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Midland Heart Limited (202226268)

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REPORT

COMPLAINT 202226268

Midland Heart Limited

1 May 2024

 

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 defects reported by the resident of a new build property.

Background

  1. The resident is a shared ownership leaseholder of the landlord under a lease dated 2 August 2022. The property is a 2-bedroom house. The property had a 12 month ‘defect period’ following handover from the developer which ended on 27 July 2023. During this period, the developer was responsible for any repairs required due to poor workmanship, quality, design or similar – often referred to as defects or snags. Following this one-year period the landlord advised leaseholders to log a claim with the National House Building Council (NHBC), as under the NHBC warranty leaseholders have a further 12 months to raise concerns under their resolution service with the full NHBC warranty lasting 10 years. The resident enlisted a private contractor to compile a snagging report on the day his lease began.
  2. The resident contacted the landlord on 26 August 2022 to report that the guttering above the patio doors was not functioning correctly, resulting in excess water being dropped into the garden. The landlord recorded this for attendance within 7 days. On 10 September 2022, he reported to the landlord that the front door was extremely hard to open and close and the door lock looked as though it had been installed incorrectly. Additionally, the back patio door was difficult to lock and he suspected the lock was not lining up when the handle was lifted. These were recorded as due for attendance within 7 days.
  3. On 12 October 2022, the resident made a complaint to the landlord as the issues he had reported had not been resolved and he felt that the doors malfunctioning presented as a security issue. The complaint also stated:
    1. The front door was letting water into the property and so the situation had worsened in the time he had been waiting. While he appreciated the landlord was a middleman as responsibility for the repairs lay with the developer, he was unhappy with the lack of action.
    2. The developer had dug up the driveway a month prior and then filled it with rubble rather than reinstating it. The suspension on his car was being damaged as a result.
    3. There were poor drainage provisions along the driveway.
    4. There was a poor finish to all the guttering.
    5. The back garden was “in a mess.”
    6. He had hired a snagging inspector.
    7. The process of buying his first home was ruined by the ongoing issues and lack of attention by the developer. He was also unhappy that safety and security did not seem to be serious enough issues to warrant attendance from the developer.
    8. Due to delays with moving in, he had been unable to claim an additional bonus from the government for first time buyers.
    9. His working hours meant that he was only available for contact in the evenings and weekends, and he was struggling to find the opportunity to constantly chase the repairs.
    10. He asked for resolution by 4 November 2022.
  4. The resident reported a faulty light switch in one of the bedrooms on 13 October 2022.
  5. On 27 October 2022, the landlord sent a letter of acknowledgment of the resident’s complaint and confirmed it would issue a full response by 9 November 2022. The stage 1 response was issued on 9 November 2022 as agreed. It apologised for the delay in speaking to him about his complaint and advised that it would take the delay into consideration when making a final conclusion. It also said that:
    1. The fact he was unable to claim a government bonus was outside of its remit to consider for redress however it recognised the inconvenience and advised that this would be factored into the complaint.
    2. It accepted that the workmanship in the garden was not up to the usual standard, and this had been fed back to the appropriate team for resolution.
    3. It was liaising with the developers to ensure the snagging list was completed and the turf in the garden was re-laid.
    4. It acknowledged that while these actions did not erase his frustrating experience, it hoped that it demonstrated that his complaints were being taken seriously.
    5. It requested a copy of the snagging list compiled by the resident’s own surveyor so it could determine what would fall within the remit of it or the developer.
    6. The complaint handler promised to continue to oversee the complaint and outstanding repairs. Once all were completed to the resident’s satisfaction, it would make a final decision on the complaint and any compensation.
