Peabody Trust (202220019)

REPORT

COMPLAINT 202220019

Peabody Trust

9 August 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:
1. Accuracy of information presented by the landlord to the resident during the sales process of the property.
2. Landlord’s communication regarding its requirement for the resident to remove a shed from the property’s patio.
3. Landlord’s complaint handling.

Background

The resident is a leaseholder of a 2-bedroom ground floor flat, with a patio to the front of the property. The lease started in May 2021. The landlord does not own the freehold of the property and is the head leaseholder in this case. A managing agent acts on behalf of the freeholder. The landlord has no recorded health vulnerabilities for the resident.
During the resident’s purchase of the property, she says the former owner informed her the sale included a shed. The resident says she was told by the former owner the landlord had given consent to erect the shed approximately 5 years earlier.
On 10 November 2022 the resident raised a stage 1 formal complaint to the landlord. She said after almost 18 months at the property, the freeholder’s managing agent had posted a letter instructing her to remove the shed. The letter said she was in breach of her tenancy conditions and may result in legal action. She considered she had been mis-sold the property by the landlord and the loss of the shed would remove storage, which had influenced her decision to buy it. She also said she was dissatisfied with how the landlord had communicated the need to remove the shed.
On 14 November 2022 the landlord emailed the resident its stage 1 complaint response. It provided a further update on 29 November 2022. It said that:
1. It apologised if the letter regarding the shed caused upset.
2. It did not own the property and had been informed by the freeholder’s managing agent that several flats on the development had sheds which breached the lease agreements.
3. It had only found out itself “a few weeks earlier” regarding the managing agent’s concerns. It advised the managing agent had been “insistent” that the resident must remove the shed.
4. While she was in breach of her lease, it was also in breach as the head leaseholder. It acknowledged the situation was in no way her fault, as she had purchased the property unaware of the breach. However, it required her to make arrangements to remove the shed to rectify the situation.
5. It apologised for the disappointment its communications had caused. It recognised the disappointment of removing the shed and offered the resident £1,000 compensation.
On 25 January 2023 the resident asked to escalate her complaint to stage 2 of the landlord’s internal complaints process (ICP). She said:
1. The landlord’s letter and threat of legal action regarding the need to remove the shed had caused her “trauma and psychological pain.”
2. The landlord’s sales process had “misled her” to enter a purchase for a property by “deception.”
3. Her mental wellbeing had been affected by the landlord’s actions and she was now on a waiting list for counselling support.
The landlord provided its stage 2 and final response on 7 March 2022. It acknowledged the shed had been in place prior to the property sale. It said as head leaseholder it did not have the discretion to change the terms of the lease or allow the shed to remain. It was therefore obliged to correct this error. It acknowledged the situation was no fault of the resident but had found no evidence of consent ever being given for the shed. The landlord offered £1,050 compensation.
The resident brought her complaint to the Ombudsman. She did not consider the landlord’s compensation offer proportionate to “its actions or the lifelong effects these would have on her.” Her complaint became one we could consider on 7 March 2023.

Assessment and findings

Jurisdiction

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Scheme. When a complaint is brought to us, we must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.
After carefully considering all the evidence, in accordance with paragraph 42 (f) of the Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction:
1. Accuracy of information presented by the landlord to the resident during the sales process of the property.
Paragraph 42 (f) of the Housing Ombudsman Scheme states that the Ombudsman will not investigate complaints which concern matters where the Ombudsman considers it quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, other tribunal or procedure.
The resident says the landlord’s advertising and marketing of the property influenced her decision to purchase the property. She understood from the former owner, the landlord’s marketing photographs and sales advertisement, and inventory that the property was inclusive of a shed. The resident’s complaint states the landlord knowingly “misled her and sold the property by deception.” She felt the landlord had told her to remove the shed after it secured the sale. She considered she had purchased a property that did not meet her needs.
It is clear the resident’s experience at the property has fallen below what she had expected. While we acknowledge and are sympathetic towards her situation, the resident’s solicitor would have been involved. The solicitor would have had opportunity to identify and address any concerns regarding the property’s lease agreements prior to completion of the purchase. Therefore, any dispute regarding the sales process or terms of the lease agreement requires a decision by a court or tribunal service. It is outside of the jurisdiction of the Housing Ombudsman Service and will not form part of this investigation. The resident may wish to seek free and independent legal advice from the Leasehold Advisory Service (LEASE).

