London & Quadrant Housing Trust (202105951)

REPORT

COMPLAINT 202105951

London & Quadrant Housing Trust

5 July 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

The complaint is about the landlord’s:
1. Communication concerning fire safety issues in relation to the resident’s property.
2. Complaints handling.

Background and summary of events

The resident is a shared ownership leaseholder of the property which is a two-bedroom first floor flat in a three storey building of which the landlord is the freeholder. The building is under 18 metres tall. The landlord has no vulnerabilities recorded for the resident.
Advice Note 14 was issued by the Government in December 2018 as part of its Building Safety Programme. In summary the advice was for owners of high-rise leaseholder buildings where the external wall system of the building did not incorporate Aluminium Composite Material (ACM). The advice set out checks which owners could carry out to satisfy themselves, and their leaseholders, that their building was safe.
In June 2019 the Government issued an advice note on risks arising from balconies on residential buildings, regardless of height. The guidance set out that where a building has balconies which are constructed of combustible materials and thereby pose a risk of external fire spread then building owners should take appropriate action to manage that risk.
The Government’s guidance was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. Paragraph 1.4 of this guidance states “for the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act”. Paragraph 1.5 of the guidance notes that “the need to assess and manage the risk of external fire spread applies to buildings of any height”.
In response to the guidance some lenders took the view that, if certification could not be provided to demonstrate compliance with the Government’s guidance on fire safety, they would be unwilling to offer a mortgage on properties within these buildings as they would have a value of £0.
In January 2020 the Royal Institution of Chartered Surveyors (RICS), The Building Societies Association (BSA), and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 meters (six storeys). Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert. Form EWS1 is required for buildings under 18 meters where specific concerns apply e.g., there are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g., timber), or the decking is constructed with combustible materials and the balconies are directly linked by combustible materials.
The landlord’s website says the following concerning the scheduling of building inspections in relation to the guidance, “As we own so many buildings affected by the guidance, we’re not able to inspect, test, and then carry out works on them all at once. Instead, we must prioritise our buildings based on risk. Our highest risk buildings, defined by height, occupancy and building materials, among other factors, will be inspected first.”
The landlord has a two stage complaints procedure. Paragraph 5.11 of the Ombudsman’s Complaint Handling Code says that landlords must only escalate a complaint to stage two once it has completed stage one and at the request of the resident.
The landlord carried out a fire risk assessment of the building in October 2018. The report of the assessment said that the whole building was fitted with wooden cladding throughout, and it was recommended that the wooden coverings be reviewed to ascertain if material should be removed or sprayed with a fire-resistant coating.
In November 2019 the resident was in the process of selling the property. On 28 November 2019 the estate agent managing the sale informed the landlord that the potential buyer’s solicitors had raised queries about the balconies and external walls systems potentially containing combustible materials. The buyer’s solicitors required the landlord to provide confirmation from a chartered professional with relevant experience in fire safety that a review of the building has taken place in accordance with the latest guidance produced by the government.
On 12 December 2019 the landlord sent the resident a letter saying that it was sorry that it could not provide the information that the buyer’s mortgage provider was requesting. It went on to explain that:
1. Mortgage lenders had begun asking applicants who lived in purpose built blocks to provide independent certification that properties met the requirements of Advice Note 14. In the short-term landlords were unable to provide this.
2. In order to obtain the certification, building owners needed to employ specialist fire engineers to carry out intrusive tests of the building structure. The test results then needed to be analysed and any resulting remedial work carried out. This was a complex and lengthy process.
3. Most housing associations predicted that the majority of their buildings would need remedial work. Buildings therefore needed to be prioritised based on risk, and it expected its programme to take several years to deliver.
4. It was not a legal requirement for a building to meet the conditions of Advice Note 14. However, some lenders had taken the view that if independent certification couldn’t be provided to demonstrate compliance, they wouldn’t offer a mortgage. It was sorry for the position this put the resident in. Unfortunately, it was something beyond its control.
5. Along with other landlords it would be calling on the government to step in, asking it for clear guidance on “the proportionate implementation of their building safety advice notes”. It hoped that this would reassure residents, allow mortgage lenders to relax their stance, and give building owners a reasonable timeframe in which to resolve any outstanding issues.
6. The building had received building control sign-off and approval from a licensed warranty provider after it was built.
7. The building had an up-to-date fire risk assessment –these were reviewed each year on its buildings above 18 meters and any recommendations are dealt with immediately or put into a programme of work to be completed as soon as possible.
On 8 January 2020 the landlord sent a further letter to the resident saying that Advice Note 14 applied to buildings 18 metres or higher. As the resident’s building was below this height, the advice note should not apply to it, and it suggested that the resident raise this with the lender.
On 24 January 2020 the landlord sent another letter to the resident saying that:
1. RICS,BSA and UK Finance had agreed a new process to try and help homeowners who were experiencing difficulty with getting their home valued. The new process still required fire safety experts to assess the materials used on the external walls of buildings. In most cases, this was likely to require an intrusive survey to be carried out.
2. For owners of multiple buildings, such as the landlord, this work would take several years to deliver and there was a shortage of appropriately qualified fire experts available to inspect the buildings, confirm whether remediation work was required and issue safety certificates.
