Derwent Housing Association Limited (202010251)

REPORT

COMPLAINT 202010251

Derwent Housing Association Limited

15 February 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:
1. the landlord’s response to the resident’s concerns about her purchase of the property via a Voluntary Right to Buy (‘VRTB’) pilot scheme.
2. the landlord’s response to the resident’s concerns about the condition of the property when she moved in as a tenant until the purchase was completed.

Background and summary of events

At the time of the issues being complained about, the resident had an assured tenancy with the landlord for a 3-bedroom house.

Policies, procedures, and agreements

The landlord has provided a copy of the Government-issued Guidance Document for this particular VRTB Pilot Scheme. This sets out the general procedure the landlord must follow, including providing the option to port the discount to an alternative property.

Voluntary Right to Buy (VRTB) Local Sales Policy:

This sets out the approach to be taken by the landlord in delivering the VRTB Pilot Scheme. In delivering the Scheme the landlord has discretion in relation to the nature and type of properties it wishes to make available for sale to tenants.
Where tenants are unable to purchase the home they live in because the property is excluded under this policy, the landlord will offer tenants an option to port their discount entitlement under its VRTB Portability Policy.
The policy states that properties which are subject to a Section 106 Agreement (or other similar restrictions) are excluded from this Pilot Scheme.

Voluntary Right to Buy Portability Policy:

This sets out the approach taken by the landlord in relation to offering tenants the opportunity to port their Voluntary Right to Buy discount to another suitable property which is eligible under the Pilot Scheme.
It states that the landlord will make one reasonable offer from its eligible (as defined in the VRTB Local Sales Policy) empty (void) properties within the pilot area. It will try where possible to match the property to the applicants’ requirements, but this may not always be possible. In considering what will be a “reasonable offer” it will take into account factors like the type of property and the number of bedrooms the applicant currently has.
The porting applicant will move to the alternative property and will be granted a new tenancy, during which time they will be expected to complete the purchase of the property. If completion does not take place then the applicant will remain in the alternative property on the tenancy granted.

Compensation Policy:

This sets out that the landlord can consider compensation where:
1. customer service has been delivered below standards set out by its policies, legislation, or tenancy agreement.
2. the overall experience of the customer requires recognition to acknowledge that it has fallen short of its expected standards.
The maximum compensation payable for distress and inconvenience is £250.

