Landlords can now complete the Complaint Handling Code Annual Submissions form. More information is available online.

Arhag Housing Association Limited (202100545)

Back to Top

REPORT

COMPLAINT 202100545

Arhag Housing Association Limited

19 January 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

  1. The complaint is about:
    1. The landlord’s offer of compensation in respect of the handling of the initial Right to Acquire (RTA) application and subsequent complaint handling.
    2. The resident having to submit a new RTA application form once the decision was changed.

Background and summary of events

  1. The resident and his family moved into the property in 2006. No tenancy agreement has been provided.

Guide to the right to acquire (RTA)

  1. The Guide to the Right to Acquire (RTA) dated May 2015 lists the residents eligible to apply.  It says a form must be completed and sent to the landlord. Step two says the landlord has four weeks to reply if the qualifying period is with the current landlord.  An example of a RTA1 (form to apply for RTA) is given.

The complaints policy

  1. The landlord’s online complaints policy says the landlord will respond in 10 working days at stage one, two and three.

The landlord’s compensation policy

  1. The landlord’s online compensation policy sets out its approach for service failure including the failure to meet service standards. A table at page six suggests £10 for failure to respond to a complaint on time, or £10 plus £2 per day up to maximum of £50 when the published standard is not met. It stipulates a flat rate of £25 where a resident has spent an unreasonable time pursuing a valid complaint and £25 for a minor service failure where a misunderstanding has caused inconvenience.

