Sage Housing Limited (202201359)

REPORT

COMPLAINT 202201359

Sage Housing Limited

12 February 2024

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

The resident’s complaint is about the landlord’s handling of:
1. Financial incentives offered during the sales process for the property.
2. Snagging issues with the property and block.
3. His complaint.

Background and summary of events

The resident is a shared ownership leaseholder who purchased the property as a new build. The property is a 2 bedroom ground floor flat within a residential block. The landlord is the freeholder of the block.
The specification of the property included the kitchen ‘white goods’ which were supplied by the landlord.
The landlord advertised an incentive of £1,200 towards buyers’ legal fees when purchasing a property in the block. Shortly after the resident had reserved his plot it introduced an additional incentive of a ‘furniture pack’. As a “gesture of good will” the landlord offered the resident £1,000 towards furniture in lieu of a pack.
The landlord produced a ‘memorandum of sale’ (MOS) for the property which was sent to the resident’s solicitors on 7 September 2021. This contained an incentives section, which listed the £1,000 towards furniture but did not include the £1,200 towards legal fees.
At a meeting on 24 September 2021, the developer advised the landlord that it was still chasing delivery of communal refuse bins for the block. On 29 September 2021, the developer had a skip delivered to the site for residents to place refuse into as an interim measure.
On 1 October 2021, the landlord’s solicitors sent a completion statement to the resident’s solicitors. The resident identified that the legal fees incentive was not included within this. On 4 October 2021, the landlord confirmed that the legal fees incentive should be applied, but had not been correctly recorded on its customer relationship management (CRM) system. The landlord’s solicitors issued a revised completion statement with both incentives included later that day and the resident completed his purchase of the property.
The landlord’s solicitors returned £1,000 to the resident’s solicitors on 13 October 2021. This was the incentive towards furniture which had not been correctly deducted at completion.
On 14 October 2021, the white goods were installed at the property.
The resident contacted the landlord on 17 October 2021. He expressed dissatisfaction that:
1. The completion statement he had received from his solicitors on 1 October 2021 had not included the £1,200 legal fees incentive “due to a lack of communication on [the landlord’s] part” causing him stress in getting this corrected on the day of completion.
2. He had still not received the £1,000 incentive towards furniture, despite being previously told this would be paid upon completion of the purchase.
3. The white goods had not been installed until over a week after he completed his purchase, when he had been these would be there when he moved in.
4. The block did not have working broadband, and he had been told this would not be available until 25 October 2021.
5. There were no communal bins provided for the block, which had caused residents to leave rubbish bags on the bin store floor attracting pests and vermin.
6. His windows had dried concrete on them – which he said he had noted before moving in and asked to be removed, and a hole in the wall behind the front door.
On 25 October 2021, the resident informed the landlord that he was unable to access the electric and water meter cupboards in the communal area of the block as he had not been provided with a key for these.
The resident confirmed to the landlord on 28 October 2021 that the broadband in the building was now operational, but all other issues were still outstanding.
The developer cleared and cleaned the communal bin store on 12 November 2021. It asked the landlord to inform residents that rubbish should be placed in the skip provided until the bins were delivered.
On 15 November 2021, the resident asked the landlord for details of how to make a complaint as he felt no progress was being made on the issues he had raised. The landlord provided contact details for its complaints team the following day.
The developer attended the property and repaired the hole in the wall on 22 November 2021.
The resident emailed the landlord’s complaints team on 23 November 2021. He requested that it address the points he had previously raised, and also the fact that he had not been receiving post due to postal workers being unable to access the building.
The communal bins were delivered to the block during the week commencing 22 November 2021.
The landlord provided its stage 1 complaint response on 8 December 2021. It said that:
1. Royal mail had not reported any issues with accessing the building, but it had raised this internally to be looked into.
2. It had raised the issue of meter access internally for investigation.
