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Greenwich Council (201910844)

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REPORT

COMPLAINT 201910844

Greenwich Council

25 January 2021


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 leaseholder 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 the landlord’s handling of the leaseholder’s:
    1. reports of a leak into the property and consequent damage;
    2. associated formal complaint

Background and summary of events

  1. The leaseholder’s property is situated in a block of flats and the landlord is the freeholder. The leaseholder has sublet her property to a tenant and is, therefore, herself a landlord of the property.
  2. On 1 May 2018 the leaseholder reported a leak in her property to the landlord. The landlord’s “roofers” attended on 18 May 2018 and decided that it was not a fault with the roof of the building as anticipated. Instead, a fault with a seal to a door to the lift motor room was identified as the source of the leak. A repair was completed on 5 June 2018. In the meantime, the ceiling of the leaseholder’s bathroom collapsed, causing significant damage.
  3. On 6 July 2018 the landlord’s “insurance section” emailed the leaseholder about the situation. It stated that the damage to her ceiling should be covered by her buildings insurance. However, it noted she was suggesting that this was not the first leak and asked her to provide some information about this. It noted that an insurance claim had, in fact, already been made for the repairs to the ceiling but had been rejected on the basis that it was “accidental damage”. Its view was that this rejection was incorrect and the claim should have been accepted by the insurer with the repairs then being organised by the leaseholder (as it did not undertake internal repairs in these situations).
  4. The landlord stated “You indicate that there is a failure to the fabric of the building. If there had been a leak that (the landlord) had previously failed to respond to then there would be a potential liability on (the landlord) as freeholder”. It maintained that no problem with the roof had actually been found – the problem being identified as relating to the lift motor room. It confirmed that it had received the leaseholder’s report on 1 May, inspected on 18 May and carried out the repair on 6 June 2018. Accordingly, it found that there had been no failure on its behalf to deal with the issue and no record of any previous reports remaining outstanding.
  5. In the leaseholder’s response of 10 July 2018, she said that she had been back in touch with the insurers who were now saying the damage did represent a valid claim and they could not explain why she had previously been told this was not so. She confirmed that she would therefore pursue the insurance claim even though she would have to pay an excess and would be out of pocket. If the claim was rejected, however, she would get back in touch with the landlord for “redress”. She also highlighted that there had been a previous leak to the roof in December 2013/January 2014 and she had reported this to the landlord, which had fixed it and carried out the necessary internal repairs to her property (redecorating the bedroom, lounge and kitchen).
  6. On 16 November 2018 the leaseholder contacted the landlord and reported that the repairs to her ceiling had been delayed whilst her property dried out. In the meantime, she now noted a crack in the underside of the roof on the outside but which ran inwards into her flat. Water had been witnessed seeping through this crack on the outside and she was concerned that it might run along the crack and leak into her ceiling. She noted that the cause of the leak had previously been identified as relating to the lift motor room but she was now wondering whether that was an error. She asked the landlord to carry out an inspection to resolve the issue, noting that she had already spoken to a member of the landlord’s staff about this and they had promised to carry out a visit but nothing further had been done. She explained that there was no point drying out her property and repairing the ceiling if the fault had not been fixed after all.
  7. The leaseholder emailed the landlord again on 24 November 2018, when she chased up her report and reiterated that her ceiling repair had been outstanding since June 2018 and it could not be completed until she was sure the roof above it was not leaking. She stated that she had been trying to get an inspection carried out of a crack to the underside of the concrete roof for several weeks without success. She insisted that an inspection take place within the next two weeks.
  8. In the landlord’s response of 28 December 2018, it acknowledged the leaseholder’s enquiry about the outstanding repairs. It stated an appointment had been made for inspection on 10 December 2018 and it was not aware of any leak issues following the previous contact in May/June 2018. On 5 February 2019 the leaseholder emailed the landlord expressing her disappointment with this response. She maintained that: a complaint had been submitted; there had been a delay in the landlord’s reply; the ceiling repair had taken nine months to fix; and it should have been dealt with by the landlord and not by her insurers. She stated that the insurers had made a mistake in accepting the claim as the damage was classed as “accidental” but by the time this was discovered, the claim was at an advanced point and the insurer no longer felt able to reject it. She highlighted that the insurance claim would now have to be declared on future insurance applications and she felt it was likely to result in higher premiums. She had also had to pay an excess of £50. She requested an apology and compensation of £500 to cover the time she had spent dealing with the issue.
  9. The landlord replied stating it had taken the email as a stage one complaint, which was being considered and a written response would be provided by 14 March 2019. However, on 19 July 2019 the leaseholder emailed the landlord reminding it about the delay in providing a response to her complaint. In the absence of a response, she subsequently contacted this Service and we contacted it on 18 November 2019, requesting a response by no later than early-December 2019.
