Housing Solutions (201817213)

REPORT

COMPLAINT 201817213

Housing Solutions

4 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 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

This complaint is about the landlord’s responses to the resident’s enquiries about which party was responsible for servicing the gas boiler in the shared ownership property that she purchased.

Legal and policy framework

Clause 6.2.1. of the landlord’s Shared Ownership Sales Policy describes the tenure of the landlord’s (new build) shared ownership properties as leasehold properties.
In the Shared Ownership Underlease for the property (or premises), dated 13 October 2011, the purchaser of the property is described as ‘the Leaseholder’ (as opposed to a tenant).
Clause 3.4 of the Shared Ownership Underlease says that the leaseholder agrees, with the landlord, to keep the ‘gas apparatus’ of the property ’clean and in good and substantial repair and condition.’
Clause 9 of the Shared Ownership Underlease says: “For the purposes of paragraph 4 of schedule 9 of the Finance Act 2003 the Landlord and the Leaseholder confirm that the premium obtainable on the open market for the Premises (by reference to which the Premium is calculated) is the Initial Market Value and the minimum rent payable is the Minimum Rent and that the Leaseholder intends stamp duty land tax to be charged in accordance with the said paragraph 4 of schedule 9 by reference to the Initial Market Value and the Minimum Rent.”
Clause 17, in Schedule 2 of the Shared Ownership Underlease, says that the leaseholder is “To arrange for gas safety inspections every twelve months by a suitably qualified gas installer to ensure that all gas appliances (if any) in the premises are maintained in good working order and upon request to supply to the landlord a copy of such inspections.”
Clause 2. Standard Lease Obligations, in Appendix 3, of the Shared Ownership Underlease, says “Although initially the property is not owned outright the leaseholder does have the normal responsibilities of a full owner this means for example that the leaseholder will be obliged to pay 100% of the outgoings relating to the property and to keep the property in good and substantial repair and condition.”