Summary of events

The resident and the landlord have both given some background to the present complaint. The resident initially applied to purchase the house she was living in via the VRTB pilot scheme in 2018. She was notified in August 2019 that her home was not eligible for purchase under this VRTB pilot scheme. She was then offered the option of porting the VRTB discount to an alternative property.
Whilst the background is noted, there is no evidence of the resident having completed the landlord’s complaints process at that time about the eligibility of her home under the VRTB pilot scheme. As such, this report will focus on events from August 2019 onwards when the porting application was made, as this is the subject of the complaint that was taken through the landlord’s complaints process and was referred to this Service.
On 2 August 2019 the landlord wrote to the resident to confirm the reasons why it could not proceed with the purchase of her existing house. It offered the resident the option of porting the VRTB Discount to an alternative property when one becomes available (empty).
The landlord and resident discussed this option on 5 August 2019 and the resident then emailed the landlord to confirm that she would like to port the discount to another property.
On 16 August 2019 the landlord confirmed that the porting application had been received and was being processed. It confirmed that the deadline to accept a suitable property was 16 February 2020, and if no suitable property was found by this time the VRTB application will be closed. It also reiterated that it will only make one offer of a suitable property through the portability scheme.
Over the next couple of months there was ongoing correspondence between the resident and the landlord as the resident was getting anxious that no suitable properties had become available.
On 18 December 2019 the resident emailed the landlord to say that she had seen a 4-bedroom house become available on the property search website and she wanted to know why this had not been offered to her. The landlord responded and explained that the property had a Section 106 restriction on it which meant it could not be included in the pilot. The resident also asked why the landlord could not simply override this restriction. The landlord explained that this was a decision for the local authority to make.
On 15 January 2020 the landlord notified the resident of a property that had become available. It said that the property was a suitable match but as it was still occupied it could not be viewed until next month. The resident was advised to have a look at the details of the house and view the local area for herself and she had 10 days to decide if she wanted to view the property. It explained that this property constituted its one Reasonable Offer under the VRTB Portability Policy. Once the resident had viewed the property internally, she would have 10 days to make a decision on whether or not to proceed with the VRTB process.
The resident responded the same day to confirm that she would like to accept the property, and she asked if she could be sent further details and whether the property had two double bedrooms. The landlord responded and said that it had limited information on the property as it was not vacant yet. It reiterated that the resident would be able to view the property in a few weeks.
The property was vacated some time in February 2020 (the records are not clear) and the landlord carried out a Void Standard Report on 28 February 2020. This showed that the property was inspected, cleaned and minor works were done.
The resident viewed the property on 5 March 2020. The subsequent correspondence between the resident and the landlord showed that the viewing went well and that the resident wished to proceed with the purchase.
The property valuation was carried out on 24 March 2020. The Valuation Report noted that the property required some upgrade and modernisation of the bathroom, kitchen and the general décor. The resident disputed the valuation of the property and felt the purchase price was too high given the updating that was needed. The resident was given the option of getting her own valuation done, but she decided to eventually accept the valuation report.
On 6 April 2020 the landlord issued the formal offer notice which confirmed that the property was sold as seen in its current condition, and that the resident would be responsible for all repairs and maintenance after the purchase.
In July 2020 the correspondence showed that it was agreed the resident would receive the keys to the new property on 7 August 2020. Whilst the records are not entirely clear, both the landlord and the resident have accepted that she moved into the new property on 7 August 2020 as a tenant of the landlord (on an interim basis) whilst the legal formalities of the purchase were finalised.
On 13 August 2020 the landlord’s records show that a repair was logged for a toilet waste pipe leak. The records show that an urgent appointment was arranged and the contractor noted he found no leaks from the toilet pipework.
On 14 August 2020 the records show that the resident made a request for replacing the taps and toilet in the downstairs WC. The landlord’s records show this job was completed in September 2020.
On 17 August 2020 the landlord’s records showed that the resident reported that the bath had holes and cracks in it. The landlord agreed to replace the bath and its records show that this was done in September 2020.
The resident also reported problems with window latches and a door, and the landlord’s records note that the window and door were ‘overhauled’ in October.
On 21 August 2020 the landlord’s records show that the resident reported holes in the plastering on the walls. This job was completed in September 2020.
On 27 August 2020 the landlord’s records show that the resident reported a problem with the boiler and radiators. This job was completed on 2 September.
On 5 September 2020 a report was logged for a leak coming through the ceiling; this was attended to the next day.
On 10 September 2020 the records show a report was logged about door handles being defective. These were replaced in October 2020.
The landlord’s records show that there were other repair reports over the next few weeks including a leak from the kitchen sink pipework; and a leak from the bath. The records show these were all attended to by the landlord.
The legal completion of the property purchase was concluded on 28 September 2020. At this point the resident ceased to be a tenant of the landlord and was now legally the owner of the property.
On 10 December 2020 the resident contacted this Service to raise a complaint about the VRTB process. This Service advised the resident to complete the landlord’s internal complaints process. The resident then logged a formal complaint with the landlord.
The resident’s main complaint was that she was told by the landlord that she would be offered the same size house or bigger to accommodate herself, her husband and their four children (boy 13, girl 11, boys 3 and 2); and/or a house with two living rooms downstairs (so that one room would be used as a bedroom). However, the house she was offered was actually smaller than her original house, and she had no choice but to reluctantly accept it. She confirmed that she had viewed the house and although it was a ‘lot smaller’ than her last house, she accepted it because she did not want to lose out on her VRTB opportunity. The resident said that the tenancy agreement she signed showed that the property was suitable for five people.
The resident was unhappy that the landlord had knowingly offered her a small house which was only suitable for five people when it knew they were a family of six. She explained that living in this smaller house had been difficult for the family and had impacted on her mental health. She also said that the house needed a lot of repairs when she moved in.