  10. In the landlord’s stage one response of 2 December 2019, it apologised for the delay in its response which it stated was due to an “administrative oversight”. It detailed the chronology of the complaint between May and June 2018 and concluded that it had responded within a reasonable timeframe. It stated that, under the terms of the lease it considered that the leaseholder was responsible for the ‘internal fabric’ of her property including the ceiling, and that building insurance was in place and paid for via her service charge. It noted that any claims under the policy needed to come from the leaseholder herself and confirmed that it had assisted her in July 2018 when the buildings insurer had initially refused to deal with the claim. The landlord confirmed its view that any claim would not affect the leaseholder’s premiums going forward.
  11. In terms of the repairs to the ceiling, the landlord confirmed its view that these were the leaseholder’s responsibility under the terms of her lease. It denied having advised her that it would carry out internal repairs in her property once the source of the leak had been identified and repaired. It offered £50 compensation for its delay in providing its complaint response.
  12. The leaseholder requested her complaint be escalated to the next stage of the landlord’s complaints procedure on 15 December 2019. She sent the landlord a copy of an email she had received from the Leasehold Advisory Service which she stated contained legal advice about the collapse of the ceiling. She said that the landlord was in breach of the terms of her lease by failing to keep the structure of the building in adequate repair. She stated that the delay in repairing the roof had caused the ceiling to collapse and she had incurred costs in getting it put right.
  13. On 12 January 2020 the leaseholder asked the landlord to supply a copy of the buildings insurance policy as she wished to check whether the insurer was correct in stating that the policy did not cover the damage because it was accidental and because it was now apparent she had a tenant living in the property. In the leaseholder’s email of 21 January 2020 she thanked the landlord for supplying the insurance schedule but stated that the policy did not meet her needs “as a leaseholder with tenants” and cover had been denied because of this (and because it was accidental damage) when the 2018 ceiling claim had been made. She reported that the insurers had, however, agreed to meet the claim as a gesture of goodwill as they had accepted the claim to begin with and had therefore mishandled the situation. She took the view that the policy was not fit for purpose and wanted the landlord to review its use.
  14. In the landlord’s stage two response of 31 January 2020, it apologised for the delay in replying and reiterated the chronology of events in May and June 2018. Its view was that it had not been in breach of any statutory duty in the length of time it took to remedy the situation and that an insurance claim should therefore be made by the leaseholder against the buildings insurance provided via her service charge. It noted that its staff member had contacted the leaseholder in July 2018 to explain this and offer assistance with making a claim against the insurance. Finally, it indicated that its offer of £50 compensation remained open.
  15. On 6 February 2020 the landlord emailed the leaseholder further on the question of the insurance provision. It stated that no policy would cover all eventualities and the one it had secured was adequate for leasehold properties such as hers. It confirmed its understanding that her claim had nevertheless been met by the insurers as a gesture of goodwill notwithstanding the possibility that the damage was not actually covered.
  16. The leaseholder replied on 18 February 2020 stating that she was dissatisfied and asking for her complaint to be escalated again. She reported that, as the insurers had refused to cover any damage to her property whilst she had tenants living in it, this meant that any future leaks would not be covered. She stated that she had had four leaks in the previous seven years and the landlord was obliged to arrange the insurance under the terms of the lease but it was inadequate for her purposes.
  17. On 11 March 2020 the landlord emailed the leaseholder noting that her complaint about the insurance claim had been passed to the insurer. It maintained its stance that the insurance it had arranged covered the risks provided for in the lease and that accidental damage cover was not actually one of them in any event. Despite this the current insurer had agreed to include it, although not for sublet properties. It suggested that it was for the leaseholder to arrange her own “landlord insurance” at her own expense to bridge the gap in cover. Finally, it confirmed that it had provided its stage two response to her complaint on 31 January.
  18. The leaseholder replied stating that she had been unable to obtain her own buildings insurance to cover the situation, as a landlord, because the insurers stated she would have dual cover. Therefore, she was left without cover for a situation like this whilst she had a tenant in the property. She considered that this was unacceptable because “given the history of this problem, I am not confident going forward that there will be no further incidents of this”. She queried how the landlord would deal with any future damage to her property and whether it was legal for it to leave her without cover in this way.
  19. In the landlord’s response of 19 March 2020, it stated that the insurance was not “invalidated” by the leaseholder having a tenant in the property and that it met the requirements of the lease. It stated “accidental damage” represented additional cover and did not apply to properties which were not owner/occupied. The landlord suggested that the leaseholder should take “insurance advice” to enable her to understand the risks she faced in letting the property out, but it could not offer her that advice itself.

