London Borough of Newham (202222349)

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REPORT

COMPLAINT 202222349

London Borough of Newham

30 August 2024


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 handing of:
    1. The resident’s requests for documents.
    2. The associated complaint.

Background

  1. The resident is a joint leaseholder of the property since September 2004. The property is a 2-bedroom maisonette. The landlord is a local council.
  2. On 4 August 2022 the resident contacted the landlord using its online complaint form. She told the landlord she was trying to retrieve a document which she said was needed to change her mortgage lender. On the following day, she added by email that she needed consent to sublet the property. The resident told the landlord on 8 August 2022 that she already holds a licence but asked the landlord for help obtaining the documents about consent, so she could sublet the property. On 12 August 2022 the resident emailed the landlord again, saying she had not received a response, and neither had her solicitors.
  3. The landlord provided a complaint response to the resident on 31 August 2022. The specific stage of the landlord’s internal complaints procedure was not documented on the correspondence. It told the resident that she would need to appoint her solicitor to submit the remortgage enquiry. It also advised she submitted her sublet enquires to a separate team.
  4. On 11 September 2022 the resident complained to the landlord by email. She told the landlord she was unhappy with the advice provided. She also said she should have the legal right for consent, as opposed to having to instruct legal representatives. She had requested consent documents from the landlord, as had her mortgage lender. Neither her or the lender had received any documentation from the landlord. She added that as result of being unable to change lender, her mortgage was increasing and having a financial strain on her. She wanted an explanation from the landlord why it had not provided her consent documents as requested.
  5. The landlord wrote to the resident on 4 October 2022 stating she was free to sublet the property if she supplied written confirmation. The landlord required a copy of the tenancy agreement, gas safety certificate, details of the resident and subtenant, and a payment of £100. Once payment was made, a sublet deed of covenant would be sent for the subtenant to sign. It advised the resident that the deed is per tenant, not per property. It also said the resident would need to apply for a selective landlord licence.
  6. On 12 October 2022 the landlord issued another complaint response to the resident. This correspondence did not specify which stage of the landlord’s internal complaints procedure the complaint was at. The landlord upheld the resident’s complaint and said the staff member who initially received the resident’s requests had left employment. This caused a delay which the landlord apologised for. The landlord said that once payment and the tenancy agreement was received, it would issue the deed of covenant. The resident replied on 24 October 2022 and said she remained unhappy with the landlord’s response, so wanted her complaint escalated.
  7. The resident contacted the landlord using its portal facility on 13 November 2022. She said she wanted her complaint escalated. Previously, the resident said she was told to make a payment of £72.80 and wanted a copy of the document. The landlord emailed the resident on 4 May 2023 and said that it had no record she had paid the £100 to process her sublet application, and asked her to provide proof of payment. stating she claimed £100 was paid to process her sublet application. She responded by email on 6 May 2023 and asked the landlord to clarify, as she was unsure about the contents of its email.
  8. The landlord issued its stage 2 complaint response to the resident on 19 May 2023. The landlord noted that on 4 October 2022 it provided information about subletting the property. The landlord said it had no receipt of the £100 fee, so it tried to resolve the issue by contacting the resident on 4 May 2023. It said that without proof of payment, the subletting process could not begin. Subject to receiving proof of payment, it committed to assessing whether any compensation was due to the resident. Further, it previously received an enquiry from the lender on 8 September 2022. It received payment of the administration fee of £72.80 on 30 September 2022, and a certificate of compliance was sent on 19 January 2023.
  9. Additionally, in the landlord’s final response it said there was a delay in responding to the resident’s complaint of August 2022, and that the response was inadequate. The resident’s email of 11 September 2022 should have been linked with the initial complaint and raised to stage 2 of its internal complains procedure. The complaint response of October 2022 was inadequate. The landlord also said there was a delay in providing its stage 2 complaint response. It had completed a self-assessment following the resident’s complaint to mitigate repeat errors. It awarded £400 in compensation to the resident for its complaint handling.
  10. The resident confirmed to this Service on 2 July 2023 that she remained dissatisfied with the landlord’s response. She wanted us to investigate her concerns due to the delays by the landlord, which she said caused her financial detriment as she was not able to remortgage earlier. She also informed us on 2 January 2024 the landlord had not paid her the £400 compensation.
  11. The landlord told this Service that on 4 April 2024 it received payment of the £100 administration fee.