3. The new valuation process was, therefore, not a solution that would help everyone and residents would still find it difficult to sell their home.
On 29 January 2020 the resident sent an email to the landlord saying that:
1. The building was under 18 meters and the landlord’s “generic” letters didn’t deal with the situation for buildings that height.
2. The landlord had failed to provide confirmation that Advice Note 14 did not apply to the building.
3. It asked the landlord to provide a clear indication of the deadline when the inspection would be completed or the next steps it was taking.
4. She wanted to complain about the landlord’s lack of support and failure to provide any clear actions and solutions to this matter.
On 30 January 2020 the resident telephoned the landlord saying that the mortgage lender required the EWS1 form completing, and she wanted this emailed to her.
The landlord sent an email to the resident on 12 February 2020 saying that it still couldn’t provide the documentation that some mortgage lenders were now looking for in relation to Advice Note 14. It was unlikely that the situation would change in the immediate future.
On 8 May 2020 the resident sent the landlord an email saying that the buyer for the property had withdrawn. She said that the buyer’s solicitor had asked the landlord several questions regarding the recommendations that were made in the 2018 fire risk assessment of the building. One of the recommendations was to address the fireproofing of the cladding on the building and the landlord had confirmed that this had not been done. She said that she had been left with a property that she could not sell and was concerned about whether she could afford the rent and mortgage payments. She wanted the landlord to provide her with the following:
1. A copy of the last fire risk assessment for the building.
2. An outline of timelines for the remedial works to take place.
3. An official answer regarding liability in case of fire at the building.
The landlord responded to the resident on 14 May 2020 and said that it would be investigating her case as a stage two complaint. It would send her a copy of the building’s latest fire risk assessment within 10 working days. It would be releasing its prioritisation policy in the next few weeks which would explain when the building would have an inspection done. Once the inspection was completed it could confirm if any remedial works were needed. If works were needed it would then determine who was responsible for the cost. Unfortunately, there were too many variables for the landlord to provide the certainty the resident was asking for. The landlord also asked if the resident would like it to make a referral to its tenancy sustainment team about her financial concerns.
The resident replied to the landlord on 20 May 2020, repeating the details of her complaint and asking it to make a referral to its tenancy sustainment team. On 26 May 2020 the landlord emailed the resident, attaching a copy of its fire risk assessment and confirming that it had made a referral to its tenancy sustainment team on her behalf.
On 28 May 2020 the landlord sent the resident its response to her complaint. In its response the landlord said:
1. As the building was under 18 metres there were no plans to remove the wooden cladding at any point. The landlord would be retreating it with a fire-retardant at some point in 2020. It could not give her a precise timetable and works were delayed by the impact of Covid 19. It would write to her when it knew more.
2. It acknowledged that the resident had received poor communication from it, with several impersonal and unhelpful letters sent to her and it apologised.
3. As the building was under 18 metres it was not able to provide an EWS1 certificate. It understood that the government were working on a solution for buildings under 18 metres
4. It understood from an email that morning that the resident didn’t want to use the services of the tenancy sustainment team. This offer remained open to the resident.
5. It was happy for the resident to sublet the property.
6. The resident might be entitled to a refund of the fees she had paid to the landlord in respect of the aborted sale. If she believed that she was entitled to a refund she needed to contact its homeownership team.
The landlord sent a further email to the resident on 16 June 2020 attaching a copy of the fire risk assessment and saying that it was in the process of arranging further specific investigations on the panelling to ensure the building had effective fire resistance. It also provided details about the building’s insurance.
On 15 October 2020 the landlord sent the resident a letter resident saying that EWS1 forms were not usually required for buildings under 18 metres. The landlord also said, “Even if your building does not require an EWS1 form I would like to reassure you that we will still inspect it as part of our wider building safety inspection programme in order to meet new government building safety guidelines “
On 27 October 2020 the resident sent the landlord an email asking for an update on when the cladding would be treated with fire retardant. She also wanted an official letter from the landlord stating that the building was under 18 metres and therefore the EWS1 certificate should not be required by lenders. She also asked that the letter include the clearly defined fire safety documentation and confirm that the building was safe. She also asked the landlord to outline the plan of any remedial works including the promised fire-retardant treatment to be completed in 2020, and an official answer regarding liability in case of fire at the development.
Following an email from the landlord on 8 December 2020 the resident sent a further email to the landlord saying that it had again failed to respond to her exact queries and sent her through an automated mass response. She asked for a response to her questions raised in her email dated 27 October 2020.
On 21 January 2021 the landlord sent the resident an email saying that the building had been assessed by its fire investment manager who advised that it was within building regulations as timber cladding was acceptable in buildings under 11 metres. It said that it would continue to analyse its blocks and react to changes in legislation, but there were no plans to carry out improvement works to the building at present.
In February 2021 the landlord arranged for a drone survey of the property to be carried out and the report of the survey was sent to it on 24 February 2021. The report said that the landlord had identified the building as requiring an EWS1 form. The report recommended the following “Based on the findings during the survey works, a further Stage 2 report and remediation advice should be produced, along with an EWS1 form. In the event where the intrusive survey does not provide sufficient information to determine the external wall build up, further areas of opening up will be required externally and /or internally.”
The resident sent an email to the landlord on 18 April 2021 saying:
1. The landlord had informed her in its response to her complaint in 2020 that the cladding on the walls would be treated with a fire retardant in 2020. However, the work hadn’t been carried out.
2. No actions or indications of plans to improve fire safety in the building had been laid out by the landlord.
3. For two years she had been unable to sell the property. Her personal circumstances had forced her to move abroad, and the financial uncertainty had affected her mental and physical health.
4. She considered that the landlord was not taking her case seriously and continued to fail to provide residents with a clear roadmap to meeting government fire safety advice. She therefore asked for her complaint to be reopened as a new complaint.
On 26 April 2021 the landlord sent an email to the resident saying that it was informed that the timber cladding was within regulations and did not require removal. It understood that the resident had been given a different message in the past, so it would reinvestigate. The resident replied on 27 April 2021 saying that residents of the building had been informed that a fire safety survey had recently been conducted by drone and she asked for the results.
On 27 April 2021 the landlord sent a further email to the resident saying that it had opened a complaint and escalated it to stage two in light of her complaint from the previous year.
On 30 April 2021 the resident sent an email to the landlord asking for the following points to be addressed in the landlord’s complaint response:
1. The landlord’s delay in sharing the October 2018 fire assessment report with residents. The resident had only received a copy of the report when it was sent to her by her potential buyer’s solicitors.
2. The landlord to provide clear indication on steps (including timelines) undertaken and planned to address safety issues with the external walls and balconies indicated in the 2018 fire assessment report.
3. Explanation why the fire repellent treatment to the walls was not carried in 2020.
4. The landlord to provide full results of the fire safety survey carried out in 2021 and an indication of steps to be undertaken to address results of this survey.
5. The landlord to provide full information on the landlord’s insurance policy and an indication on a process for submitting a claim on behalf of residents.
6. The landlord to provide EWS certification indicating that the flats were safe.
7. Acknowledgment of miscommunication from the landlord as several different officers had provided misleading and contradictory statements on key issues.
On 27 May 2021 the landlord sent the resident its stage two complaint response. In its complaint response the landlord said:
1. The resident had requested a copy of the fire risk assessment on 8 May 2020 as part of her original complaint and the landlord sent it to her on 16 June 2020. She had been told on 14 May 2020 that she would receive the report within 10 working days, however she had received it 17 working days later than expected. The landlord apologised for the delay and any inconvenience caused. Its policy was to share fire risk assessments on request to residents, leaseholders, solicitors (for conveyancing purposes) or other managing agents who are involved in the property.
2. A surveyor from its fire investment team attended the site with a chartered fire engineer on 26 May 2020, (this appears to have been a typo for 26 May 2021), in order to inspect the timber cladding. The landlord expected to receive a report from the engineer within the next few weeks and would act upon its recommendations.
3. The fire-retardant coating was not applied in 2020 due to a ‘hard stop’ that was placed on the programme in 2020, which was implemented due to budget constraints in the wake of COVID-19. This incomplete action was noted by its fire investment team which had led to the inspection on 26 May 2021.
4. The drone surveys were carried out by fire consultants, who didn’t have the level of specialism of a fire safety engineer, who were in extremely high demand. The landlord listed the external materials that were visually identified from the drone survey.
5. The information from the drone survey had been used as part of its risk-profile for its medium-risk inspection tranche. It had created a schedule of buildings for this inspection tranche and was currently planning the sequence. It would be writing to residents with more information and what to expect next in the upcoming months. It was likely that the next step would be an intrusive survey. After the intrusive inspection, a summary report would be produced, including details of any remedial works.
6. It had provided the information on its insurance policy to the resident on 16 June 2020. It attached its insurer’s summary of cover and said that any claims should be progressed with the insurer directly.
7. The building sat outside of the EWS1 guidance from the Royal Institute of Chartered Surveyors (RICS). For buildings four storeys and below, an EWS1 should only be requested where there was a covering of ACM, MCM or HPL cladding on the property. The drone survey did not identify that any of these materials were present on the building. The landlord recommended that the resident or a potential buyer request the lender’s rationale if they were requesting an EWS1 certificate.
8. It understood what a difficult situation this continued to be for its residents, and it was sorry that that its inconsistent communication had resulted in additional stress. It acknowledged that leaseholders were in this position through no fault of their own, and it was committed to doing all it could to assist.
9. The initial scope of EWS1 certificates was supposed to be limited, but it had been applied to almost all buildings with flats and the landlord had found itself “playing catch up with a lack of robust processes and procedures to deal with the new enquiries”. Input for responses was often drawn from various parts of the organisation, which was difficult to coordinate.
10. New members of staff had been hired but embedding them during the beginning of the pandemic had proved to be a challenge. However, the landlord was establishing a new fire safety department which would include dedicated customer-focussed officers who will work closely with the fire surveyors, and the contractors who are doing the work.
The landlord’s letter dated 27 May 2021 was its final response to the complaint confirming that its internal complaints process had been exhausted.
During the course of this investigation the landlord has informed this Service that the following recommendations were made following the inspection of the building on 26 May 2021:
1. That the render around the stair be removed and replaced with a non-combustible material, as it is assumed to be combustible. It was trying to confirm the construction details so the fire engineer can review.
2. That the balcony decking be treated with fire retardant coating to reduce the risk of fire spreading from balconies. This would be subject to a full, intrusive investigation. The landlord planned to communicate to residents with a window for this inspection within the next few months.

