Midland Heart Limited (202307009)

REPORT

COMPLAINT 202307009

Midland Heart Limited

9 July 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:
   1. The landlord’s delay to register the property with the land registry.
   2. The landlord’s handling of a dispute over the shared pathway.
   3. The landlord’s complaint handling.
2. The Ombudsman has also considered the landlord’s record keeping.

Background

3. The resident was a shared owner of the property between April 2021 and July 2023.
4. The resident emailed the landlord on 29 March 2023. The resident said that she was having difficulty selling her share of the property, due to the landlord’s delay in registering the property with the land registry. She was at risk of losing £7,000 in sale fees if the sale did not proceed. She said that the situation was having a significant effect on her mental health, and she had raised a complaint with the landlord’s solicitors.
5. The resident emailed the landlord again on 19 May 2023, expressing dissatisfaction that she had not received a response from the landlord or its solicitors to her complaint. The resident said that after some effort on her part, the property had been registered in the landlord’s name. However, the property had been registered using an incorrect title plan. Unless the matter could be resolved quickly, the resident’s title would be registered without the shared footpath. The resident was concerned that she might lose her buyer and would be unable to complete on her onwards purchase. She said the situation was having a significant effect upon her mental health and she stood to lose £10,000 in sale fees.
6. The landlord acknowledged the resident’s dissatisfaction as a stage 1 complaint on 2 June 2023. It issued the stage 1 response on 10 August 2023. The landlord partially upheld the complaint. The landlord:
   1. Found no failure in its registration of the property with the land registry. However, it accepted that it could have communicated more clearly with the resident about this.
   2. Found no failure in its handling of the dispute over the shared pathway.
   3. Found failure in its handling of the complaint. It recognised that its communications had sometimes fallen short. It apologised for not raising the complaint sooner.
   4. Offered £150 compensation, comprising:
      1. £100 in recognition of poor communications and inconvenience.
      2. £50 in recognition of complaint handling failure.
7. The resident asked the landlord to escalate the complaint to stage 2 on 15 August 2023. The landlord issued the stage 2 response on 14 September 2023. The landlord did not change its position in relation to the substantive matters of complaint. In addition, it accepted that it had not escalated the complaint in a timely manner. It increased its offer of compensation to £170.
8. The resident brought the complaint to the Ombudsman in October 2023, dissatisfied with the stage 2 outcome. The resident suggested that the landlord had not completed a thorough investigation and there was no explanation as to why the issues had occurred. The resident felt that the landlord’s solicitors were at fault, and the landlord was not taking responsibility. The resident felt the landlord’s offer of compensation was insufficient.
9. The landlord took the opportunity to review its complaint handling in January 2024, after the Ombudsman accepted the complaint for investigation. Following its own review, the landlord offered the resident an additional £200 compensation.

Assessment and findings

The landlord’s delay in registering the property with the land registry.

10. The landlord took handover of the property from the developer in November 2020. The evidence shows that the landlord’s solicitor made an application to the land registry on the 5 January 2021, to change the register. The landlord states that around this time, the land registry was experiencing excessive delays due to the COVID-19 pandemic and increased workloads. The Ombudsman has verified this from an internet search.
11. It is understood that the resident purchased shares in the property in April 2021. However, when she came to sell her shares at the beginning of March 2023, it became known that the property had not been registered in her name or the landlord’s name. The resident was unable to proceed with the sale until these matters had been resolved.
12. The resident states that upon further investigation, she identified that the land registry had cancelled the landlord’s initial application to change the register. The land registry told the resident that the landlord’s solicitor had not responded to their requisition request. According to the land registry’s website, a requisition is raised “when information is missing, incomplete, or wrongly drawn, and the further improvements will see applications progressed quicker”. If a response is not received by the land registry within “40 days” of the requisition being issued, the land registry will cancel the application.
13. The Ombudsman has been unable to verify from the evidence provided, that the landlord’s application to change the register was cancelled. But the landlord does not dispute that its solicitor received a requisition from the land registry on 30 November 2021, which was not passed onto the developer’s solicitor until 57 days later. This would suggest that the landlord’s solicitor did not respond to the requisition within the land registry’s expected timeframe. This is a concern.
14. The landlord has told the Ombudsman that the land registry “asked it” to submit a further application to change the register in 2022, “due to the time that had elapsed”. The resident has suggested that this was prompted by her own application to register her interest in the property. The Ombudsman has been unable to determine from the evidence seen, the events that led to the landlord’s application being resubmitted by the landlord’s solicitor on 9 June 2022. This could suggest there was an issue with the landlord’s record keeping.
15. The landlord’s records are also silent between 10 June 2022 and 9 March 2023, when the land registry issued a further requisition. The landlord replied to the requisition on 22 March 2023, which was well within the land registry’s expected response timescales. This was encouraging.
16. From the evidence seen, the landlord was not made aware of the resident’s difficulties to register her interest in the property until 29 March 2023. It was in the best interest of both the landlord and the resident that the property was correctly registered in a timely manner. It was unclear if the landlord had been tracking the progress of the registration, which would have been best practice. While the speed of the registration may have been frustrating for the resident, in the Ombudsman’s view, this presented little detriment to the resident until such time as she decided to sell her shares.
17. The Ombudsman does not doubt that the resident experienced distress and worry after the issue with the registration became known. The Ombudsman accepts that liaising with relevant parties, was likely to have required some effort on the resident’s part. But ultimately, there was no delay in the landlord responding to the land registry’s second requisition. The property was successfully registered within 20 days of the land registry requisition being issued.
18. Overall, in consideration of the landlord’s delay to register the property with the land registry, the Ombudsman finds no maladministration.