3. The developer was responsible for providing the bins for the block. It had asked the developer to remove the skip, which was currently full, and would arrange clearance and cleaning of the bin store.
4. It apologised that the resident had “not had a great moving-in experience” and partially upheld his complaint as it should have provided him with information about accessing his meter.
The resident responded to the landlord the same day. He said that it had not addressed his complaints about the sales incentives or the concrete on his windows. He said he felt the response was insufficient and did not recognise “how horrible my experience has been…and how much stress this has caused me”.
On 7 January 2022, the resident emailed the landlord to advise that as he had not received a response to his previous email, or an “adequate resolution” to his complaint.
On 8 February 2022, the resident emailed the landlord again. He advised that he had left a negative review for the landlord online, as a result of which it had asked him to contact it about his complaint. He forwarded a copy of his email from 8 December 2021.
The landlord emailed the resident on 17 February 2022 asking him to provide more information/evidence in relation to his complaint. The resident provided copies of emails between him and his solicitor in response.
The resident contacted the landlord on 1 March 2022, 31 March 2022 and 19 April 2022 advising that he had still not received a response to his complaint.
On 22 April 2022 the landlord emailed the resident asking for details “of any issues that concern you, that are still outstanding”.
The resident emailed the landlord on 31 August 2022 to say that his keys “don’t seem to work in any of the [utility meter] cupboards anymore when they used to”. The landlord replied advising that it would check these when it completed the end of defect period inspection at the property on 2 September 2022.
The Ombudsman wrote to the landlord, on the resident’s behalf, on 11 September 2022 asking it to respond to his outstanding complaint. After the landlord failed to do this, the Ombudsman wrote to it again on 26 October 2022 repeating this request.
The landlord responded to the Ombudsman on 1 November 2022. It stated that it had asked the resident to “provide evidence regarding the issues he’s raised but received no response”. It said it was “unable to investigate a complaint without any evidence of service failure”.
On 4 November 2022, the landlord emailed the resident providing its position on the matters he had complained about. It:
1. Said that its sales progressor had advised the resident that he would receive the furniture incentive within 4 weeks of completing on the property. The landlord asked him to provide evidence of any agreement that the incentive would be paid sooner than this.
2. Asked the resident to provide any evidence that it had agreed to pay the legal fees incentive within a specified time and failed to do so.
3. Claimed that all purchasers had been made aware of a supply chain issue affecting the delivery of white goods to the block.
4. Stated that the resident had advised that he had cleaned the concrete from the windows in his email of 18 October 2021, so it had only passed on feedback regarding this to the developer.
On 5 November 2022, the Ombudsman wrote to the landlord again asking it to provide a final response to the resident’s complaint.
On 8 November 2022, the landlord emailed the resident. It said that the developer had not provided it with keys to the meter cupboards when it took handover of the block and it had been trying to get these. It said it had recently had the locks removed – meaning the cupboards were currently accessible and would be replacing them with standard locks and distributing keys to all residents. The landlord’s records indicate that it sent a key for the new locks to the resident on 15 November 2022.
The landlord resent a copy of its email of 4 November 2022 to the resident on 14 November 2022. It added that “We do not consider the issues you have raised as formal complaint and we are unable to investigate this matter any further unless you can provide evidence/ correspondence from Sage homes to yourself or representative. Evidence between you and your representative is not something we can investigate or consider evidence. Once you have the correct evidence, we will be happy to investigate these issues for you”.
On 18 November 2022, the Ombudsman issued the landlord with a ‘complaint handling failure order’ (CHFO) for its refusal to appropriately consider the resident’s complaint and ordered it to do so. The landlord responded on 29 November 2022 advising that it had now escalated the resident’s complaint to stage 2 of its complaints process.
The Ombudsman wrote to the landlord on 19 January 2022 informing it that we had accepted the resident’s complaint for investigation without it having completed the landlord’s internal complaints procedure.
On 27 January 2023, the landlord provided its stage 2 complaint response. This repeated the content of its email of 4 November 2022 and stated that it had not upheld his complaint.