Assessment and findings

Scope of investigation

  1. The process for obtaining the certificate of compliance and consent documents in this case involved third parties, namely lenders and legal representatives. It is not within the remit of the Ombudsman to assess the actions of these third parties. Paragraph 41.b. of the Scheme states the Ombudsman cannot consider complaints that concern matters which do not relate to the actions or omissions of a member of the Scheme. In line with paragraph 41.b. of the Scheme, this Service can only consider the actions or omissions of the landlord in the circumstances.
  2. In addition to the above, the resident told this Service she was unable to remortgage earlier. The requirements of the lender, its actions or inactions, or the mortgage rate offered, among other concerns of borrowing, may fall within the jurisdiction of the Financial Ombudsman Service. However, the resident may wish to seek independent advice about pursuing her complaint. This report will focus on the landlord’s actions as a social landlord, and its communication.

The resident’s requests for consent documents

  1. Under the lease, the resident is required to give notice to the landlord if she wishes to sublet the property. She is also required to provide the tenancy agreement and pay a ‘reasonable’ fee of no less than £40. The fee is also due for assignment, mortgage, transfer, assent, and devolution.
  2. The evidence shows the resident first requested that the landlord assist her with documents to enable her to remortgage on 4 August 2022. At the outset, the resident had not specified which documents she needed. It was not until 8 September 2022 that the landlord received the request for the certificate of compliance. The landlord replied on 21 September 2022 (9 working days after) that it required an administration fee of £72.80 and a notice of charge, this was appropriate as the covenants in the lease set out a fee is due.
  3. The landlord received payment of the administration fee on 30 September 2022 but did not receive the notice of charge until 18 January 2023. There is evidence the landlord chased the lender for the notice of charge. It promptly supplied the certificate of compliance the following day. However, during the period from 4 August 2022 until 19 January 2023, the landlord could have been proactive in its communication with the resident directly. It is evident the resident was distressed from this experience and unaware about the status of the certificate of compliance, including what was outstanding and the name of the documents. This was unfair and unreasonable in the circumstances.
  4. Additionally, it was not until 4 October 2022 that the landlord told the resident what it required from her in terms of subletting the property. Her initial email about this was on 5 August 2022. This was 41 working days after her initial notification of subletting the property, which was an unreasonable delay.
  5. The landlord apologised for the delay related to consent and it provided justification in its complaint response of 12 October 2022. The landlord said the staff member who would answer these queries had left its employment. However, this does not absolve the landlord from failing to communicate with the resident. Under the Ombudsman’s Spotlight report on Knowledge and Information Management, it says that without good information management, a landlord cannot adequately:
    1. Horizon-scan and identify risks.
    2. Contingency plan.
    3. Proactively address hazards.
    4. Fully comply with legal and regulatory requirements.
    5. Ensure evidence-based practice.
    6. Provide a high-quality service to residents.
  6. By not responding to the resident’s queries regarding subletting the property until 4 October 2022, the landlord demonstrated it did not have systems in place to maintain good information management. It did not have a contingency plan for unexpected events. This was unreasonable and caused the resident time and trouble in chasing the landlord for a response prior to 4 October 2022. A recommendation has been made in this regard.
  7. The resident wrote to the landlord 2 more times after 4 October 2022 and as she received no response, she first contacted this Service on 16 December 2022 for assistance. The landlord did not ask the resident about the £100 fee and supplementary information required until 4 May 2023. This was 6 months after the landlord’s initial request for her to provide information pay a fee. It is unclear as to why the resident had not paid the £100 fee and supplied the information required in this period. However, it was unreasonable that the landlord did not engage in communication with her for 6 months. It was aware of the urgency of her request, and her dissatisfaction with its responses.
  8. The Ombudsman understands that the circumstances around the need for deed of covenant and a certificate of compliance may require the consideration of different departments and third parties. The landlord evidenced communication with the lender between September 2022 and January 2023. The landlord has confirmed to this Service that it has received payment from the resident on 4 April 2024. However, it has not demonstrated that it honoured its commitment to assess any detriment to the resident following proof of payment.
  9. The landlord has acknowledged that its communication was poor which contributed to delays to the remortgage application and left the resident not knowing how to proceed prior to 4 October 2022. This caused her distress and inconvenience.
  10. Delays in the landlord’s initial handling of the matter, and issues with its communication throughout amount to maladministration in its handling of the resident’s requests for consent documents. While the Ombudsman appreciates the resident incurred a significant financial loss because she was unable to remortgage earlier, it is not possible to apportion full responsibility for this on the landlord. To hold the landlord fully responsible would negate the actions of third parties and require this Service to speculate that, without the initial delays the outcome would have been different.
  11. Therefore, it is not appropriate, or within the Ombudsman’s remit, to require the landlord to compensate the resident for the additional mortgage costs. However, under this Service’s remedies guidance, consideration is given for distress and inconvenience caused to a resident by a particular service failure, considering the severity of the situation and the length of time involved as well as other relevant factors.
  12. The landlord’s compensation policy says that it will make payments to residents for delay and distress. In the policy, delay and distress is considered more significant than time and trouble. A payment of £150 is suggested for moderate distress. Taking into consideration the Ombudsman’s remedies guidance and the landlord’s compensation, £200 compensation is awarded to the resident to put things right. Orders consider the overall distress, inconvenience, as well as the time and trouble experienced by resident.

