London & Quadrant Housing Trust (202109210)

REPORT

COMPLAINT 202109210

London & Quadrant Housing Trust

13 July 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

This complaint is about the landlord’s handling of the resident’s queries regarding the building safety inspection at their property and their request for an ESW1 form.

Background and summary of events

Background

The resident is a leaseholder of the property which the complaint concerns. The landlord is the freeholder.
The property is a flat situated in a three-storey purpose-built block (the building).
The resident’s concerns were registered as a complaint on 26 February 2021, and the landlord issued its final response on 7 June 2021. The focus of this investigation is the matters which resulted in the original complaint and the landlord’s response to this.

Relevant Guidance and legislation.

Advice Note 14 was issued by the Government in December 2018 as part of its Building Safety Programme. In summary the advice was for owners of high-rise buildings where the external wall system of the building did not incorporate Aluminium Composite Material (ACM). The advice set out checks which owners could carry out to satisfy themselves, and their leaseholders, that their building was safe. This guidance was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. Paragraph 1.4 of this guidance states “for the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act”.
In response to the guidance some lenders took the view that, if certification could not be provided to demonstrate compliance with the Government’s guidance on fire safety, they would be unwilling to offer a mortgage on properties within these buildings as they would have a value of £0.
In January 2020, The Royal Institution of Chartered Surveyors (RICS), The Building Societies Association (BSA), and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 meters (six storeys). Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert.