Assessment and findings

Communication concerning fire safety issues in relation to the resident’s property

The Ombudsman appreciates that the resident’s current situation is difficult and that she is in this position through no fault of her own. This is because until the landlord is able to provide certification, in line with the Government’s guidance, the resident is effectively in limbo as she is unable sell the property as lenders will not lend on it because of the potential fire safety issue.
In reaching a decision about the resident’s complaint we consider whether the landlord has kept to the law, followed proper procedure and good practice, and acted in a reasonable way. Our duty is to determine complaints by reference to what is, in this Service’s opinion, fair in all the circumstances of the case.
The Ombudsman’s Spotlight Report on Dealing with Cladding Complaints published in May 2021 says:
1. It is clear most landlords are taking a risk-based approach to inspections and, whilst this is rational, these plans do not appear to adequately consider the broader implications for all residents, especially those living in buildings below 18 metres. It is essential for landlords to provide a clear road map, with timescales, to all residents.
2. Effective communication is vital, and landlords need to assure themselves that their strategy for this is robust, well-resourced and proactive.
3. Landlords should always address the individual circumstances presented in a complaint.
As the Government’s expectations in relation to cladding and fire safety are only detailed in guidance there is an element of discretion for a landlord as to how and when it chooses to comply with it.
It appears from the landlord’s correspondence with the resident and this Service that the landlord intends to comply with the Government’s guidance in respect of the building and to obtain form EWS1. This is because the landlord has explained that it will be carrying out an intrusive inspection of the building and completing any remedial works. In the Ombudsman’s opinion this is appropriate as, while the guidance is not a legal requirement, it has been established as best practice in relation to building safety and form EWS1 is required by lenders.
However, the landlord’s communication with the resident has been confusing. Although it has indicated that it will be carrying out an intrusive inspection of the building and completing any remedial works (to comply with guidance in order to obtain form EWS1) it informed the resident in its complaint response that the building sat outside the EWS1 guidance from RICS and recommended that the resident or a potential buyer should request the lender’s rationale if they were requesting an EWS1 form.
Within its correspondence to the resident and on its website the landlord explained that it is taking a risk-based approach to prioritising its buildings for inspection and remediation considering height, occupancy and known building materials. It is appropriate that the landlord has shared this information, to provide an outline of its approach and to demonstrate that its approach in prioritising the inspections and remediation is fair and rational. The landlord also explained that the inspection and remediation would take a significant amount of time to complete. This was appropriate to manage the resident’s expectations.
While the Ombudsman accepts that a risk based approach is a reasonable method for prioritising buildings for inspection and remediation in relation to Advice Note 14, the landlord’s approach does not take into account that not all leaseholders are in the same situation or circumstances and may be significantly affected if they are required to wait for buildings with a higher priority to be dealt with first.
In this case the resident wished to sell the property but was unable to do so as form EWS1 was not available for the building. There is no evidence that in considering the resident’s concerns in relation to form EWS1 the landlord considered the impact of its prioritisation policy on her individual circumstances, namely that its strict adherence to the policy meant that she would likely be unable to sell the property for a significant period of time which could be longer than leaseholders in higher priority buildings.
The Ombudsman’s Spotlight Report on Dealing with Cladding Complaints says that “Landlords must ensure that they are proactive in providing appropriate and timely updates on a regular basis, at least once every three months even where there is little or no change.” The landlord informed the resident on 15 October 2020 that it would be inspecting the building as part of its wider building safety inspection programme in order to meet government safety guidelines. However, the Ombudsman has seen no evidence that the landlord provided any updates to the resident about the timing of any inspections. This was unreasonable, especially given the resident’s individual circumstances requiring her to sell the property.
