A2Dominion Housing Options Limited (202116978)

REPORT

COMPLAINT 202116978

A2Dominion Housing Options Limited

5 December 2022

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 request for the suspension of rent payments for the period when the resident reported the property was unfit.

Background and summary of events

The property is a third floor, one bedroom flat. The resident is a shared owner and the lease began on 27 September 2011. A managing agent manages the property on behalf of the landlord and provides insurance cover for the building.
The resident pays the landlord rent on the share of the property that is owned by the landlord and pays separate service charges. The resident has confirmed to this service that she is seeking a refund of the rent and not the service charges.
Appendix 3 of the lease states: “Although initially the property is not owned outright, the leaseholder does have the normal responsibilities of a full owner. This means, for example, that the leaseholder will be obliged to…keep the property in good and substantial repair and condition”.
Clause 4.2 of the lease states:

“…The landlord covenants with the leaseholder as follows…at all times during the Term (unless such insurance shall be cancelled, invalidated or revoked by any act or default of the leaseholder) to keep the building insured against loss or damage by fire and such other risks as the landlord may from time to time reasonably determine…”

Clause 5.5 of the lease states:

“If the whole or any part of the Premises (or the Common Parts necessary for access to it) are destroyed or damaged by fire or any other risks covered by the Landlord’s or the Superior Landlord’s insurance so as to be rendered unfit for use then (unless the insurance money is irrecoverable by reason of any act or default of the Leaseholder) the Specified Rent or a fair proportion of it shall be suspended until the Premises (and the Common Parts necessary for access) are again fit for use.”

