Aster Group Limited (202209256)

REPORT

COMPLAINT 202209256

Aster Group Limited

18 March 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 complaint is about the landlord’s handling of the resident’s prospective purchase of a shared ownership property.

Background

The resident was a prospective purchaser of a shared ownership new build property, which the landlord was expecting to take handover of from the developer.

Complaint policy

The landlord’s policy stated that it operated a 2 stage process. It said that it would aim to provide a full response to complaints with 10 and 20 working days, at stages 1 and 2 respectively.
The policy said that where the landlord was unable to meet those timescales, it would explain the reasons why to the resident, and write to them again within a further 10 working days.

Compensation procedure

The landlord’s procedure stated that where compensation was offered. The resident’s acceptance of it must be recorded either by a signed declaration, or an auditable email from the resident.

Summary of events

On 9 June 2021 the landlord wrote to the resident to advise that the property she wanted to purchase had been reserved for her, and that the £250 reservation fee she had paid would be deducted from the sale price.
On 15 June 2021 the resident confirmed to the landlord that she was selling her existing property, which she was hoping to tie in with her purchase. The landlord told the resident that it was due to take handover of her property from the developer at the end of July 2021, but advised of the potential for this to be delayed. It said that it would have a better idea of sale completion dates once it had taken handover of the property from the developer.
The landlord and resident were in contact through July 2021. In early August 2021 the landlord told the resident that it was now expecting to take handover of her property on 21 October 2021. The resident expressed her disappointment with this, and described the difficulties it could cause with her own property sale. The landlord expressed its empathy to the resident, but advised her that she was responsible for her related sale. It stated that delays can happen with new builds, as it was reliant on the developer, and suggested that she discuss it with her estate agent.
In early September 2021 the resident told the landlord that her buyer was ready to exchange contracts, and asked whether the aim was still for her to move into her property in early November 2021. The landlord reiterated to the resident that new builds can be subject to delay, and that it did not yet have a definite handover date. It stated that the resident may need to ask her buyer to wait for her, or consider temporary accommodation.
During October 2021 the resident and landlord exchanged emails regarding various aspects of her property purchase, including carpeting, sheds, and the options for her to view the property. On 15 October 2021 the resident told the landlord that her buyer wanted to exchange that month, and shared her thoughts on temporary accommodation. The landlord told the resident that it had little control over the developer’s handover delays, and said that it was good that she had a plan if this continued to be the case.
On 4 January 2022 the resident told the landlord that having had her property purchase delayed since August 2021, she was really hoping to move in by the end of the month. She said that given the extra rental costs she was incurring as the result of the delay, the landlord should consider adding a shed to the property as a goodwill gesture. The landlord told the resident that it was trying to get an update, but that given how delayed the other plots on the development had been, it was not confident that her property would be handed over that month. It promised to provide any information it could as soon as possible.
On 9 January 2022 the resident complained to the landlord that she was not being kept in the loop, and was having to chase it for updates.
On 19 January 2022 the landlord offered the resident £2100 towards the cost of her carpets, and asked if she wanted to make a complaint. Over the following days the resident accepted the landlord’s carpet offer. She told the landlord that she had paid rent on her temporary home up until the end of March 2022, and needed to let her landlord know whether she needed to extend that further.
On 15 February 2022 the landlord told the resident that the developer was now targeting 31 March 2022 to handover the resident’s property, but emphasised that this date remained subject to change.
On 18 April 2022 the resident made her complaint to the landlord. Her key points were as follows:
1. She said that the landlord had told her that her she would be able to move into her new property in August 2021. She said that her move had been initially delayed to October, then to December 2021, and then further delayed to January, and then March 2022.
2. She explained the personal reasons why she had had to move out of her former property, which had been sold. She said that she was now paying £2300 per month rent, which she could not afford, and was at risk of becoming homeless.
3. She described the stress and impact on the mental health of her, and her children.
4. She asked the landlord to communicate more effectively, keep her better updated, and to expedite her property snagging and handover. She asked for compensation, and for the landlord to assist by providing a shed and curtains, in addition to the carpets it had previously agreed to.
On 22 April 2022 the resident sent several emails to the landlord. The landlord assured the resident that it was not ignoring her, and would be responding to her complaint.
On 27 April 2022 the landlord sent the resident an acknowledgment of her stage 1 complaint, and said that it would aim to respond by 12 May 2022.
During early May 2022 the landlord’s internal records referred to its contacts with the resident, and to its lack of confidence in the assurances being made by the developer. On 6 May 2022 its records said that it had told the resident that her property may not be ready for some time, and expressed its sympathy for her position.
On 12 May 2022 the landlord issued its stage 1 response to the resident, which referred to their subsequent emails and calls, and summarised her complaint. The landlord’s key points were as follows:
1. It acknowledged the stress that the situation was causing to the resident, and apologised on behalf of itself and the developer for how long the build was taking.
2. It explained that the delays had been exacerbated by COVID-19. It highlighted that the developer was on its seventh site manager, which it said was indicative of the difficulties the developer was having in completing the properties to a suitable standard.
3. It stated that despite repeated assurances, it was still awaiting warranty cover sign off. It described the works necessary to allow this. It explained that it could not take handover from the developer without the warranty, nor complete the resident’s purchase.
4. It explained the steps it was taking to expedite this with the ‘building director’, and its next steps in terms of de-snagging. It said that it would share the results with the resident once done. It stated that it would then need to decide if the workmanship was of a quality where it could take handover, and that the resident would also need to decide if it was acceptable to her.
5. It advised potential timescales, but accepted that the developer and building director had previously broken promises, and so it could not offer guarantees.
6. It acknowledged the resident’s unexpected costs, but stated that it was not legally obliged to cover this, nor offer her alternative accommodation. It explained that it had always been the resident’s decision whether to continue with the purchase, and that if she decided not to it would refund her reservation fee.
7. It said that it had endeavoured to keep the resident informed, but accepted that there had been some lapses in its updates. It stated its learning from this, and provided the resident with a main point of contact going forward.
8. It accepted the inconvenience of the delay, but stated that it had been due to matters outside of its control. It offered the resident £250 compensation for the communication issues, and a further £250 compensation for her time and trouble pursuing the matter. It repeated its agreement to carpet her property.
9. It advised how the resident could escalate the matter if she remained dissatisfied, and that this should be done by 26 May 2022.
On 23 May 2022 the landlord told the resident that it was still chasing an update on the warranty sign off, and assured her that it would keep trying.
On 24 May 2022 the resident asked the landlord to explain stage 2 of its complaint process, and to allow her an extension to request an escalation. The landlord responded to the resident with an explanation of its process, agreed to an extension, and asked if she could advise what aspects of its stage 1 response she was dissatisfied with. The landlord separately provided the resident a detailed update on her property, and the reasons the building warranty provider deemed it not fit for sign off.
On 26 May 2022 the resident gave her reasons for requesting a stage 2 escalation to the landlord. Her key points were as follows:
1. She accepted that sometimes things go wrong, and that she could have pulled out of her purchase, but highlighted that the landlord had repeatedly assured her that she would be moving imminently.
2. She asked that the landlord pay her £8000 for her rental costs, stress and anxiety, along with any future rental costs if the delays continued.
3. She asked for a full explanation of the outstanding issues with her property, and what the landlord was doing to address it.
The landlord had several subsequent contacts with the resident, and on 10 June 2022 it acknowledged that her complaint had been escalated to stage 2 of its process. It said that it would aim to issue its stage 2 response by 27 June 2022.
On 14 June 2022 the resident told the landlord that she had been shocked to hear that the warranty provider was no longer working on the site, and that her property was being left without a warranty. She described her sleepless nights, and the strain the situation was putting on her and her children.
On 27 June 2022 the landlord wrote to the resident to apologise that it had not finalised its stage 2 complaint investigation. It said that it was now aiming to issue its response to her by 11 July 2022. The resident said that the landlord called her the same day and advised her that due to the ongoing difficulties, it had cancelled the sale of her property.
On 11 July 2022 the landlord issued its stage 2 response to the resident. Its key points were as follows:
1. It said that the reassurance and updates that it had provided the resident had been made in good faith, and often first hand direct from site. It explained that it had taken this approach due to the extensive delays, but that the situation with the new build development had been unprecedented, and unforeseeable.
2. It said that it had addressed its communications at stage 1, but that it had reassessed its compensation offer, which it had increased from £500 to £2000.
3. It said that in addition it would reimburse the £1800 of transactional sale costs that the resident had incurred, and her £250 deposit. It said that the reimbursement of those 2 amounts was outside of its compensation policy, and would be paid to the resident irrespective of whether she felt that it resolved her complaint.
4. It advised that it was still working closely with its legal advisors and the developer, but was not currently able to continue with the sale of the resident’s property, and not yet able to advise when this might change.
5. It explained that the warranty provider, and the new homes building council (NHBC) had refused to guarantee the properties. It said that discussions were ongoing, and that it would keep the resident updated as promised.
6. It assured the resident that if it reached a position where it could legally accept handover of her property, and proceed with the sale, she retained first refusal.
7. It emphasised that it had done everything possible to progress the development under unique circumstances, which it said it had never before encountered. It apologised for the upset the situation had caused the resident.
8. It provided a bank details slip for the resident to complete and return, which stated that she accepted the £2000 compensation in settlement of her complaint.
9. It referred the resident to this Service if she remained dissatisfied.

