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Magenta Living (202122836)

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REPORT

COMPLAINT 202122836

Magenta Living

03 May 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 preserved right to buy (RTB) application.

Background

  1. The resident was a tenant of the landlord living in a 3-bedroom terraced house with her husband and sons. They had lived in the property since 15 October 1998, when the council owned it. The landlord acquired ownership of the property. The resident signed a transferred tenancy agreement with the landlord on 7 February 2005.
  2. The resident sent her application for RTB to the landlord, which it registered on 24 June 2021. On 21 July 2021, It sent her an RTB2 to her, admitting her application and a notice of intention to conduct the property valuation. On 14 September 2021, it sent an S125 notice to the resident, and the resident returned the S125D notice of her intention to proceed with the RTB by email on 9 October 2021. On 12 November 2021, the landlord sent relevant documentation to its solicitor to enable the solicitor to prepare legal documentation in respect of the property.
  3. On 17 December 2021, the resident complained to the landlord about its handling of the RTB and its communication throughout the process. She stated that the landlord’s solicitor was not communicating with hers, which was prolonging the process. She was having to pay more rent than a mortgage. The process had gone on so long that she could have gotten another year’s discount towards her application. She also stated that her mortgage application was due to expire on 31 March 2022. She wanted communication improved.
  4. On 20 December 2021, the landlord contacted the resident by phone to discuss her complaint and gave her a verbal response. It stated that there were no issues or delays with her application. It had met all statutory timescales. There was nothing for her to worry about, and the landlord’s solicitor would be in touch probably in January. The resident’s complaint was not upheld. The landlord sent the resident a written response to her complaint on 17 January 2022 after the resident contacted this Service which in turn asked the landlord to provide a written complaint.
  5. On 19 January 2022, the resident asked that her complaint be escalated to Stage 2. The landlord’s representative who rang her had advised her that its solicitors would be in touch by mid-January, but this had not been the case. They had given contradictory information. The representative had also been unsympathetic and patronising.
  6. On 1 February 2022, the landlord gave its Stage 2 response. It stated it had met all statutory dates set out in the RTB legislation and had passed the resident’s application to its solicitors for conveyancing. The property sale was in the hands of both parties’ solicitors. The mortgage company extended the resident’s application to 7 April 2022. The sale was completed on 5 April 2022. 
  7. The resident was dissatisfied with the landlord’s response. She has advised she wants compensation for the extra rent she had to pay as well as for the stress caused because of the landlord’s solicitors’ lack of cooperation and RTB handling.

Assessment and findings

The landlord’s handling of the resident’s preserved right to buy application (RTB).

  1. The resident’s complaint is that the landlord’s solicitors prolonged her RTB application and refused to communicate with her solicitors. In its final response, the landlord did not uphold the resident’s complaint on the ground that it had met its statutory timeframes. The application was now in the hands of its solicitors.
  2. The landlord has stated that it has no RTB policy but was guided by the RTB Housing Act 1985 and The Housing (Right to Acquire RTA) Regulations 1997. Sections 124 & 125 of the Housing Act 1985 and Schedule 2 of the Housing (RTA) give timescales for landlords to issue the required statutory notices to its residents who have applied to buy their homes under the scheme. The RTB2 notice should be sent within 4 weeks of the fully completed application and the S125 notice should be issued within 8 weeks of the RTB2 notice if the property is a house. The evidence shows that the landlord issued all statutory notices to the resident within the stipulated timescales.
  3. The resident stated that she wants compensation for the additional rent she had to pay throughout the RTB process. Section 153(a) of the Housing Act 1985 allows for a tenant to serve an “Initial Notice of Delay” (RTB6) on the landlord where there the landlord is delaying the application in any way. If the landlord does not serve the counter-notice to an RTB6 form within the time limit, the tenant can serve an “Operative Notice of Delay” (form RTB8). The RTB6 will include a date, which will be at least a month, to rectify the delay. The landlord may then have to refund rent paid during the delay period or take off the property sale price. It is unknown why the resident and her solicitor did not pursue this option at the time. The landlord is not responsible for the resident not seeking this form of redress and therefore not liable to pay compensation to the resident for the additional rent she had to pay during the RTB process.
  4. The resident also wants compensation for the stress caused because of the landlord’s solicitors’ lack of cooperation and its RTB handling. The landlord passed on the resident’s application to its solicitors for the conveyancing process. The RTB legislation does not apply timescales to this part of the process.
  5. The Ombudsman does not have jurisdiction over legal firms and therefore cannot assess the landlord’s solicitors’ actions or the RTB conveyancing process. However, the landlord has a responsibility to seek to ensure that third parties providing services on its behalf do so effectively and within a reasonable timeframe. The Ombudsman can, therefore, investigate and assess how the landlord responded to issues raised or notified to it by the resident and its subsequent handling of the complaint.
  6. On 20 December 2021, in response to the resident’s formal complaint of 17 December 2021, the landlord informed the resident verbally that there were no issues or delays with her application. It had over 100 outstanding applications, which were being dealt with in priority order. The resident’s timeframe for completion of her application by Christmas was unrealistic, and it would probably be in January 2022.
  7. The Ombudsman does not consider the landlord’s response in paragraph 14 above reasonable or appropriate. From the start of the resident’s application, the landlord could have managed the resident’s expectations regarding its solicitors’ conveyancing process. Informing her much later of its backlog of applications would have caused her distress and inconvenience, especially as she had a little over three months till the expiration of her mortgage application. There were implications for her if the sale of the property was not completed by then, therefore earlier advice about her backlog would have allowed her more time to explore her options.
  8. The Ombudsman also considers that the landlord could have been more proactive in chasing the progress of her application with its solicitors, especially as there were no set timeframe for the parties to rely on, and completion did not take place in January 2022 as originally anticipated. The landlord stated in an email that it contacted the resident’s solicitors on 25 November 2021 to explain the reason for its solicitors’ delay. The landlord has not provided evidence of this discussion. There is also no evidence to suggest it made any attempts to contact its solicitors before giving its verbal response on 20 December 2021. Therefore, whilst it is appreciated that the landlord wished to allay the resident’s concerns, there is insufficient evidence that it took the necessary steps to assure her that there was nothing to worry about.
  9. The evidence shows it chased progress on the following dates:
    1. 5 January 2022.
    2. 24 January 2022, when it was investigating the resident’s stage two complaint.
    3. 29 March 2022, eight working days before the expiration of her mortgage application.

There was an eight week period where the landlord took no action to progress the resident’s application.  The landlord was aware of the resident’s concerns about the time taken for the purchase of her property to complete, therefore it was unreasonable that it did not do more to keep the resident and her solicitors updated on the progress of her application.

  1. Lastly, the landlord’s verbal response was not in keeping with the Ombudsman’s complaint handling code which states that a landlord’s response should be in writing. However, following the intervention of the Ombudsman, the landlord rectified its error in a timely way by apologising and sending out a written response to the resident within one working day of the Ombudsman bringing it to its attention.
  2. Overall, there were some failings in the landlord’s handling of the resident’s RTB application due to its poor communication, which caused her caused her distress and inconvenience.

Determination

  1. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord regarding its response to the resident’s concerns about the handling her RTB application.

Orders

  1. Within 4 weeks from the date of this notice, the landlord should pay the resident £100 for the distress and inconvenience caused by its RTB handling failures.

Recommendations

  1. The landlord reviews its procedure for dealing with the RTB applications, focusing on what action it and its solicitors should take during the conveyancing process.