Chamber), should the resident wish to pursue this matter further. Her assertions that she was mis-sold the property due to this charge is also a legal matter, for which the resident may wish to seek legal advice. 

 

Complaint handling 

 

44. The landlord did not respond to the resident’s complaint in December 2020, only responding in February 2021, after this Service contacted it, in January 2021. 

 

45. No explanation has been provided as to why the landlord did not respond to this initial complaint but where there is unavoidable delay – for example, during an exceptionally busy period or where the issues complained of are complex – it is inappropriate to not respond at all, even by way of a very brief holding letter. In not responding to the complaint, the landlord did not demonstrate that it had taken the matter seriously and did not manage the resident’s expectations. 

 

46. The lack of explanation in its stage one response and its further delay thereafter at stage two, does not indicate that the landlord was sufficiently remorseful or apologetic for the delays or that it had learned lessons and taken steps to help prevent a recurrence – one of the Ombudsman’s published ‘Dispute Resolution Principles’. 

 

47. The landlord did not indicate in its response that it had sufficiently heard and understood the complaint.  It was inappropriate that the landlord failed to respond to the aspect of the complaint relating to the sinking fund at stage one.

 

48. Turning to compensation, the landlord’s offer was in accordance with its compensation policy. Compensation is not the only way of resolving a complaint, however and the landlord relied too heavily on compensation resolving the complaint, rather than addressing the root cause of the issues, explaining its investigations and findings, seeking to put things right and taking steps to learn from its failings for the future.

Determination (decision)

49. In accordance with paragraph 54 of the Housing Ombudsman Scheme (the Scheme), there was no maladministration by the landlord in respect of the complaint about the chip in the bath and its decision not to repair it.
50. In accordance with paragraph 54 of the Scheme, there was service failure in respect of the complaint about access to communal areas.
51. In accordance with paragraph 55(b) of the Scheme, the landlord has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily in respect of the complaint about the sinking fund.
52. In accordance with paragraph 54 of the Scheme, there was service failure by the landlord in respect of its complaints handling.

Reasons

53. The landlord was not obliged to accept that the chip was a defect, once it was raised in November 2020 and no evidence of its cause, or existence prior to the tenancy, has been provided.
54. The landlord did not demonstrate sufficient investigation of the issue of the use of the communal areas and has not provided clear explanations to the resident thereafter.
55. The landlord took reasonable steps to address the error of not informing the resident about the sinking fund, apologised for this and waived the fee for 2020-2021.
56. Although the landlord offered compensation for its handling of the complaint, this was insufficient to address the further issues, with the landlord also not evidencing learning from its mistakes.

Orders and recommendation

Orders

57. The landlord to re-offer the £175 compensation to the resident.
58. The landlord to pay the resident an additional £100 compensation for the service failure in its clarification and communication regarding the lease and communal access.
59. The landlord to seek to clarify the position with the lease. It should advise the resident in writing about when she can expect its findings. It is not sufficient to simply say that the lease does not permit communal access when the lease does refer to communal access – the communal access in question needs to be clarified.
60. The landlord to confirm compliance with the above orders within four weeks of the date on this report.

Recommendation

61. The landlord should consider carrying out a lessons-learned exercise in respect of the sinking fund and its failure to communicate this to the resident. 
62. The landlord should consider carrying out a lessons-learned exercise in respect of the complaint and the findings in this report in respect of complaints handling.