Handling of the associated complaint

  1. The landlord has accepted that it failed in its complaint handling to the resident and offered £400 in compensation. The Ombudsman will consider whether the landlord’s offer of redress for complaint handling was in line with the Ombudsman’s dispute resolution principles and remedies guidance. The principles are:
    1. Be fair, treat people fairly and follow fair processes.
    2. Put things right.
    3. Learn from outcomes.
  2. The Ombudsman’s Complaint Handling Code (the Code) sets out that landlords should do the following:
    1. Acknowledge the resident’s complaint within 5 working days of receipt.
    2. At stage 1 of the internal complaint procedure, provide a response in 10 working days.
    3. If all or part of the complaint is not resolved to the resident’s satisfaction at stage 1, it must be progressed to stage 2 of the landlord’s procedure.
    4. At stage 2 of the internal complaint procedure, provide a response within 20 working days of the resident’s complaint escalation.
    5. The complaint responses should contain the complaint stage.
  3. From the evidence provided, the landlord said both its complaint responses of 31 August 2022 and 12 October 2022 were stage 1 complaint responses. The complaint stages were not denoted on either of the complaint responses, therefore unclear to the resident. However, the landlord had identified learning from its complaint handling. It acknowledged in its final response that it should have aligned its stage 1 complaint responses, as the resident’s email of 11 September 2022 should have been treated as a complaint escalation. This would have been appropriate and in line with the Code.
  4. It was also clear from the evidence the resident was dissatisfied with the landlord’s responses which caused her distress and confusion. When she initially contacted this Service in December 2022, she told us she had not received a stage 1 or stage 2 complaint response. However, the landlord acknowledged its error as it said both stage 1 complaint responses were inadequate.
  5. In terms of timeliness, the landlord has acknowledged and apologised for the delays in responding. The first stage 1 complaint response was provided in 19 working days. The second stage 2 complaint response was sent in 21 working days. These responses exceeded the 10-working day timescale at stage 1 and 20-working day timescale at stage 2 set out in the Code. Therefore, this was not appropriate action by the landlord.
  6. The resident asked for her complaint to be escalated on 24 October 2022, following receipt of the second stage 1 complaint response. It was not until 19 May 2023 until it provided its stage 2 complaint response. This delay was inappropriate as it exceeded the timescales set out in the code by 122 working days and involved the resident expending more time.
  7. As a result of the resident’s complaint journey which resulted in time and trouble for her, as well as distress, the landlord completed a complaint handling self-assessment to mitigate repeat errors. The £400 compensation awarded to the resident for its complaint handling is in line with the Ombudsman’s remedies guidance.
  8. Given the circumstances, the landlord recognised its poor complaint handling and acknowledged its failings, and how the resident was affected by it. The landlord has demonstrated it attempted to put things right and has learned from this outcome. As such, this Service finds reasonable redress in the landlord’s handling of the associated complaint. The finding of reasonable redress is subject to payment of the £400 previously offered in its stage 2 complaint response.

Determination

  1. In accordance with paragraph 52. of the Scheme, there was maladministration in the landlord’s handling of the resident’s requests for consent documents.
  2. In accordance with paragraph 53.b. of the Scheme, the landlord has made an offer of reasonable redress for its handling of the associated complaint, which resolves the complaint satisfactorily.

Orders and recommendations

Orders

  1. Within 4 weeks of the date of this report, the landlord is ordered to:
    1. Apologise to the resident for the failings identified in this report. Unless it had done so, the apology is to include not reconsidering whether compensation was warranted as set out in its final response, following receipt of the £100 payment fee made by the resident.
    2. Pay directly to the resident’s bank account £200 in compensation for the time and trouble, distress, and inconvenience experienced by the resident.
  2. The landlord must provide evidence of compliance to this Service with the above orders.

Recommendations

  1. Subject to the finding of reasonable redress, if the landlord has not already paid the resident the £400 in compensation it offered in its stage 2 complaint response, it is recommended it re-offers the £400 for its complaint handling failures. If the landlord has already paid the £400 in compensation, it is to provide the resident and this Service proof of payment.
  2. It is also recommended the landlord reviews the Ombudsman’s Spotlight report on Knowledge and Information Management, published in May 2023. If it has not already done so, it is to assess the contents and consider implementing a contingency plan in the event of unexpected staff absence.