Midland Heart Limited (202121358)

REPORT

COMPLAINT 202121358

Midland Heart Limited

19 December 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 reports of defects after she moved into the new build property, including its complaint response.

Background

2. The resident is the shared owner of the property which she moved into in February 2021.The property is owned by the landlord and a third-party company is the developer.
3. After the resident moved in, she agreed a list of defects with the landlord which it said it would remedy. The list included problems with doors, floor coverings and water pressure. She later wrote to the landlord setting out these concerns and adding that the bath leaked, and her boiler was unreliable. The landlord and the developer of the property arranged for some of the works to be done. The resident said some defects remained. In March 2021, the landlord told the resident to hand in a final list of repairs before the end of the two-year warranty period, which was 24 October 2021. In June 2021, she sent her list to the landlord and it included concerns about stains on walls and ceilings, the heating system and drainage.
4. The landlord did not respond to this and, in early 2022, the resident complained formally to it that many of the defects remained. Among her concerns were faulty doors, a radiator which did not work, a broken bath panel, and stains on ceilings and walls. In its stage 1 complaint response sent on 25 May 2022, the landlord accepted that it had it had failed to address the resident’s concerns.  It said it would arrange for the repairs to be completed as soon as possible.
5. In August 2022, the landlord provided a stage 2 response. It said a manager had visited the property in June 2022 and identified outstanding issues including stains to walls and ceilings, a broken boiler cover and letterbox. It said that all works had now been completed. Because of the delay in the completion of the works, it offered the resident £671 in compensation. The resident rejected this offer and asked for a review of the decision.
6. The landlord later accepted that some repairs had not been completed at the time of the stage 2 response. It wrote to the resident again on 20 October 2022 and said that, because some repairs had not been completed until October 2022, it would offer her a further £120.
7. The resident continued to contact the landlord saying there were still issues at the property including the boiler and out-of-date carbon monoxide monitors.
8. In August 2023, the landlord wrote a “compensation update” email to the resident in which it said it had now completed its review of her complaint and found that, because the repairs had not been completed until October 2022, it would offer her a further £641 making a total of £1432, which the resident rejected.
9. On 3 October 2023, the landlord’s contractor carried out a further visit in which it carried out further works including painting and remedying problems with drainage from the bath.

Assessment and findings

Scope of the investigation

10. The resident seeks to be compensated for the impact of the events on her and her physical and mental health. It is not within the Ombudsman’s authority or expertise to determine negligence, liability or compensation claims in the same way as the courts, or to order damages in relation to these. A court is best placed to offer a definitive and legally binding decision in these matters. The Ombudsman can assess whether the landlord appropriately considered matters within the timeframe of the complaint, applied its policy and procedure, complied with any relevant legislation and followed good practice when reaching decisions.
11. The resident made reports of further problems in February 2023 which was after the landlord had responded to her complaint. She said that carbon monoxide and smoke alarms were out-of-date. Paragraph 42(a) of the Housing Ombudsman Scheme provides that this Service will not investigate complaints which “are made prior to having exhausted a member’s complaints procedure, unless there is evidence of a complaint handling failure and the Ombudsman is satisfied that the member has not taken action within a reasonable timescale.” Thus, these issues have not been investigated in this report. The resident may wish to make a formal complaint to the landlord on any matters which remain outstanding at this time.