The landlord’s handling of a dispute over the shared pathway.

19. After the property was registered to the landlord on 29 March 2023, the resident’s buyer identified an issue with the position of the boundary line on the title plan for the property. The registered title plan excluded the shared pathway next to the property. However, this had been included on the transfer plan provided to the resident at the time of the purchase. This issue was brought to the landlord’s attention by the resident’s solicitor sometime around 9 May 2023.
20. The landlord appropriately investigated the shared pathway with its solicitor and the developer’s solicitor between 9 May 2023 and 17 May 2023. On 17 May 2023, the developer’s solicitor confirmed that there had been an error with the transfer plan provided to the resident at the time of the sale. The developer’s solicitor said they would take instructions from their client, as to whether their client had intended the shared alleyway to be transferred to the landlord.
21. The resident emailed the landlord on 19 May 2023. The resident expressed her concern that unless the issue with the boundary was resolved by 1 June 2023, her interest in the property would be registered by the land registry with an incorrect title plan. The resident said she did not want to go to the expense of paying for an indemnity insurance. She expressed her belief that this was the landlord’s problem to fix.
22. The landlord chased its solicitor on 1 June 2023 and asked it to assist by resolving the matter as a priority. This is evidence that the landlord was treating the resident’s concerns with the attention they deserved.
23. The following day, the landlord emailed the resident, apologising for the situation the resident had found themselves in. It said the developer had agreed to transfer the alleyway and issue a letter showing its intent (a “comfort letter”), which could be forwarded to the resident’s purchaser. The landlord said, “this letter would outline the fact that the developer had agreed to transfer the accessway to us, and that steps are being taken to address this. Hopefully, this will provide the reassurance required to protect your sale”. The landlord’s response was timely, showed empathy, and was fair.
24. The developer’s solicitor issued the comfort letter on 7 June 2023. This was forwarded to the resident the following day by the landlord. The landlord offered to send a copy of the comfort letter to the resident’s solicitor, however, the resident said she had already done this. The landlord showed that it was keeping lines of communication open by asking the resident if there was any more it could do to assist her. This was encouraging.
25. In the landlord’s internal records around this time, the landlord commented that it would expedite the signing of the new transfer, when this was received from the developer. The Ombudsman has seen evidence that the landlord was tracking the progress of the transfer and was chasing involved parties regularly for updates. This was both reasonable and appropriate.
26. According to the land registry website, the resident sold her interest in the property on 28 July 2023. The alleyway was transferred from the developer to the landlord on 4 October 2023. This suggests that the dispute over the alleyway did not unduly delay the sale of the property.
27. Overall, in consideration of the landlord’s handling of a dispute over the shared pathway, the Ombudsman finds no maladministration.

The landlord’s complaint handling.

