Metropolitan Thames Valley Housing (MTV) (202208539)

REPORT

COMPLAINT 202208539

Metropolitan Thames Valley Housing

5 July 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. This complaint is about the landlord’s:
   1. Response to requests for an External Wall System (EWS1) form.
   2. Complaint handling.

Background

2. The resident is the leaseholder of a two-bedroom flat in a block of flats. The landlord is the freeholder of that block.
3. The resident began enquiring about selling or subletting their flat in December 2020, sending an email to the landlord asking for general information. The landlord responded in January 2021 to confirm that the resident was a 100% owner of the lease and therefore it was not party to the sale. The landlord also confirmed that the resident’s solicitors would contact the landlord asking for necessary sales information.
4. On 21 October 2021, the resident sent an email to the landlord asking for information on the “EWS1 status” of the block. The resident said that a potential buyer had requested this during negotiations. The landlord responded a week later to confirm that it did not believe an EWS1 form was required as the block was four storeys tall. It also highlighted that the requirement for an EWS1 form was at the discretion of mortgage lenders.
5. On 15 January 2022 the resident asked the landlord for information relating to service charges, buildings insurance, and notices sent to residents. It was not clear from this email that the information requested related to a property sale. On 25 January 2022, the resident’s solicitors wrote to the landlord in relation to requesting a “management pack”. This pack normally contains all information required for solicitors involved in the sale of a leasehold property. The landlord responded with details of how to request the pack, but no further request was received.
6. On 24 February 2022, the resident wrote to the landlord to confirm that the buyer’s lender had requested an EWS1 form and that the sale would fall through without one. The landlord responded on 3 March 2022 to confirm that it had completed a visual inspection of the property and concluded that the property now required an EWS1 form. However, this form would not be available until some point later in the year.
7. On 2 March 2022, the resident submitted a complaint to the landlord regarding the lack of advice provided about the EWS1 form. The resident sent a further email to the landlord on 3 March 2022 to confirm that, because of the lack of an EWS1 form, the mortgage provider had valued the property at £11,000 less than expected. On 4 March 2022 the landlord wrote to the resident to offer some further context on the national situation regarding EWS1 forms. It also offered to support the resident in subletting the property if this would help until an EWS1 form was available.
8. The landlord responded to stage 1 of the complaint on 11 April 2022 stating:
   1. An EWS1 form would not be available for some time. It could provide a fire safety report, but lenders may not accept this.
   2. Building owners across the country were struggling to obtain these forms due to the shortage of surveyors.
   3. It had prioritised buildings on a risk basis and expected an intrusive survey to take place at the resident’s building during the financial year 2022/23.
   4. It offered £50 as compensation for the inconvenience experienced by the resident during the complaint.
9. On 22 April 2022, the resident escalated the complaint to stage 2. They explained that the landlord had not considered the costs incurred by the resident in attempting to sell the property. The resident estimated they had incurred around £1,400 costs which they were unable to recoup. The landlord wrote to the resident on 11 May 2022 with its final response. It said:
   1. It could not be held responsible for the delays in providing an EWS1 form.
   2. It apologised for not addressing the costs incurred in the previous letter, and for poor communication during the stage 1 complaint. It re-offered the £50 compensation from the stage 1 response.
   3. It did not agree that it was liable for the resident’s losses, however as these costs were over £300 any claim would need to be sent via the landlord’s insurance team.
10. The resident remained in contact with the landlord after the final response, however there is no indication when an EWS1 form is likely to be available. The fire safety report was sent to the resident in July 2022. The resident escalated their complaint to this Service in July 2022 Following the escalation, the landlord reconsidered the complaint and has told this Service that it is now willing to offer £800 in relation to the complaint, broken down as:
    1. £350 in recognition of the time and trouble the resident has expended throughout the process.
    2. £150 to recognise its poor complaint handling.
    3. £300 as a goodwill gesture to recognise the costs the customer incurred.

The resident has not accepted this latest offer and asked the Ombudsman to continue its investigation.

