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Incommunities Limited (202226652)

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REPORT

COMPLAINT 202226652

Incommunities Limited

14 September 2023

 

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice, or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman, and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

  1. The complaint is about the landlord’s handling of the resident’s request to purchase his home under the Right to Acquire scheme.

Background

  1. The resident holds an assured tenancy on a 3-bedroom house owned by the housing association landlord. The tenancy agreement began on 13 August 2019.
  2. On 27 October 2022, the resident submitted a Right to Acquire (RTA) application. The landlord denied the application on 3 November 2022, stating that the property was not constructed or purchased with grant funding; therefore, it was not eligible for the RTA scheme.
  3. The resident made a stage 1 complaint to the landlord on 16 December 2022. He stated that when he viewed the property in 2019, the landlord told him he would be eligible to purchase the property under the RTA scheme. On that basis, the resident said he spent £7,000 on home improvements, thinking he would one day become the property’s owner.
  4. Throughout the complaint process, the landlord explained that all residents can apply to buy their homes. However, not all properties qualify for the scheme. The landlord stated it could not reverse this decision because the property did not meet the RTA eligibility criteria. In its final response letter on 19 January 2023, the landlord reiterated its stage 1 response. It added that it could find no evidence that the resident was told he would be able to purchase the property. It informed the resident he had the right to refer his complaint to this service.
  5. The resident remained dissatisfied and escalated the complaint to this service on 1 February 2023. To resolve the complaint, the resident requested the landlord:
    1. Allow the purchase of the current property under the RTA or
    2. Allow the purchase of a different property in the area under the RTA or
    3. Pay the resident £7,000 in compensation, the cost of the home improvement.

