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The Guinness Partnership Limited (202200956)

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REPORT

COMPLAINT 202200956

The Guinness Partnership Limited

27 September 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 communication in relation to the resident’s application to sell the property.

Background

  1. The resident is a shared ownership leaseholder of the property and the landlord is the freeholder. Each has a 50% share in the property.
  2. The resident notified the landlord of her intent to sell the property (the exact date when the landlord was notified has not been provided to the Ombudsman). It is reasonable to determine from the evidence provided that the nomination period had passed (the period when the resident was obliged to allow the landlord the opportunity to find a buyer for her share of the property) and the resident was allowed to sell the property on the open market.
  3. On 7 December 2021, the resident notified the landlord that she had found a potential buyer. In response to this, on 14 December 2021, the landlord forwarded the resident a link to a shared ownership application form and asked the resident to advise the potential buyer to fill out the form. The landlord also advised that should the buyer wish to purchase the landlord’s remaining 50% share, they should contact he landlord directly. Following this, the landlord missed an email from the resident which notified that the potential buyer wanted to buy 100% of the property.
  4. The resident raised a formal complaint to the landlord, in which she raised concerns that she had been sent the wrong link to give to the potential buyer, and that there was no acknowledgement of the fact that the resident was intending to sell 100% of the property. As a result of this, she believed that the landlord was at fault for the buyer pulling out of the sale. She also advised that she wanted an open–ended agreement to continue to market the property beyond July 2022, and that she expected the landlord to cover any additional costs in getting another valuation. She also did not want to pay any fees to the landlord due to the service that she had received. Although the complaint has not been provided, it was acknowledged by the landlord on 1 February 2022.
  5. The landlord’s final response to the complaint was issued on 22 March 2022, in which it maintained that it was not responsible for the buyer withdrawing from the purchase of the property. It noted that when it provided the link to the form, it also requested the buyer to contact the landlord directly if they intended to purchase 100% of the property. However, it did acknowledge that its communication with the resident had been poor. It apologised for the overall experience and the frustration that had been caused, and offered £75 compensation. £25 was originally offered in its stage one complaint response for poor communication. The £50 increase in its final response was broken down to £25 for delays in responding to the complaint, and £25 as an apology for the poor communication.
  6. The resident remained unhappy with the compensation offer and notified this Service that she was seeking £250 for the further rental charges incurred since the sale fell through and the administration fee she had to pay.

Assessment and findings

Policies & Procedures

  1. Section 4 of the landlord’s Shared Ownership & Resale Policy stipulates that ‘The lease states a specific timeframe (nomination period… which usually ranges between eight and twelve weeks). If the landlord does not find a buyer in this time, the resident can then sell the property on the open market’.
  2. Section 10 of the landlord’s Shared Ownership & Resale Policy states that ‘[the resident] may wish, at the end of the nomination period, to staircase to 100% and then sell the property as one transaction. The landlord will allow this so long as the lease does not contain any restrictions on staircasing. This may extend the transaction time’.
  3. Section 11 of the landlord’s Shared Ownership & Resale Policy states that ‘The landlord will charge the resident the nominations fees specified in the resident’s lease and any additional administration and legal costs incurred by the landlord in selling the resident’s shares. A list of the landlord’s fees will be sent to the resident at the start of the process’.
  4. The landlord’s Staircasing Policy states that ‘The landlord will only accept the valuation as valid for three months from the date that the valuation was carried out. A further valuation will be required if the staircasing transaction has not been completed within three months. The resident will be required to pay for all valuations after the first one’.
  5. The landlord’s Staircasing Policy states that ‘The landlord will charge the resident an administration fee, payable by the resident, for the landlord’s work in administering the staircasing transaction’.
  6. Section 9 of the landlord’s Compensation Policy states that a goodwill gesture is ‘a discretionary financial payment or other gesture given to recognize a shortcoming in the way the landlord has delivered its service’.

The landlord’s communication in relation to the resident’s application to sell the property

