Catalyst Housing Limited (201914610)

REPORT

COMPLAINT 201914610

Catalyst Housing Limited

17 December 2020

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 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:
1. Response to the resident’s request for certification demonstrating compliance with Government guidance on fire safety in relation to the building which he owns a property in.
2. Complaint handling.

Background and Summary of Events

Background

The resident is the leaseholder of the property (the property) which the complaint concerns.
The property is a flat situated in a purpose-built building (the building).
The freehold of the building is owned by a third-party private company (the freeholder). The landlord holds a head-lease with the freeholder and an under-lease with the resident.
Advice Note 14 will be referred to throughout the assessment. This advice note was issued by the Government in December 2018 as part of its Building Safety Programme. In summary the advice was for owners of high-rise leaseholder buildings where the external wall system of the building did not incorporate Aluminium Composite Material (ACM). The advice set out checks which owners could carry out to satisfy themselves, and their leaseholders, that their building was safe. This guidance was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. Paragraph 1.4 of this guidance states:

For the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act.

In response to the guidance some lenders took the view that, if certification could not be provided to demonstrate compliance with the Government’s guidance on fire safety, they would be unwilling to offer a mortgage on properties within these buildings as they would have a value of £0.
In January 2020 The Royal Institution of Chartered Surveyors (RICS), The Building Societies Association (BSA), and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 metres (six storeys). Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert.
Paragraph 35 of the Scheme sets out that ‘the Ombudsman will consider complaints about the actions or omissions of a member’.
As part of his complaint the resident raised concerns regarding the freeholder. As the freeholder is not a member of the Scheme, the Ombudsman cannot comment on its actions. However, the freeholder’s actions will be referred to within the report, as it provides context to the complaint which this Service can consider about the landlord.