Agreements, policies and procedures

  1. The lease contains the following provisions:
    1.       The leaseholder promises the landlord that she will keep the flat in good repair and condition, renewing and repairing all worn or damaged parts. The flat is defined as including “the interior walls and partitions and the ceilings and floors…..and the joists and beams on which the floors are laid but not the joists and beams to which the ceilings are attached”;
    2.       The landlord promises to the leaseholder that it will keep in repair the structure and exterior of the flat and the building it is situated in;
    3.       The landlord promises to the leaseholder that it will insure the flat against loss or damage by the “insured risks”. Those risks are set out in the lease as follows: “the Insured Risks” means fire explosion lightning riot civil commotion malicious damage collision by aircraft or other aerial devices or articles dropped from them or by any vehicle storm or flood escape of water from any fixed tank pipe or appliance earthquake accidental breakage of glass and sanitary ware and such other risks as may be specified by (the landlord) or (the landlord’s) insurers from time to time”;
    4.       The landlord is entitled to recover the cost of the insurance from the leaseholder by way of a service charge. It can also recover its administrative costs of managing the building.
  2. The Household Buildings Insurance Policy states that:
    1.       “Accidental Damage” is defined as meaning “damage which has not been caused on purpose by external and visible means”. For an additional premium the insurance can be extended to include such cover;
    2.       the optional accidental damage cover was purchased by the landlord for the benefit of the building/leaseholders and the persons/entities insured were the landlord and the leaseholders.
    3.       Leaseholder is defined in the general conditions as the person who is named on the lease relating to the insured building.
  3. The landlord produces a handbook for leaseholders which gives a comprehensive overview of the relationship between them. It states that the leaseholder must let it know if they sublet the property.
  4. The landlord has produced a Repairs and Maintenance Handbook which states that:
    1.       when a repair is notified to the landlord the timescale for a response will depend upon how serious it is. It categorises repairs as: emergency 2 hours; urgent 1 – 5 working days; and non–urgent up to 20 working days;
    2.       examples of situations which might be considered “urgent” include “Leaking Roof 5 working days”.
  5. The landlord’s Complaints Policy states that:
    1.       its aim is to try to resolve any service issue or complaint informally to begin with but if that is unsuccessful, it operates a two-stage formal process;
    2.       formal complaints should be acknowledged within 5 days and investigated within 15 working days;
    3.       stage 2 complaints should be investigated within 20 working days;
    4.       where timescales cannot be met, the leaseholder should be informed of the reason for the delay and given a revised timeframe for a response.
  6. The landlord operates a Housing Services Policy which deals with “Compensation, Reimbursement and Redress”. It states that:
    1.       It does not apply where an alternative policy or insurance scheme already covers the situation;
    2.       the landlord will consider requests to reimburse leaseholders who have incurred an unreasonable additional expense where it has failed to meet its service standards;
    3.       discretionary “voluntary” payments may be made by way of compensation and with the aim of putting the complainant back in the position they would have been in had the service failing not occurred. The policy gives no guidance about the level of payments likely to be made.