Summary of events after the completion of the landlord’s complaint process

In early August 2022 the resident asked the landlord why it had not yet reimbursed her £2050 costs as it had promised. The landlord replied that it was waiting for the resident to provide her bank details. The resident highlighted to the landlord that its stage 2 response had only stated that she needed to provide bank details for her £2000 compensation payment, which she did not wish to accept. She said that she had expected her £2050 costs to be refunded to her account from which she had paid them, and provided the landlord her bank details.
On 22 and 31 August 2022 the resident chased the landlord again regarding the reimbursement of her costs, and highlighted that it had been 2 months since it had cancelled her property purchase. The landlord replied to the resident requesting her bank details. The resident highlighted that she had already provided the landlord her bank details, but sent them again.
On 14 September 2022 the resident again chased the landlord for reimbursement of her £2050 costs. The landlord confirmed that the payment had been processed, and was due to reach her account by 22 September 2022.
The landlord provided this Service with evidence of its ongoing discussions with the developer, and warranty provider, up until the point where it took handover of the resident’s prospective property in July 2023. The landlord said that it gave first refusal on the property to the resident, but that she had advised that she had bought another property, and no longer wanted it.

Assessment and findings

The landlord evidenced its engagement with the property developer throughout the process. It highlighted to the resident that the delays, and the fact that it was unable to legally accept handover of her prospective property, had occurred for reasons beyond its control. However, it accepted that there had been some lapses in its communications to the resident during the unsuccessful sales process.
The landlord further considered what it described as the unprecedented situation with the developer, and the distress and inconvenience the resident had experienced. It offered the resident £2000 compensation, along with a £2050 refund of her associated transactional costs.
The resident had sold her previous property, and rented another while she waited for the landlord to take handover of the property, and progress the sale to her. The resident emphasised the significant financial cost of this, and stated her belief that the landlord’s compensation offer should be substantially increased to cover her rental costs. The landlord acknowledged the expense that the resident had incurred, but highlighted that this had not been as a result of any failing on its own part, and that it had no legal obligation to cover her costs.
It is not the role of the Ombudsman to determine legal liability. If the resident believes that the landlord does have a legal obligation towards her housing costs, this would be more appropriately considered by the Courts. This is because the decisions of the Court are legally binding, whereas the Ombudsman’s decisions are not. The resident may wish to take independent legal advice if she believes this to be the case.
The resident was clearly looking forward to moving into her new home, and the Ombudsman readily acknowledges how impactful the many months of delays, and her ultimately unsuccessful purchase, would have been for her and her children. Nevertheless, the Ombudsman has seen no evidence that the landlord could have either foreseen or prevented the developer’s delays, nor that its communications to the resident were made in anything but good faith, based on the available information.
It was appropriate for the landlord to apologise that its contacts and updates to the resident were not always made in a proactive or timely manner, and to offer her compensation. The landlord’s offer of £2000 compensation considered the significant time, trouble, and distress that the resident had experienced over a prolonged period, and was in line with the Ombudsman’s Remedies Guidance. As such, it is the view of the Ombudsman that there was reasonable redress offered by the landlord for the communication failings identified during its handling of the resident’s prospective purchase of a shared ownership property.
The landlord confirmed the resident’s reservation of her property in June 2021, and advised her that the handover of the property from the developer was due at the end of the following month. It was appropriate for the landlord to also advise the resident of the potential for this to be delayed. The landlord repeated this advice to the resident at various stages of the overall matter, which demonstrated its efforts to manage expectations. At the start of August 2021, the landlord told the resident that the property handover was not now expected until October 2021. Over the following weeks the resident explained the personal reasons why it was necessary for her to complete her own property sale, and moved into rented accommodation.
Over the remainder of the year the resident found it necessary at times to chase the landlord for updates. In January 2022, the resident expressed her frustration that the landlord was not keeping her “in the loop”. She highlighted the rental costs that she was incurring, and detailed the goodwill gestures that she thought reasonable for the landlord to provide.
The landlord was meeting the developer regularly throughout this time. It would have been well aware of how the developer’s difficulties and delays were impacting the resident, and of how stressful this period would have been for her. As the landlord did later recognise, it was a failing that the resident had to chase it for information rather than proactively keeping her informed, which would have further added to her distress.
