Metropolitan Housing Trust Limited (202014988)

A picture containing logo

Description automatically generated

REPORT

COMPLAINT 202014988

Metropolitan Housing Trust Limited

1 October 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

The complaint is about:
1. The resident’s request for a refund of her rent and service charges.
2. The landlord’s handling of the resident’s staircasing request.
3. The landlord’s associated complaint handling.

Jurisdiction

What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the 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(g) of the Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.
1. The resident’s request for a refund of her rent and service charges.
Paragraph 39(g) of the Scheme confirms that the Ombudsman will not consider complaints that “concern the level of rent or service charge or the amount of the rent or service charge increase”. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges, such as the resident’s request to be compensated for her rent and service charges to the landlord from 21 August to 13 October 2020, are therefore not within the jurisdiction of this Service to investigate. As a result, we are unable to consider this and a determination will not be made on this aspect of the complaint.

Background and summary of events

Leasehold agreement, policies and procedures

The fourth schedule, section 3.1 of the leasehold agreement between the resident and the landlord confirms that “at any time the leaseholder shall have the right on giving notice to the landlord to acquire the freehold of the premises for no charge” provided the leaseholder had acquired 100% of the property.
Section 8.3 of the landlord’s staircasing and sim sale (simultaneous staircasing) policy and procedure confirms that, for a house, the resident’s surveyor will only provide a valuation report based on the freehold value of their property, prior to its offer to them to confirming the full valuation for them to buy more shares of this.
The landlord’s compensation policy confirms that it will considering paying compensation from £150 for its repeated failures of service when these have meant that its standards have not been provided and have impacted residents. When calculating compensation for poor complaint handling, for example where it had “not met [its] own complaint policy”, it will start with an apology and then up to £50 compensation.
As per the landlord’s complaints policy, it will respond to stage one complaints within 10 working days. For final stage complaints, it will respond within 20 working days. If the landlord is unable to respond within this timescale, it will keep the resident informed and agree new response times.

Background

The resident was a 75% shared ownership leaseholder of the landlord, which owned the freehold of the property until she completed her purchase of this from it, together with the remaining 25% of the property, on 20 November 2020. Her leasehold agreement allowed her to increase her share of the property through a staircasing process up to the full 100% of this. In this case, the resident was looking to purchase up to the full 100% of the property in 2020, and to therefore acquire the freehold of this. She reported that her application for this was time-sensitive, as she was relying on her partner’s overtime to qualify for the mortgage to pay for this, which was going to be reduced.