The resident felt that the landlord had only offered her this house as it was one of the properties they no longer wanted to maintain and it was in a ‘rough neighbourhood’. She also said that she was not offered other more desirable houses that became available as the landlord wanted to dispose of its bad stock.
The landlord acknowledged the complaint on 17 December 2020. The subsequent internal email correspondence showed that the landlord made further enquires with its teams to investigate the complaint about the VRTB process.
With regards to the condition of the property, the internal emails confirmed that there had been an unusually high number of repair reports logged in August 2020. It was concluded that when the property became vacant it had been flagged as to be sold (and not re-let). As such, only minor void works were carried out to ensure that the property was safe. The Lettable Standards did not apply to a property that was marked as for sale. It was noted that the property was then let to the resident but the full void inspection (to bring it up to the Lettable Standard) had not been carried out. This was put down to an ‘internal communication breakdown’.
On 22 December 2020 the landlord’s internal emails show that it had reviewed its failings and it was producing a report on the VRTB pilot, highlighting areas that did not go well so improvements could be made for the next pilot.
The landlord issued its Stage 1 complaint response on 4 January 2021:
1. It acknowledged the background to the complaint. It explained that it could only make a property available for porting when it becomes vacant, and that it had extended its original 3-month porting deadline to 6-months in this case to give the resident more time.
2. It explained that the resident listed only six local arears for her search, which it said limited the chances of a suitable match becoming available. It also noted that the resident was willing to accept a 3 or 4-bedroom house.
3. It explained that there was a shortage of 4-bedroom houses in the areas she specified and the likelihood was that she would be offered a 3-bed house. It reiterated that the 4-bed house she found was not eligible for the pilot.
4. Its portability policy stated that a reasonable offer will be a property of the same type that the applicant currently lives in. The resident was living in a 3-bed 5-person house at the time of the application, and the new property that was offered was also a 3-bed 5-person house, within the areas she specified.
5. It noted that the resident accepted the offer of this property within about an hour of receiving the email. She viewed the property and accepted the valuation report which confirmed that the property needed modernisation.
6. It noted that the purchase of the property was completed in September 2020 with a discount of just under £50,000 off the purchase price. It said that having viewed the property, the resident was under no obligation to carry on with the purchase and could have withdrawn from the process if she felt that the property was not suitable for her family. Therefore, it did not uphold the complaint about the VRTB process.
7. With regards to the complaint about the condition of the property when she moved in as a tenant, it noted the high number of repair reports. However, it said that the resident had agreed to purchase the property in the condition as it stood, and therefore there was no failure in this regard.
8. It did accept that as she was a tenant at that time, the property should have been let to a certain standard and that some of the repairs ought to have been attended to before the property was let. It apologised for this failure and for the inconvenience of having to arrange the repairs and it upheld this aspect of the complaint. It said that the resident had benefitted from these repairs (because the purchase price was based on the condition of the property before the repairs were raised) and therefore it would offer her £100 compensation for the inconvenience of these repairs being completed during the letting period. The landlord acknowledged that there was learning to be taken from this complaint on how to handle such situations in future.
The resident requested that her complaint be escalated on 9 January 2021. She said that whilst she could have remained on the waiting list for a 4-bedroom house, ‘who in their right mind would allow a once in a lifetime offer from the government like this pass and slip out their fingers?’ She said that cancelling the VRTB application was not an option for her as she was ‘desperately wanting to purchase a house’. Her main grievance remained that she was offered a smaller house suitable for five, and not six, people.
She accepted that both houses were 3-bedroom but she said that the new house had smaller room sizes and was more compact. She reiterated that she had been promised a 4-bedroom house or a 3-bed with two receptions rooms with the scope to turn one into a bedroom. She acknowledged that she did accept the property immediately, but she said she did so as not to lose out on the VRTB opportunity. The resident also referred to the repairs that were needed and to an incident when her husband had been told by the landlord contractor to go into the loft and in doing so he fell through the ceiling and injured himself. The resident said that she was pursuing a personal injury claim for this incident.
The subsequent correspondence showed that the personal injury claim would be dealt with separate to the complaints process. The resident also confirmed that in resolution to her complaint she wanted the landlord to either convert the existing loft into a bedroom or give her the funds to do so; or alternatively offer her a 4-bedroom house to purchase with another VRTB discount.
The landlord issued its Stage 2 final complaint response on 29 January 2021:
1. With regards to the VRTB process, it had reviewed this and found no service failure. It reiterated the Stage 1 findings and said it could not add anything further to this. It maintained that the resident had every opportunity to withdraw from the purchase at any time. She had lived at the property for approximately seven weeks, during which time she had ample time to decide whether or not the property was right for her family and she chose to proceed with purchasing the property. The resident’s comments suggested that she was willing to compromise on the property she was purchasing to take the opportunity offered by the VRTB scheme. This was purely a decision for the resident and her decision was not the responsibility of the landlord. It maintained that it had offered her a suitable property.
2. With regards to the condition of the property, it accepted that it ‘did not get everything right’ in terms of the condition of the property when it was let. It said it was clear that as the property was due to be sold, it did not go through its usual Lettable Standards process. As a result of this, the resident was forced to raise numerous repairs immediately after moving into the property. It recognised that this was a failure of service and apologised for this. It said that it had learnt from the errors and would provide feedback.
3. It was of the view that it had carried out repairs at its own cost which had benefitted the resident in that the purchase price she paid was reflective of the pre-repairs condition of the property. Nonetheless, it reviewed its compensation and agreed to award an additional £140 in compensation, which it felt more accurately reflected the level of inconvenience experienced.
On 8 February 2021 the resident declined the compensation offer and referred the matter to this Service.