Summary of events

On 8 November 2019 the resident wrote to the landlord to request a copy of the “fire safety strategy report” for the building. The resident explained that the report was required by their buyer’s mortgage broker to proceed with the sale of the property.
On the same day the landlord responded. The landlord confirmed that it was in the process of attempting to locate the report within its own internal records. The landlord explained that it may have to approach the freeholder for the report as it did not own the building.
On 12 November 2019 the resident wrote to the landlord requesting an update.
On the same day the landlord responded following a telephone conversation with the resident. The landlord confirmed that it had spoken with the freeholder who advised that it did not have a copy of the report required by the mortgage broker however it would commission one. The landlord explained that the housing sector was currently “inundated” with requests for these reports and there was a currently a “bottle neck” in their provision due to limited availably of “accredited professionals” who could complete them.
On 13 November 2019 the resident wrote to the landlord. In summary the resident said:
1. The landlord had failed to inform him during previous discussions that a fire risk assessment would not be sufficient to appease the mortgage broker regarding fire safety following the introduction of Advice Note 14.
2. The freeholder should be able to provide a timeline for the provision of a report confirming compliance with Advice Note 14.
3. It was unsatisfactory that the landlord had “not sent an official notice” to leaseholders within the building, following the introduction of Advice Note 14 in December 2018, which explained the impact of the guidance on remortgaging or selling their property.
On 13 November 2019 the resident wrote to the freeholder also. In summary the resident asked the freeholder to provide a statement confirming that the building was compliant with Advice Note 14.
On 22 and 26 November 2019 the resident chased the landlord for a response.
On 26 November 2019 the landlord responded. In summary the landlord said:
1. It was sorry for the delay in responding.
2. It was “keen to resolve” the matter concerning compliance with Advice Note 14, however, as it was not the freeholder of the building, it was not responsible for obtaining certification demonstrating compliance.
3. The freeholder had informed it of “an expected timeline of 8-12 weeks” for a report to be ready in line with Advice Note 14. The landlord noted that the freeholder had commissioned the report in November 2019.
4. It “intend[ed] to engage with all resident in buildings above 18 meters that [were] subject to Advice Note 14”.
On 27 November 2019 the resident acknowledged the landlord’s response. The resident asked the landlord if it was able to provide a written statement by a “qualified independent professional advisor” confirming that “the cladding system for the subject property [met] the requirements of the current guidance from the Ministry of Housing, Communities and Local Government (MHCLG)”.
On the same day the landlord responded. In summary the landlord said:
1. The written statement the resident had requested was “prepared from the precise report” the freeholder had commissioned.
2. A shortage of accredited professionals who could complete the report had delayed the report. The landlord noted that it had previously informed the resident of the delays.
3. The report had been commissioned by the freeholder and it would forward the written summary to the resident once it was in receipt of it.
On 27 November 2019 the freeholder wrote to the resident. The freeholder advised the resident that the report was delayed. The freeholder said that the delay was due to its “contractor company” who were providing the report.
On 29 November 2019 the landlord forwarded the resident communication it had received from the freeholder. The Ombudsman understands that the communication was a letter from a fire engineer to the freeholder dated 27 November 2019. The fire engineer said “I can confirm that the building has been inspected including the materials used in the construction of the external cladding of [the building] and in my professional opinion, the risk of external fire spread is compliant with Requirement B4 to Schedule 1 of Building Regulations and Advice Note 14. The statement that in my opinion the building is compliant with requirement B4 means I believe the building is safe with respect to the fire performance of the external wall build-up”.
On 9 December 2019 the resident wrote to the landlord following the freeholder’s communication. The resident said that the mortgage broker had reviewed the communication and concluded that while it was “acceptable for cladding” it required inclusion of the building’s postcode and confirmation that the balconies were safe. The resident also wrote to the freeholder requesting the same information.
On 16 December 2019 the resident chased the landlord for a response. On the same day the landlord responded that it had contacted the freeholder and was waiting a response.
On 6 January 2020 the resident wrote to the landlord advising that he was still waiting for confirmation that the building was compliant with Advice Note 14 so the sale of the property could proceed. On the same day the landlord confirmed that it had chased the freeholder for a response.
On 22 January 2020 the resident wrote to both the landlord and freeholder. In summary the resident said:
1. He was aware of the introduction of form EWS1 to demonstrate compliance with Advice Note 14.
2. It was unsatisfactory that the freeholder was unable to confirm when form EWS1 would be available.
On the same day the freeholder wrote to the resident. In summary the freeholder said:
1. It was sorry that the “situation exist[ed]”, acknowledging that it was frustrating for the resident.
2. It was unable to provide a timeline for the provision of form EWS1.
3. It was “endeavouring to engage consultants to close out the situation”.
4. It had committed to providing the landlord with regular updates and would do so by the end of the week. The freeholder noted that it had a meeting “on-site tomorrow” with the fire engineer.
5. The resident should contact the landlord for updates moving forwards.
On 23 January 2020 the resident wrote to the freeholder copying in the landlord. In summary the resident said:
1. It was unsatisfactory that the freeholder would not engage directly with him. The resident suggested that this was in contravention of the property’s lease.
2. The freeholder had provided “contradictory stories” regarding a report demonstrating compliance with Advice Note 14. The resident noted that the building had been inspected in November 2019 and therefore it was not clear why a further report was required. The resident asked if this was because the inspection in November 2019 was paper based rather than “physical”.
3. He required clarification on the status of form EWS1.
On 27 January 2020 the resident wrote to the landlord and freeholder. The resident said that he had learnt that he had been given misinformation regarding the inspection to achieve compliance with Advice Note 14. The resident stated that the landlord informed that the inspection would take place “this week” however he had now been informed it would take place in February 2020.
Also on 27 January 2020 the resident registered a formal complaint with the landlord regarding its response to his request for documentation confirming that the building was compliant with Advice Note 14. The resident confirmed that he first requested evidence of compliance in November 2019 and it was unsatisfactory that neither the landlord nor the freeholder was able to provide a definite timescale for the provision of form EWS1. The resident said that the sale of the property was at risk.
On 28 January 2020 the landlord wrote to the resident. The landlord said that the freeholder had confirmed that fire consultants were scheduled to attend the building w/c 3 February 2020 to inspect.
On 29 January 2020 the resident wrote to the landlord saying that he appreciated the “update” and “clear timeline”.
On 30 January 2020 the landlord acknowledged the complaint confirming that it would provide a response by 12 February 2020.
On 6, 10 and 11 February 2020 the resident asked the landlord for an update on the “status of the inspection”.
On 11 February 2020 the landlord wrote to the resident following a telephone conversation with the resident the previous day. The landlord said the building had been inspected during w/c 3 February 2020. The landlord confirmed that the “accredited professionals [would] now analyse the findings and put together a comprehensive report”. The landlord said that no “specific timeline” had been provided for the report however it hoped that this would be in the “near future”.
On 17 February 2020 the resident contacted the Ombudsman as the landlord had not responded to his formal complaint. On receipt of the referral the Ombudsman contacted the landlord requesting that it respond to the resident’s concerns under its complaint procedure.
On 18 February 2020 the landlord wrote to the resident to acknowledge his complaint, confirming that a response would be provided by 2 March 2020.
On 26 February 2020 the freeholder wrote to the resident’s solicitor confirming that it had received confirmation that the building must undergo an intrusive inspection in order to obtain form EWS1. The freeholder confirmed that it was in the process of arranging the inspection and it would update the landlord in due course. The freeholder copied in the landlord to this correspondence.
On 3 March 2020 the resident chased the landlord for a response.
On 5 March 2020 the landlord wrote to the Ombudsman explaining that it would not respond to the resident’s complaint under its complaint procedure. In summary the landlord said:
1. It was not responsible for obtaining form EWS1, the freeholder was.
2. It was acting as “an intermediary” between the freeholder and the resident.
3. It had received confirmation from the freeholder that the building must “undergo intrusive inspection” to obtain EWS1. The landlord confirmed that the freeholder had “assured” it that it was “working to schedule [the inspection] as quickly as possible”.
4. It had kept the resident “in the loop” with all developments.
5. It considered the complaint “unreasonable” as it must rely on the information provided by the freeholder.
On 13 March 2020 the Ombudsman acknowledged the landlord’s correspondence. The Ombudsman reiterated that the landlord should provide the resident with a response under its complaint procedure.
On 25 March 2020 the resident wrote to the landlord stating that it had provided wrong and misleading information regarding the inspection to complete form EWS1.
On 30 March 2020 the landlord responded to the resident following a telephone call with him on 27 March 2020. The landlord apologised for any misinformation provided regarding the inspection to complete form EWS1. The landlord confirmed that an inspection had taken place at the building and an accredited professional would complete the findings. The landlord said that it hoped that the report would be ready by 2 November 2020.
On 31 March 2020 the resident wrote to the landlord setting out that it had provided more contradictory information regarding the inspection and report needed for form EWS1. The resident said that during a telephone call on 27 March 2020 the landlord had advised that the report following the invasive inspection would be ready by summer 2020.
On 3 April 2020 the landlord provided its formal complaint response. In summary the landlord said:
1. It had reviewed “the past correspondence between all parties”. The landlord stated that as it stood it had agreed to contact the resident as soon as it had “the report in question”.
2. It hoped to have the report by 28 August 2020.
3. It was sorry for any misinformation and miscommunication it had provided. The landlord confirmed that it would therefore like to award the resident £50 compensation.
4. The resident may refer his complaint to the Ombudsman if it was not satisfied with its response.
On 27 May 2020 the freeholder wrote to the resident’s solicitor. In summary the freeholder said:
1. The “intrusive inspection” on the building had taken place and the findings issued to its “appointed consultants”. The freeholder noted that the inspection had been delayed due to Covid-19.
2. The consultants had raised “further queries” and it was collating the final information required.
3. It could not place a timeframe on when it would be in receipt of form EWS1 as it was reliant on third parties.
4. Upon receipt of the completed EWS1 it would send a copy to the landlord.
On 19 June 2020 form EWS1 was signed. The form set out that “the fire risk [was] sufficiently low that no remedial works [were] required”.
The landlord informed the Ombudsman that the resident sold the property in September 2020.