The landlord informed the resident in May 2020 that it would be retreating the cladding with a fire-retardant at some point during 2020. Whilst it is understandable that the works were impacted by the Covid 19 restrictions, the landlord acted unreasonably in not informing the resident that the works would not be carried out. The landlord only informed the resident of this in its complaint response dated 27 May 2021, and only then in response to enquiries from the resident from 18 April 2021 onwards.
The landlord acknowledged in its complaint response that it had sent the resident a copy of its fire assessment report 17 working days later than expected and it apologised for the delay. However, it appears that the resident’s actual complaint was that the landlord had not shared the fire risk assessment with all residents when it received the assessment in 2018, rather than only when it was requested by the buyer’s lender’s solicitors.
The landlord has said that its policy was to share fire risk assessments on request to residents, leaseholders, solicitors (for conveyancing purposes) or other managing agents who are involved in the property. As by mid-2019, the impact of compliance with AN14 and the approach being taken by many lenders was widely known it would have been reasonable for the landlord to share the fire risk assessment with residents, rather than waiting for residents or solicitors to specifically request a copy.
The landlord did acknowledge in its complaint response that its inconsistent communication had resulted in additional stress for the resident. When there are acknowledged failings by a landlord, as is the case here, the Ombudsman’s will consider whether the redress offered by the landlord (an apology and details of a change in processes), put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles; be fair, put things right and learn from outcomes.
The landlord demonstrated that it had learnt form outcomes by detailing what process changes it was making to improve communication going forward. However, whilst the landlord acted fairly by apologising for the additional stress caused by its inconsistent communication, as set out in paragraphs 40 and 42 to 47 the issues with communication were significant and an apology alone did not put things right.
Therefore, for the reasons set out in paragraphs 40 and 42 to 49 the landlord’s communication with the resident concerning fire safety issues was unreasonable and this represents maladministration by the landlord.

Complaints handling

The landlord escalated the resident’s complaint to stage two of its complaints process without having first considered the complaint at stage one. This was in breach of paragraph 5.11 of the Ombudsman’s Complaint Handling Code and represents maladministration by the landlord.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was maladministration by the landlord in respect of the complaints about the landlord’s:
1. Communication concerning fire safety issues in relation to the resident’s property.
2. Complaints handling.

Reasons

The landlord’s communication with the resident about fire safety has been confusing. While the Ombudsman accepts that a risk based approach is a reasonable method for prioritising buildings for inspection and remediation in relation to Advice Note 14, there is no evidence that the landlord considered the impact of its prioritisation policy on the resident. The landlord did not provide the resident with updates about the timing of any building inspections and did not inform her that it would not be treating the cladding with a fire retardant. In addition, the landlord did not share the fire risk assessment with residents, unless residents or solicitors had specifically requested a copy.
The landlord escalated the resident’s complaint to stage two of its complaints process without having first considered the complaint at stage one.

Orders

The landlord is ordered within four weeks of the date of this report to pay the resident compensation totalling £400. This comprises:
1. £300 for the distress and inconvenient incurred by the resident as a result of the landlord’s communication concerning the fire safety issues in relation to the resident’s property.
2. £100 for the distress and inconvenience incurred by the resident as a result of the landlord’s complaint handling failures.
The landlord is ordered within four weeks of the date of this report to provide a clear timetable to the resident concerning:
1. The inspection of the building to demonstrate compliance with PAS 998 (which has now replaced the Government’s Consolidated Advice Notice).
2. Carrying out of any remedial works.
3. Provision of form EWS1.