The resident contacted the landlord on 2 October 2020 to report a leak in her flat. The resident followed this up by emailing the managing agent on 7 October 2020 to make a buildings insurance claim and to advise that she had booked a specialist leak detection company to diagnose the cause of the leak. The managing agent replied on 13 and 14 October 2020 and requested a copy of the leak detection company’s report when available. The managing agent also confirmed it had appointed a loss adjuster to examine the claim.
On 25 October 2020, the resident emailed the landlord to confirm that the leak detection company had attended on 16 October 2020 and that further exploratory work would be needed.
On 2 November 2020, the resident emailed the landlord to report that the property was uninhabitable due to “health concerns” and that mould was present in one of the rooms. This was followed by a further email on 4 November 2020, in which the resident asked the landlord whether there was an option of not paying the rent while the property was “in disrepair”. The landlord responded on 6 November 2020, in which it referred the resident to the lease agreement (specifically clause 5.5) and suggested that the resident could contact the buildings insurer.
The resident exchanged emails with the loss adjuster on 10 February 2021 and confirmed that the leak had been caused by a defective bath waste pipe. She had therefore arranged for a plumber to carry out repairs in November 2020 and for further associated repairs to be done in December 2020, as the resident was responsible for all internal repairs under the terms of the lease.
The resident emailed the landlord on 10 February 2021 to say that the property had been uninhabitable since November 2020 due to the leak from the bath waste and that this had affected the whole flat. The resident added that she was expecting a credit for any rent paid to the landlord from November 2020. The email also mentioned that the bath waste pipe had previously been repaired by the managing agent in 2015.
The resident emailed the landlord on 24 February 2021 explaining that she had left a message during the previous week and had not received a call back. She then telephoned the landlord on 1 March 2021 to make a formal complaint because:
1. She had been unable to live in the property since November 2020;
2. She had sent emails to the landlord and had not received a response to her queries;
3. She had paid “service charges” even though she was not occupying the property.
The landlord emailed the resident on 4 March 2021 and apologised for the delay in replying. The landlord asked the resident to supply confirmation from the insurers that the property was uninhabitable and to provide details of where she had been staying. The landlord confirmed that that once it had the information, it would assist with the application for the rent to be “suspended” for the period the property was uninhabitable.
On 4 March 2021, the resident sent the landlord photos of the damage and provided details of where she had been staying. The landlord replied on 5 March 2021to explain that as it was not responsible for the bath waste pipe, it would not provide a refund of the “service charges”. The landlord said that the insurers should deal with the matter.
The landlord emailed the resident again on 8 March 2021 and asked whether the resident could provide confirmation from the insurers that the property was unfit as this would be helpful in processing the “rent suspension”. The landlord emailed the resident again on 11 March 2021 to request this confirmation.
The landlord emailed its stage one response to the resident on 16 March 2021. The main points contained in the response were:
1. The landlord gave a commitment to assist with the resident’s application to have the rent suspended;
2. The landlord apologised for the incorrect information given to the resident and offered £100 compensation for the resident’s “time, trouble, distress and inconvenience” (the email did not provide details of the ‘incorrect information’ that had been given, but the landlord has since clarified to this service that it related to previous advice indicating that the resident could engage her own professionally qualified person to assess the habitability of the property).
The resident emailed the landlord on 24 March 2021 and provided the following information:
1. A letter from the loss adjusters confirming that the property was unfit;
2. Photos of the leak damage and confirmation that “restoration” works were underway;
3. Confirmation that the property was uninhabitable from 10 November 2020 to 2 April 2021 (the resident later advised the landlord in an email dated 15 April 2021 that the actual dates the property was unfit were from 10 November 2020 to 9 April 2021).
On 29 April 2021, the landlord wrote to the resident to confirm that one of its surveyors would inspect the property and, after this inspection, the landlord would arrange the refund, which the landlord confirmed would be backdated to the dates provided by the resident.
During May 2021, the resident sent the landlord further photos of the damage and the works invoice that was included in the insurance claim. During this period, the resident also sent emails requesting updates from the landlord.
On 11 June 2021, the resident emailed the landlord and asked for her complaint to be escalated to stage two of the complaints process. The landlord sent its response to the stage two complaint on 13 July 2021 and the main points included in the letter were:
1. The landlord requested a copy of the report from the loss adjuster to confirm the property was uninhabitable;
2. The resident was asked for any correspondence from the insurance provider to confirm they had accepted liability for the costs of the remedial work and any sums due for the property while it was deemed uninhabitable;
3. The landlord confirmed that it would not be sending its own surveyor to inspect the property and apologised for giving this incorrect information to the resident;
4. The landlord said its understanding was that the building insurers would be the liable party for any rent payments;
5. The landlord agreed to provide a full response on the suspension of the rent payments when the resident had provided it with a copy of the loss adjuster’s report.

Post the internal complaints process

In response to the landlord’s stage two letter, on the 13 July 2021, the resident wrote to the landlord to say that she had already provided the information requested by the landlord to confirm the property was uninhabitable.
On 26 July 2021, the landlord wrote to the resident advising that it had reviewed the lease (including clause 5.5 of the lease) and that rent payments continued to be due while the property was unoccupied due to the water damage. The letter went on to say:
1. The insurers had provided and paid for alternative accommodation for the resident while the property was uninhabitable;
2. The insurers had covered the cost of the repairs;
3. As the insurers had covered the cost of alternative accommodation and the repairs, the resident did not experience any financial loss.
The resident responded to the landlord on the same date and advised that:
1. The leak had been caused by the bath waste pipe;
2. In relation to the remedial work, the resident had paid an excess sum of £15,000 on the insurance policy;
3. The resident stayed with friends and family while repairs were being carried out (between November 2020 and April 2021) and therefore the insurers did not pay for alternative accommodation;
4. There had also been a leak from the bath waste pipe in July 2014 and this resulted in the removal and refitting of the bathroom. In the resident’s view, this was an indication that the works at the time “were done to a poor standard”.
5. The resident said she would obtain further advice on whether the landlord was obligated under clause 5.5 of her lease to reimburse the rent payments while the property was uninhabitable.
The resident submitted a complaint to the Housing Ombudsman on 25 October 2021, in which she said that the landlord should refund the rent paid during the period November 2020 to April 2021.