  6. On 15 November 2022, the resident reported that the central heating zones had been programmed incorrectly. This meant that when he attempted to switch on one zone, it heated the opposite zone.
  7. There is no record of when the resident submitted his private snagging list to the landlord, however this list contained 255 ‘snags’. The landlord compared this list to NHBC guidelines for defects and compiled a final snagging list of 39 items which was then shared with the resident. This was sent to the developer on 8 December 2022. The list included (but is not limited to):
    1. Incorrect installation of external doors
    2. Incomplete grouting
    3. Power sockets and light switches unfinished
    4. Loose pipework
    5. Unsecured radiators
    6. Leaks from underneath the bath
    7. External paintwork and pointing repairs.
  8. Additional defects reported on 24 December 2022 included a sewage smell from the kitchen sink and a gap at the bottom of the front door causing a draught.
  9. On 6 January 2023, the landlord issued its final response, upholding the resident’s complaint.
    1. It had reviewed the communication throughout the complaints process and found that it was unnecessarily delayed due to poor handovers between colleagues. It stated it had learned from this and had implemented additional resources moving forward.
    2. The snagging list was longer than it would have hoped given the property was a brand new construction, and it recognised that there had been delays in completing the repairs.
    3. While the responsibility of completing the repairs was with the developer, it found that it should have escalated the situation more promptly and apologised for not doing so.
    4. It confirmed that the turf was fitted on 5 January 2023. It thanked the resident for his patience through the delays which included a period of inclement weather, which had prevented the turf being laid before Christmas.
    5. It said that the snagging list provided by the resident was useful to help it understand the number of issues in the property, and it had passed all appropriate defects to the developer.
    6. To expedite the works, it had taken ownership and allocated its trusted subcontractor to complete them. While this was not standard practice, it felt that this was the best way to resolve the issues the resident was experiencing.
    7. It acknowledged the resident’s request to assess compensation until the date of its response, and then reconsider the amount once all works are completed. It agreed to this, and awarded £540 initially:
      1. £200 for the delay in resolving the outstanding defects.
      2. £170 for poor communication and inconvenience.
      3. £170 for the initial delay in moving in.
  10. The resident approached the Ombudsman on 22 February 2023 as he was unhappy with the number of outstanding defects and the length of time taken to attend following his reports. He was also unhappy that he had not been provided with a copy of his NHBC warranty certificate by the landlord.
  11. On 8 March 2023, the resident reported a potential leak in his roof, which was evidenced by a patchy ceiling above the stairs.
  12. Additional compensation was offered by the landlord on 30 March 2023, taking into consideration further failures.
    1. £254 for the length of time he experienced a fault with electrics in a bedroom (£1 a day in line with its policy to cover 1 July 2022 – 11 March 2023).
    2. £ 254 for the length of time he experienced a fault with electrics in the kitchen (£1 a day in line with its policy to cover 1 July 2022 – 11 March 2023).
    3. £170 for further delays.
    4. £170 for further inconvenience.
    5. £170 for poor communication when the previous complaint handler left the business.
  13. On 27 July 2023, the landlord attended the property to complete a final inspection of the property as the defect period was ending. It recorded that there was no access to the property.
  14. In September 2023, a number of additional repairs were reported to the landlord, including the driveway being “dipped” and glass being scratched.
  15. A formal complaint update was provided to the resident on 10 January 2024, and the landlord confirmed that the final repairs were being completed the following day. It apologised for the inconvenience and stated that it used the lessons learnt to identify and make improvements to its service. Additional compensation was offered:
    1. £400 to reflect further delays.
    2. £250 for poor communication.
    3. The total amount paid to the resident throughout the complaint was £2208.