Summary of events

On 31 January 2019, the resident completed her purchase of a one bedroom ground floor apartment. She bought it from the previous leaseholder (as opposed to as a new build direct from the landlord) and owned 25%, while the landlord owned the remaining 75%.
On 4 February 2019, the resident contacted the landlord about the gas central heating boiler in the property. She said:
1. On completion day, she met the seller in the communal car park. The seller handed over the keys to the property. She was not given any paperwork for the gas boiler and neither was any paperwork left in the property.
2. She immediately discovered some serious problems with the gas boiler.
3. On the purchase paperwork, the seller had clearly stated that that the boiler had been serviced in 2018 and the gas safety certificate was “to follow” and that the heating system was in good working order. However, she had not seen the certificate.
4. She emailed her conveyancing solicitors. They told her they do not obtain warranties from the sellers for heating systems, they advised her to arrange for a plumbing engineer to inspect the boiler and keep any invoices or details of any repairs, which they would send to the seller.
5. She arranged for a plumbing engineer to inspect and repair the boiler. The plumbing engineer concluded that a new heat exchanger was needed, costing around £600 to supply and fit, but he could not guarantee that this repair would solve the problem. She therefore obtained quotes for a new boiler – one of the quotes was for £2,435.
6. She felt she was unable to move into her new home until the boiler is working.
7. She was unhappy about having to make these arrangements and felt it is unfair that she should pay for the repairs or replacement of an item that is clearly not working and which she has not yet been able to use.
On 6 February 2019 the landlord replied to the resident. The landlord informed the resident that:
1. As it does not hold keys to its properties, it was logical for the seller to have handed the keys, plus any operating manuals, over to the resident personally.
2. The lease is a full repairing lease, which means the previous owner should have carried out all necessary maintenance to the property and its systems – and which she was now obliged to do.
3. It normally looks after the assigning of leases and the service charges aspect of a purchase, but all other factors affecting a purchase are handled by the respective conveyancing solicitors for the buyer and seller. It is common practice for conveyancing solicitors to advise a buyer to inspect the condition of a property before exchange of contracts to make sure there have been no major changes since the viewing.
4. An occupier of a property is responsible for arranging gas safety inspections and to obtain a certificate which states that an appliance is gas safe and compliant. As the seller had declared to the resident that the gas boiler was recently serviced and in good working order, the resident should ask her conveyancing solicitor whether they had obtained a copy of the gas safety inspection certificate from the seller, as part of the purchase documentation. The resident should also approach the seller about reimbursement of her repair expenses.
On 8 February 2019, as a goodwill gesture, the landlord sent one of its gas safety engineers to the property to provide a second opinion about the boiler. The engineer’s report had condemned the boiler as being dangerous and recommended a new replacement boiler. The engineer said that in his opinion the faults with the boiler had been existing for some time and should have clearly been identified when the recent gas safety inspection was carried out, although he was aware that the resident had not yet received a copy of the completed certificate. A copy of the engineer’s report and pictures taken was sent to the landlord. The Ombudsman has seen the report and the pictures.
The resident arranged for a new replacement boiler to be installed, which she said was at a cost of £2,100.
On 26 February 2019 the resident’s mother informed the landlord that although the resident’s purchase was 25% share of the property, she was renting the remainder of the property and was therefore a tenant. The lease clearly states that the upkeep of the property is the responsibility of the leaseholder. However, in this situation it was very clear that the previous tenant (the seller) had not maintained the property – there was not even a carbon monoxide detector in the property which the engineer (who replaced the boiler) had stated was illegal. The resident’s mother said the resident had an expectation that a landlord would check if ‘tenants’ complied with their leases because, in this case, not doing so could have posed a serious danger to other tenants in the entire building. She added that in a shared ownership property the maintenance of the gas boiler might be ‘the tenant’s’ responsibility but, in this situation, the resident could not even move in and enjoy the property as a first time buyer. She added that the resident was disillusioned and unhappy with the purchase process. As the resident pays rent as a ‘tenant’, she felt that, as a company, the landlord should reimburse, or contribute towards, the cost of the new boiler.
The resident’s mother also told the landlord that they had now received a copy of the gas safety certificate, stating that the boiler was checked in August 2018 – but the information contained in the certificate was not the same as in the landlord’s engineer’s report.
A formal stage one complaint was raised, to which the landlord issued its reply, on 4 March 2019. The stage one decision letter stated:
1. The landlord had explained its role in the sale of shared ownership properties, on 6 February 2019 (see paragraph 4, above). It did not hold any keys to its properties or manuals and instructions for the appliances within the properties. The landlord’s role was to source a potential buyer when a shared owner wants to sell their shared ownership of one of its properties. In these types of properties, the landlord holds the head lease and handles the assignment of the lease. All other aspects of a purchase are handled by the seller and buyer and their solicitors. The resident had been provided with relevant information when she registered her interest in purchasing the property.
2. The landlord is responsible for repairing and maintaining the structure and fabric of the building, e.g. its roof, the guttering, all communal areas and windows. The resident’s responsibility as a shared owner includes repairing and maintaining the internal part of property, its fittings and fixtures, which includes the gas boiler.
3. With a shared ownership lease, the resident is paying an affordable rent on the share of the property that she does not own. But, this type of rental is not the same as a social housing tenant or a private tenant. In these types of tenancies the rent paid covers all repairs and maintenance to a property and, where applicable, the block.
4. Shared ownership leases contain clauses that explain what repair responsibilities the shared owner has, which includes any gas appliances. The landlord provided an extract from the lease which covers these responsibilities, on 6 February 2019.
5. In response to the resident’s point about why the landlord does not check that shared owners are carrying out their repairs responsibilities, especially in relation to gas boiler services: The landlord said that the lease does not stipulate that the landlord has a statutory responsibility for ensuring that annual gas safety checks are carried out, as it might state in social housing or private rental leases. For shared ownership properties, the resident is the owner of her property, therefore she is responsible for any gas appliances in the property.
6. As a goodwill gesture, the landlord sent a gas safety engineer to inspect the boiler – the engineer found that the boiler was dangerous and recommended that it was replaced.
7. The landlord assumed the resident had contacted her conveyancing solicitor for further advice and assumed that completion went ahead without a gas safety certificate for the boiler, stating that it was safe. If no certificate was available, the resident could have insisted that completion would not take place until she had received (written) confirmation that the boiler was safe and in good working order.