Summary of events

On 4 February 2021, the landlord emailed residents to advise that it was undertaking a building safety inspection programme to ensure that its buildings met the Government’s latest building safety advice. The landlord advised that it had already removed ACM cladding from its high-rise towers and was now in the process of inspecting the external wall systems for the remainder of its buildings. The landlord went on to explain that:
1. It was going to undertake an external drone survey in the week commencing 8 February 2021. If either COVID restrictions or adverse weather conditions impacted on the inspection date it would write confirming a new date.
2. Given the extent of the new guidance, and the fact that it was introduced after the resident’s block was constructed, it was likely that the resident’s building would require some form of remedial works.
3. It would share a summary of the inspection findings, and any plans for remedial works, with residents as soon as possible after their building was inspected.
4. It was unlikely the report would be available immediately after the inspection, as the inspection findings must be analysed by a qualified expert, and they may require more information from the landlord, such as the building data already held in its systems, or information from materials manufacturers / construction companies involved in building the resident’s block.
5. The inspection was a building safety inspection and would not secure an EWS1 form for the building. It would, however, inform the landlord as to the building’s likelihood of passing an EWS1 inspection and what work would be required to obtain one.
6. Should the building safety inspection reveal no remedial work is required, it would schedule an EWS1 inspection as soon as possible.
7. Until the inspection was complete, it would not know the extent of any remedial work required and so could not offer a timescale for works at this point.
8. Any necessary remedial works would be programmed alongside other buildings, the programme for which would prioritise work based on several factors, including risk. Which would mean that it may not always be able to carry works out as soon as they are identified.
9. Where this was the case, the landlord would install additional fire safety measures to keep residents as safe as possible: which may include a Waking Watch or an interim fire detection and alarm system. The landlord would write to residents in advance of putting these systems in place and would not pass on the cost of these new safety measures to residents.
10. The landlord ended by saying it recognised that waiting for this process to take place had been difficult and that it would like to offer its apologies for any upset or frustration caused. Alongside its programme of inspections, the landlord said it was working closely with its partners in the housing sector to call on Government to provide more funding for works, give building owners a reasonable timeframe in which to resolve any outstanding issues, and work with mortgage lenders to help them relax their stance and begin lending on affected properties again.
On 11 February 2021, the landlord emailed the resident, following its email of 4 February 2021, to advise that the inspection that was due to take place as part of its building safety inspection programme could not go ahead due to weather conditions and had been rescheduled for 15 February 2021.
On 12 February 2021, the resident emailed the landlord asking that the landlord confirm that all the costs relating to the cladding, any inadequacy of the building, the costs of all surveys, interim and long-term repairs or claims under relevant insurance would be borne by the landlord.
On 26 February 2021, the resident emailed landlord to say that they had received no reply from the landlord to their email of 12 February 2021.
On 2 March 2021, the resident emailed the landlord’s Cladding Review team as they had not had a response to their emails of 12 and 26 February 2021. The resident then logged a formal complaint on 22 March 2021, requesting that the landlord provide the following:
1. Confirmation that all the costs relating to the cladding and inadequacy of the building would be borne by the landlord, what the necessary works were, when they would happen and that they would be resolved in a timely manner with good and clear communication.
2. An EWS1 positive inspection with confirmation that their home was safe and a copy of the fire risk assessment and any other reports.
The landlord acknowledged resident’s email of 26 February 2021 on 25 March 2021 and said that it would respond within 10 working days.
The landlord’s stage one response was issued by the Property Manager on 13 April 2021, following a conversation with the resident earlier that day. The Property Manager said that they were upholding the resident’s complaint on the basis that the department dealing with the building survey had advised that each resident would be contacted with the results of the survey from April 2021, however, no timeline had been given as to what date the resident would receive their response. The Property Manager apologised to the resident for any trouble this may have caused and advised the resident that they could contact them for further updates if they had not heard anything within the next couple of months.