Assessment and findings

EWS1 form

11. Following the tragic events at Grenfell in June 2017, the Government issued advice in December 2018 concerning wall covering systems cladding that did not incorporate Aluminium Composite Material (ACM). This advice sets out checks owners of high-rise buildings could carry out to satisfy themselves that their building was safe. In December 2019, 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. Form EWS1 was introduced to prove to lenders that the external cladding had been assessed by an expert. Due to the sudden surge in assessments required, there were significant delays in arranging surveys.
12. Subsequently, in January 2020, the Government issued further advice which stated that “the need to assess and manage the risk of external fire spread applies to buildings of any height”. In response to the guidance, some lenders took the view that, if certification could not be provided to demonstrate compliance, they would be unwilling to offer a mortgage on these properties. In March 2021, RICS put forward new guidance which sought to clarify when an EWS1 form is required. This proposed that mortgage providers primarily only seek assurance for buildings over 18m tall, or with more than 25% of the external wall covered in cladding.
13. The landlord has provided their policy for completing checks on all buildings for which they have a responsibility. This includes a risk-based approach across its portfolio which recognised the difficulty many freeholders had in appointing surveyors to complete these checks. The landlord did provide information on its website for residents in relation to EWS1 forms and fire safety checks. It also sent letters to owners and shared owners, but it is not clear if specific information was sent to this resident.
14. In May 2021, the Ombudsman published a Spotlight report on this topic. This report recognised the distress being caused by the difficulties residents were having when trying to sell their properties. One area of concern was a lack of communication from landlords when it came to selling properties. This included the use of generic responses for lower-risk buildings and those which fell outside the primary criteria identified by RICS.
15. When the resident initially contacted the landlord in 2020, they made it clear that they were making inquiries but not notifying the landlord of an intention to sell. For owners of leasehold properties, the freeholder would have very little input into the sales process, save to provide legal and insurance information about the building. It would normally be for a resident, and their solicitors, to understand the sales process and requirements.
16. The resident requested information in relation to the EWS1 form in October 2021. At the time, the landlord did not believe the form was required. The landlord stated that it was undertaking visual inspections of properties that fell outside the normal criteria to establish if an intrusive survey (required to provide an EWS1 form) would be required.The emails sent by the resident to the landlord referred to a prospective buyer and information about the EWS1 form. This should have encouraged the landlord to provide any information it could on its policy. While it did not believe one was required, this information would have been useful to allow the resident to make an informed decision. In particular, the advice around costs incurred in relation to sales which fall through would have been helpful. At some point between October 2021 and March 2022 the landlord, after a visual inspection, determined that an intrusive survey would be required.
17. Following the visual inspection, it would have been good practice for the landlord to proactively write to residents to confirm that their initial assessment of the property was incorrect, and an intrusive survey was now required. When the resident wrote to the landlord in February 2022, they said that the sale was likely to fall through unless the EWS1 form was provided. This assessment was based on the buyer’s lenders valuing the property at less than expected. However, at this point neither the resident, nor the resident’s solicitors, had informed the landlord that they were in the process of selling the property and required the EWS1 form, or a statement confirming it was not needed. While information requests could have implied this was the case, there is no evidence that the landlord failed to respond to direct queries as accurately as it could.
18. The resident reported that, due to the incorrect information provided by the landlord, the sale fell through and they incurred costs in the region of £1,400. £1,000 of this was in relation to a deposit the resident had put down on a property they intended to purchase. When the sale did fall through, they lost this deposit. The remaining costs were in relation to solicitors’ fees.
19. The landlord did not provide information at the first opportunity in October 2021, and again did not provide information when the visual survey was completed. Based on these aspects, we have concluded that there was maladministration in its handling of these requests. However, the resident decided to pay the deposit on the other property without advice from the landlord, and therefore it would not be reasonable to ask the landlord to reimburse this cost. The lower valuation of the property was also outside of the landlord’s control and therefore we would not consider it responsible for the sale falling through.