Scope of investigation

The Ombudsman notes the resident’s correspondence said the landlord’s handling of matters which led to her complaint had affected her mental wellbeing. She described requiring psychological support to assist with depression and sleepless nights. We do not doubt the resident’s comments.
While we are an alternative dispute resolution service, we are unable to establish legal liability on whether a landlord’s actions or lack of action have had a detrimental impact on a resident’s health. Nor can we calculate or award damages. We are therefore unable to consider any personal injury aspects of the resident’s complaint. Such decisions require an assessment of liability and are decided by a court or insurer. The resident may wish to seek independent legal advice if she wants to pursue a claim for damages for any adverse effect on her health.
We also note the resident’s dissatisfaction with the landlord’s requirement to remove the shed from the patio area. She disagreed with the decision and said the shed had been in place before she purchased the property. While we acknowledge the resident’s dissatisfaction and upset, any dispute regarding the terms, conditions, and requirements of the resident’s lease agreement are a matter for a court or tribunal service. While we can consider the landlord’s communication in this matter, the resident will need to seek independent legal advice if she disputes the terms of the lease.
In reaching a decision about the resident’s complaint, we consider whether the landlord has kept to the law, followed proper procedure and good practice, and acted in a reasonable way. Our duty is to determine the complaint by reference to what is, in our findings, fair in all the circumstances of the case. Where the Ombudsman identifies a failure by a landlord, we can consider the resulting distress and inconvenience.

Landlord’s communication regarding its requirement for the resident to remove a shed from the property’s patio

Upon receipt of a hand delivered letter from the managing agent, the resident emailed it on 2 September 2022. She advised she had been at the property for more than a year and the shed had been in place for more than 5 years. She expressed dissatisfaction that the managing agent did not speak to her in person and requested the appropriate consent forms.
While we acknowledge the resident’s dissatisfaction with how she was first informed of the tenancy breach, her disappointment at this stage was not with a member landlord of the Housing Ombudsman Scheme. Paragraph 25 of the Scheme states that there needs to be or have been a landlord and tenant relationship with a member of the Scheme. Therefore, this interaction would be a separate complaint, directly with the managing agent, and is outside of our jurisdiction.
However, on 5 October 2022 the landlord emailed the resident a similar tenancy breach warning. It specifically said it had been informed that the resident had placed a shed outside the property. It advised the lease did not permit this, nor had it or the managing agent given consent. Its letter informed her that it required her to remove the shed with “immediate effect.”
While the landlord had a legal obligation to ensure the resident was complying with the terms and conditions of her lease agreement, its email lacked any demonstration of an investigation of the situation. Had the landlord’s teams communicated prior to sending the tenancy breach email, it would have identified the shed had been present during the property sale in May 2021. Being inadequately prepared and not using the accurate information available to it, the landlord’s communication left the resident feeling accused of something she had not done. At this stage, the landlord’s communication was insensitive and caused the resident distress.
On 6 November 2022 the resident approached her local councillor for assistance. The councillor wrote to the landlord and managing agent on 7 November 2022 and received the landlord’s responses on 10 November 2022. While the landlord’s policies are silent on the timescales for responding to such enquiries, a timescale of 3 working days was reasonable in the circumstances.
On 11 November 2022 the landlord provided the councillor with an update. It said the managing agent had insisted on the removal of the sheds and it was therefore required to “strictly follow the lease terms.” While this decision would understandably have been upsetting for the resident, the landlord was not the final decision maker. It demonstrated making enquiries on her behalf and provided prompt communication to her and to the councillor regarding the freeholder’s decision.
There is evidence the landlord wrote to the resident on 14 November 2022. It apologised for any upset caused and reminded the resident of the terms of her lease. It was appropriate for the landlord to rely on the terms of the lease agreement as both the resident and landlord were legally obliged to adhere to them. The lease and head lease terms state that:
1. The head lease did not permit the resident storing anything in or on the grounds forming part of the premises.
2. The terms of the lease agreements required the resident to obtain consent from the landlord to make alterations.
3. The resident was not permitted to do anything that may render void the building’s insurance.
On 29 November 2022 the landlord wrote to the resident. It offered its sincere apology for her dissatisfaction. It advised it “was not its intention to mislead her. It was unaware that the shed was breaching the lease and believed it came with the property.” It apologised and offered £1,000 compensation for the disappointment caused.
While the matter of whether the shed should have formed part of the sale requires a decision by a court or tribunal, the landlord has demonstrated providing the resident with timely responses. It has referred to the resident’s lease, the terms of the head lease, and provided this information to the resident and her local councillor. It has demonstrated its attempts to communicate with the freeholder’s managing agent and informed the resident of the outcome. While the outcome was not what the resident hoped for, the landlord’s communication, once it identified the resident was not at fault, was empathetic and apologetic.
The landlord’s email to the resident on 29 November 2022 states it was unaware the shed was breaching the terms of the lease. While the landlord apologised for any effect on the resident, it did not demonstrate a landlord undertaking effective scheme inspections or maintaining accurate records.
It is good practice for landlord’s to complete inspections of its stock. Had the landlord undertaken this practice effectively, it would have been aware of any tenancy breaches and could have dealt with them. Given there is evidence that the former owner had erected the shed approximately 5 years prior to the property sale, it is unclear why this matter had not been picked up sooner. This demonstrates a record keeping failure.
While it would understandably be upsetting to receive any communication that refers to potential legal enforcement action, these forms of communication are reasonable. It is important for landlords to communicate clearly. By informing the resident that legal action was a possibility, it informed the resident of the seriousness of the required action. This was reasonable in the circumstances.
On 7 March 2023 the landlord provided it stage 2 final response. There is evidence the landlord’s stage 2 investigation did not agree with the compensation award made at stage 1 of its ICP. The response sent by the landlord:
1. Reminded the resident of the property’s lease conditions.
2. Reiterated the landlord’s obligation to correct the breach of tenancy conditions.
3. Accepted the shed was visible in photographs used to market the property but was satisfied it had made no reference that the shed formed part of the sale. It said it had referred to a cycle store, which the resident has access to in the basement of the development.
4. Said it was reasonable that the resident’s solicitor would have checked the covenants of her lease and the head lease as part of their obligations as her legal representative overseeing the sale. While it acknowledged the inventory provided by the former owner included the shed, this did not supersede the terms of the lease.
5. Advised the resident that its complaint handling process was “unsuitable” to consider the resident’s claims of mis-selling. It encouraged the resident to seek independent legal advice.
6. Said it “did not entirely agree” that £1,000 compensation offered at stage 1 was proportionate to the complaint. However, “in the interest of good customer relations and recognition of the resident’s comments relating to her mental health,” it upheld the award. Furthermore, it offered an additional £50 to put right the identified complaint handling delays.
The landlord’s compensation policy states it will consider compensation of £401 to £600 for a resident’s time, trouble, and inconvenience when “extensive disruption” has been caused by the landlord’s service failure. While the landlord’s opinion of the failure changed between its stage 1 and stage 2 response, it honoured its stage 1 offer. The offer of £1,000 for this complaint point exceeds the suggested level of redress within the remedies guidance available to us.
Therefore, it is our finding that the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, satisfactorily resolves the landlord’s communication regarding its requirement for the resident to remove a shed from the property’s patio.
communication regarding its requirement for the resident to remove a shed from the property’s patio the landlord’s communication in this matter.

