London & Quadrant Housing Trust (L&Q) (202127357)

REPORT

COMPLAINT 202013732

London & Quadrant Housing Trust

3 May 2023

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:
   1. The sale of the residents’ shared ownership property.
   2. The associated complaint.

Background

2. The residents held a shared ownership sub-lease with the landlord. The landlord was not the freeholder of the property. At the time of the sale, the residents owned a 70% share of the leasehold.
3. In 2020, the residents sought to sell their leasehold property. The property was marketed via the landlord’s sales team between 3 August 2020 and 25 September 2020. The initial completion date was set as December 2020. The sale of the property was completed on 18 March 2021.
4. The resident raised a complaint with the landlord in relation to its handling of the sale of the property. The copy of the initial complaint that this Service has received, is undated. The residents said they had difficulties in contacting the landlord via phone and email. Furthermore, each time the prospective buyer tried to contact the landlord, they couldn’t get through. The residents have said the only way they could get a response was via Twitter. The residents requested a full explanation for the delay and a refund of a significant portion of the fees they had paid.
5. The landlord responded to the residents’ complaint. The response is undated, however, in their stage one complaint, the residents refer to having received this response on 23 March 2021. It said that:
   1. It acknowledged that the residents felt that it had not communicated with them and that this had caused them stress.
   2. The terms of the resale fee were set out in the lease.
   3. It was unsure as to whether it would be able to offer the refund of the resale fee, but it would see if the valuation report fee could be refunded.

It did not want to list all the chasing and research it had done in relation to the sale of the property, but the residents could pursue a subject access request if they wanted to see evidence of this. The landlord provided the residents with a contact email address should they wish to pursue a subject access request.

6. On 16 June 2021, the residents submitted a stage one complaint to the landlord. They said that:
   1. The sale of the property did not take place in December 2020 as originally scheduled.
   2. They were unable to get through to the landlord via phone calls, and emails went unanswered. The prospective buyer also struggled to get through to the landlord’s sales team on multiple occasions.
   3. The landlord should have supported them in relation to their queries regarding cladding, but it did not do so.
   4. The landlord had advised them that they were entitled to a free extension to the valuation report, should the initial report expire. However, the residents had to pay £108 to cover the cost of this.
   5. In January 2021, they became aware that the mortgage offer approval had been delayed. However, the landlord had not contacted the prospective buyer to say that they needed to provide further information.
   6. The residents contacted the landlord on the date of completion, 18 March 2021, to say that they were no longer the owners of the property. The landlord said the rent and service charge accounts would be closed and backdated. It told the residents not to cancel their direct debit as any refund would be processed to this account. It said that no further money would be taken. However, £540.41 was taken by the landlord on 1 April 2021 and was not refunded until 23 April 2021.
   7. The landlord gave the residents the wrong contact details after they enquired about making a subject access request. This delayed the residents receiving the information by a month.
   8. They wanted a refund of £5145, which equated to 70% of the administration fee the landlord had charged them.
7. The landlord issued a stage one complaint response on 8 July 2021. It said that:
   1. The dates on the memorandum of sale were estimated dates and that with a sale of a property, all dates were subject to change.
   2. It had complied with the terms of the lease.
   3. Arranging viewings with prospective buyers and appointments with charted surveyors, was the residents’ responsibility.
   4. In relation to queries regarding cladding, the landlord was not the owner of the building, therefore, the residents would have needed to contact the freeholder directly.
   5. The cost of a valuation extension was outside of its control.
   6. It had acted on the mortgage lender requesting further details as soon as it had received this request.
   7. It apologised that further monies had been taken from the residents’ account and advised the residents to pursue this matter with its revenue team.
   8. It apologised for providing the wrong details in relation to the residents’ subject access request.
   9. Due to the stamp duty holiday, it had received an increased number of calls and that the Covid-19 pandemic had also caused some delays.
8. The residents escalated their complaint to stage two of the landlord’s procedure on 8 July 2021. They said that Covid-19 was not a valid reason for the delays they experienced. They said that the sale would have fallen through if they hadn’t chased the landlord on the buyer’s behalf.
9. On 16 September 2021, the landlord issued its stage two complaint response. It said that the delay in providing the management pack was due to the residents’ solicitor not paying the required fee for this. It acknowledged there had been a delay in relation to the mortgage approval and offered the residents £250 in compensation.
10. The residents referred their complaint to the Ombudsman on 14 March 2022. They said that the landlord did not fulfil its role relating to the sale of the property. They said the process was stressful and had affected their mental health. The residents said they were seeking a refund of 70% of the administration fee they had paid the landlord.