28. The landlord had a 2-stage complaint policy which set out the landlord’s approach to complaints. The landlord defines a complaint as “an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the organisation, its own staff, or those acting on its behalf, affecting an individual resident or group of residents”. The landlord aimed to acknowledge stage 1 complaints within 5 working days and provide a full response within 10 working days. It aimed to provide a full response at stage 2 within 20 working days. If an extension to these timescales was required, it would agree this with the resident. It would only seek an extension of more than 10 working days, where a resident requested additional time or the complaint was complex.
29. The resident emailed the landlord on 29 March 2023, expressing dissatisfaction with the landlord’s delay to register the property with the land registry. While the landlord acknowledged the resident’s email in a timely manner, it did not recognise the resident’s dissatisfaction as a complaint. This was inappropriate.
30. The resident emailed the landlord again on 19 May 2023, repeating her dissatisfaction about delays registering the property. She added a new element of dissatisfaction concerning the shared alleyway. The landlord recognised the resident’s communication as a complaint within internal communications on 23 May 2023. However, there is no evidence that the landlord formally acknowledged this with the resident. This was inappropriate and resulted in the resident expressing further dissatisfaction on 26 May 2023, about the landlord’s complaint handling.
31. The landlord logged a stage 1 complaint on 2 June 2023 and sent a formal acknowledgement to the resident. The landlord initially set out to provide the stage 1 response by 9 June 2023. After finding the investigation more complex than it originally anticipated, it wrote to the resident confirming that it would need an extension. This was in line with its policy. The landlord committed to issuing the stage 1 response by 30 June 2023.
32. It was both inappropriate and unreasonable that the landlord did not provide the resident with the stage 1 response within the revised timescale it had committed to. If the landlord was unable to issue the stage 1 response by 30 June 2023, it should have proactively contacted the resident to explain why. It should then have agreed a new timescale for issuing the response. The landlord’s inaction left the resident unclear as to how her complaint was being addressed, which was unfair.
33. The resident emailed the landlord on 1 August 2023, asking it to escalate the complaint to stage 2. In this email, the resident suggested that she had already asked the landlord to do this by phone. It is unclear from the evidence seen, when the resident first attempted to escalate the complaint, which is a concern. Again, this suggests there was an issue with the landlord’s record keeping.
34. It is unclear why the landlord issued a stage 1 response on 10 August 2023 (dated 11 August 2023), rather than escalating the complaint to stage 2, as had been requested. It is possible that this was agreed with the resident during the phone call on 1 August 2023. However, this could not be verified, as the landlord did not provide the contact notes from its telephone conversation with the resident.
35. Unhappy with the stage 1 response, the resident asked the landlord to escalate the complaint to stage 2 on 15 August 2023. The landlord has not provided the Ombudsman with a copy of the resident’s escalation request. It is further noted that the landlord’s stage 2 response was issued 2 working days late. This contributed to the overall delay in the landlord’s complaint handling.
36. In the Ombudsman’s opinion, failures in the landlord’s complaint handling resulted in the landlord’s complaint process being unduly long. There was an unreasonable level of involvement required from the resident to progress the complaint, which would have caused her inconvenience, as well as increased time and trouble. The landlord does not dispute that there were failures in its complaint handling and that its communication with the resident fell short. The landlord has already apologised for this and has offered compensation. After the complaint was accepted by the Ombudsman for investigation, the landlord increased its offer of compensation. In the Ombudsman’s opinion, the landlord’s revised offer of compensation was proportionate to the likely detriment caused to the resident, arising from the identified failings.
37. Although the landlord has addressed the complaint handling failures fully, this was partially completed after the landlord’s complaints process was exhausted. We encourage landlords to keep working with residents to resolve complaints, even after the matter has gone to the Ombudsman. However, to ensure transparency and consistency, the Ombudsman does not encourage landlords to revisit compensation on the basis that they have gone to the Ombudsman. As such there was service failure in the landlord’s complaint handling.

The landlord’s record keeping

38. While the Ombudsman was able to determine this case based on the evidence provided, there were gaps and omissions in the landlord’s records, as highlighted throughout this report. This made it difficult to always determine exactly what happened and when. It also made it more difficult for the Ombudsman to assess whether the landlord’s actions were fair.
39. The Ombudsman would expect a landlord to keep a robust record of contact and evidence of its actions relating to each case file, which can be provided to the Ombudsman upon request. Landlords who fail to create and record information accurately, risk missing opportunities to identify its actions were wrong or inadequate and contribute to inadequate communication and redress.
40. The Ombudsman finds service failure in the landlord’s record keeping.

Determination

41. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration in:
    1. The landlord’s delay to register the property with the land registry.
    2. The landlord’s handling of a dispute over the shared pathway.
42. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in:
    1. The landlord’s complaint handling.
    2. The landlord’s record keeping.

Recommendations

43. If it has not already done so, the landlord should pay the resident £370 in compensation. This is in accordance with the offer of compensation made by the landlord prior to the Ombudsman’s investigation starting.
44. The landlord should consider reviewing its record keeping in this case. In particular, it should consider the reason for any gaps or omissions in the evidence it provided to the Ombudsman. Depending on its findings, it should act accordingly thereafter.