On 26 April 2021, the resident emailed the landlord requesting that their complaint be escalated to stage two and that the landlord to respond to the specific questions raised in their initial complaint. The resident referred specifically to a Fire Risk Assessment of their building in October 2018 which they asked the landlord to urgently provide a copy. The resident said that they had not received any further re-assurances regarding mitigating risk and that the landlord’s communications had been delayed, confusing and contradictory. The resident also said that it was impossible for residents to sell their properties or plan as it was not possible to raise a mortgage on their properties without a positive EWS1 certificate. The resident said that the landlord had allowed this to drag on for years, referring to both their recent four emails, dated 12 and 26 February and 2 and 22 March 2021, and correspondence from another shared owner in the block dating back to January 2020.
On 27 May 2021, the landlord emailed the resident to confirm that matters that it would be considering in its stage two and final response and to ask the resident if there were any other issues they wanted considered. The resident responded the following day to say that they also wanted the landlord to address an issue that was raised in a market valuation that they had undertaken on their property on 6 August 2020, which stated that “In the event that there are issues with the cladding on the building and an EWS1 form gives a positive outcome, then this valuation is confirmed. If the outcome of the EWS1 form has a negative outcome then the flat would then have a £NIL valuation, until such time that any issues highlighted in an EWS1 form are resolved.”
The landlord issued its stage two, and final response, on 7 June 2021:
1. With regards to what the necessary works were, when they would happen and that they would be resolved in a timely manner, the landlord provided the resident with a summary of the external materials visually identified from the drone survey and explained that:
  1. The Consolidated Advice Note, published by the Ministry for Housing and Local Government in January 2020, recommended that building owners inspect and verify the materials used in the external walls in all of their buildings, regardless of size. This inspection process was complex, time consuming and often resulted in recommendations for remediation, with around 9 in 10 being reported as needing work.
  2. It would be able to confirm what was required at the resident’s building, to ensure that it meets the new legislation, after an intrusive inspection had taken place and a report compiled by a fire engineer.
  3. It had begun the intrusive inspections of its high-risk buildings in November 2020 and this was expected to last until September 2021. The resident’s block was not part of the high-risk tranche but fell into a tranche that would be receiving further communication in the coming months.
  4. The resident was due to receive communication regarding an inspection window in the next few months, followed by a specific date.
  5. Once the inspection was completed the resident would receive post-inspection communication followed by a summary report. It would then be able to advise the resident on the remediation that was required.
  6. If the resident required further information or wanted more frequent contact they were to contact their property manager in the first instance.
  7. It aimed to have the remediation completed in as an efficient way as possible. However, it was difficult to provide too much detail without a fire engineer’s report and factors such as the availability of specialist contractors, who were in short supply, and the extent of the works needed will influence the speed of the remedial works as well.
2. With regards to the cost relating to the cladding and inadequacy of the building being borne by the landlord, the landlord explained that:
  1. The overall costs incurred would run into the hundreds of millions of pounds, which was not an amount that the landlord could simply or easily guarantee to cover.
  2. It had confirmed costs for interim fire safety solutions, such as waking watch or temporary fire alarms, would not be passed on to residents and that since 2017, it had absorbed over £20m in costs for waking watch.
  3. It was committed to pursuing every penny it could to avoid passing on costs, and it would continue to work with developers, central government, insurers, and warranty provides to ensure that leaseholders were not left with a bill. Passing costs on to leaseholders remained an absolute last resort.
  4. It was awaiting further information around Government assistance for leaseholders, and it expected this to be provided in the upcoming Building Safety Bill, which was due to move through Parliament in the next session.
  5. Until then its stance remained that residents may be charged, to some extent, in accordance with their lease.
3. With regards to the resident’s request for receipt of a positive EWS1 inspection with confirmation that their home was safe to live in, the landlord explained that:
  1. The RICS guidance with regards to EWS1 forms notes that these should not be requested for properties four stories or less unless ACM, MCM or HPL panelling is present, none of which applied to the resident’s building.
  2. The RICS guidance was guidance only and lenders were not obliged to follow it.
  3. If it continued to see ESW1 requests at buildings outside of scope it would commission forms and if an EWS1 form was required, this would only be commissioned once remediation was complete.
4. The landlord provided a copy of the 2018 fire risk assessment as requested.
5. The landlord also explained that a Nil valuation did not render the resident’ flat worthless but were used for the valuing of a property for mortgage lending purposes, and often signalled that the lender required further information before a valuation could be made.