The landlord’s response to reports of defects

12. Often, in new build properties, defects which were not identified at the point of handover become apparent once the occupier moves in. For this reason, shared owners are protected by a warranty period of 2 years during which the developer is responsible for repairing any defects that become apparent. Thereafter, leaseholders can claim on their building insurance. In this case this insurance was provided by the National House Building Council (NHBC).
13. It is the responsibility of the landlord to liaise with the developer and to ensure that any defects are remedied. The existence of defects alone does not constitute a failure in the landlord’s service. The Ombudsman will investigate the landlord’s response to reports of defects to see if these amount to maladministration.
14. As well as defects, residents may complain about the standard of works such as painting and decorating in a property. They may say that the works are not up to standard, there are stains on the walls or that paint colours do not match. Where this happens, the Ombudsman is not able to judge whether such concerns are justified. Instead, the Ombudsman must decide whether a landlord has responded to such concerns in an appropriate way.
15. The resident signed a leasehold agreement to take a 50% share in a property owned by the landlord in February 2021. The resident said that the landlord told her when she moved into the property, but after she had entered into her shared ownership agreement, that it had been completed 15 months earlier and had been standing empty until she bought it. She says that, had she known this, she would never have bought her share of it. This Service has seen no evidence as to what was said by the landlord during this time.
16. It is the Ombudsman’s role to investigate whether the landlord was responsible for maladministration in its dealings with the resident. This Service has seen no evidence that the landlord misled the resident who, the records show, was represented by a solicitor during her purchase of the interest in the property. The solicitor asked for deeds and other documents from the landlord and there is no evidence that the landlord provided misleading information in any form.
17. The resident says that, when she took possession of the property, the landlord told her that, because the house had been completed in 2019, the developer’s warranty had expired. In fact, the warranty period would not expire until 24 October 2021. The landlord later told the resident this. In any event, the landlord took responsibility for defects found at the property from the outset. The resident was not disadvantaged by this misstatement.
18. On the day the resident moved in, the landlord agreed a list of defects with the resident which it would ask the developer to repair. These were:
    1. Front door catches and needs draft excluder refitting.
    2. Back door difficult to shut.
    3. Both bedroom doors in need of adjustment.
    4. Low pressure in bath taps.
    5. Bathroom floor had lifted.
19. The resident wrote to the landlord 2 weeks later and set out further concerns. She stated that the house had been completed 15 months before she bought it. She had not been told this in advance and would not have bought it if she had known. She outlined the repairs issues as including:
    1. A crack in the wall in the lounge.
    2. A crack on either side of the handrail on the stairs.
    3. A broken letterbox.
    4. The carpet in the second bedroom was faulty.
    5. After she had a bath in February 2021, the water leaked through the floor into the downstairs toilet.
    6. The boiler needed servicing.
    7. Her heating had not come on.
    8. The landlord told her that repairs were her responsibility as a shared owner.
20. The landlord informed the resident in March 2021 that the developer’s warranty period ended on 24 October 2021. It worked with the developer to ensure that some defects were remedied. The developer filled the cracks on the stairs and in the lounge; replaced the carpets and flooring and replaced the front door.
21. The landlord told the resident in March 2021 to be sure to send a list of any outstanding defects to the builder before 24 October 2021 to ensure that they were remedied under the warranty. This was an appropriate request in line with its responsibility to ensure that the defects identified by the resident were remedied during the warranty period.
22. The resident sent a list of outstanding defects to the landlord on 29 June 2021. These were:
    1. A broken boiler cover.
    2. A water mark on the kitchen ceiling after a leak from the main bedroom radiator which had been fixed.
    3. The rear door did not lock properly and the handle was slightly difficult to lift.
    4. Discoloured patches on the lounge ceiling and minor plaster defects on wall.
    5. The lounge barrier mat by the front door was faded.
    6. The letterbox was missing the brush strip.
    7. A cracked bath panel.
    8. Poor drainage in the bath and shower in the bathroom.
    9. A scratched plug in the bathroom basin.
    10. The landing radiator was not working.
    11. The outside light was not working and filled with rainwater because it was placed directly below the front door porch canopy.
    12. Tarmac in the driveway and main access road was marked and broken in places.
    13. The landscaping of the estate had never been completed.
23. The landlord did not provide any response until 2022 after the resident complained.
24. The landlord says it will sometimes offer customers compensation which it calculates according to a compensation matrix which it has provided on request to this Service.
25. The resident contacted the landlord in March 2022 but received no response. She then complained to this Service. As she had not yet complained through the landlord’s internal complaints procedure, the Service referred her complaint to the landlord on 11 May 2022. It provided a complaint response on 25 May 2022.
26. The resident’s complaint of May 2022 contained 3 points. She said that the landlord:
    1. Had failed to send her legal documents she had requested.
    2. Had not remedied defects at the property.
    3. Had communicated with her poorly.