Complaint handling

The landlord operates a 2 stage complaints process. It states that a resident can expect a response within 10 working days at stage 1 and within 20 working days at stage 2. If more time is required this should not exceed a further 10 working days without good reason and be agreed with the resident in advance. This is appropriate and in line with the Housing Ombudsman’s Complaint Handling Code (the Code).
The resident raised her stage 1 complaint on 10 November 2022. The landlord acknowledged the resident’s complaint the same day and provided its stage 1 response on 14 November 2022. This was appropriate and in line with the landlord’s complaint handling policy.
The resident escalated her complaint to stage 2 of the landlord’s ICP on 25 January 2023. She should therefore have expected an acknowledgement by 1 February 2023 and a stage 2 final response by 22 February 2023. The landlord failed to meet these dates by 3 working days and 9 working days, respectively.
While the nature of the resident’s complaint was understandably causing her distress, the detriment of these short response delays would have been minimal. However, it was appropriate for the landlord’s stage 2 response to acknowledge the complaint handling failures and offer £50 compensation. This was reasonable in the circumstances and demonstrated the landlord’s attempts to put things right.
Based on the above, we consider that the compensation amount offered for the landlord’s identified complaint handling failures was reasonable and proportionate in the circumstances. Therefore, we find that the landlord has offered reasonable redress in this matter.

Determination

In accordance with paragraph 42 (f) of the Scheme, the resident’s complaint about the accuracy of information presented by the landlord to the resident during the sales process of the property is outside the Ombudsman’s jurisdiction.
In accordance with paragraph 53 (b) of the Housing Ombudsman Scheme, the landlord made an offer of redress which, in the Ombudsman’s opinion, satisfactorily resolves the matter of the landlord’s communication regarding its requirement for the resident to remove a shed from the property’s patio.
In accordance with paragraph 53 (b) of the Housing Ombudsman Scheme, the landlord made an offer of redress which, in the Ombudsman’s opinion, satisfactorily resolves the matter of the landlord’s complaint handling failure.

Recommendations

The landlord is encouraged to reoffer the £1,000 compensation offered at stage 1 of its ICP if it has not already been paid.
The landlord is encouraged to reoffer the £50 compensation offered at stage 2 of its ICP if it has not already been paid.
The landlord is encouraged to review the Housing Ombudsman’s May 2023 Spotlight Report on Knowledge Information Management (KIM). It should use the recommendations in the report to inform its future record keeping practices to aid service delivery.