On 24 March 2019, the resident escalated her complaint to stage two of the complaints procedure. She said that according to clause 9 of the lease, a tenant is expected to carry out an annual gas safety check, but as the new owner of the property she was expected to ensure that the gas boiler is in a good working condition. However, during the sale and purchase process, the previous tenant (the seller) had not said that there were issues with the gas boiler, since the last gas safety inspection in August 2018. The resident said she was addressing this point with the solicitor as well as the solicitor’s handling of the purchase. But, as far as it concerned the landlord, she wanted to know why there were clauses in the lease that were not being followed. In addition, the resident said that she appreciated the goodwill gesture by the landlord of sending its gas safety engineer to her property, but she questioned why the landlord sent an engineer and why it took just over two weeks for her to receive the gas engineer’s report. The engineer had told her on the day that he would send his report that afternoon or on the following Monday. The resident added that the stage one response was unfair because it placed responsibility upon her as the new owner from the first day of owning the property.
On 9 April 2019, the landlord issued its stage two decision:
1. As explained in the stage one decision, in shared ownership property leases a landlord is not responsible for ensuring that annual gas safety checks are carried out. As the owner of this type of property, the resident is responsible for maintaining the safety and working order of gas appliances – just as the seller (as the previous owner) was. This includes making sure the gas boiler is serviced annually and a certificate is obtained. The lease is a full repairing lease and the clauses in it set out who is responsible for what repair.
2. On 6 February 2019, the landlord asked the resident to check if her solicitor had obtained the last safety check certificate as part of their enquiry documents and to liaise with the seller’s solicitor about reimbursing her repair costs, since the seller had declared the boiler to be in good working order for the purchase. The resident had stated, on 24 March 2019, that she would be doing this. The landlord felt that this was a more appropriate course of action in the circumstances.
3. In response to the resident’s point about why the landlord sent its gas safety engineer, on Friday 8 February 2019, to inspect the boiler, the landlord said that this was a goodwill gesture. The resident was issued with a warning notice on the next working day, Monday 11 February, and was told that a report would follow. There was a delay, as the engineer’s notes were not available until 25 February, for which the landlord apologised, but hoped that they were useful for her negotiations with the solicitor.
4. Conclusion: All shared owners are responsible for maintaining their gas boilers, including the resident, under the terms of their lease. The landlord sent its gas safety engineer as a goodwill gesture. The engineer promptly issued an advisory note, but the landlord accepted there was a delay before his report was issued. The landlord was not responsible for the boiler.
On 30 April 2019, the resident requested a stage three decision, as she felt that the landlord had not fully answered her questions. She said:
1. Clause 9 of the lease: The landlord expects a tenant to annually service a gas boiler and to obtain a gas safety certificate, as a requirement in a shared ownership lease as part of the owner’s responsibilities. Could the landlord confirm if the previous tenant did in fact have the boiler serviced annually and if a certificate was obtained for each year that the previous tenant was in the property. Although the landlord was stating that this is an annual requirement, it was not actually checking to see if the tenant carries this out. She queried if landlords are responsible for ensuring a tenant complies with their repairing responsibilities.
2. Breach of the lease terms: The reports and pictures of the boiler that the resident submitted clearly showed that the previous tenant had not kept the gas boiler in working order or serviced annually. The resident now had a copy of the gas safety certificate, dated August 2018, confirming that the boiler was serviced, but the landlord’s own gas safety engineer issued a warning notice and said that the boiler was in a poor state. She asked the engineer and was told that in his opinion, the boiler had not been serviced or maintained “in at least a couple of years.” The boiler had not worked from day one of the purchase, which proved that the seller was in breach of the lease terms. She asked why she was being made responsible for this.
3. Attendance by the landlord’s gas safety engineer: The landlord said that it had sent its gas safety engineer as goodwill gesture However, when the resident was talking to a member of the landlord’s staff, she was informed that the engineer should not have been sent out. The resident is wondering whether it was a goodwill gesture by the landlord or if it was a mistake. If the landlord was not responsible for the gas boiler issues, why did it send out its gas safety engineer? The resident also wanted to know why it took just over two weeks to receive the gas engineer’s report and when the landlord had initially received the report.
On 20 May 2019, the resident informed the landlord that the outcome she was seeking was to be reimbursed for the cost of the new boiler.
On 10 June 2019, the landlord issued its response and explained that it was not going to escalate the complaint to stage three of its complaints procedure (which involves a panel decision):
1. Clause 9 of the lease and breach of the lease terms: The landlord was not obliged to check that a shared owner had carried out an annual service on a gas boiler or has had a gas safety check carried out. This is because, as explained previously, the lease is a full repairing lease – the shared owner was responsible for all repairs and maintenance, which includes fittings, fixtures and gas boilers. There is no implied responsibility upon a landlord, in these types of leases, to check that an annual gas safety check is undertaken. The term ‘landlord’ in this respect is not the same as any statutory obligations imposed upon a social housing or a private rental landlord. As the shared owner of the property, the resident was responsible for any gas appliances. As explained on 6 February 2019, the previous owner should have carried out all necessary maintenance to the property and its systems and the resident was obliged to do the same, moving forward. In the 6 February email, it was also recommended that the resident discussed with her solicitor the possibility of any reimbursement for her costs, following the seller’s declaration that the boiler was in good working order. She may want to provide her solicitor with the report from the landlord’s gas safety engineer and check the findings in her surveyor’s report (for the purchase) in respect of the boiler.
2. Attendance by the landlord’s gas safety engineer: The landlord’s position had been set out in its (stage two decision) letter of 9 April 2019. The landlord had sent its gas safety engineer as a goodwill gesture – it was not a mistake – to assist the resident while she was in difficult circumstances. The inspection took place on 8 February 2019. The resident was promptly given an advisory/warning notice, on 11 February – the next working day – so there was no delay of informing the resident about the condition of the boiler. There was no delay by the engineer for issuing his emailed report, on 25 February 2019. The landlord had apologised in the 9 April letter for the report not being issued earlier, but there was no explanation or reason why the engineer was only able to issue the report by that date.
3. Conclusion: The landlord is not in a position, and did not have an obligation, to reimburse the resident for the replacement boiler. This was a matter she needed to pursue (with the seller) through her solicitor.

