Karbon Homes Limited (202004608)

REPORT

COMPLAINT 202004608

Karbon Homes Limited

31 May 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

This complaint is about:
1. The residents’ allegation their share in the property was mis-sold;
2. The landlord’s response to the residents’ reports that build quality issues caused ongoing damp and mould at the property;
3. The landlord’s complaint handling.

Jurisdiction

What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
After carefully considering all the evidence, in accordance with paragraph 39(i) of the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.
1. The residents’ allegation the property was mis-sold.
The residents have said crucial information concerning flooding was withheld when they bought a share of the property. Further, they would not have completed the purchase had they known this information. They feel they should be allowed to “hand the property back” to the landlord. In its final response letter, the landlord said the residents’ solicitor was responsible for advising them on matters such as flood risk.
Paragraph 39(i) of the Scheme says the Ombudsman will not investigate complaints which, in the Ombudsman’s opinion, “concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure”.
The Ombudsman can consider complaints which concern the activities of a Housing Ombudsman Scheme member while it is acting in its capacity as a landlord. Typically, these activities are set out in the relevant tenancy/lease agreement. No information concerning the parties’ obligations at the point of sale was seen in the lease agreement. Further, the Ombudsman cannot compel the landlord to accept the return of the property.
Given the above, this aspect of the residents’ complaint is outside of the Ombudsman’s jurisdiction. The information seen suggests the matter is likely to need consideration by a court. The residents could contact Citizen’s Advice for help to pursue the matter.

Background and summary of events

Background

The residents are shared owners of the property, and the lease began on
11 March 2020. The property is a recently constructed semi-detached bungalow on an estate containing similar housing.
The lease agreement confirms the respective parties must jointly appoint an independent expert to resolve any disputes requiring determination by a professional.
The landlord’s leaseholder handbook confirms newbuild properties are subject to a formal inspection to check for defects. It shows the defect inspection will occur around 12 months after the property is first occupied. The estates’ builder is responsible for repairing any confirmed defects.
The landlord operates a two stage formal complaints procedure where concerns cannot be resolved informally. It aims to respond to complaints within five working days at both stages. The landlord’s complaints policy, effective April 2021, shows it can close a complaint in the event a complainant fails to respond to a request for pertinent information. The Ombudsman was unable to find a more relevant policy document online.