Assessment and findings

Financial incentives

The landlord acknowledged in internal emails that it had not appropriately logged the £1,200 legal fees incentive on its CRM system. As a result, this had been missed off of both the MOS and the initial version of the completion statement – which its solicitors provided on 1 October 2021.
This was only recognised by the landlord after the resident raised it with his solicitors upon reviewing the completion statement. It was then amended in a second version of the completion statement issued by the landlord’s solicitors on 4 October 2021 (the next working day).
Although the resident received the legal fees incentive at completion, he described how the landlord’s oversight caused him “a lot of stress as I would not have gone through with buying the property without this as I simply could not afford to pay that”. He described how “after going back and forth with the solicitors, my mortgage advisor and the estate agents, this was eventually sorted on the day of completion”. It is clear therefore that the landlord’s failure to appropriately record the legal incentive caused the resident distress and inconvenience during what would already have been the very stressful process of completing on the property.
The resident also stated that his solicitors claimed to be “unaware” of the £1,000 furniture incentive. This however was recorded on both the landlord’s CRM system and the MOS as well as the second version of the completion statement. Despite this, this sum ended up not being deducted from the completion funds that the resident’s solicitors sent to the landlord.
The reason for this appears to be in dispute. The resident’s solicitors advised him in an email that the incentive was to be provided after completion, whilst an internal landlord email stated that “the legal teams jumped the gun in sending funds over before the new completion statement was issued” resulting in the overpayment.
The landlord’s version of events is supported by an email to its solicitors, sent on 4 October 2021 whilst clarifying the completion statement, which stated that it had “agreed to deduct a further £1000 from completion funds on top of the £1200 for legal.” On balance, therefore, it appears that the £1,000 was not deducted from the resident’s completion funds due to an oversight by the legal teams, rather than the landlord.
It is acknowledged that the resident has described this as having a significant impact in delaying him from moving into the property. However, the landlord cannot reasonably be held responsible and acted swiftly in instructing its solicitors to return the £1,000 on the day of completion. The landlord was entitled to rely on its solicitors to action this and return the funds immediately. There is no evidence that it was made aware that they had not until the resident’s email of 17 October 2021 – by which point its solicitors had then returned the funds.
In summary, the landlord failed to appropriately record the legal fees incentive it had offered, which resulted in this only being applied after the resident raised it. This caused the resident distress and inconvenience in rectifying this on the day of completion and represents service failure by the landlord.