It was appropriate for the landlord to commit to providing the resident with updates as soon as information became available to it, and to advise her of her right to make a complaint. It was further reasonable for the landlord to agree to carpet the resident’s property as a goodwill gesture after its handover, which demonstrated a resolution focused approach.
In February 2022 the developer again pushed back the potential handover date until the end of March 2022, and it was again appropriate for the landlord to be clear with the resident that this date remained subject to change.
The resident made her complaint to the landlord on 18 April 2022, and again asked that it communicate more effectively with her. It was a failing that the landlord took 17 working days to issue its stage 1 response to the resident, which was 7 working days beyond the timeframe of its policy. The landlord did however maintain contact with the resident in the intervening period, and on 6 May 2022 advised her that it could still be some time before her property was ready.
The landlord issued its stage 1 complaint response to the resident on 12 May 2022. The landlord expressed empathy with the resident’s position, and provided a comprehensive explanation and update of the issues that were preventing the handover of the property. It advised potential timescales, but again highlighted the developer’s previous broken promises, and the potential for continued delays. As above, it was appropriate for the landlord to acknowledge its ‘communication lapses’, and to offer the resident compensation.
The resident asked for her complaint to be escalated to stage 2 of the landlord’s process on 26 May 2022. Over the following month the landlord had regular contact with the resident, and the issues with the warranty provider became apparent. The landlord wrote to the resident 20 working days after her complaint had been escalated, to advise that it had not yet completed its investigation. It advised that it would issue its stage 2 response to the resident in a further 10 working days, which was in line with its policy. The resident said that her purchase of the property was cancelled the same day.
The landlord issued its stage 2 response to the resident on 11 July 2022. It was appropriate that it again expressed empathy, and provided a comprehensive update of the situation.
The landlord’s internal communications had noted that it was not legally required to reimburse the resident’s costs, but that it considered it appropriate to do so in the circumstances. It was therefore reasonable that the landlord stated that it would reimburse the resident’s £2050 of costs, retain her first refusal of the property, and increase its offer of compensation to £2000. This again demonstrated the landlord’s resolution focused approach.
However, while it is the view of the Ombudsman that the redress the landlord offered to the resident was reasonable, its handling of her compensation offer was not. The wording of the landlord’s stage 2 response, and bank details slip, implied that its £2000 offer of compensation was contingent on the resident accepting it in settlement of her complaint. It is reasonable to conclude that the resident’s refusal of the landlord’s offer was due to her understandable belief that her acceptance of it would limit her ability to take the matter further, including referring her complaint to this Service.
The landlord’s handling of its £2000 compensation offer to the resident caused confusion, and unreasonable delays to its subsequent reimbursement of her £2050 costs. Furthermore, the landlord’s handling of the offer was also misleading and inaccurate. It was appropriate that the landlord followed its procedure with regards to obtaining an auditable record of the resident’s acceptance of its compensation offer. However, the landlord could not have prevented the resident from approaching the Ombudsman, regardless of whether she believed its compensation offer settled her complaint.
The landlord should have ensured that its communications did not imply otherwise, and the Ombudsman has made a recommendation to this regard.

Determination (decision)

In accordance with paragraph 53(b) of the Scheme, and in the Ombudsman’s opinion, there was reasonable redress offered by the landlord for its handling of the resident’s prospective purchase of a shared ownership property.

Reasons

It is acknowledged that the resident will be disappointed with the determination. The Ombudsman sympathises with how stressful the resident described the unsuccessful property purchase process to be, and does not dispute the unexpected costs that she incurred.
Nevertheless, the Ombudsman has seen no evidence that the landlord could have foreseen or prevented the developers delays, nor that it provided the resident with anything other than the information that was available to it at the time. The landlord emphasised to the resident its reliance on the developer, and the potential for delays throughout. The Ombudsman is also unable to determine legal liability of the resident’s housing costs, which would be more appropriately considered by the Courts.
The landlord accepted that at times the resident had needed to chase it for updates during a period that would have already been very stressful for her, and that its communications were not always as timely as they should have been. The landlord made an offer of compensation that was in line with the Ombudsman’s Remedies Guidance.

Recommendations

The Ombudsman recommends that the landlord review its staff training needs, to ensure that it makes residents aware of their right to refer complaints to this Service, regardless of whether they have accepted its offer of compensation.
The Ombudsman’s finding of reasonable redress is based on the landlord’s compensation offer to the resident of £2000. The landlord should reoffer this award to the resident if it has not already done so.