Assessment and findings

The landlord’s handling of the VRTB process

The Ombudsman’s role is to consider whether the landlord’s response to the resident’s concerns was appropriate and in accordance with its policies, procedures, and any agreements it has with the resident.
It is clear from the resident’s submissions that she has been distressed by what she considers is the mismanagement of her VRTB application, and she has said that this adversely impacted on her mental health. The resident’s feelings are duly acknowledged however, it is not for the Ombudsman to determine or medically assess the impact of the landlord’s actions on the resident’s mental health and wellbeing; such matters are better suited for medical professionals to determine. Our role is to consider the landlord’s response to the reports it received, and to the formal complaint, and consider whether its response was reasonable in all the circumstances of the case.
Looking at the facts and the available evidence, the gist of the resident’s complaint is that the landlord offered her an unsuitable (smaller) property, and she had no choice but to purchase this unsuitable property. The resident has made assertions to the effect that the landlord deliberately offered her an unsuitable property and withheld suitable properties from her. She has also said that she was promised a large property and the landlord has reneged on this and effectively forced her to accept a small property.
The landlord’s VRTB policies set out its process and there is nothing to suggest that in this case the policies and processes were not followed. The landlord acted appropriately by explaining the VRTB process several times to the resident and explained how the scheme worked. It repeatedly advised the resident that it could not guarantee when a suitable property would be available. It also explained what properties were eligible for the scheme and why certain properties were not. There is no evidence to suggest that the landlord deliberately withheld an eligible property from the resident.
The resident has said that the landlord specifically promised her a 4-bedroom house or a house with two living rooms so that one could be converted into a bedroom. The Ombudsman has seen no evidence to support that the landlord gave this undertaking. Whilst the Ombudsman is not privy to what conversations the resident may have had with the landlord, a review of the available documentary evidence does not show that such assurances were made. Indeed, the landlord has said on many occasions that it cannot control when a property may become available.
In any event, even if it could be evidenced that the landlord verbally promised the resident that she would be offered a 4-bedroom house, this does not take away from the fact that when the property was offered to the resident, it was accepted by her with full knowledge that it was a 3-bedroom house.
The landlord’s VRTB policy states that only one offer of a suitable property will be made, and that property should be suitable match in terms of the type of property and the number of bedrooms. In this case, the resident has said that she should not have been offered a 3-bedroom 5-person property. However, the fact remains that her old house was a 3-bedroom, 5-person modern semi-detached house and the property that was offered was a similar 3-bedroom 5-person modern semi-detached house. Ultimately, the house that was offered was a suitable match to the resident’s previous house.
The resident may well feel that the new house had smaller room dimensions than her old house, but it cannot be overlooked that she was fully aware of this and chose to continue with the purchase. It must also be noted that the resident lived at the new property for approximately seven weeks before completing the legal purchase. In this scenario, the Ombudsman considers that the landlord is not being unreasonable when it says that it gave the resident full information about the property and it was the resident’s own decision to accept the property and proceed with the purchase.
The resident may well feel that she had no choice but to go ahead with the purchase or she would lose out on the VRTB opportunity and the discount, but the landlord cannot be held responsible for the resident’s decision to proceed with the purchase even though she was fully aware that the property had smaller sized rooms than her previous house.
Ultimately, the resident had a choice to make whether or not to compromise on the size of the property in order to be able to benefit from the VRTB opportunity (and the £50,000 discount off the purchase price). The resident’s own comments in her correspondence with the landlord make it clear that the chance of buying her own home was at the forefront of her mind, and she was willing to accept a property with smaller sized rooms. Therefore, it is not evident that the landlord ‘forced’ the resident into buying the house, but rather, that the resident knowingly and willingly agreed to accept a smaller house than she would have liked, in order to be able to make use of the VRTB opportunity.