Snagging issues

For clarity and brevity, the issues with the delivery of communal bins, availability of broadband in the building, installation of white goods to the property, defect repairs to the property and supply of meter cupboard keys will all be addressed under the above heading with a single determination.
Supplying the bins to the property was, as the landlord’s stage 1 complaint response stated, the responsibility of the developer. The landlord’s records show that it had been chasing this with the developer as early as 24 September 2021, when the developer agreed to provide a skip as an interim measure. The developer advised the landlord on 29 September 2021 that the skip was now in place outside of the bin store.
It seems clear from the resident’s email of 17 October 2021 that he had not been made aware of this interim measure. Nor seemingly had other residents, who were entering the bin store to leave their refuse inside – this requiring more effort than simply putting it into the open skip left nearby. An email from the developer to the landlord on 12 November 2021 supported this view stating that “we are continuing to supply a site skip which is located outside the bin store (road side) but the residents continue to not use this”. It asked the landlord to speak to residents and ensure they were aware of the skip.
In an email of 18 October 2021, the landlord told the resident it would arrange for the bin store to be cleared and cleaned. However, the landlord has provided no evidence that it followed through with this and it was not until 11 November 2021 that it asked the developer to clear the bin store – which it did the following day.
The landlord therefore failed not only to communicate with the resident (and seemingly others within the block) about the interim procedure whilst the bins were awaiting delivery, but also to act in a timely manner upon the resident’s concerns about the condition of the bin store and potential pest issues.
In his email of 17 October 2021, the resident asserted that he had been “told that the Wi-fi was ready to go and it was all set up” by the landlord, when in fact he discovered after completion that the building was “not ready to accommodate” wi-fi yet and wouldn’t be until 25 October 2021 – 3 weeks after he had completed his purchase.
The resident said that he relied on wi-fi for work and the lack of broadband in the building was a “huge issue” which inconvenienced him in being unable to work from home during this period. It was reasonable for the resident to expect internet services to be available at the point at which he moved in unless told otherwise, especially as the block had handed over from developer in June 2021 allowing plenty of time for any issues to be resolved.
In its stage 2 complaint response the landlord remarked only that the internet lines had been “installed in November 2021. We are not responsible for installing Wi-Fi. Customers are responsible for finding their own internet service provider”. Whilst the landlord is not responsible for providing wi-fi to residents, it is responsible under the terms of the lease for “service media” within the communal parts of the building – which would include the broadband lines. It therefore failed to ensure these were in place before the resident moved in, or to manage his expectations about the fact that they were not.
The landlord claimed in its stage 2 complaint response that its sales progressor had made the resident aware of supply chain issues causing a delay in the white goods being delivered to the property. It said the resident had not raised any concerns about this. However, in his email of 17 October 2021, the resident said “I was told I would be getting white goods in my kitchen for when I moved in”. This Service has not been provided with any further information in order to reasonably be able to prefer one version of events above the other.
However, it was unreasonable for the landlord to expect the resident to live in the property with no washing machine or fridge/freezer for almost 2 weeks until these were delivered on 14 October 2021. This meant the resident was unable to wash his clothes or store frozen and chilled food within the property and it would have been appropriate for the landlord to offer some compensation for the inconvenience and extra expense that this is likely to have caused him.
The resident raised 2 defect repair issues in his initial email of 17 October 2021. The first of these was a hole in the wall caused by the closer on property’s front door. The landlord informed him on 18 October 2022 that it would raise this with the developer and the developer attended and completed the repair on 22 November 2022. This was a reasonable timeframe for such a repair, which did not impact the resident’s enjoyment of the property beyond its cosmetic nature.
The resident also advised that he had noted concrete “sprayed” over the windows and French doors of the property when he had viewed it and had asked for this be removed, which it had not. He said, “I have attached pictures of two of my windows which aren’t easy to reach but I have ended up scraping the concrete of the rest of them myself as it was horrible to look at”.
The landlord misinterpreted this as the resident having removed all of the concrete, responding “I note that you have said that you have cleaned the concrete from the windows yourself – I will raise this with the builder to let them know of the issue and your disappointment but will assume that the issue is resolved and there is no work for them to do – please let me know if this is not the case”. This Service has seen no evidence that the resident responded to correct this error at that time.
The resident did, however, clarify the matter in his email of 8 January 2022. In this he raised the fact that the landlord had not addressed the concrete in its stage 1 complaint response repeating “like I said I could only get the bits off my french doors as it was disgusting but I can’t reach the other windows and it is all still there”. The landlord was put on notice of the defect repair at this point but failed to act or respond, despite the fact the property was still within its 12 month defect period, and it would be a simple case of referring the matter back to the developer to resolve.
Within its stage 2 complaint response the landlord continued to fail to recognise that the issue was outstanding saying that the resident had informed it that he had cleaned the concrete. The resident has advised this Service that he later arranged for the concrete to be removed at his own expense.
On 4 October 2021, when the resident completed his purchase of the property, the landlord filled in a ‘completion checklist’ with him. This notes the fact that there were no keys for the electric or water meter cupboards provided. The landlord does not appear to have followed up on this.
On 25 October 2021, the resident raised with the landlord that he was unable to access the meter cupboards in the communal area as he had not been provided with a key. On 4 November 2021, the landlord told the resident it had asked for a key to be sourced and provided to him.
When it provided its stage 1 complaints response, over a month later, the landlord offered only the fact that it had asked the relevant department to investigate the matter – despite it partially upholding his complaint on the basis it hadn’t provided him with access to the meters.
The resident told this Service that he was eventually provided with the meter cupboard keys “about 8/9 months after moving in”. The chain of events surrounding this is unclear as the landlord claimed in its email of 8 November 2022 that “when we were handed over the property by the developer we were not provided keys to the riser cupboards and we have been trying to work with them to get the correct keys” – indicating that at no point had it had these.
The email continued to explain that the landlord had taken the decision to change the locks on the cupboards and would provide all residents with a copy of the keys. It is of concern that the landlord claims to have been unable to access the communal electric cupboard for over a year after the properties became occupied. This has potential ramifications for serious issues such as fire safety and brings into question the quality and effectiveness of any estate inspections it carried out over this period.
The resident has described how being unable to access his meters and provide readings to his suppliers led to him being billed based upon estimates and as a result overpaying on his utilities for an extended period.
In summary, the landlord completed the sale of the property and allowed the resident to move in without white goods, broadband or communal bins. It failed to appropriately communicate with him or manage his expectations around these issues. The landlord then failed to appropriately address the defect issue with concrete on his windows, despite the resident making clear in his reply to its stage 1 response that this was still outstanding. These matters accumulated to cause distress and inconvenience to the resident and damage the landlord/resident relationship at its very earliest stages. This represents maladministration by the landlord.