Summary of events

The landlord’s repair history records suggest it attended the property on 30 April and 6 May 2020. No information was seen to confirm the details of these visits.
On 22 June 2020 the landlord emailed the residents in connection with the 12-month defect inspection. It said the landlord would attend the estate on 24 June 2020 to assess external defects. However, it was unable to conduct internal inspections due to the pandemic. It said if it didn’t receive a response by 1 July 2020, it would assume the residents had nothing to report.
On 30 June 2020 the residents gave the landlord a list of issues with the property. The list said water ingress from outside was causing damp and mould in the kitchen along with a foul smell. Further, the front and kitchen doors were incorrectly sealed, which exposed the property to the elements.
The landlord’s correspondence confirms it passed the list to the builder on 1 July 2020. The builder asked for additional information but said mould in the kitchen cabinets was not a defect. This was on the basis newbuild properties were not vented or heated until they were occupied. The landlord relayed the information to the residents the same day.
The parties exchanged emails the same day. The residents asked for details of the property’s warranty on the basis there was “a water problem with the build”. They said they raised this with the landlord before and after the purchase. Since it failed to respond to their information, they would be seeking legal advice. The landlord said the property had a 12-month warranty with the builder. Further, it was unaware of any issues, but it was willing to try and resolve the situation.
On 3 July 2020 the landlord acknowledged correspondence from the residents’ solicitor. It said the builder would investigate the list of issues and the residents would be contacted in due course. The Ombudsman has not seen the solicitor’s correspondence.
The landlord emailed the residents on 8 July 2020 following contact from the builder. It said the builder advised it attended the property that day to investigate the reported issues. However, the residents were unhappy with the visit and it was unable to complete a full investigation. The landlord said it needed to carry out relevant inspections and it required the residents’ cooperation during visits.
It said a further inspection would be arranged to investigate damp and mould, and the installer would attend the property’s doors. Further, it was aware the residents recently expressed concern the living room was unusable, but it needed a detailed explanation of the problem.
The parties exchanged emails on 10 July 2020. The residents attributed damp at the property to the builder’s failure to install drains contrary to approved plans. They also disputed the parties present on the builder’s behalf during the recent visit. The landlord asked the residents for a convenient date and time to inspect the property.
The residents updated the landlord on 14 July 2020. They provided photos to support water ingress into the property. They also raised several technical build quality issues, such as the height of paving slabs relative to the damp proof course.
The residents emailed the landlord on 16 July 2020. The subject heading was “letter of complaint”. The main points were:
1. On moving in, the residents raised the doorway seals with the landlord, which passed details to the builder. The builder never contacted the residents about the issue.
2. The residents were not given advanced notice of the visit on 8 July 2020. Contrary to the landlord’s leaseholder handbook, the builder’s representatives did not have an identity card when they asked to access the property. Issues the residents raised about the property’s exterior were dismissed on the basis it could be jet washed.
3. The property had several defects including excessive mushroom growth in the back garden, missing yard “gullies” and paving situated “too high”. Overall, the property did not meet building standards and the residents should have been informed during the sale process. Further, their health was being affected by the water ingress.
The landlord replied the following day. It said it was waiting for the residents to confirm a suitable time for an inspection. Further, it was unable to assess the issues reported without the residents’ permission.
On 10 August 2020 the residents added further issues to their complaint including: a missing gulley in the parking area; failure by the builder to comply with “a flood risk assessment” or a “suds maintenance plan” and dirt covering the external front of the property. The said the problems resulted from drainage defects and omissions.
The door installer wrote to the residents on 12 August 2020. It said it emailed them on 6 July 2020 to confirm it would attend the property’s doorways on
5 August 2020. Since it was unable to gain access on this date, it would reattend the property on 8 September 2020. The landlord emailed the residents the same day. It said they had not responded to several email requests to arrange an appointment. It would therefore close the case unless they replied the following day.
The residents responded the next day. They said four previous visits had failed to resolve their concerns and the landlord had failed to respond to their photos. Given the circumstances, they wanted to know the purpose of a further visit and the position of the person attending. They said property’s issues resulted from the builder’s failure to comply with planning conditions and an “expert determination” was needed in line with the lease agreement. Further, they wanted the relevant details to raise a claim with the landlord’s insurer.
On 24 August 2020 the residents postponed an inspection due to take place the following day due to illness.