Assessment and findings

The Ombudsman’s internal guidance for caseworkers considering complaints about cladding sets out that, as the Government’s expectations in relation to cladding and fire safety are only detailed in guidance, there is an element of discretion for a landlord as to how and when it chooses to comply with it.
The Ombudsman’s guidance further sets out that when investigating a complaint relating to the Government’s guidance on fire safety and cladding the Ombudsman will consider the following points:
1. What are the landlord’s long-term plans for compliance with the guidance and are these fair and reasonable?
2. How has it communicated with shared owners/leaseholders regarding the situation and was this communication appropriate?
3. How has it responded to the individual circumstances of the leaseholder?
These points will be considered when assessing whether the landlord’s actions and response to the complaint were fair in all the circumstances.

Assessment

Prior to January 2020, Advice Note 14 did not apply to the resident’s building as it only applied to buildings 18m or higher. The Government guidance was revised in January 2020 and since then it has applied to the resident’s building. This means that from January 2020, the landlord was expected to carry out checks to ensure that any cladding system was safe and to carry out any necessary remedial works.
It is clear from the landlord’s correspondence with the residents, in addition to information published on its website, that the landlord was taking steps in order to comply with the Government’s guidance in respect of the building. This is because the landlord explained that it would be inspecting its buildings and then completing any remedial work identified. It is appropriate that the landlord has shared this information, to provide an outline of its approach and to demonstrate that its approach in prioritising the inspections is fair and rational. Whilst the guidance is not a legal requirement, it has been established as best practice in relation to building safety and form EWS1 required by lenders.
The landlord also explained that the inspections would take a significant amount of time to complete. This was appropriate to manage the resident’s expectations and it is recognised that the process to obtain certification is complicated and requires input from experts.
The landlord informed the residents on 4 February 2021 that an external drone inspection was due to take place on 8 February 2021. Once the landlord was aware that it would be unable to carry out the initial external survey in the time it had given the resident, it promptly contacted the resident to confirm a new date for the survey to be completed, which was within one week of the original date.
Following the completion of the external drone survey on 15 February 2021, the landlord advised that it would need to carry out a further intrusive inspection. The landlord explained that in the first instance it needed to carry out such inspections on high-risk properties, provided the resident with a timescale for the completion of this in September 2021, confirmed that the resident’s block was not part of the high-risk tranche but that they would receive communication regarding an inspection window in the next few months, followed by a specific date.
The process to achieve compliance with the Government guidance is complicated and requires input from experts, and there is currently a shortage of experts within the industry. Given this and the number of buildings owned by the landlord that require assessment, the landlord’s long-term plans for compliance with the guidance was reasonable.
Whilst the landlord’s approach and long-term plans may be reasonable, there were however failings with regards to how the landlord communicated this information with the resident.
There is no evidence of the landlord providing the resident with any further information about the survey in February 2021 until its final response to their complaint in June 2021, some four months later. This was not a reasonable amount of time for the resident to have to wait for an update.
In its correspondence of 4 February 2021, the landlord clearly explained the process it would need to follow to obtain an ESW1 form for the resident’s building. It was clear from the landlord’s correspondence that the inspection it intended to carry out would give an indication of the building’s likelihood of passing an EWS1 inspection and what work might be required to obtain one.
Given that the external drone inspection had taken place on 15 February 2021, it was understandable, and explained by the landlord in its letter of 4 February 2021, that the report would not be available immediately after the inspection and so when the resident initially requested a copy on 2 March 2021, it was reasonable for this not to be provided by the landlord at that time.
However, its initial letter to the resident on 4 February 2021 the landlord did not mention the possibility of a further, intrusive inspection, stating that following the external inspection in February 2021 it would share a summary of the inspection findings, and any plans for remedial works, with residents as soon as possible after their building was inspected. The landlord also advised that the inspection would inform it as to the building’s likelihood of passing an EWS1 inspection and what work would be required to obtain one.
Given the information provided by the landlord in that letter, it would have been reasonable for the resident to assume that this was the only inspection required in order for the landlord to progress any required works. As such, the mention of a further inspection and further delay, four months later and only following a formal complaint by the resident, would have been understandably distressing to the resident.
In addition, there was a delay in the landlord answering the resident’s enquiries about who would be responsible for the costs of the works to their block and their request for a copy of the Fire Risk Assessment for their block.
The resident first asked the landlord to confirm that all the costs relating to the cladding, any inadequacy of the building, the costs of all surveys, interim and long-term repairs or claims under relevant insurance would be covered by the landlord on 12 February 2021. At the point this point there were no actual charges, the resident was asking for information about what might happen in the future.
Despite chasing emails from the resident on 26 February 2021 and 2 March 2021, there is no evidence of the landlord providing the resident with a response to their query until its final response to their complaint on 7 June 2021, almost five months later. The landlord also did not provide a copy of the Fire Risk Assessment until its final response, some three months after the resident’s request on 2 March 2021.

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 queries regarding the building safety inspection at their property and their request for an ESW1 form.

Reasons

The Ombudsman is satisfied that the landlord is taking appropriate steps in response to fire safety and the Government’s guidance, having committed to inspecting the building and undertaking any remedial works to make the building compliant with Advice Note 14.
However, there was an unreasonable delay in the landlord providing the resident with an update following the drone survey on 15 February 2021, the landlord failed to make it clear in its correspondence of 4 February 2021 that a further intrusive survey might be required in order to ascertain whether any remedial works were required to the resident’s building. The landlord also delayed unreasonably in responding to the resident’s concerns regarding who would be responsible for the costs of the works to their block and their request for a copy of the Fire Risk Assessment for their block.

Orders

That within 28 days of the date of this report, the landlord is to:
1. Apologise and pay the resident £200 compensation for the failures identified in this report.
2. Confirm to this service that it has complied with the above order.