Assessment and findings

Scope of investigation

TheOmbudsman’s role in this case is not to decide whether the property was unfit during the period specified by the resident, as this service cannot provide a technical assessment on the condition of the property. Also, the Ombudsman cannotmake a binding decision on whether the resident’s rent should have been suspended under the terms of the lease, as producing a definitive or binding ruling on the interpretation of the lease would be a matter for the courts or tribunal. Paragraph 42(g) of the Housing Ombudsman Scheme states: “The Ombudsman may not consider complaints which, in the Ombudsman’s opinion…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”.

Assessment

The resident’s repair responsibilities are contained in Appendix 1 of the landlord’s responsive repairs policy, which shows that shared owners are responsible for internal repairs, including leaking pipes inside the property.
The leak came from a defective bath waste pipe, which then caused other damage within the property. As the defective bath waste pipe and the damaged areas were inside the property, the resident was responsible for the repairs under the terms of the lease. The resident submitted a buildings insurance claim, and the property subsequently underwent significant repairs.
The resident first notified the landlord that the property was “uninhabitable due to health concerns” on 2 November 2020 when she reported that there was mould present in the property.
The landlord wrote to the resident on 11 March 2021 and asked her to obtain confirmation from a professionally qualified person that the property was unfit for use. The resident therefore wrote to the landlord on 24 March 2021 and provided a copy of a letter from the loss adjusters confirming the property had been uninhabitable.
The resident’s stage one complaint specifically mentioned that the lease contained provisions regarding the non-payment of rent in the event of a buildings insurance claim. The landlord’s stage one response, which was sent on 16 March 2021, did not address the resident’s point about the rent suspension and did not refer to the lease. The landlord’s failure to address the specific issues raised by the resident meant that the resident did not receive a comprehensive response to her complaint. Also, by not making reference to the provisions within the lease on insurance claims and rent refunds, the landlord missed an opportunity to manage the resident’s expectations in relation to her request for a rent refund.
The following is an extract from the Housing Ombudsman’s Complaint Handling Code:

Clause 4.8: “Where a key issue of a complaint relates to the parties’ legal obligations landlords should clearly set out their understanding of the obligations of both parties and seek clarification before doing so where this is not initially clear”.

Clause 5.6: “Landlords must address all points raised in the complaint and provide clear reasons for any decisions, referencing the relevant policy, law and good practice where appropriate.”