Summary of events

On 11 August 2020, further to the resident’s staircasing request to the landlord, her surveyor from its approved panel attended the property to value this, and she reported that the surveyor had described being asked by it to provide both a leasehold and a freehold valuation for the property. She subsequently received her surveyor’s valuation report on 21 August 2020, and she reportedly unsuccessfully continued to call the landlord to query the need for both valuations until 4 September 2020.
On 4 September 2020, the resident emailed the landlord following a telephone call which had been disconnected. She asked for written confirmation from it that she would be staircasing to 100% of the leasehold value of the property, and that she could then acquire the freehold of this, as she had understood from it during the call, when she had explained that she had limited time in which to apply for her mortgage.
This was because the resident had received the above two valuations on 21 August 2020 from the survey which she had instructed, which were £490,000 for the leasehold of the property, and £530,000 for the freehold. The landlord requested a call back from her if she did not receive its response to her request for written confirmation that she would staircase to the leasehold value, which it had agreed to send her.
On 28 September 2020, the resident confirmed that she had received a letter from the landlord offering to sell her either 15% of the freehold value or 25% of freehold value of the property, depending on how many shares that she wished to purchase of this.
On 13 October 2020, the landlord confirmed to the resident that it would send her a revised offer to purchase more shares of the property based on the leasehold value of this. An email was also sent by it to her solicitor to confirm that it would “allow the [resident] to proceed based on the leasehold value” of the property.
On 28 November 2020, the resident submitted her stage one complaint to the landlord, which is summarised as follows:
1. She had sought legal advice regarding it using the freehold valuation of the property, and was advised that the offer was “wrong”, as per the fourth schedule, section 3.1 of her leasehold agreement. The resident was also unhappy that it had told her on 29 September 2020 that the above call where she had been informed by it that her staircasing would be at the property’s leasehold value “had not taken place.”
2. She had been informed verbally by it that the leasehold valuation of the property should be used for her staircasing, yet it took until 13 October 2020 to provide written confirmation of this to her.
3. Her desired outcomes were as follows:
  1. Compensation for the rent and services charges that she had paid during the periods from 21 August to 3 September 2020, and from 28 September to 13 October 2020. This was because the resident did not receive the correct valuation from the landlord for the property, which had “held up the completion” of her staircasing.
  2. An apology that it had asked her to staircase for 15% of the freehold value of the property on 28 September 2020, as this should have been specified as being at 15% of the leasehold value or 25% at the freehold value.
  3. An apology for it having denied that the above conversation with it when it had told her that her staircasing would be at the leasehold value of the property had taken place.
  4. A “full investigation” into its previous final staircasing transactions, as she believed that other residents may have been “wrongly charged” by it.
  5. For it to carry out a “lessons learnt” exercise, where staff were fully trained to handle such enquiries in the future.
On 16 December 2020, the landlord emailed the resident to inform her that it was investigating her complaint, and that it would update her accordingly.
On 23 December 2020, the landlord issued its stage one complaint response to the resident, which is summarised as follows:
1. It upheld her complaint, recognising that it had caused her an “inconvenience while the staircasing process was being evaluated”, and that there had been miscommunication during the sale, for which it apologised.
2. It therefore offered her £20 compensation for her time and trouble in progressing the complaint, and assured her that “any learnings as a consequence of [her] experiences have been acted upon.”
On 9 January 2021, the resident submitted her final stage complaint to the landlord, which is summarised as follows:
1. Although she had completed her purchase within the expected timescale, her completion had been delayed by “28 days”. The landlord’s offer of £20 compensation was, as a result, not adequate in recognising the time that she had spent, and this did not “cover the extra days when [she was] paying [the landlord] rent and service charges”.
2. Although it had “apologised generally” to her, it had not provided her with an explanation for the points that she had raised during her stage one complaint of 28 November 2021. Therefore, the resident requested a full response from the landlord to all of the points that she had previously raised.
3. In respect to it having written to her solicitor confirming that it would allow her to proceed with her staircasing based on the leasehold value of her property, she wanted to know why it had agreed to this. This was because the resident felt that the landlord was trying “to avoid it being found out” that it had been “breaking the rules” on other staircasing transaction on houses to 100% ownership.
On 31 January 2021, the landlord emailed the resident to apologise for the delay in its response to her final stage complaint, which was due to “staff shortages”. It therefore aimed to provide an update on this to her within five working days.
On 5 February 2021, the landlord emailed the resident to provide the update that it had committed to on 31 January 2021, which is summarised below:
1. In respect to her assertion that it had “held up” the completion of her staircasing, it explained that it had sought legal advice as the terms of her lease were slightly different. Residents would usually need to use the freehold value as their leasehold agreement permitted this. The landlord confirmed, however, that “the case completed within the valuation expiry period which is the norm for staircasing transactions.”
2. It apologised “if there was any misinformation” in respect to her needing to use the freehold valuation. The landlord explained that the operative involved in this handled general queries, and that they did not work in the team responsible for dealing with such sales queries.
On 23 February 2021, the landlord issued its final stage complaint response to the resident, which is summarised as follows:
1. In respect to the valuation for the property, it confirmed that, following the instruction from her on 24 September 2020, it had reviewed its next steps with its legal team and had responded to her about whether to use the leasehold or freehold value of this two days later. As the landlord did not identify any service failure by it with regard to this, it did not uphold this element of the resident’s complaint.
2. It apologised for any frustration caused to her because of its communication regarding its offer to her to staircase on the freehold value of the property for 15%, as this should have been 25% at the freehold value, or 15% at the leasehold value. The landlord confirmed that, for staircasing, anything less than 100% was offered on the leasehold value of the property and, if 100%, this would be based on the freehold value.
3. In respect to the concerns raised over the telephone call with its customer services operative, it apologised “for any confusion or miscommunication [she] may have experienced. Furthermore, the landlord reiterated its comments from its stage one complaint response to the resident that it would act upon any lessons learnt following her complaint.
4. Accordingly, it found no evidence of additional service failures from its stage one complaint investigation. The landlord did recognise there had been delays in its final stage complaint response to the resident. Therefore, it offered her an additional £15 compensation for this delayed response. This meant that the total compensation offered in settlement of the resident’s complaint was £35.
The resident subsequently complained to this Service, raising the following concerns:
1. She felt that compensation should have been offered covering the rent and service charges while she was waiting for the landlord’s confirmation of which valuation should be used.
2. She has spent a lot of time and trouble progressing her complaint, causing stress, anxiety and affecting her partner’s mental health.
3. She had received a “brief” apology from the landlord for it asking her on 28 September 2020 to staircase on the freehold value in error.
4. She felt that the landlord had contradicted itself when it had stated that it was permitting the staircasing application based on the leasehold value of the property and, as a result, she wanted to know whether she should have had to use the freehold value at all.
5. As the landlord’s handling of her enquiry had resulted in a lack of confidence in it, she requested a full investigation into its previous staircasing transactions, and an assurance that those who had been wrongly charged would be compensated by it.
6. She also asked that the landlord to carry out a “lessons learnt” exercise, where staff were fully trained to handle such staircasing enquiries in the future.