Complaint handling

20. The landlord’s complaints policy in force at the time had a two-stage process and provided the following timescales:
    1. Acknowledge new complaints within 5 working days.
    2. Respond to stage 1 complaints within 15 working days.
    3. Acknowledge escalations to stage 2 within 5 working days.
    4. Respond to stage 2 complaints within 20 working days of escalation.

The Ombudsman’s Complaint Handling Code sets out our expectations for landlords in respect of timescales. The Ombudsman would expect a stage 1 response to be sent within 10 working days, rather than 15, outside exceptional circumstances. We understand that the most recent version of the landlord’s complaints policy adheres to this timescale.

21. The resident’s complaint was logged on 2 March 2022 and requested again on 3 March 2022. The landlord responded by advising the resident how to log a complaint, which would have been somewhat confusing. There is evidence from internal emails that the landlord made enquiries about when an EWS1 form would be available, the answers to which were provided on 18 March 2022. However, the landlord did not respond to the complainant until 11 April 2022. This was over 5 weeks after the complaint was logged and outside the 15 working days quoted in the landlord’s policy. The stage 1 response was also titled a “Final Response” which would have been confusing for the resident, although it did include details of how to escalate the complaint to stage 2. The landlord offered £50 compensation in that response.
22. We have not seen any evidence how the resident escalated the complaint on 22 April 2022. The landlord told us that it was escalated because the resident did not believe the landlord had considered the costs they incurred due to the sale falling through. The landlord sent its stage 2 response on 11 May 2022. In the stage 2 response the landlord apologised for the limited information provided in the stage 1 response. It reconfirmed that it did not consider itself liable for the losses incurred as it had not made any error. However, the landlord also invited the resident to make an insurance claim if it disagreed with this assessment.
23. The landlord’s compensation policy provides guidance on how much should be considered for different reasons. The relevant parts of the table are laid out below:

The compensation offered by the landlord demonstrates that the failures identified were considered a low failure.

24. The offer of compensation at both stage 1 and 2 was the same, however, the landlord has only rationalised the offer as being for “time and trouble”. The stage 2 response offered apologies for poor communication and the stage 1 response was sent significantly outside the landlord’s own timescales. In our opinion these aspects should have been considered when offering the compensation.
25. Since the complaint was escalated to the Ombudsman, the landlord has reconsidered this compensation, offering £800 in total. This latest offer considers both the time and trouble and poor complaint handling. It also included £350 as a gesture of goodwill. We are pleased that the landlord has reflected on its original offer. Although the landlord told us that the offer was sent to the resident in September 2022, there is no evidence that it was sent. The resident has also told us he was unaware of the offer until recently.
26. The latest offer is within a range that the Ombudsman would consider fair and reasonable, taking into account the failings identified over both complaints. However, as this was not sent to the resident during the landlord’s own internal complaint procedure, we are unable to conclude that the landlord made a reasonable attempt to resolve the complaint. Therefore, we have concluded that there has been maladministration in the landlord’s complaint handling.

Determination

27. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there has been maladministration in the landlord’s handling of the request for an EWS1 form. This is because the landlord failed to communicate appropriately with the resident in a timely manner.
28. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there has been maladministration in the landlord’s handling of the complaint. This is because it did not make an offer of compensation which adequately considered all the relevant factors.

Orders and recommendations

Orders

29. It is hereby ordered that the landlord pays a total of £800 for the failures identified within this report. This is inclusive of the £50 already offered and should be broken down as follows:
    1. £350 in recognition of the time and trouble the resident has expended throughout the process.
    2. £150 to recognise its poor complaint handling.
    3. £300 for distress and inconvenience caused by poor communication in respect of the EWS1 form.
30. The landlord should update the resident again on when an EWS1 form is likely to be available.
    1. The landlord should also proactively update the resident going forward, at least every three months, on its progress. There is no need to provide evidence of compliance with this aspect of the order.

Recommendations

31. The landlord should review its compensation policy to ensure that adequate compensation is fully considered within its own internal processes. Residents should not be forced to escalate their complaint to this service to receive full consideration.
32. The landlord should consider its process for communicating with residents about EWS1 forms to ensure they receive timely and appropriate information.