The landlord’s stage one response also gave a commitment to assist the resident with her application to have her rent suspended. However, the wording in the letter is unclear whether the landlord’s intention here was to consider refunding the rent itself, or whether it intended to assist the resident in her application for a refund from the insurance provider. The view of this service is that the landlord did not follow the guidance in the Complaint Handling Code in that it did not provide the resident with sufficiently clear information in its complaint response.
The landlord acknowledged in the stage one response that it had failed to respond to emails and had provided incorrect information to the resident (the landlord clarified to this service that the resident had been incorrectly advised that she could engage her own professionally qualified person to assess the habitability of the property). The landlord apologised and offered compensation of £100 “in recognition of your time and trouble in pursuing this matter as well as the distress and inconvenience caused”.
The resident confirmed to the landlord on 15 April 2021 that she did not occupy the property during the period 10 November 2020 to 9 April 2021 as it was uninhabitable. The resident requested confirmation of how the rent for this period would be repaid to her.
On 11 June 2021, the resident asked for her complaint to be escalated to stage two of the complaints process.
The landlord sent its stage two response on 13 July 2021, but again did not refer to the lease, and therefore did not address the resident’s question about whether the landlord was obliged to suspend the rent in the circumstances outlined in clause 5.5 of the lease. The landlord indicated that the insurers would be liable for any rent payments once the loss adjusters had provided the relevant information. However, the landlord did not:
1. Acknowledge that this advice contradicted the advice given by the landlord in its email dated 29 April 2021, in which it had confirmed that it would arrange a refund, backdated to the dates given by the resident;
2. Provide the resident with any information to confirm it had checked with the insurers that they would be liable for the rent payments.
The landlord should have acknowledged that its latest advice was different to earlier advice. Also, if the landlord was stating that the insurers were liable for the rent payments, it should have confirmed in the letter that this had been checked with the insurers. This service has not seen any documents to show that the landlord checked the question of rent liability with the building insurers. It was therefore unreasonable for the landlord to advise the resident that the insurers were liable for the rent payments without having checked first, as it risked providing the resident with incorrect information.
The landlord sent a follow-up letter to the resident on 26 July 2021, in which it addressed the resident’s query about the lease and specifically her query regarding clause 5.5 of the lease. The landlord quoted part of the clause and advised the resident that the clause was applicable where “the property was totally destroyed and the building insurers refused to cover the cost of the claim”. The landlord therefore stated that the clause was not applicable in the circumstances of this case.
This service would expect the landlord to have investigated the meaning of clause 5.5 and other provisions within the lease at a much earlier stage in the process, as it sets out the rights and responsibilities of both parties. As part of its investigations, the landlord could have obtained legal advice, rather than relying on its own interpretation. In the view of this service, the wording in the landlord’s letter dated 26 July 2021 was not clear, as clause 5.5 of the lease refers to circumstances where the premises are “destroyed or damaged”, whereas the landlord’s letter suggested that it only referred to the premises being “totally destroyed”.
The view of this service is that overall:
1. The landlord did not adequately respond to the resident’s request for the rent to be suspended;
2. The landlord did not give an early, clear explanation to the resident as to why it believed clause 5.5 of the lease was not applicable in these circumstances;
3. The landlord did not acknowledge that different advice had been given to the resident about whether the rent would be suspended;
4. The landlord did not indicate whether it had checked the question of liability for rent payments with the insurers.
As a result of these failings, the resident was not given clear information on the liability for the rent payments, nor was she given an adequate explanation of why the landlord believed clause 5.5 of the lease did not apply in these circumstances.
Although as part of its stage one response the landlord offered £100 compensation for “incorrect information”, in the view of this service it has not offered appropriate redress for the failures outlined in paragraph 40 of this report, because the £100 was only intended to reflect the incorrect advice that the resident’s own representative could determine the habitability of the property. An order below has therefore been made for the landlord to pay an additional £300 compensation to the resident to recognise the stress, time and trouble caused to the resident for the service failures and to recognise the length of time that has elapsed since the resident’s request for the rent to be suspended. The total compensation, including the £100 already offered by the landlord, is therefore £400.
The level of compensation ordered is in line with the Housing Ombudsman’s Remedies Guidance (available on the Housing Ombudsman’s website) for circumstances where the landlord has “made some attempt to put things right but failed to address the detriment to the resident…(and)…the offer was not proportionate to the failings identified by our investigation”.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in the way the landlord handled the request for the suspension of rent payments for the period when the resident reported the property was unfit.

Reasons

The resident was not given clear, timely information on whether the rent would be suspended for the period the property was reported as unfit. This resulted in the resident having to contact the landlord on various occasions to request clarification, including going through the complaints process.

Orders and recommendations

Orders

The landlord is ordered within four weeks to:
1. Take appropriate legal advice to review whether the rent should have been suspended under clause 5.5 of the lease;
2. Having carried out the review, write to the resident clearly setting out its decision, and the reasons for its decision, on whether to reimburse the resident for the rent while the property was vacant;
3. Pay total compensation of £400 (this sum includes the £100 already offered by the landlord);
4. Apologise to the resident for the service failures.

Recommendations

It is recommended that the landlord provides appropriate training to staff on dealing with requests for rent to be suspended when a property becomes uninhabitable.