27. In its response, the landlord said it had attempted to contact the resident about her concerns in March 2022 but had been unable to reach her. It found that she had had to contact it on numerous occasions. It had agreed that it would contact her before the warranty period ended. It accepted that it had failed to do so and agreed to send her documents she asked for. It did not offer her compensation.
28. In the circumstances, given that the landlord had failed, by this time, to consider the resident’s list of defects or carry out any remedial works for 11 months, this was not an adequate complaint response.
29. The landlord began to consider and respond to the resident’s list of defects in July 2022. It arranged for the boiler cover and the letterbox to be repaired. It also arranged for stains in the kitchen and lounge to be repainted.
30. The landlord also decided that certain works were not its responsibility. It said the tarmac on the resident’s drive was adequate. It said the scratched plug in the bathroom, the broken bath panel, and the faded doormat were caused by wear and tear and were therefore not its responsibility. These were matters of professional judgment and were decisions which it was reasonable for the landlord to make after an inspection.
31. The landlord also arranged for a plumber to inspect the landing radiator. This was a proper response to the resident’s concerns. The plumber came and checked the system several times in July 2022. The boiler manufacturer serviced the boiler in late 2022 and said there was no problem with the boiler.
32. The resident continued to report defects. She also pressed the landlord to pay her compensation not only for her distress but also for the fact that her mental health had suffered, and she had had to give up her job.
33. The landlord has said it calculated its compensation payments with reference to its compensation matrix. The matrix states that a customer who waits for “routine repairs” for more than 28 days should be paid £1 a day for the duration of the period.
34. In August 2022, the landlord wrote to the resident offering her £671 in compensation. It said the amount awarded included £271 for delays in receiving a two-year expiry inspection, (at £1 per day), £170 for poor communication and inconvenience and £170 for delay escalation to a formal complaint. It also included 2 “good will” payments: £30 for a new bath panel and £20 for a new outside light. It said this would be paid to the resident within 14 days if she agreed.
35. The landlord emailed the resident on 10 August 2022 saying that all the works agreed had now been completed. The resident disagreed, stating that she had received no contact about her concerns about plumbing. She said the painting was below standards and the compensation offer was “an insult”. She would not accept payments for a bath panel and an outdoor light; she wanted them installed at the landlord’s expense as she could not do it herself.  She added that the landscaping on the estate had never been carried out.
36. The landlord sent a further complaint response in October 2022. It said that its previous offer of £671 had been made on an incorrect basis as it had believed that the agreed works had been completed in August 2022 whereas, in fact, they were not completed until October 2022. It therefore offered her a further £120: £70 for further delays and £50 for further inconvenience.
37. While the landlord did continue to respond to the resident’s concerns for 3 years, its handling process was poor. There were errors of fact in the decisions provided to the resident. For example, at stage 1, the landlord stated that the resident had moved into the property in July 2021 but this was not the case. The August 2022 response stated that all the works had been completed but the evidence indicates that this was incorrect. A compensation calculation also assumed in error that the resident had moved into the property on 14 January 2021.
38. In addition, the November 2022 complaint response stated that the works had been completed in October 2022. On the contrary, in November 2022, the resident continued to complain about drainage and heating as she had since February 2021. The landlord’s poor and incomplete complaint responses allowed confusion to continue as to whether these matters had been resolved.
39. In an email to the landlord, in January 2023, the resident said that the landing radiator had not been working since February 2021 and no one had responded to her complaints. She wanted to know who was responsible for the boiler service. She wanted a copy of the current building insurance certificate.
40. In early 2023, the resident dealt with the developer directly about her concerns. The developer was acting as the landlord’s contractor and so these events are considered in this report. She continued to argue that the landing radiator had been faulty from the time she moved into the property and, if the boiler was not faulty, then there must be a leak in the heating system as the pressure in the system occasionally dropped. She said that this too must have been a latent defect which existed since before she took possession of the property.
41. In May 2023, the developer advised the resident that its plumber did not believe the defect had been down to poor installation. It said that any latent defect would have come to light much earlier.  It concluded that, as the matter had occurred outside the warranty period, it would have been caused by “general wear and tear.” Thus, it had become the resident’s responsibility as the homeowner to undertake any required repairs by engaging her own plumber at this stage.
42. This was an appropriate response, except that it came over 2 years after the original complaint about the radiator was made. It was reasonable for the landlord to rely on the professional advice of a plumber with respect to the landing radiator.  The resident continues to complain about the landing radiator and the heating system, but this report concludes that the matter has been dealt with adequately.
43. If the resident disagrees with this position, she can engage an independent contractor to inspect the system. If this expert evidence shows that the heating system had a latent defect at the time she occupied the property, she can make a fresh complaint to landlord or escalate it to the National House Building Council.