On 25 August 2020 the landlord acknowledged the residents’ complaint at stage one. It recognised the residents had approached the Ombudsman with their concerns. It said an appointment was scheduled for 8 September 2020 to investigate the reported defects. The residents would be notified of the next steps following the outcome of the inspection.
The landlord updated the residents on 14 September 2020. It said it was considering their concerns following a meeting on 8 September 2020, and it would contact them in due course. It asked for a convenient time to inspect a hole in the floor which the residents reported on 9 September 2020.
The landlord issued a stage one response on 24 September 2020. It said the residents refused to allow the landlord access to investigate their concerns during the pre-arranged inspection on 8 September 2020. It acknowledged they also raised additional concerns at this time. The main points were:
1. Gullies marked on the original planning application were deemed surplus to requirements.
2. The flood risk and suds assessments had been technically approved by the planners. However, a final inspection would be conducted when the estate was complete.
3. Technical issues were discussed with the residents during the meeting and details of the property’s construction was explained. The paving was a standard specification.
4. The hallway floor had now been repaired and the landlord was happy to arrange jet washing to the external front of the property.
5. The landlord was willing inspect mould and musty smells in the kitchen at the residents’ request, but it would need access to the property.
The residents responded the same day. They said the landlord’s response was “shocking” and they would take legal advice. Further, they did not agree to jet washing given the property was “surrounded in water”.
On 28 September 2020 the landlord said it was happy to inspect the property to address the residents’ concerns. Further, it said it might be able to escalate the complaint if the residents explained which aspects had not been addressed, why they disagreed with the response and what their preferred outcome was.
The residents updated the landlord on 4 October 2020.They said during the recent meeting the parties agreed to “expert determination”. So, they were surprised this information was missing from the landlord’s response. Further, they were told dirt on the external front of the building was due to a flood. However, this information was omitted during the sale process. Though they previously agreed to jet washing, they did not want to cause additional water damage to the property.
They said one of the residents had health issues and they chose the property believing it was “disability friendly”. However, they now felt differently and were unhappy with the time and stress involved in resolving the situation. Further, they were using air conditioners and diffusers to improve conditions at the property. They said the landlord should compensate them for their associated costs including electricity usage.
On 23 October 2020 the landlord said it needed answers to its recent questions to consider escalating the complaint. This was in response to an update request from the residents.
On 9 November 2020 the residents asked the landlord to refer to their correspondence from 4 October 2020. They said they had asked the landlord’s representative if they wanted to take damp readings during the September meeting, but they were told “it wouldn’t look at it”. The residents therefore wanted an expert determination in line with the agreement reached during the meeting. They also said they did not agree with the builders’ technical assessment of the paving and suds systems.
On 12 November 2020 the landlord thanked the residents for answering its questions. It said it would review the situation and respond in due course.
The landlord replied on 4 December 2020. The wording of the reply suggests “build and engineering layouts” were provided to the residents around this time. The main points were:
1. The flood the residents referenced was a deluge of rain which swept onto the estate leaving sandy deposits on brickwork and render. The local authority and water company were involved because buildings outside the estate were also affected. A “bund” had now been formed to prevent the situation from reoccurring.
2. The landlord was unable to say whether the flood caused water ingress through the airbricks. However, any water would pass into the void under the floor and soak away in accordance with the property’s design.
3. Footpath levels, along with other technical design features, were signed off by the relevant building authorities, and yard gullies the residents referenced would “take very little water”.
4. The landlord wanted to understand the residents’ desired outcome in relation to the expert determination.
The residents responded in detail on 9 December 2020. They said flood water entered the property and was still present in the foundations. Further, the property was vulnerable to flooding given the absence of gullies. Expert determination was therefore required to establish the amount of water in the foundations.
Further, because the property was in an area of high flood risk, the residents wanted evidence the decision to omit the gullies was correctly approved. They said they would not have bought a share in the property if they were aware of flood issues during the sale. They restated an expert determination was needed to resolve the situation overall.
On 7 January 2021 the landlord updated the residents about its progress with the expert determination. It said it was waiting to hear from the local authority’s planning department and it would respond in due course.