Summary of events

  1. A land registry record entry shows the property was transferred to the ownership of the landlord on 17 July 2000.             
  2. A ‘gov.uk’ list dated January 2013 shows the RTA discounts by location and the discount available in the resident’s borough as being £13,500.
  3. An email dated 14 November 2019 showed the resident asked the landlord for RTA forms and asked how much his discount would be.  There is an undated letter responding to such an enquiry which enclosed the RTA form and gave the discount for the property as £16,000 and referred to the discount guide.
  4. No document has been provided to this Service with respect to any communications between the parties after the email of November 2019, until September 2020. The landlord confirmed receipt of the RTA application on 25 September 2020 and apologised that no earlier form was recorded as having been received, and that the resident did not get a call back as he had requested. The landlord said the RTA application may take 6-8 weeks.
  5. The landlord wrote to the resident on 15 October 2020 and denied the RTA on the grounds that the property was built or bought before April 1997.
  6. An undated RTA2 (‘notice in reply to tenants right to acquire claim’) form signed off by the Head of Housing, denies the RTA due to the property being purchased ‘using a private loan and not wholly using public funds.’
  7. A further undated document provided by the landlord, detailing the resident’s RTA application, says homes to be bought under the RTA must have been paid for through a social housing grant and built or bought by the housing association after 1997. The form says that the resident’s tenancy started in August 2006, and they qualified for the scheme as they had been there more than five years. It also states that the property was purchased or built on 1 March 2000 using the social housing grant.   
  8. On 17 October 2020, the resident asked the landlord for details of when the property was purchased and how, and whether he could be offered another property that he could acquire.  
  9. The landlord updated the resident on 23 October 2020 to say that it needed to get further information and it hoped to respond by 6 November 2020. In its response of 5 November 2020, the landlord explained that the RTA refusal would be revised. It said that it had no other properties it could offer the resident.  It confirmed that the property was leased to it in 1995 and then purchased via a private loan in 2000 making it ineligible for RTA. The landlord apologised that the previous refusal was on the wrong grounds.
  10. The resident approached his MP who wrote to the landlord on 30 November 2020. The MP said that the original RTA form submitted in February 2020 was mislaid. The resident submitted another on 25 September 2020 and had been advised he did not qualify as the property was built before 1997, after being previously advised he did qualify. He had submitted a FOI request and discovered the property was purchased by the landlord from the council in 2000. The landlord had said it could not make another offer through the RTA scheme. The MP asked if the resident could be allowed to acquire this or another property, or if the landlord could convert the attic into bedrooms.
  11. The landlord replied to the MP on 2 December 2020 and explained that the resident was wrongly advised; that the property could not be purchased under the RTA as it was bought in 2000 using a private loan. It did not respond to an application in February 2020 as it had no record of this, but the response would have been the same. The landlord initially leased the properties in October 1995 then bought them via a private loan in 2000, making them ineligible for RTA. It was a small landlord and had no other properties to offer the resident. It was not able to offer a programme for a loft extension to any of its suitable accommodation to ease overcrowding, but the resident could register for an internal transfer, although there were others before him. 
  12. There is no evidence of further communication between the parties until an email from the resident to the Head of Housing on 21 March 2021. The resident attached an application for a transfer while the landlord was considering his request to acquire the property and said he would only consider a transfer that was eligible for the RTA.
  13. The landlord wrote to the resident’s MP on 24 March 2021 and said that the decision outlined in its response of 2 December 2020 had not changed. It had the resident’s application to transfer which it would review but looking to purchase a property was not a criterion to transfer.
  14. On the same day, the landlord emailed the resident as follows:
    1. The resident’s request to transfer would be reviewed but the RTA is not a condition of that process and there had been no 2/3-bedroom properties available for over three years.
    2. The landlord again suggested transferring to another landlord.
    3. The landlord was not in a position to transfer the resident to a property to buy.
    4. It was a small landlord with limited resources and not in a position to fund a loft extension.
    5. The landlord apologised if the resident felt he was misled.
    6. The landlord could not sell the resident his home as it did not fall into the criteria to allow a RTA.
    7. It confirmed that a private loan was wholly used to purchase the property.
    8. He was advised that he could escalate the matter to this Service.
  15. Following contact from the resident’s MP, the landlord was approached by this Service on 13 April 2021 to send the resident a final response letter. It wrote to the resident on 23 April 2021 and said the matter must complete stage three of its complaint process first, and the resident would get a response in ten working days.
  16. An internal landlord email dated 28 April 2021 said that the property was bought with a social housing grant as well as a bank loan, therefore the refusal was due to the bank loan element. However, it was clarified that it seemed the tenant did have the RTA; there were no regulations stating all the costs had to be met by the social housing grant. The landlord also considered whether legal advice had been sought on the matter.  Further internal clarifications confirmed that the property was leased from 1995 and bought by landlord in 2000 using both a grant and private loan. The RTA was refused as the purchase used a private loan. If this was in error the landlord would retract the refusal and review all similar cases to ensure no other residents had been disadvantaged.
  17. The landlord issued a stage three complaint response from the CE on 13 June 2021:
    1. It apologised for the delay and confirmed that the resident was wrongly advised that he was not entitled to RTA, this was a serious error on the part of the landlord.
    2. A further application form was attached.
    3. The landlord said that the resident may wish to investigate alternatives as his family were overcrowded and any application to convert the loft would need the freeholder’s permission and a loft conversion may not be technically feasible. 
    4. The landlord again suggested other housing associations who offered shared ownership or home buy schemes within the local area and that the resident apply for a transfer, albeit there would be significant delays.
    5. Compensation was offered; £50 for distress and inconvenience and £25 for time and trouble due to poor complaints handling.
    6. The landlord said that the learning was that it would review all refused cases to ensure this serious error was not repeated, and all salient officers would attend training relating to the sale of properties.
    7. He was advised that he could escalate the matter to this Service.

Post Final Response

  1. On 19 June 2021 the resident asked the landlord if it could use the previous RTA form and said that the sum offered in compensation was an insult. The landlord responded on 21 June 2021 to ask the resident to suggest a more suitable level of compensation. It explained that a new RTA form would be needed as it was several months since the initial application. Once the new form was received it would be processed as a matter of urgency.

