London & Quadrant Housing Trust (202103724)

REPORT

COMPLAINT 202103724

London & Quadrant Housing Trust

13 September 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 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 time taken for the landlord to inform the resident that a potential buyer had pulled out of the purchase of her property.

Background and summary of events

2. The resident is the shared owner of the property, which is a flat. The landlord leases the property from the freeholder of the building.
3. The resident was in the process of selling her property and, on 10 July 2020, the landlord informed her that it was able to offer her property to a buyer, subject to the buyer attending a successful financial interview.
4. On 25 August 2020, the landlord noted on its system that it was awaiting contact to see if the mortgage lender accepted the resident’s documents advising that the freeholder of the building was arranging for an EWS1 (External Wall Fire Review certificate) to be issued. An EWS1 is needed for mortgage lenders to confirm the risks to a building posed by cladding and the potential costs of repairs to reduce this risk.
5. The landlord also noted that it needed to know which solicitor the resident was going to be using.
6. The resident forwarded the landlord an email of her instructing her solicitor on 7 September 2020.
7. On 11 September 2020 the landlord wrote to the resident to confirm her buyer had successfully attended a financial interview and his mortgage offer had been applied for. The landlord confirmed the buyer had instructed a solicitor to act on his behalf and attached a copy of the resident’s memorandum of sale detailing the sales information.
8. The landlord said that the resident should have by now formally instructed her solicitor to act on her behalf and that the sale was now in the hands of resident and buyer’s solicitors. It asked the resident to ensure she kept in regular contact with her solicitor to progress the sale and advised that her solicitor would be expected to provide her buyer’s solicitor with a response to their management enquiries. The landlord explained it could provide this information in the form of a ‘landlords enquiry pack’ and gave more information on this.
9. Finally, the landlord said that the cladding certificate of remedial works, received by the buyer’s mortgage lender, was not accepted due to the documents only confirming that part of the work has been completed.
10. The landlord was informed on 18 November 2020 that the potential buyer would not go ahead with the purchase.
11. On 6 January 2021 the landlord wrote to the resident. It said it was reviewing its files and could see that the resident’s buyer withdrew in November due to not being able to obtain a mortgage without an EWS1 certificate. The resident responded that she was not notified when this was happened, and the landlord apologised.
12. The resident completed the landlord’s complaints form on 27 April 2021. She expressed her dissatisfaction that she was not informed that her buyer had withdrawn when this happened and said that, had she have been aware, she would have sublet or acted immediately to resale her property.  She explained she had to move out in August 2020 and could not afford to pay for two properties, therefore, she asked to be compensated the costs for this (which she estimated to be £1700).
13. In the landlord’s complaint response of 10 May 2021, it confirmed that the mortgage broker advised the landlord that the buyer had withdrawn on 18 November 2020 and apologised that it had not contacted the resident until 6 January 2021. The landlord explained that it presumed that the resident’s solicitor would have notified her of the aborted sale at this time as this was normal practice and the buyer would have had to let their solicitor know who, in turn, should have relayed this information to all parties. The landlord said it was unable to refund any rent and service charge costs to the resident, as she was the legal owner of the property and these costs were a contractual obligation within her lease. In light of the miscommunication of the withdrawal of the resident’s buyer, the landlord offered to reimburse her the valuation costs she incurred throughout her resale process.
14. The resident asked to escalate her complaint on 14 May 2021 because she was unhappy that the landlord would not refund her for the costs she incurred in paying for the property after the sale fell through.
15. On 28 May 2021 the landlord sent its final complaint response to the resident. It acknowledged the resident’s frustration about the time it took to contact her regarding the sale being aborted. It said that it understood that from a customer service point of view this could be seen as a service failure, which it apologised for. The landlord advised it had since put further procedures in place to ensure this did not happen again. The landlord reiterated its offer to cover any valuation costs the resident incurred and given the circumstances, explained it considered this to be reasonable. It said that it would have been her solicitor’s responsibility to notify the resident that her buyer had withdrawn and based on this it would then wait to hear from the resident on how she wished to move forward. Because it had not heard from the resident about her sale, it assumed she was given all information and was making a decision. The landlord confirmed this was its final response to her complaint and explained the next steps available.

Assessment and findings

16. In line with the terms of the lease, the resident is obliged to pay the rent and service charges specified in the lease.
17. Prior to the sale of the property falling through, the landlord explained to the resident that the sale was now in the hands of resident and buyer’s solicitors. It also said the resident should ensure she kept in regular contact with the solicitors to progress the sale. In line with common industry practice, and the landlord’s advice, it was not the landlord’s obligation to keep the resident updated on the progress of a sale as her solicitor was expected to do this.
18. The landlord was not responsible for the resident’s buyer pulling out nor for notifying her that the buyer had pulled out. Therefore, the landlord was not responsible for the costs the resident incurring in paying for the property after she moved out. There is no evidence of the resident contacting the landlord until it advised her the sale fell through, and the resident’s solicitor should have notified all parties that the buyer had pulled out of the sale. Therefore, the landlord was not obliged to have compensated the resident in the range of £1,700, as requested.
19. Nonetheless, it would have been helpful for the landlord to have contacted the resident earlier regarding her position. The landlord has acknowledged that it could have done this. It also explained that it had since put further procedures in place to ensure similar situations did not occur and would reimburse the resident for the valuation costs she incurred throughout her resale process, as compensation for this lack of clarity.
20. When considering whether the redress offered by the landlord (an acknowledgment of its shortcomings, an apology, changing its procedures and compensation in this case) was reasonable, this Service takes into account whether the remedy was in line with this Service’s dispute resolution principles: be fair, put things right and learn from outcomes.
21. The landlord acted fairly in acknowledging that it could have contacted the resident earlier and apologising. It put things right by changing its procedures to ensure the same situation did not happen again and offering to cover the resident’s valuation costs.
22. In summary, the landlord offered compensation proportionate to the distress and inconvenience experienced by the resident in relation to the landlord’s failings.

Determination (decision)

23. In accordance with paragraph 55(b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Reasons

24. Considering the circumstances of the case, and that the resident’s solicitor did not inform the resident of the sale falling through, it would not be proportionate for the landlord to bear the costs that the resident incurred in paying for two properties. However, it would have been helpful for the landlord to have contacted the resident earlier regarding her position, for which the landlord has provided reasonable redress.