On 2 February 2021 the residents chased the landlord for its final response to the complaint. The landlord replied its expert determination was from the local authority and it was awaiting responses from “planning enforcement” and “building control”.
On 25 February 2021 the Ombudsman asked the landlord to provide a stage two response by 11 March 2021.
The residents emailed the landlord on 3 March 2021. They said expert determination should be carried out by an independent surveyor in line with the lease agreement. They denied preventing the landlord from accessing the property and said the issue had been ongoing since August 2020.
The landlord wrote to the residents on 11 March 2021. It said it had found a suitable independent consultant to assess the property’s drainage. Access to the property would be required for a full assessment. The landlord suggested a discussion to progress matters. It wrote again on 24 March 2021 and said it was unable to issue a final response without further information about the residents’ complaint. Further, it was open to alternative options if the residents did not agree to its suggested consultant.
On 16 and 26 April 2021 the landlord and the residents updated the Ombudsman respectively. The landlord said the independent consultant tried to contact the residents, but they had failed to engage. The residents said the property was full of damp and odour despite dehumidifiers running constantly. They said they should be allowed to hand the property back to the landlord, which should also award compensation.
On 7 May 2021 the residents detailed the scope of the expert determination. It included assessing: flood damage “under footings” using thermal imaging; water ingress into the kitchen; water wicking on the paving; the absence of yard gullies; water table height; paving height and a waterfall effect from the neighbouring property. They said they wanted to source a surveyor themselves with the landlord’s consent.
Between 17 and 27 May 2021 the parties jointly agreed an independent surveyor. Correspondence from this period confirms the surveyor was suggested by the residents and approved after the landlord established its qualifications. The surveyor told the landlord “We hold Safecontractor accreditation but are not members of RICS etc as our work is not purely buildings, this is just one of the many different types of survey that we carry out”. Later correspondence confirms the landlord agreed to cover an equal share of the survey’s cost.
The survey report confirms the inspection took place on 3 June 2021. It included multiple pictures of the property including thermal images. It shows “higher levels of moisture were detected” on internal and external walls. It said the internal moisture levels “would not be expected” and moisture was “tracking down” the external brickwork. However, no defects were identified in the report, which made no recommendations to address any of its observations.
On 4 June 2021 the residents told the Ombudsman the landlord had offered them a choice of three surveyors. However, they opted for an alternative surveyor which they felt would review the flooding issue.
The landlord updated the residents around 10 June 2021. It said it considered the survey report was inconclusive since no cause was identified and no remedial works were recommended. Nevertheless, it would pass the report to the builder for further comment and update the residents in due course.
Another surveyor gave technical feedback on the report in a letter to the builder dated 21 June 2021. It said interpretation of thermal patterns should be undertaken by an expert qualified to comment on the cause of dampness. While it suggested checking the sealant around a door frame, based on the information in the report, it said the survey did not “show, indicate or prove” dampness at the property.
The landlord issued a stage two acknowledgement on 17 June 2021. It said access was needed to allow a “property preservation specialist” to undertake further investigations. Should the residents decline to facilitate access, it would issue a final response based on the information available. However, if the residents agreed, the landlord would appreciate the opportunity to incorporate any new findings into its final response.
The landlord issued its stage two response on 25 June 2021. The main points were:
1. The landlord attended the property on 8 and 9 July 2020 to investigate the residents’ initial reports of damp and mould. No evidence was seen during the initial visit, so it returned the next day and removed a plinth. On removal, minor black spots were noted which were considered typical of condensation in areas that lack ventilation.
2. The landlord had not received a response from the local authority, in relation to the residents’ request for detailed technical information, despite making several requests.
3. The landlord referred the survey report to the builder along with an independent surveyor, subsequently it was submitted it for a further review internally. While they acknowledged its contents, the parties agreed there were no defects or recommendations highlighted in the report. As a result, it did not prove there was a damp issue at the property.
4. The landlord subsequently wrote to the residents to request access for further investigation by a “property preservation specialist”. Since the residents had declined access to date, the landlord’s final response reflected the information available.
5. Overall, the landlord had investigated and responded to the residents’ concerns as fully as possible given the circumstances. It remained “committed to helping alleviate” their concerns and it would undertake any necessary remedial works identified.
The information seen suggests the situation was ongoing at the point of the Ombudsman’s assessment.