  1. We have not disregarded the resident’s comments about the reasons why the sale of her property fell through. However, this Service cannot determine whether the landlord’s actions directly caused the potential buyer to pull out of purchasing the property. There are several reasons why the buyer could have discontinued their purchase of the property, and without any definitive confirmation explaining their reasons for doing so, this Service cannot draw any conclusions, or make assumptions as to why the buyer made this decision. However, this Service can determine whether the landlord acted fairly and appropriately throughout the process, and also whether it acted in line with its relevant policies and procedures.
  2. On 7 December 2021, the resident notified the landlord that she had found a potential buyer for the property. The resident also advised in a separate email (not provided) that the buyer wished to purchase 100% of the property. The landlord confirmed in an internal email dated 4 February 2022, that it should have sent its Staircase and Resale form to the resident to be filled out and returned ‘at the time the resident informed the landlord of wanting to sell 100% of the property’, but the landlord admitted that it did not see this email, and therefore failed to respond to it.
  3. The landlord acknowledged this delay in an email to the resident on 2 February 2022, in which it acknowledged that its failure to identify and respond to this email was an “oversight”. The landlord also acknowledged this in its stage one complaint response (10 February 2022) and offered £25 compensation for the poor communication. This was increased to £50 in its final response to the complaint. The landlord’s decision to offer compensation for its shortcomings in communication was in line with its Compensation Policy. As stated in section 9 of the policy, the landlord can offer ‘a discretionary financial payment or other gesture given to recognise a shortcoming in the way the landlord has delivered its service’. This Service’s remedies guidance (published on our website) suggests that a payment of £50 would be reasonable for instances of service failure where there has been “repeated failures to reply to letters or return phone calls”.
  4. Whilst the landlord had admitted that the delay in progressing the sale was partly its fault, it also noted that had it received confirmation from the buyer when asked, ‘the matter would have progressed accordingly without any issues’. On 14 December 2021, upon the resident’s notification that she had found a potential buyer, the landlord sent the resident a link to a shared ownership application form, and advised that the buyer needed to complete it. In the same email, it also advised that if the buyer wanted to acquire the landlord’s shares, it would need to contact the landlord directly. Although the link was in regard to the buyer’s eligibility for a shared ownership, there were clear instructions for how to proceed in purchasing further shares up to 100% of the property.
  5. The landlord noted in its final response (22 March 2022) that when processing any staircase resale matters, it would confirm the shares that the buyer wanted prior to drafting the relevant documents. This is a reasonable approach for the landlord to take, because the Shared Ownership & Resale Policy does not explicitly say who the landlord should contact first regarding the matters; ultimately, it is up to the landlord’s discretion as to how it progresses the application provided it progresses it in a timely manner without putting unnecessary barriers in the way of the sale.
  6. In its final response to the complaint, the landlord said it had also contacted  solicitors on three occasions between December 2021 and January 2022 in order to confirm how much of the share would be purchased. However, the landlord advised that it had not received a response. As it was past the nomination period, the resident was attempting to sell the property on the open market at this time. As stated in section 4 of the landlord’s Shared Ownership & Resale Policy, “The lease states a specific timeframe (nomination period… which usually ranges between eight and twelve weeks). If the landlord does not find a buyer in this time, the resident can then sell the property on the open market”. By contacting the solicitors, the landlord demonstrated that it had attempted to obtain the information through other means, and that although it had missed the resident’s email on 14 December 2021, it was being proactive in its attempts to source the correct information.
  7. It has not been disputed that the landlord contacted the solicitors on three occasions. However, the landlord has not provided any records of the attempted contact. This highlights an issue with the landlord’s record keeping that is further reinforced by the omission of correspondence with the resident during January 2022. The landlord stated that it had contacted the resident on 2 January 2022 as it had not heard from the buyer, and again on 20 January 2022 to confirm/acknowledge that it was now aware that the buyer wanted to purchase 100% of the property.
  8. Whilst this is not a service failure in and of itself, as it does not change the outcome of the complaint, it should be something that the landlord considers going forward. The landlord is expected to keep robust records of correspondence with the resident, as if there were to be a disagreement in the accounts of the resident and the landlord, and especially considering the landlord’s admitted communication failures, the onus would be on the landlord to provide documentary evidence showing its attempts at seeking information regarding the potential buyer’s desired shares.
  9. Following the buyer pulling out, the resident expressed that she expected the landlord to cover any costs of getting another valuation. The landlord’s Staircasing Policy states that “The landlord will only accept the valuation as valid for three months from the date that the valuation was carried out. A further valuation will be required if the staircasing transaction has not been completed within three months. The resident will be required to pay for all valuations after the first one”. Therefore, it was reasonable for the landlord to refuse to cover the cost of a further valuation as there was no evidence to suggest that the landlord was responsible for the buyer pulling out. As such, it would be unreasonable to expect the landlord to act outside of the terms set out in its policies and procedures.
  10. The same reasoning can also be made for the resident’s assertion that she did not expect to pay any fees to the landlord, in recognition of the ‘appalling’ service she had received. Section 11 of the landlord’s Shared Ownership & Resale Policy states that “The landlord will charge the [resident] the nominations fees specified in the resident’s lease and any additional administration and legal costs incurred by the landlord in selling the resident’s shares. A list of the landlord’s fees will be sent to the resident at the start of the process”. The landlord. It was reasonable for the landlord to maintain that the fees were payable because as set out above there is insufficient evidence to show the landlord was directly responsible for the sale falling through.

Conclusion

  1. This Service cannot determine that the landlord was to blame for the buyer’s decision to not purchase the property without explicit confirmation from the buyer that this was the case. Although the landlord missed an email confirming the share the buyer intended to buy, which led to a delay in the sale progressing, it apologised for this and compensated for the communication failure. Additionally, it had also given clear instructions for the buyer to get in contact prior to the delay in response. The landlord also acted reasonably within its policies and procedures in its handling of the sale. With this in mind, it would have been unreasonable for the landlord to cover any further costs of administration fees or valuation of the property and, therefore, the compensation offered constitutes reasonable redress.

Determination

  1. In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves the complaint about the landlord’s communication in relation to the resident’s application to sell the property.

Recommendations

  1. It is recommended that the landlord conducts a review of its record keeping process in order to ensure that all correspondence can be provided in the future if needed as part of any investigation or complaint.