Assessment and Findings

The landlord’s response to the resident’s request for certification demonstrating compliance with Government guidance on fire safety in relation to the building which he owns a property in

As the Government’s expectations in relation to cladding and fire safety are only detailed in guidance there is an element of discretion for a freeholder as to how and when it chooses to comply with it.
As the landlord is not the freeholder of the building it is unable to obtain certification pursuant to Advice Note 14 itself, the freeholder must do this. While the landlord cannot obtain evidence of compliance itself, the Ombudsman does consider that the landlord has a responsibility in respect of the guidance. As the resident’s contract for the property, the lease, is with the landlord and not the freeholder the Ombudsman would expect to see pro-active engagement by the landlord with the freeholder regarding its response to the guidance in order to provide the resident (and its other leaseholders) with updates. The landlord informed the Ombudsman that “there was no communication [with the freeholder] prior to November 2019, the need only arose when the resident sought to sell his property and was asked by the [resident’s] buyer’s lender to provide evidence of compliance to the advice note”. In the Ombudsman’s opinion the landlord’s position was not reasonable.
The landlord said on 26 November 2019 that it intended to engage with all leaseholders who had an interest in a building above 18 meters and was therefore subject to Advice Note 14. In the Ombudsman’s opinion it was unsatisfactory that the landlord had not communicated with the resident, and other leaseholders, regarding Advice Note 14 prior to November 2019 given the nature of the issues involved and potential impact on residents. As the impact of the guidance on mortgage applications was widely recognised within the housing sector by mid-2019 the landlord should have communicated the situation to its leaseholders at that time, including so that they were informed of the situation and aware of the impact on the properties which they owned. As part of the communication with the resident, the landlord should have detailed the freeholder’s response to the guidance and committed to providing regular updates as the matter progressed.
The landlord’s website has detailed information on the Government’s guidance on fire safety and its response. The Ombudsman is not clear if this information existed at the time of the resident’s complaint. However, should the information have existed at the time of the complaint, in the Ombudsman’s opinion, it would not have negated the need for direct correspondence by the landlord with its leaseholders. This is because not all residents may proactively check the landlord’s website for updates and some may not have readily available internet access. Further the advice given would need to be tailored depending on whether the landlord was the freeholder or not.
The evidence shows that the freeholder was committed to achieving compliance with Advice Note 14 and did so by June 2020 – when form EWS1 was signed. The Ombudsman can see that in order to achieve compliance three inspections were undertaken; in November 2019, February 2020 and late March/early April 2020. The Ombudsman requested copies of the reports following the inspections for the investigation, however was not provided with them. The landlord said that it did not hold the reports as it was “not privy” to them as they were commissioned and retained by the freeholder. While the reports were not provided the Ombudsman understands that the inspection in November 2019 and corresponding statement from the fire engineer did not satisfy the buyer’s lender that the building was compliant with Advice Note 14. The freeholder then commissioned a further inspection in February 2020 which indicated that an intrusive inspection was required; which was undertaken in late March/early April 2020.
Between November 2019, the date of the resident’s enquiry, and April 2020, the end of the complaint procedure, the evidence shows that the landlord did engage with the freeholder regarding the steps it was taking to comply with Advice Note 14. This was appropriate. The evidence shows that the landlord communicated the freeholder’s updates to the resident.
While the resident is not satisfied with the level of communication by the landlord during the period between November 2019 and April 2020, following a review of the landlord’s correspondence the Ombudsman is satisfied that overall it was satisfactory as the landlord did relay the updates it received from the freeholder on receipt, including provisional timescales for the inspections and explanations for delays – which included demand for accredited professionals to complete the required inspections. The Ombudsman appreciates that the landlord was reliant on the responses and information provided by the freeholder in order to communicate with the resident.
During the complaint procedure the landlord acknowledged that it did provide some conflicting and unclear information to the resident regarding the three inspections and dates for the provision of form EWS1. The Ombudsman agrees with the landlord’s conclusion. In the Ombudsman’s opinion the landlord could have been clearer regarding the inspection in November 2019 and the need for further inspections in 2020. The landlord apologised for its omission and awarded £50 compensation. In the Ombudsman’s opinion the landlord’s offer of redress was proportionate to the error identified here.