Assessment and findings

Although the resident has reported experiencing stress, anxiety and her partner’s mental health being affected by the complaint, it is not within the authority or expertise of this Service to determine whether the landlord was liable or to award damages for this in the way that a court, tribunal or insurer might. Therefore, this aspect of her complaint is outside of the scope of this investigation.
The resident has also requested that the landlord review all staircasing applications that it had previously received, and that it pay compensation to those residents if it had identified that it had over-charged them. This is also outside of the scope of this investigation, as this Service can only consider complaints from her about issues that have adversely her, or that she has made as a representative of others who have been with their authorisation. As there is no evidence that the resident has been adversely affected by the landlord’s handling of other residents’ staircasing applications, or that she has their authorisation to complaint to us about this as their representative, we are unable to investigate this.

The landlord’s handling of the resident’s staircasing request

Following the resident’s request from 21 August 2020 for confirmation as to which valuation of the property was to be used for her staircasing application, the landlord had appeared to have provided her with accurate advice for this during its call with her on 4 September 2020 that the leasehold value was to be used for this. Despite this, it then took 27 working days until 13 October 2020 to provide her with the necessary written confirmation of this, which followed its contradictory letter to her of 28 September 2020 stating that only the freehold value was to be used for her application.
It is nevertheless recognised that this was a more complex enquiry, as the landlord explained to the resident on 5 February 2021 that it would not normally receive leasehold valuations for houses, and most leasehold agreements permitted it to use the freehold valuation for staircasing.
However, this delay was unfair on the resident, and there was a failing on the landlord’s part for its above delay in providing this information to her accurately, or evidencing that it had kept her informed while it was considering its response to her request for this. Although it is noted that, despite this delay, her staircasing application was completed successfully within her and its expected timescale for this on 20 November 2020. It was therefore reasonable of the landlord to ensure that it did not delay this timescale.
During the landlord’s internal complaints process, the resident also raised concerns around its communication. For example, in respect to its above communication on 28 September 2020, it had incorrectly informed her that she could purchase an additional 15% of the freehold value of the property, or that she could buy another 25% of the freehold value of this. This added confusion, distress, inconvenience, time and trouble to the resident after she had been accurately told that the leasehold value of the property would be used for her staircasing application on 4 September 2020. A failing has therefore also been identified on the landlord’s for not providing her with the correct information about this at the time.
It is also noted that the landlord’s above communication of 13 October 2020 could have been improved, as its suggestion that it had permitted the resident to continue her application for staircasing based on the leasehold value of the property had led her to believe on 9 January 2021 that it had relaxed its rule for this, unlike its other staircasing transactions. As it subsequently confirmed to her on 23 February 2021 that staircasing for anything less than 100% of the property should be based on the leasehold value, she should never had to have used the freehold valuation for this.
It would therefore have been preferable for the landlord to have instead confirmed to the resident at the time that it should have only used the leasehold valuation for her staircasing application. This is because of the clause to this effect in her leasehold agreement, as detailed in the agreement above and in the legal advice that she had described receiving about this on 28 November 2020.
The landlord had additionally assured the resident that it would act upon any lessons that it had learnt as a result of the complaint, in both its stage one and final stage complaint responses of 23 December 2020 and 23 February 2021, respectively. This was reasonable of it to agree to do, and this demonstrated a desire to improve its ongoing service to residents by learning from its above failings. Although it is of concern that, as suggested by her, it did not provide any details as to the specific actions that it would take in order to do so, unlike the “lessons learnt” staff training exercise that she requested from it on 28 November 2020, and so it has been ordered below to take such specific action.
The landlord’s above compensation policy nevertheless recommended that it also consider offering the resident compensation from £150 for its repeated failures of service, when these meant that its standards were not provided and had impacted her. However, it failed to do so or to otherwise recognise the distress and inconvenience caused to her by the complaint, its delayed response to her staircasing valuation enquiry to it from 21 August 2020, and its miscommunication to her about this of 28 September 2020.
This was an unreasonable response from the landlord to the resident, in light of the distress and inconvenience that she reported experiencing from its above failings in her case. This is also because of its compensation policy’s above recommendation for compensation awards for such service failures. Moreover, as the resident expressed concerns as to the extent of the landlord’s apologies and explanations for its poor handling of her staircasing application above, it should have also sought to put these right by providing them to her more fully, and in further detail, and so it has been ordered to do so below.
In this case the landlord’s failings would have caused distress and inconvenience to the resident, but these did not affect the overall outcome of the complaint because it had confirmed the appropriate staircasing value to use for the property, with her staircasing application completing within its target timescale. Accordingly, this Service has ordered it below to pay £150 compensation to her to provide proportionate redress for the service failures identified on its part above.