The Ombudsman has not been made aware of the outcome following the resident’s discussions with her solicitor.
On 6 November 2020, the resident told this service that she cannot locate a copy of a shared ownership lease that contains Clause 9.
On 16 November 2020, the landlord informed this Service that Clause 9 (as the resident had referred to it) does not exist in any of the lease documents. The wording of Clause 9 of the lease is quoted in paragraph 4 of this report.

Assessment and Findings

According to Clause 17, in Schedule 2, of the Shared Ownership Underlease, the resident, as the present leaseholder, is to arrange for gas safety inspections every year and is to ensure that all gas appliances, which includes gas boilers, are maintained and in good working order – plus, upon request by the landlord, to supply the landlord with a copy of the annual inspection reports.
From the available evidence it does not appear that the landlord has requested copies of the previous gas boiler inspections but this clause does not impose an obligation upon it to do so. The wording of the above clause allows the landlord to request a copy if it wants or needs to – it does not categorically have to see previous inspection certificates as a matter of course.
Clause 3.4 of the Shared Ownership Underlease says that the leaseholder agrees with the landlord to keep any gas apparatus in the property in good repair.
These clauses place an obligation on the leaseholder to make sure that gas safety inspections for the boiler have taken place each year. There is nothing in these, or in any other clauses, to suggest that the landlord must check that an inspection has been carried out on any gas apparatus.
The resident purchased the property on 31 January 2019, but on the day of completion she was not given any paperwork about the condition of the gas boiler and neither was any paperwork about the boiler left for her in the property. As the obligation to keep the boiler in good repair is upon the leaseholder, this obligation was upon the previous leaseholder up until point of sale. But, from the point of sale, it was the resident’s responsibility because she became the leaseholder from that time.
In the purchase paperwork the previous leaseholder had stated that the boiler had been serviced in 2018 and that a gas safety certificate would follow. Any information about the working order of the boiler could therefore have only been obtained from the seller (the previous leaseholder), not from the landlord. There is no indication about whether the resident, or her solicitor, had requested sight of the gas safety certificate for the boiler as part of the conveyancing process, during the sale, or had requested the previous leaseholder to supply some proof that the boiler was in good working order. This would have been the time to do so or to request the seller to carry out an updated service as a condition of sale. The Ombudsman notes that the resident has made enquiries with her solicitor about the checks that took place during the conveyancing process.
On 8 February 2019, the landlord sent one of its gas safety engineers to the property. The engineer confirmed that the boiler had been faulty for some time and this would have been identified during an earlier gas safety inspection. The gas safety inspection certificate as at August 2018 had apparently contained different information to that of the opinion from landlord’s engineer. However the landlord was not responsible for the condition of the boiler either when it was checked in August 2018 or when it sent its engineer to inspect it in February 2019. The Ombudsman notes that the landlord sent its gas inspection engineer as a goodwill gesture – it did not have to do this and neither was this a gesture to acknowledge any errors on its part.
The landlord’s approach to matters is noted by the Ombudsman. The landlord correctly explained its position in its complaint responses. The resident requested in an escalation of her complaint and relied on Clause 9 in the shared ownership under lease – but it is clear that Clause 9 is not concerned with the gas boiler or who is responsible for servicing it. In the Ombudsman’s view, it would have been helpful if the landlord had explained this to the resident and had pointed her to the correct part of the lease.
The Ombudsman is satisfied that the landlord’s responses were appropriate and reflected both its obligations and those of the resident, as set out in the lease. It never had any obligation to make sure the previous boiler was in a good condition – therefore it is does not have an obligation to reimburse the resident for the cost of replacing it with her new boiler.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of its responses about which party was responsible for servicing the gas boiler in the shared ownership property that the resident purchased.

Reasons

At each stage of the complaints process the landlord clearly explained its position under the Shared Ownership Underlease. The onus is upon a leaseholder to ensure that a gas boiler is working effectively in a property. At the point of sale and purchase of a property, it is up to both parties to ensure that the appropriate gas safety inspections have been carried out and that any certificates are passed from the buyer to the seller in good time.
When the resident found herself in the unfortunate position of purchasing a property with a faulty gas boiler, the landlord sent its gas safety engineer to inspect the boiler when it was under no obligation to do so.
As the resident became the leaseholder upon completion of her purchase, the responsibility of replacing the faulty boiler became hers.
Therefore, and taking all the circumstances into account, the Ombudsman is satisfied that there was no maladministration by the landlord in this case. This is because it explained its obligations as set out in the lease, explained the resident’s responsibilities and arranged an engineer’s visit on a goodwill basis to assist the resident.