Complaint handling

The resident raised his complaint on 23 November 2021, with the landlord providing its stage 1 response on 8 December 2021. This was in keeping with the 10 working days time frame contained in its complaints policy – when considering the resident’s complaint was submitted outside of office hours and would not have been received by the landlord until the following morning.
The landlord only addressed the lack of communal bins and access to meter cupboards in its stage 1 complaint response. This was despite the resident’s complaint containing the full email chain dating back to 17 October 2021 which covered all of the issues detailed in this investigation. This is not in keeping with the Ombudsman’s Complaint Handling Code (the Code) which is clear that “landlords must address all points raised in the complaint” and that “if any aspect of the complaint is unclear, the resident must be asked for clarification and the full definition agreed between both parties”.
The resident replied to the landlord’s stage 1 complaint response on the same day it was issued pointing out that it had not provided a response to all of the matters raised and he did not deem the response sufficient. The Code states that “if all or part of the complaint is not resolved to the resident’s satisfaction at stage one it must be progressed to stage two of the landlord’s procedure”. The landlord failed to do this, or even to respond to the resident’s email.
The complaint was drawn to the landlord’s attention again after the resident left a negative review for it online. Following this, the landlord asked the resident on several occasions to provide “evidence” to support his complaint. Even after the resident contacted the Ombudsman, which intervened on his behalf, the landlord maintained a stance that it did “not consider the issues you have raised as formal complaint and we are unable to investigate this matter any further unless you can provide evidence/ correspondence from Sage homes to yourself or representative”.
Whilst the landlord was entitled to ask the resident to produce any information he may have to support his complaint, he was not obligated to do this in order for his complaint to be investigated. As explained in the Ombudsman’s CHFO “A resident is not required to provide evidence of a failing before a complaint can be logged. Rather, a landlord should log a complaint when a resident raises dissatisfaction about the standard of service, actions, or lack of action by the landlord. The landlord then has the opportunity to investigate the resident’s complaint and provide its findings in a formal response”.
By refusing to escalate the resident’s complaint in this manner, the landlord unreasonably obstructed his access to its complaints process – and thus his ability to bring his complaint to this Service for investigation, for a period of approximately 12 months.
It is noted that the landlord’s policy in operation at this time did not contain any details of ‘exclusions’ from its complaints process. However, it is encouraging to see the landlord has rectified this in the current version of the policy which provides clear guidance in keeping with the Code.
The landlord did eventually provide a stage 2 complaint response to the resident on 23 January 2023 – over 2 months after the Ombudsman had ordered this as part of the CHFO. The fact that this response only repeated the information given in the landlord’s email of 4 November 2022 indicated that the landlord had not carried out an appropriate and impartial complaint investigation during this period in order to support effective dispute resolution. This is not in keeping with its own complaints policy which says that a “stage 2 review will only be completed after thorough and detailed investigation to ensure that the complaint has been handled in a fair and appropriate manner”.
In summary, the landlord failed to appropriately address all points of complaint raised by the resident at stage 1 of its process. It then unreasonably refused to escalate his complaint to stage 2, placing the onus on the resident to prove its service failures rather than it carrying out an appropriate investigation. This resulted in the resident incurring significant time and trouble seeking assistance from the Ombudsman to progress his complaint. The landlord then provided a stage 2 complaint response, but this was delayed and did not evidence that it had carried out an appropriate investigation.
The landlord failed to acknowledge any of the failings in its complaint handling or to offer the resident an apology and reasonable redress for these. This represents maladministration.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme there was service failure by the landlord in its handling of:
1. Financial incentives offered during the property sales process.
In accordance with paragraph 52 of the Housing Ombudsman Scheme there was maladministration by the landlord in its handling of:
1. Snagging issues with the property and block.
1. The resident’s complaint.

Reasons

The landlord failed to appropriately record the legal fees incentive it had offered, which resulted in this only being applied after the resident raised it. This caused the resident distress and inconvenience in rectifying this on the day of completion.
The landlord completed the sale of the property and allowed the resident to move in without white goods, broadband or communal bins. It failed to appropriately communicate with him or manage his expectations around these issues. The landlord then failed to appropriately address the defect issue with concrete on his windows, despite the resident making clear in his reply to its stage 1 response that this was still outstanding. These matters accumulated to cause distress and inconvenience to the resident and damage the landlord/resident relationship at its very earliest stages.
The landlord failed to appropriately address all points of complaint raised by the resident at stage 1 of its process. It then unreasonably refused to escalate his complaint to stage 2, placing the onus on the resident to prove its service failures rather than it carrying out an appropriate investigation. This resulted in the resident incurring significant time and trouble seeking assistance from the Ombudsman to progress his complaint. The landlord then provided a stage 2 complaint response, but this was delayed and did not evidence that it had carried out an appropriate investigation.

Orders and recommendations

Within 4 weeks of the date of this determination the landlord is ordered to:
1. Pay the resident compensation of £1,100 composed of:
  1. £100 for the distress and inconvenience caused by its handling of the financial incentives.
  2. £500 for the distress and inconvenience caused by its handling of snagging issues.
  3. £500 for the time and trouble caused by its handling of his complaint.
2. Apologise to the resident in writing for the service failure and maladministration identified in this report.
3. Review its processes during shared ownership sales to ensure that buyers are notified in advance, and in writing, of any communal facilities, service media etc. which will not be available at the time of completion of their purchase.
4. Take steps to remind relevant staff of the importance of ensuring a full set of keys, including those for communal areas, is received at handover of new build developments and distributed to residents in a timely manner.
The landlord should provide evidence of compliance with these orders to this Service.