44. In October 2023, the landlord wrote to the resident and increased its offer of compensation for the problems she had suffered at the property. It offered her a further £643 to “recognise the delays to the repairs in being completed following the end of defects period until the date of repairs completion”. This represented “£1 per day from 14th January 2021 to 19th October 2022 when all defects were confirmed to be completed.”
45. While the landlord was right to increase its offer in the light of its new calculations, this response was only necessary because the previous offer had been based on the incorrect basis that the works had already been completed. The new calculation was also based on incorrect information as, the works were not completed in October 2022 and this complaint response was, therefore, also inadequate.
46. The resident wrote to the landlord the same day and rejected this offer. She said it was insufficient and continued to argue that the repairs were not yet completed.
47. The landlord visited the property on 28 September 2023 and agreed a further list of defects that it would remedy. It said it would attend the property on 3 October 2023 and:
    1. Sand and paint a bulkhead.
    2. Remove sealant from the bathroom sink and reseal.
    3. Investigate the problem with the radiator on the landing.
    4. Investigate the problems with draining the bath which seemed to be caused by the plug.
48. The landlord’s contractor visited the property on 3 October 2023 to carry out these works. The resident reports that the contractor found that the problem with drainage from the bath was caused by the fact that the waste pipe did not slope downwards from the plughole as it should have done. Instead, a section of pipe sloped upwards. This prevented the water from draining adequately. The contractor repaired it, and the problem was solved.
49. The resident confirmed that the bath now drained well. However, she complained that the contractor had refused to replace the bath panel as this was not an agreed repair. The landlord stated that it would not send a contractor to replace the bath panel as it had already offered her £30 as a goodwill gesture. The landlord later stated that this was its final position and restated its offer of a total compensation payment of £1,432. The resident rejected the offer, stating that she had suffered severe trauma and her landscaping concerns had not been addressed.
50. The landlord’s response to the resident’s reports of defects was, overall, inadequate. It failed to respond at all for more than a year. The resident then complained but the complaints decisions did not address all the issues fully, it relied on inaccurate information and the landlord did not learn from the process or address all the points in the list. This meant that the resident continued to complain about the landing radiator for nearly 2 and a half years and about the poor drainage in the bath for nearly 3 years before the matters were resolved.
51. The landlord’s final remedy calculation was, again, based on incorrect information as it stated that all the resident’s concerns had been addressed by October 2022 when, in fact, the problem with the bath’s drainage was not resolved until October 2023. As the drainage was not remedied until a year after the landlord claims, it should increase its payment of compensation from £1432 to £1800.  This figure is based on a further £365 for the extra year until the works were completed.
52. In addition, the landlord failed to address the resident’s concerns about the bath panel adequately. She said it had been damaged by the landlord’s contractors who had removed it several times while attempting to improve the bath’s drainage. She also stated that she could not install bath panels herself and therefore needed it fitted.
53. On the evidence, there was a problem with the drainage beneath the bath which was not discovered until October 2023. The resident says that the landlord had removed the bath panel on several occasions to look for problems. Given that the resident complained about problems with drainage from the bath in early 2021 and the problem was not solved until late 2023, the Ombudsman considers that the damage was most probably caused as the resident claims.
54. The issue of the outdoor light was an additional point of raised by the resident in June 2022 and was not part of the original list. She reported that the outdoor light filled with water, stating that this was due to it being wrongly positioned. This was a report made after the end of the warranty period of 24 October 2021. The landlord inspected the light and advised that the issue would be resolved by the light being changed. It offered her of £20 for the replacement of the light but the resident stated that she was unable to install it herself.
55. The shared ownership lease states in clause 3.5 that it is the leaseholder’s responsibility to keep the premises, including the fixtures and fittings, in good condition. As the matter was reported after the defects period, this Service, concludes that the landlord’s offer of £20 was reasonable in the circumstances of the case as it demonstrated its willingness to resolve the issue despite the lease provisions. The resident may wish to make a further report to the landlord if the problem continues after the light is replaced.
56. In addition to the above, the landlord should pay the resident £300 in recognition of the distress caused to her and the time and trouble she took pursuing her concerns.

Determination

57. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in the way the landlord handled the resident’s reports of defects at the property.

Orders and recommendations

Orders

58. Within 5 weeks of the date of this report, the landlord must:
    1. Write to the resident and apologise for the failures identified in this investigation.
    2. Pay the resident the total sum of £2100, including the amount previously offered.
    3. Arrange with the resident for the bath panel to be replaced.
    4. Provide evidence to this Service of compliance with all the above orders.

Recommendations

59. The landlord should reoffer the sum of £20 to the resident for the replacement of the outside light and consider assisting her with the installation.