The landlord’s associated complaint handling

As per the landlord’s complaints policy above, it was required to aim to provide a stage one complaint response within ten working days, or to notify the resident if it needed more time for this. It received her stage one complaint on 30 November 2020, and it subsequently responded to this on 23 December 2020. The landlord had previously informed the resident on 16 December 2020 that it was investigating her complaint, but this was still 11 working days after it had received the stage one complaint.
This was not in line with the landlord’s complaints policy, and so it was a failing on its part that it had not provided a timely update to the resident on the progress of her stage one complaint. Furthermore, it is unclear whether she had agreed for it to set a revised timescale for its response to the complaint, which was another requirement under its complaints policy.
The landlord’s complaints policy also allowed it 20 working days for final stage complaint responses and, if it needed longer for these, it could agree new response times with the resident. Following her final stage complaint to it of 9 January 2021, it issued its final stage complaint response to her on 23 February 2021. This was 31 working days later, and this was therefore outside of the landlord’s above target response time, and so there was additionally a failing on its part for this delay.
The landlord’s above complaint handling delays at both stages of its complaints procedure were not fair on the resident, which would have added unnecessary distress, inconvenience, time and trouble to her. There were therefore failures on its part in respect of its delays in its handling of her stage one and final stage complaints.
The landlord nevertheless acknowledged the resident’s time and trouble from its above complaint handling delays in its stage one and final stage complaint responses to her, and it offered her £20 and £15 compensation, respectively, for these delayed responses and her time and trouble. In doing so, it identified that its stage one and final complaint responses were not issued within its complaints policy’s timescales, and that there were failings on its part towards her for this.
As the landlord’s compensation policy specified that it would start with an apology and then up to £50 compensation as a suitable award for poor complaint handling such as this when it has not met its complains policy, it offered the resident £35 total compensation for its delayed stage one and final stage complaint responses. It was therefore appropriate for it to have done so, as it offered her proportionate compensation in line with the compensation policy for its delayed complaint responses.

Determination (decision)

In accordance with paragraph 54 of the Scheme, there was service failure by the landlord in its handling of the resident’s staircasing request.
In accordance with paragraph 55(b) of the Scheme, the landlord has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, resolves the complaint about its associated complaint handling satisfactorily.

Reasons

The landlord’s delay in providing written confirmation of which valuation of the resident’s property to use for her staircasing application was unreasonable. Furthermore, it had incorrectly informed her about this, for example on 28 September 2020, for which it apologised.
The landlord did not make a compensation offer to the resident that was proportionate to recognise the detriment experienced by her because of the complaint about its handling of her staircasing request, or that complied with its compensation policy.
The landlord failed to respond to both the resident’s stage one and final stage complaints in a timely manner, or within an agreed timescale with her, contrary to its complaints policy. However, it recognised and offered compensation to her for its delayed complaint responses, identifying its failures to respond to her complaints in accordance with its complaints policy, which complied with its compensation policy.

Orders

The Ombudsman orders the landlord to:
1. Pay the resident total compensation of £185 within four weeks, compromising of:
  1. £150 for her distress, inconvenience, and time and trouble as a result of its delay and incorrect information in handling her staircasing request.
  2. The £35 that it previously awarded her for its poor complaint handling, if she has not received this already.
2. Write to the resident within four weeks to fully apologise to her for all of its above failings in her case, and to explain in detail how each of these occurred and how it will seek to prevent these from occurring again in the future, including in light of its specific actions taken from the lessons that it has learnt from her complaint.
3. If it has not done so already, review its staff’s training needs in relation to their application of its policies and procedures with regard to staircasing, compensation and complaints, to seek to prevent a recurrence of its above failures in the resident’s case. This should include consideration of this Service’s guidance on remedies, at https://www.housing-ombudsman.org.uk/about-us/corporate-information/policies/dispute-resolution/policy-on-remedies/, and the completion of our free online dispute resolution training for landlords, if this has not been done recently, at https://www.housing-ombudsman.org.uk/landlords/e-learning/.
The landlord shall contact this Service within four weeks to confirm that it has complied with the above orders.
The Ombudsman accepts that, because of the present restrictions due to the corona virus pandemic, the timing of the above actions will depend on what is reasonable in the light of Government guidance regarding the health of the resident and of the landlord’s staff.