Assessment and findings

It is recognised the situation is distressing for the residents and that it has been ongoing for a considerable period of time. The Ombudsman is unable to independently establish the presence of damp or build quality issues. Similarly, the Service is unable to evaluate medical information. We can assess a whether a landlord responded appropriately to reported issues in line with any relevant policies, regulations or guidance.

The landlord’s response to the residents’ reports that build quality issues caused ongoing damp and mould at the property

The timeline confirms the landlord was actively checking for defects within a 12-month period in line with its relevant policy. It also shows the landlord engaged appropriately with the residents’ reports overall. For example, its initial inspection took place within seven working days of receiving the residents’ defect list, which referenced damp and mould. The evidence confirms it also reacted promptly to the residents’ report of a hole in the floor, which was repaired within eleven working days.
While the evidence suggests the landlord did attend the property on several occasions between 30 April and 9 July 2020, no evidence was seen to show the visits were related. Overall, the Ombudsman was unable to fairly say the landlord made an excessive number of visits based on the information seen. No evidence was seen to show the landlord failed to respond to any issues the residents reported at the beginning of the timeline.
Correspondence between the parties shows the landlord confirmed it was willing to respond accordingly to any repair issues identified by an inspection. This was an appropriate response, and the landlord maintained this position consistently throughout the dispute. No information was seen to suggest any areas of the property were uninhabitable at any point during the timeline. Nor was any seen to suggest the property fell below any applicable building standard.
The timeline confirms the landlord offered the residents a choice of three qualified surveyors to undertake an independent survey. This is in line with the Ombudsman’s expectations in these situations. It also confirms the landlord showed flexibility in allowing the residents to source their own specialist. The landlord demonstrated it was resolution–focussed by covering an equal share of the specialist’s costs.
When it received the specialist’s report, the landlord sought further opinions on its content. This included a professional opinion from a relevant surveyor. This shows the landlord proactively sought to improve the quality of its decision making in respect of the report. The landlord is entitled to rely on the opinion of relevant qualified professionals. When it determined the report was inconclusive, the landlord offered the residents a further inspection from a building preservation specialist to try and resolve the dispute. This was appropriate action given the circumstances.
The Ombudsman is often given surveyor’s reports in damp and mould cases. In general, we expect landlords to comply with any recommendations to address an identified issue. In this case, the report did not specify the cause of the moisture levels or make any corresponding recommendations. As a result, the Ombudsman cannot fairly say the landlord’s response to the report was inappropriate. It is noted the report made no reference to either flood water in the property’s foundations or the absence of gullies.
Nevertheless, the timeline shows there were problems with the landlord’s overall response. For example, the residents consistently said the parties agreed to an expert determination on 8 September 2020 to progress the dispute. They also pointed out this agreement was not reflected in the landlord’s subsequent correspondence. The Ombudsman has not seen any records detailing the outcome of the meeting. Overall, this indicates an issue with the landlord’s record keeping.
However, the timeline shows the landlord could have reasonably concluded an independent survey was needed based on the residents’ comments on
9 December 2020. Ultimately, little progress was made on the issue until the residents’ clarification email on 3 March 2021. The interim period therefore represents an avoidable delay of around 12 weeks. That said, the landlord ultimately complied with the terms of the lease in respect of the expert determination.
Given the above, there was service failure in respect of the landlord’s response to the residents’ reports. Overall, it was responsible for an avoidable delay which prevented the residents from progressing the dispute for a period of around 12 weeks. It is evident that this caused them a degree of inconvenience for which an apology is appropriate. It is reasonable to conclude any delays could have been avoided by improved record keeping from the landlord during the meeting on
8 September 2020.

The landlord’s complaint handling

The timeline points to delays in respect of the landlord’s complaint handling. This is because it took around eleven months, based on the period between
16 July 2020 and 25 June 2021, for the landlord to issue a stage two response following the residents’ formal complaint. It is accepted that during this time the landlord was attempting to engage with the substance of the complaint. However, this represents an unreasonable timeframe overall.
The correspondence between the parties shows the residents frequently chased the landlord for its complaint response during this time. It is reasonable to conclude this was both avoidable and inconvenient. The timeline suggests the residents were seeking a prompt response to their complaint to allow them to pursue matters outside of the landlord’s complaints process. This may be because they felt their relationship with the landlord had broken down.
Given the above, the landlord should have reasonably considered issuing a final response, based on the information available, at an earlier stage. This may have avoided some of the inconvenience the residents incurred. Overall, the eleven-month timeframe, and it associated impact on the residents, represents service failure in respect of the landlord’s complaint handling.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman scheme there was service failure in respect of:
1. The landlord’s response to the residents’ reports that build quality issues caused ongoing damp and mould at the property.
2. The landlord’s complaint handling.

Reasons

There was an avoidable delay of around 12 weeks before the landlord began to make progress with the residents’ request for an expert determination. The evidence suggests the delay was inconvenient for the residents. Further, any delays could have been avoided by improved record keeping from the landlord.
It took around eleven months for the landlord to issue a stage two response after the residents’ formal complaint. This was an unreasonable timeframe, and the residents chased the landlord for a response on several occasions. The landlord should have reasonably considered issuing a final response earlier based on the information available.

Orders and recommendations

Orders

The Ombudsman orders the landlord to issue the residents a written apology within four weeks for the above identified delays and failures in respect of the landlord’s response to their reports.
The Ombudsman orders the landlord to pay the residents a total of £150 compensation within four weeks for any distress and inconvenience the residents were caused by the above identified delays and failures in respect its complaint handling.

Recommendations

The landlord to ask the local authority for the requested technical information and write to the residents with an update. It may wish to consider whether the information required can be sourced from elsewhere.
The landlord, if it has not done so already, to give the residents the suggested building preservation specialist’s details.
The landlord to review its record keeping processes in respect of site meetings with residents. This is with a view to ensuring any agreed actions are captured and progressed accordingly.
The landlord should provide evidence of compliance with the above orders and confirm its intentions regarding the recommendations to this service within four weeks of the date of this report.