Assessment and findings

The repair of the leak and the insurance claim

  1. It is not in dispute that the landlord is responsible for maintaining the roof of the building and the lift. It is also agreed that the leaseholder reported a leak on 1 May 2018 when she noted an issue with her bathroom ceiling. The evidence shows the probable cause was assumed to be a fault with the roof and the landlord arranged for “roofers” to attend. The landlord’s Repairs and Maintenance Handbook sets out that it aims to attend to such leaks within five working days (see paragraph 24 above). However, the roofers did not attend until 18 May 2018, which was 14 working days, and the landlord therefore failed to comply with its own service level standards. This was an inappropriate response which represented a service failing on its part.
  2. It is important to note at this point that this complaint should not be looked at with the benefit of hindsight. The leaseholder has reported to this Service that, during the five–week period it took the landlord to fix the leak, matters deteriorated to the point where her bathroom ceiling collapsed, causing significant damage. This suggests that, when she first reported the leak, the damage was not as severe and might explain why the extent of the problem was not as apparent as it later came to be.
  3. The problem was ultimately identified as a leak to a seal of the door frame to the lift motor room and the fault could not be fixed immediately as a part needed to be manufactured. As a result, the repair was not completed until 6 June 2018 and there is no evidence that the repairs process could have been concluded more quickly. Sometimes repairs cannot be concluded straightaway and the service level standards for completion need to be applied to that initial response and ‘diagnosis’.
  4. The landlord acted in accordance with its Housing Services Policy in directing the leaseholder down the insurance route to claim for the damage as there was an insurance scheme in place. Whilst initially the insurers accepted the claim, they then noted that the property had been sublet and asserted that the policy did not provide cover under those circumstances (as the leaseholder’s tenant was not the named ‘leaseholder’ within the terms of the policy).
  5. It is not disputed that the Lease places responsibility for insuring the building with the landlord. It sets out a list of specific risks to be covered and the insurance policy summarised above reflects those requirements closely (see paragraph 21.3 above). There is no requirement on the landlord to secure “Accidental Damage” cover, although it has done so anyway. Neither is there a requirement for the landlord to arrange cover for any other risks or to envisage what might happen if a leaseholder sub-lets their property. Therefore, the landlord acted appropriately in securing the insurance cover.
  6. This does, however, raise the issue of how the leaseholder was supposed to know that by subletting her property she left herself exposed from an insurance perspective, particularly as she was not involved in arranging the insurance. The leaseholder argues that the landlord has failed to secure adequate cover for her particular situation, but its obligation does not extend that far. Given this exception to the insurance provision, it is this Service’s view that the landlord might reasonably be expected to advise the leaseholder of the position once she had notified it of the subletting. Indeed, the landlord’s Leaseholder Handbook states that a leaseholder should let it know if a property is sublet (see paragraph 23 above). However, in the landlord’s response to this Service it advised that it only became aware of the subletting during the life of the insurance claim and there is no evidence to contradict this point. By this time, it was too late to advise the leaseholder of the possible implications of the subletting.
  7. Fortunately for the leaseholder, the insurers volunteered payment, but she remained dissatisfied for three reasons, as follows:
    1.       She has no confidence that she will not experience further damage inside her property due to faults with the structure of the building, as there have been several over the years. However, the evidence only reflects the leak in May 2018 and a report of one in the winter of 2013/14. She considers that the landlord is “negligent” in its handling of its obligations and the upkeep of the building;
    2.       She reports that she cannot get her own insurance to cover accidental damage as the existence of the landlord’s policy would result in dual cover. As a result she is left in the position where she might have to pay for damage caused where the landlord has failed in its maintenance and repair obligations and through no fault of her own;
    3.       She was put to inconvenience in dealing with this complaint and pursuing the insurance aspect of it. She chose to defer having her property repaired whilst she waited for it to dry out and because she had noted a possible further source of leakage developing in the fabric of the building which might affect her property. She considers that she should receive compensation of £500 to reflect the impact on her of all the effort required to deal with the situation.
  8. This Service does not have the legal expertise or the authority to make legally binding decisions about whether a landlord has been ‘negligent’. This is a specific legal concept which must be considered and decided by the courts. If it is the case that the landlord is aware of, or should reasonably be aware of, outstanding maintenance and repairs but fails to deal with them, it is at risk of claims for compensation from its tenants. In this case it is now on notice of the possible impact to the leaseholder moving forward of any failings on its part. The leaseholder might reasonably argue that damage to her property is foreseeable and the landlord should shoulder the cost of putting it right.
  9. It is not possible to say whether the collapse of the ceiling and the resulting damage could have been avoided (in whole or in part) had the landlord inspected the property more quickly, identified the fault and set in motion the repair. However, it is reasonable to conclude that the delay had some adverse impact on the situation because once a leak appears it is unlikely to fix itself and was ongoing and therefore cumulative in effect. All of the time the repair was delayed, the risk of a ceiling collapse grew stronger. The landlord might reasonably have been expected to take this into account even if the severity of the problem was not apparent at the time of the initial report.
  10. The leaseholder was put to a great deal of time and trouble in dealing with the aftermath and it is reasonable that the landlord should offer some compensation towards that effort despite it being entitled to direct her to make an insurance claim. There was a service failing here, and the possibility of the ceiling collapse being avoided had the landlord complied with its service level standards cannot be ruled out.