Assessment

Policies and procedures

11. The lease states that: “In the event the leaseholder requires the assistance of the landlord in respect of staircasing, re-mortgaging the premises, a re-sale of the premises, providing copy documents or any other occasion which involves the landlord expending time or other resources in respect of the premises, the landlord shall charge the leaseholder a reasonable administration fee which fee will also include any charges made by the superior landlord or the manager in providing assistance to the landlord”.
12. The landlord’s homeownership standard operating procedure states that its purpose is to: “ensure our residents receive a consistent and effortless experience in our handling of all homeownership requests”.
13. The Ombudsman’s complaint handling code sets out our service’s expectations for landlords’ complaint handling practices. The version of the Ombudsman’s complaint handling code in effect when the residents’ complaint was submitted, states at paragraph 3.1 that “landlords should have a person or team assigned to take responsibility for complaint handling.” In addition, the code states at paragraph 3.2, that complaint officers should “have access to staff at all levels to facilitate quick resolution of complaints” and should “have the authority and autonomy to act to resolve disputes quickly and fairly”.

The landlord’s handling of the sales process

14. The landlord acknowledged that it took longer to answer calls and emails because of the Covid-19 pandemic and increased demand due to the stamp duty holiday. It apologised for this but has not offered any financial redress for the time, trouble, distress and inconvenience these delays would have caused the residents. This has been considered when assessing compensation, as detailed further below.
15. The landlord offered the residents £250 in compensation for the delay relating to the mortgage approval. The delay will have caused time, trouble, and inconvenience to the residents. The Ombudsman’s remedies guidance states that where there is evidence of maladministration that affected the residents, compensation between £100-£600 should be offered. The Ombudsman considers that £250 represents reasonable compensation for the distress and inconvenience caused by the landlord’s delays. The landlord acted appropriately by offering compensation in line with the Ombudsman’s guidance and therefore does not need to do anything further in this regard.
16. The landlord acted unreasonably in advising the residents that they should have contacted the freeholder of the building directly, in relation to any queries about the cladding of the property. This was incorrect advice. Although the landlord was right to say that it did not hold the documentation about the cladding (as it later did in its stage two complaint response), the residents’ relationship was with the landlord and not with the owner of the building. It was the landlord’s responsibility to pass on the residents’ queries to the freeholder and to chase the freeholder for updates, if it did not provide the information requested, in a timely manner. This was a failing by the landlord and it should pay compensation in view of this.
17. The landlord’s failures in the handling of the sale of the property, will have caused time, trouble, and inconvenience to the residents. The Ombudsman’s remedies guidance states that between £100-£600 is appropriate in cases where residents have been adversely affected. In the opinion of this Service additional compensation of £200 is due in view of this.

The landlord’s handling of the associated complaint

18. The landlord’s complaint handling was poor. It is not clear whether the staff member who responded to the residents’ initial complaint had the authority to do so. In accordance with the Ombudsman’s complaint handling code, complaints should be handled by staff who can act decisively to put things right.
19. The staff member who responded to the residents’ initial complaint said they would attempt to get a rebate of the resident’s valuation fee. This will have created uncertainty and false expectations for the residents. In its later complaint responses, the landlord said valuation extensions were outside of its control.
20. The landlord told the residents to submit a subject access request if they wanted it to provide a timeline of the actions it had taken on their behalf. This was incorrect advice. The residents were entitled to information about what actions the landlord had taken, without the need for a subject access request. Furthermore, the email it provided to the residents to submit the subject access request to, was wrong.
21. The landlord did not respond to the residents’ stage two complaint until 16 September 2021. This exceeded the timescales set out in the landlord’s complaint policy by over a month.
22. The landlord said that the residents should raise a separate complaint with its revenue department in relation to the money taken in error. This was an unnecessary and complicated approach. As set out in the Ombudsman’s complaint handling code, complaint officers should have access to staff at all levels to resolve complaints quickly and efficiently. This is to prevent residents having to contact multiple teams in seeking resolution to complaints.
23. Overall, the landlord’s complaint handling failure, will have caused additional time, trouble, and inconvenience for the residents. The Ombudsman’s remedies guidance states that £100-£600 is due in cases where the resident is adversely affected by the landlord’s failures. In this Service’s opinion, compensation of £200 is due in view of this.

Determination (decision)

24. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in the way the landlord handled the sale of the property.
25. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in the way the landlord handled the associated complaint.

Orders and recommendations

Orders

26. The landlord is ordered to do the following within four weeks of the date of this report, ensuring that it provides this Service with evidence of compliance by the same date:
    1. Pay the residents a further £200 for its failures in its handling of the sale of the property. This amount is in addition to the £250 compensation already offered to the residents through the landlord’s complaints process.
    2. Pay the residents £200 for its complaint handling failure.

Recommendations

27. It is recommended that the landlord:
    1. Carry out staff training to ensure any complaints it receives are always handled by designated complaint staff.
    2. Review its complaint handling policy to ensure that residents are not required to go to different teams to raise different aspects of a complaint.