Assessment and findings

The offer of compensation  

  1. The landlord has acknowledged its service failure in respect of its handling of the RTA application. This investigation therefore focuses on the appropriateness of the compensation offered by the landlord, as the service failure is not in dispute.
  2. There is no evidence of the RTA application the resident stated he submitted in February 2020, and the landlord has said it had no record of this. There is no indication this was chased beyond one phone call which was noted but not returned. It would be reasonable for the resident to have made more robust enquiries regarding the application between February and September 2020.   Therefore, there are no grounds to indicate that the landlord failed in its response to an RTA application prior to the one which was acknowledged in September 2020. This is not to suggest that the earlier form was not sent, but had the resident checked earlier, the matter could have been rectified nearer the time.
  3. The resident was initially told that the discount for his property was £16,000 and later the figure of £13,500 was confirmed. It would seem from the document dated 2013 that the figure was £13,500 at the time the resident started the RTA application. Although this was not a core aspect of the complaint, it points to further confusion about the process and lack of thoroughness by the landlord.
  4. There was confusion around the landlord’s handling of the RTA application, and the changing reasons given for the resident’s application being declined. This would reasonably lead the resident to feel a lack of confidence in the landlord, and frustration at the continued delay at a time when he was looking to proceed with the purchase of his property. 
  5. The landlord issued a fulsome apology and asked the resident to suggest a more suitable sum of compensation. While this indicated that the landlord was willing to engage on this issue, it could have offered a higher sum in the final response and avoided further negotiation. The resident did not respond to the offer, and it may be that the issue could have been resolved between them without further delay.
  6. The Guide to RTA says that the landlord had four weeks to reply to the application, and the landlord did respond within this time frame, albeit with wrong information. The Ombudsman would not find service failure due to the landlord reconsidering its decision, but seeks to know whether in reconsidering, it fully acknowledged its shortcomings and made reparation. The landlord has shown that it eventually fully acknowledged its error. However, the compensation offer is inadequate given the delay between the application being submitted in October 2020 and the correct response being issued in June 2021 and the conflicting information given during this time.
  7. Had the resident not pursued the matter to his MP and this Service, the misunderstanding of the RTA policy within the landlord’s organisation would likely have gone undiscovered. The landlord has not indicated that it has seriously considered that its error may not have been rectified if the resident had not persisted in pursuing and then escalating the matter.
  8. In addition, when the resident did complain, the complaints process was not clearly defined. The landlord’s letter to the resident’s MP on 2 December 2020 would appear to be a stage one response, although it did not say it was in response to a complaint, and no information was given on escalation. The response dated 24 March 2021 referred the resident to this Service, which would normally be at stage three of the landlord’s process and suggests the first response was a stage one response. While the landlord can shorten its complaints process if it feels that there is no merit in further considering a matter, in this case the landlord then said the complaint must complete stage three of the process. Accordingly, the communication from the landlord was unclear and inconsistent.
  9. The landlord’s complaint process says that stage three complaints will be responded to within 10 working days, in this case the landlord was contacted by this Service on 13 April 2021 and the stage three response was sent on 13 June 2021, 41 working days later. Again, the landlord did apologise for this delay, but the corresponding offer of £25 compensation does not adequately reflect the considerable delay and lack of clear complaints process that has occurred.  
  10. Accordingly, compensation of £75 to reflect the confusion over the RTA application and £75 for the poor complaints handling, making a total of £150, would be more appropriate in this case. 
  11. As per the landlord’s online compensation guidance, this is calculated as the maximum £50 where a published standard had not been met, plus £25 for when a ‘minor service failure has caused inconvenience’ in respect of the errors in the administration of the RTA. In respect of the delay in the complaint and unclear process, the maximum of £50 as the published standard was not met plus £25 where the resident has spent an ‘unreasonable time pursuing a complaint’. 

The request for a new RTA application form 

  1. No specific guidance has been seen regarding the landlord’s process following a refusal of an RTA application. Therefore, this investigation has looked at whether the request by the landlord in June 2021 that the resident complete a new application form was reasonable in all the circumstances. 
  2. It is not unreasonable that the resident was asked to submit a new RTA form as the previous one was in September 2020, albeit his frustration is understood.  The information requested in the RTA application may have changed over this period and it is fair that the landlord be provided with up-to-date details to process the application. The Ombudsman understands this form has since been provided by the resident and the matter is progressing.

Determination (decision)

  1. In accordance with paragraph 54 of the Scheme there was service failure in respect of the landlord’s offer of compensation for in respect of the handling of the initial Right to Acquire (RTA) application and subsequent complaint handling.
  2. In accordance with paragraph 54 of the Scheme there was no maladministration in respect of the landlord’s request for a new RTA application form to be submitted by the resident.

Reasons

  1. The offer of compensation did not fully reflect the fact that had the resident not persisted in pursuing and then escalating the matter, the erroneous decision would not have been changed.
  2. It is not unreasonable that the resident was asked to submit a new RTA form as the previous one was in September 2020.   

Orders

  1. Within four weeks of the date of this determination, the landlord should pay the resident £75 to reflect the confusion over the RTA application and £75 for the poor complaints handling, making a total of £150.