Assessment and findings

Scope of investigation

  1. As the property was within a 12-month defect period, the responsibility for all repairs and ‘snags’ was with the developer, who is not a member of the Housing Ombudsman Scheme. However, the resident’s contractual relationship is with the landlord and we would expect a landlord to do all it can to ensure all issues are resolved. The Ombudsman will therefore assess the landlord’s handling of reported repairs and its handling of communication with the developer but cannot assess the actions of the developer.
  2. The resident also raised to the Ombudsman that he had not been provided with a copy of his NHBC warranty certificate. This was not highlighted in the resident’s original complaint to the landlord and was not brought up during the complaints process so will not be covered in this complaint. The landlord has addressed this issue in its communication with the Ombudsman and advised that the resident was provided with the cover note which provided his warranty policy number, and name of warranty provider. That information would be sufficient for him to raise a claim with NHBC. A recommendation will be made at the end of this report for the landlord to contact the resident and either provide the document or ensure he is aware of its location.

The landlord’s handling of defects reported by the resident of a new build property.

  1. The landlord provides all new leaseholders with a handbook which provides information about repairs, leases, complaints, and other landlord policies. In the section relating to new homes, it states that, if the property is covered by a defect liability period, it will inspect the property with the developer and agree what outstanding repairs, if any, are the developer’s responsibility.
  2. The handbook defines a defect as “any problem with a property, or part of a property, which needs repair work and which the builder should put right.” This definition is not sufficiently clear, and it is understandable that new occupants would report cosmetic issues in addition to genuine defects. For first occupants of a new property, there is an expectation that the property will be in pristine condition, including decoration. This may explain why the defects list provided by the resident’s private contractor was considerably larger than the final agreed defects list. It was reasonable for the landlord to categorise defects based on the NHBC guidelines, however its literature should be more specific on what it will and will not consider to be a defect. While it cannot reasonably list every accepted defect, it could add a list of examples of excluded items such as cosmetic issues, to manage the expectations of its leaseholders more effectively. In this case, the landlord informed us that it explained to the resident why some listed defects would not be attended to once it had compiled its final list.
  3. As the defects were reported during the 12-month defect period, it was appropriate for the landlord to refer all snagging issues to the developer. We requested that the landlord provide us with its records of contact between it and the developer. While we have been provided with information pertaining to liaison with senior management for the developer, we were not given a full record of communication. Some defects such as the front door being difficult to open and close, and faulty external guttering were allocated a response time of 3-7 days however all deadlines were missed. It is unclear whether the developer also followed the same timescales for repairs. If the planned response times set by the landlord differ from the response times set by the developer, this could mismanage the expectations of residents. While the landlord was not responsible for the delays in attendance as it did not have the responsibility to complete the repairs, it could have considered using its own tradesmen sooner or chased the developer more frequently.
  4. It is positive that the landlord did eventually make the decision to complete the repairs itself, and that it reported the service failures from this case to its senior management team so that the developer could be held to account for its errors. It has provided the Ombudsman with confirmation that it held a meeting with the developer on 23 January 2023 where it discussed the failings in this case. The landlord has shared its records with this Service which indicate that all defects have been rectified as of the date of this report. Additional work has also been completed by the developer on the communal road. The Ombudsman also notes that many of the defects were external issues, and a majority of the internal issues would not affect daily usage of the property, for example missing screws, grouting requiring renewal and scratched glass.
  5. At the end of the defect period on 27 July 2023, the landlord attempted to carry out a final inspection of the property with the aim of compiling a list of outstanding defect repairs to be agreed with the developer but it could not gain access as the resident was not at the property. The appointment was booked between 9.30am and 12.30pm however there is evidence that the resident called the landlord at 12.35pm to chase attendance as no-one had arrived. The landlord should have arranged another appointment to complete the inspection, given the number of defects which had been identified and the fact that it had not attended for the booked inspection at the correct time.
  6. In its communication with the Ombudsman, the landlord noted that the snagging list completed by the private contractor was not considered a ‘professional’ snagging list as the surveyor was not professionally chartered or registered. The Ombudsman has not been made aware of the qualifications of the surveyor, however we note that in general the responsibility to report defects lies with leaseholders who also are not professionally chartered or registered. The landlord was entitled to scrutinise this list and compare it to NHBC guidance however in the Ombudsman’s opinion, the qualifications of the individual reporting the defect are not relevant. If a landlord has doubts regarding the validity of a defect report, it should attend to survey the property itself.
  7. The complaint responses from the landlord were detailed, providing apologies for its failures and a commitment to resolving the outstanding issues. While there were additional delays with communication, the landlord followed the Ombudsman’s dispute resolution principles of “Be fair. Put things right. Learn from mistakes.” Its complaint process was flexible, and the complaint was kept open until all issues were resolved, rather than sticking rigidly to its policy and issuing a final response within 20 working days of the complaint escalation. This allowed the landlord to tailor its offer of compensation to the failings in the case.
  8. Importantly, the landlord identified that there was a risk of the errors made in this case being replicated in other cases with the same developer and escalated its concerns, instead of simply hoping it did not happen again. It also informed this Service that following this case, it allocated more resources to its development team to reduce delays and maintain a high level of communication with residents reporting similar issues.
  9. The total amount of compensation paid in this case was £2,208, paid in stages throughout the complaints process. It was sensible for the landlord to continually reassess compensation throughout the complaints process given the number of defects and the previous issues with the developer. This level of compensation is consistent with the Ombudsman’s remedies guidance and, in the Ombudsman’s opinion, is proportionate to the level of service failure and associated impact on resident.
  10. There were a number of service failures owing to poor communication and delays with chasing the developer and making the decision to complete the repairs itself. However, in the Ombudsman’s opinion the landlord’s offer of compensation and its ultimate decision to complete repairs, rather than wait for the developer, were appropriate redress and resolve this complaint satisfactorily.

Determination

  1. In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, the landlord made an offer of reasonable redress to the resident in respect of how it managed the complaint which, in the Ombudsman’s opinion, satisfactorily resolves the complaint.

Recommendations

  1. The Ombudsman makes the following recommendations:
    1. Within the next 4 weeks the landlord should contact the resident to either provide a copy of the NHBC warranty certificate, or advise the resident of its location.
    2. Within the next 8 weeks the landlord should review its leaseholder booklet and provide more clarity on the definition of defects. If it cannot provide a full list of accepted defects, it should provide examples of common issues which are not considered to be defects, in order to manage leaseholder expectations more effectively.
    3. Within the next 8 weeks the landlord should ensure that its response times and that of any developers it uses are aligned. If there is any discrepancy, it should ensure that it manages the expectations of residents reporting issues during the defect period.