Assessment and findings

  1. When investigating a complaint, the Ombudsman applies its Dispute Resolution Principles, which include treating people fairly, following fair processes, putting things right and learning from the outcomes.
  2. The RTA scheme allows residents to purchase their property at discounted prices after living there for 3 years. However, specific criteria must be met, as not all residents and properties are eligible. For example, residents must be assured or secured tenants to qualify for the RTA scheme. The property must have been built, bought, or transferred to the housing association after 31 March 1997. The landlord is responsible for administrating the RTA scheme.
  3. The Ombudsman expects that when a landlord receives a request to clarify the process of exercising the RTA scheme, it will respond clearly with a detailed explanation of the steps involved, avoiding ambiguity. If the landlord was unsure of the details, the Ombudsman will look to see that the landlord documented the enquiry properly and asked the responsible department to respond, or that it signposted the resident accordingly. The landlord should keep records of all enquiries and communications with residents so that information is accessible and retrievable.
  4. In this case, the resident asserted that when he viewed the property before the start of the tenancy agreement, the landlord misinformed him that he would be able to purchase the property in 3 years. The resident said that, as a result, he spent his savings on home improvements and did not have the funds to purchase another property in the area. The resident believes that the landlord ought to take responsibility for the alleged misinformation he was given, and it should compensate him for what he considered to be the adverse financial impact on him and his family.
  5. The landlord explained that when residents enquire about purchasing their home via the RTA scheme, they are told to complete the application form. The landlord would then check to ensure both the property and the resident are eligible for the scheme. The landlord explained that the resident could not have been advised that he could purchase the property before the assessment of the application form, which could only be submitted 3 years after the start of the tenancy. The landlord said it had reviewed communications with its contact centre and home sales departments about this matter and could find no evidence that the resident had been advised he would be able to purchase the property at any point. Therefore, it concluded its internal complaint process, having identified no failure on its part.
  6. Following escalation to this service in February 2023, the resident provided screenshots of his mobile phone showing text messages between him and the landlord’s housing officer. On 5 July 2019, the resident asked if he could purchase the property under the RTA scheme. The housing officer replied on the same day: “It is possible. I don’t actually have any dealings with the right to acquire, but I don’t see a reason why not”. A further text message on 15 July 2019 by the resident said: “I spoke with Sales and was advised they would need to speak with you. Please let us know if we could buy the property after 2 years, what discount we would be looking at, and the estimated price for the property so we can plan ahead. We will then make a decision in regard to moving there thanks”. There is no evidence that this text was replied to.
  7. From the resident’s point of view, the housing officer was the face of the landlord, and therefore, he interpreted the housing officer’s words as consent to purchase the property.
  8. In the Ombudsman’s view, if the landlord did not have the requisite information on this subject, it should have explained that to the resident and taken the time to find the correct information or alternatively signposted the resident to an authoritative source. The consequence in this case is that the landlord’s communications have led to the resident’s disappointment in not being able to acquire the property. This amounts to a service failure on the part of the landlord.
  9. As part of this investigation, this service showed the text messages to the landlord. The landlord responded that although the housing officer said he ‘did not see why not’, he also stated he ‘did not deal with the RTA applications’. The landlord accepted, however, that the resident contacted the sales team responsible for RTA applications. It acknowledged that it missed an opportunity to investigate the property’s eligibility for the scheme and inform the resident at the earliest opportunity that the property was not eligible.
  10. To put things right, the landlord said it would reimburse the resident’s home improvement costs subject to valid receipts being provided. The landlord also said it identified learning from the outcome and that in the future, it would establish property eligibility for the RTA scheme to inform prospective residents before the commencement of the tenancy, thereby minimising potential confusion and disappointment.
  11. The landlord missed an opportunity to resolve the resident’s complaint at the earliest opportunity, which is the purpose of the complaint process. The landlord would have had access to the text messages and other correspondence before the resident escalated his complaint to this service. As such, it could have reached its conclusion without this service’s intervention, and had it done so within its internal complaint process, this would have resulted in a finding of reasonable redress.
  12. With regard to the RTA of the property, the Ombudsman understands that the property has never been eligible for RTA, and any potential misadvice or error on the landlord’s part would not change the property’s eligibility under the RTA scheme. The fact remains that the resident was not entitled to acquire this property. Neither the landlord nor the Ombudsman can change the RTA scheme rules or criteria set out in legislation.
  13. The landlord is under no obligation to offer the resident a different property to purchase under the RTA scheme.
  14. The resident has provided no evidence to support his request for reimbursement of £7,000, and the landlord is under no obligation to recompense on this basis.
  15. There is no evidence that the landlord was aware of the resident’s decision to invest £7,000 in home improvements. Had permission been sought, the resident would have been entitled to compensation for home improvements should he leave the tenancy. This is in line with the tenancy agreement in accordance with the Housing Act 1985. A recommendation has been made below for the landlord to consider providing consent in retrospect for the home improvements. Should the resident terminate his tenancy in future, he may be able to receive compensation for any remaining monetary value from his investment, which would be at the landlord’s sole discretion.
  16. Meanwhile, in the Ombudsman’s view, the resident is able, for all intents and purposes, to enjoy his family home and the home improvement for years to come, irrespective of whether he could purchase it.
  17. In summary, the landlord failed to identify shortcomings in its communications during the complaint process, which led to disappointment for the resident. An order has been made below to remedy this for the resident, in line with the Ombudsman’s remedy guidance, which can be found on the Ombudsman’s website.
  18. The decision to invest in home improvement was a decision that was open to the resident. The resident had the benefit of enjoying his investment. No action taken by either the landlord, the resident or this service could change the fact that the property cannot be purchased under the RTA scheme; therefore, the outcome for the resident cannot change.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was a service failure in the landlord’s handling of the resident’s request to purchase his home under the Right to Acquire scheme.

Orders and recommendations

Order

  1. Within 28 days from the date of this report, the landlord must pay the resident £200 for the distress and inconvenience caused by the landlord’s handling of the resident’s request to purchase his home under the Right to Acquire scheme. Evidence of the payment must be sent to this service.

Recommendation

  1. The landlord should consider taking the necessary checks to provide consent in retrospect for the resident’s home improvements. In the event that the resident terminates his tenancy, the landlord could consider whether the resident is due any further compensation subject to the landlord’s policies and procedures at that time.