The landlord’s handling of the repairs

The landlord has recognised that there were shortcomings in its handling of the repairs issue. It is positive to note that within its complaint investigation it has acted appropriately by investigating the resident’s concerns, establishing where errors had been made and apologising for this. It has also acted appropriately by offering compensation in recognition of its service failures and has said that it has taken steps to learn from its errors on this case.
The key issue here seems to be that when the property was offered to the resident it was done so as a purchase (and not as let). As such, its usual void process was not completed and steps were not taken to ensure that the property was in a condition that met its Lettable Standards. When it made the decision to allow the resident to move into the property as a tenant in August 2020 (albeit on a short-term basis while the legal purchase was formally completed) it entered into a tenancy agreement with the resident and it was therefore obliged to carry out an inspection and undertaken any repairs that were necessary in order to bring the property in line with its Lettable Standards. The landlord failed to do this and as a result the resident moved into the property and had to raise several repair requests within the following days and weeks.
The landlord has responded appropriately by identifying that there was a lack of clear communication between its internal departments and that it failed to recognise that, although the property was initially put forward for sale, it did have an interim period where it was responsible for the condition of the property. Had the relevant departments communicated better, the Lettable Standards process could have been completed prior to the resident moving in.
In addition to apologising for this error, the landlord has said that it has reviewed its internal processes to ensure that this situation does not occur again, which is a positive step. It has also offered a total of £240 compensation to the resident for the inconvenience caused during the period it was responsible for repairs to the property. The resident rejected this offer and has said that in resolution to her complaint she would like the landlord to either carry out a loft conversion or provide her with the necessary funds for her to do so.
In considering whether or not the landlord’s offer of compensation is reasonable, the Ombudsman has taken into account the landlord’s compensation policy, and this Services’ own Dispute Resolution Principles (be fair, put things right and learn from outcomes) and our published Remedies Guidance.
In particular, the ‘Remedies Guidance’ explains that where there have been service failures by the landlord, if the landlord has recognised the failures itself and has taken appropriate action to put this right, including offering reasonable compensation, then the Ombudsman will not necessarily require that the landlord do anything more. One of the factors that the Ombudsman considers is whether the redress is proportionate to the severity of the service failure by the landlord.
Looking at the severity of the service failure in this case, and without wishing to diminish the resident’s experiences during the seven-week period the landlord was responsible for the repairs, the Ombudsman is satisfied that the landlord’s offer is reasonable and commensurate with both the landlord’s own policy and the Ombudsman’s guidance.
Taking an overall view on the matter, the landlord is to be commended for its proactive approach to complaint investigation and its swift admission that it needs to do better with its internal communications. The landlord has acted appropriately by not only recognising its shortcomings but has also offered the resident an apology and compensation. In the Ombudsman’s view, the offer of compensation recognises the impact of the service failure and the offer represents proportionate and reasonable redress for this.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its response to the resident’s concerns about her purchase of the property via the VRTB pilot scheme.
In accordance with paragraph 55(b) of the Housing Ombudsman Scheme the landlord has made a reasonable offer of redress in respect of its response to the resident’s concerns about the condition of the property when she moved in temporarily as a tenant until the purchase was legally completed.

Reasons

The landlord’s handling of the VRTB issue was appropriate and its decision-making with regards to the outcome was reasonable and in line with its policies. It fully considered the resident’s concerns and investigated the complaint in depth and provided appropriate responses in a timely manner.
The landlord has acknowledged the resident’s concerns about the repairs and has accepted that there were initial failings in its internal communications which led to a failure to properly carry out the void works. It has apologised for this and has offered compensation which the Ombudsman considers to be reasonable and proportionate redress for the service failure.

Orders and recommendations

Recommendation

If it has not already done so, the landlord to pay the resident the total award of £240 compensation it offered in its final complaint response.