The formal complaint

  1. The landlord has accepted that there was a service failing on its part, in that it failed to deal with the leaseholder’s complaint in accordance with its Complaints Policy and Procedure and this was inappropriate. The landlord was due to give its stage one complaint response by 14 March 2019, but did not do so it until 2 December 2019, some nine months later.
  2. At stage two, there was a further delay as the response was issued 12 working days outside of the target response time. During these cumulative periods of delay, the leaseholder was left unclear as to the outcome of her complaint and had to seek the assistance of this Service to secure a response.

Compensation/remedy

  1. The landlord has not offered any compensation in respect of its service failing in the repairs process but has offered £50 for the complaint handling delay. This Service’s view is that this does not adequately reflect the impact on the leaseholder of the landlord’s failings. Compensation of £250 in total has been ordered below and is considered a fairer resolution to this dispute. This sum takes into account the significant delays in the complaints process and the delays in carrying out the repair in May/June 2018.
  2. The leaseholder reports being unable to secure insurance for accidental damage to her property whilst it is insured by the landlord as insurance companies view this as dual cover. This is despite the landlord’s insurers confirming that the current policy does not cover the risk so there would be no duplication. This leaves the leaseholder in a difficult position. Therefore, a recommendation is made below that if the leaseholder so desires, the landlord might consider contacting the insurer to see if the existing policy might be extended to cover accidental damage to the leaseholder’s specific property (whilst tenanted) on the basis that she would have to pay any additional premium in its entirety and the landlord’s administration costs in addition.

Determination (decision)

  1. In accordance with paragraph 54 of the Scheme there was service failure by the landlord in respect of its handling of the leaseholder’s:
    1.       reports of a leak to her property;
    2.       associated formal complaint.

Reasons

  1. There was a delay in the landlord initiating investigations into the cause of the leak and it is reasonable to conclude that this contributed to causing significant damage to the leaseholder’s property. There was also a significant delay in it responding to the formal complaint. The level of compensation offered by the landlord is insufficient to reflect the impact on the leaseholder of these failings. 

Orders

  1. The Ombudsman orders the landlord to pay the leaseholder £250 compensation (£100 for the long delays in its complaints handling and £150 for the distress and inconvenience caused by the delayed repairs).

Recommendations

  1. The Ombudsman recommends that the landlord should, upon the leaseholder requesting it, consider contacting the insurer to see if the existing buildings insurance policy might be extended to cover accidental damage to the leaseholder’s specific property whilst sub-tenanted. This would be on the basis that she would have to pay any additional premium in its entirety and the landlord’s administration costs for arranging the extension. If the landlord considers that such a request of the insurers would be made in vain, it should explain this to the leaseholder giving any reasons for taking this view.