The landlord’s complaint handling

The landlord uses the Chartered Institute of Housing’s definition of a complaint which sets out that a complaint is “an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by us, or those working on our behalf, affecting an individual customer or a group of customers”.
The landlord informed the Ombudsman on 5 March 2020 that it had not and would not respond to the resident’s complaint dated 27 January 2020 under its complaint procedure as it considered the complaint “unreasonable” as it must rely on the information provided by the freeholder. While the landlord’s complaint policy allows it to refuse to investigate a complaint, in the Ombudsman’s opinion the landlord’s decision to refuse to investigate the resident’s complaint was unsatisfactory, unfair and a missed opportunity; given the circumstances of the complaint, issues raised and the position the resident found himself in through no fault of his own. The landlord should have used the complaint as an opportunity to set out its responsibilities in relation to Advice Note 14 and to demonstrate the steps it was taking to pursue the freeholder regarding compliance with the guidance. It would also have been an opportunity for the landlord to have managed the resident’s expectations in respect of the complex and time-consuming nature of the inspections involved in the process, in addition to explaining why a further inspection was required following the one undertaken in November 2019. The Ombudsman notes that the landlord’s decision also delayed the resident in bringing his complaint to this Service.
The Ombudsman notes that prior to this Service’s involvement the landlord did not inform the resident that it would not provide a response to his complaint under its complaint procedure. This is unsatisfactory.
While the landlord was corresponding with the resident regarding Advice Note 14 outside of its complaint procedure, in the Ombudsman’s opinion this does not mitigate the landlord’s inadequate handling of the formal complaint.
Following intervention from this Service the landlord did provide a formal response to the resident’s complaint on 3 April 2020 under its complaint procedure. While it was appropriate that the landlord did eventually provide a response under its complaint procedure, the Ombudsman is not satisfied with the response provided. This is because the complaint response was brief, did not comprehensively address the concerns raised by the resident and did not provided adequate reason and explanation concerning its obligations in relation to the building and compliance with Advice Note 14. Further the landlord’s response failed to acknowledge the difficult circumstances that the resident found himself in through no fault of his own.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was:
1. Service failure by the landlord in respect of its response to the resident’s request for certification demonstrating compliance with Government guidance on fire safety in relation to the building which he owns a property in
2. Service failure by the landlord in respect of its complaint handling

Reasons

While the landlord did engage with the freeholder regarding the steps it was taking to comply with Advice Note 14 following receipt of the resident’s enquiry in November 2019, which was appropriate, the Ombudsman is not satisfied that the landlord engaged with the resident regarding the impact of Advice Note 14 prior to this. As the impact of the guidance on mortgage applications was widely recognised within the housing sector by mid-2019 the landlord should have proactively communicated the situation to its leaseholders at that time, including so that they were informed of the situation and aware of the impact on the properties which they owned. As part of the landlord’s communication with the resident it should have detailed the freeholder’s response to the guidance and committed to providing regular updates as the matter progressed.
In the Ombudsman’s opinion the landlord’s decision to exclude the resident’s complaint from its complaint procedure was unsatisfactory, unfair and a missed opportunity; given the circumstances of the complaint, issues raised and the position the resident found himself in through no fault of his own. The landlord should have used the complaint as an opportunity to set out its responsibilities in relation Advice Note 14 and to demonstrate the steps it was taking to pursue the freeholder regarding compliance with the guidance. It would also have been an opportunity for the landlord to have managed the resident’s expectations in respect of the complex and time-consuming nature of the inspections involved in the process in addition to explaining why a further inspection was required following the one undertaken in November 2019. The Ombudsman further notes that the landlord did not notify the resident of its initial decision to not provide a response under its complaint procedure.
While the landlord did eventually provide a response to the resident’s complaint under its complaint procedure in the Ombudsman’s opinion the landlord’s response was unsatisfactory. This is because the complaint response was brief, did not comprehensively address the concerns raised by the resident and did not provided adequate reason and explanation concerning its obligation in relation to the building and compliance with Advice Note 14. The landlord’s response also failed to acknowledge the difficult circumstances that the resident found himself in through no fault of his own.

Orders and recommendations

Orders

The landlord should pay the resident the following compensation within four weeks of the date of this report:
1. £200 for not communicating with the resident regarding Advice Note 14 and the potential impact of the guidance on his ownership of the property prior to his enquiry in November 2019
2. £100 in respect of its complaint handling

Recommendations

The landlord should review its communication with leaseholders in buildings which are subject to Advice Note 14 to ensure that the implications of this are clearly communicated to them. This advice may vary depending on whether the landlord is the freeholder of the building or not.